[2010] FWAFB 7578 |
FAIR WORK AUSTRALIA |
DECISION |
Fair Work Act 2009
s.604—Appeal of decisions
JUSTICE GIUDICE, PRESIDENT |
|
[1] On 7 September 2009 the Construction, Forestry, Mining and Energy Union - Mining and Energy Division (the CFMEU) lodged applications on behalf of ten employees alleging that the termination of their employment by Ulan Coal Mines Limited (Ulan) on or around 25 August 2009 was unfair. The decision under appeal was made by Commissioner Raffaelli on 12 July 2010. 1 The Commissioner found that the dismissal of six of the employees did not involve genuine redundancy. Those employees are Messrs Honeysett, Oldfield, Michaelides, Atkinson, Dixon and R. Butler. He dismissed four of the applications on the basis that the dismissal in each case involved a genuine redundancy. Those are the applications concerning Messrs Howarth, Murray, M. Butler and C. Butler. There are two appeals before us. The first is an appeal by Ulan against the finding that none of the six dismissals was a case of genuine redundancy. The second is a joint appeal by Messrs Murray, M. Butler and C. Butler against the finding that the dismissal of each of them was a case of genuine redundancy. Both appeals are made pursuant to s.604 of the Fair Work Act 2009 (the Fair Work Act).
[2] The appeals were heard together. Ulan was represented by Mr J Murdoch SC, and the employees by Mr S Crawshaw SC.
The statutory provisions
[3] The proceedings before the Commissioner were under Part 3-2 of the Fair Work Act which deals with protection from unfair dismissal. Under that part Fair Work Australia may order a remedy to an employee who has been unfairly dismissed. The applications were made under s.394. Section 396 provides that the tribunal must decide a number of specified matters before considering the merits of an application under s.394. Section 396 provides, where relevant:
“396 Initial matters to be considered before merits
FWA must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:
... ...
(d) whether the dismissal was a case of genuine redundancy.”
[4] In each of the applications before him the Commissioner was required to decide, pursuant to s.396(d), whether the dismissal was a case of genuine redundancy. The term “genuine redundancy” is defined in s.389 of the Act. That section reads:
“389 Meaning of genuine redundancy
(1) A person’s dismissal was a case of genuine redundancy if:
(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:
(a) the employer’s enterprise; or
(b) the enterprise of an associated entity of the employer.”
[5] It can be seen that the definition has an inclusionary aspect, that in s.389(1), and an exclusionary aspect, that in s.389(2). It is common ground that the conditions in ss.389(1)(a) and (b) were fulfilled in relation to each of the dismissals, that issue having been decided by a Full Bench in determining an earlier appeal. 2 The question arising in the appeals is whether the exclusion in s.389(2) also applied. The answer to that question involves an examination of the statutory concept of redeployment in the circumstances of this case.
The circumstances of the dismissals
[6] The dismissals of the applicants arose as a result of a restructuring of Ulan’s coal mining operations. The Ulan mine is around 50 kilometres north of Mudgee. The ten applicants were among 14 permanent mineworkers retrenched. Ulan is part of Xstrata Coal Pty Ltd (Xstrata). A number of other companies in the Xstrata group operate coal mines in New South Wales. All of the relevant companies, including Ulan and Xstrata, are associated entities for the purpose of s.389(2)(b). The mines operated by these companies include Baal Bone, Bulga, Beltana/Blakefield and Ravensworth mines. None of these mines is in close proximity to Ulan, with the nearest being Baal Bone, which is approximately 100 kilometres south-east of Mudgee.
[7] At the time of the dismissals there were vacancies for positions as mineworkers at all of these mines. Prior to the terminations taking effect, Ulan took a number of steps to ascertain the availability of suitable positions and facilitated applications by the employees whose employment was going to be terminated. For example, on 13 August 2009 Ulan management put up an advertisement for positions at the Baal Bone colliery. The employees were not, however, given any preference and had to compete against other applicants for the positions. Mr Oldfield and Mr Michaelides were successful in obtaining positions at Baal Bone some weeks after their dismissal by Ulan. Mr M. Butler commenced employment at Ulan some months after his dismissal.
The Commissioner’s decision
[8] As indicated, the case before Commissioner Raffaelli proceeded on the basis that each of the dismissals involved a genuine redundancy within the terms of s.389(1). The decision was concerned with the application of the redeployment exclusion in s.389(2) and in particular the concept of redeployment within an associated entity in s.389(2)(b).
[9] The Commissioner found that it would not have been reasonable in all the circumstances for the employees to be redeployed within Ulan. However, he found that at the time of the dismissals, Xstrata was in a position to require the other mines in the Xstrata group, all being associated entities, to engage the employees. He noted that:
“[20] While some of the ex-Ulan employees found jobs at other Xstrata mines, they had to apply for such positions. Those engagements do not constitute redeployment.”
[10] The Commissioner’s decision includes the following:
“[36] A stark point of difference between the parties concerns what is meant by “redeployment”. I do not accept the definition put forward by Ulan. It says one must give the word a broad, practical and purposeful meaning. Its argument results, in effect, to mean employment in an associated entity. In my view, to suggest that redeployment equates to employment elsewhere is not to take an expansive view of the word redeployment. It is to alter its meaning....
... ...
[40] Redeployment as envisaged by s389(2) requires a transfer of the employee. This is so even if it also might mean the entering into a new contract of employment.
[41] Any action of Ulan to make some job vacancies known to employees, taking steps to have associated entities delay closing employment opportunities and then with those associated entities offering employment following an open selection process is not redeployment. It is merely assisting in the gaining of employment.”
[11] Having examined the circumstances of Messrs Oldfield, Michaelides and M. Butler, the Commissioner found that none of the employees had been redeployed within the enterprise of any associated entity of Ulan. He then considered whether it would have been reasonable for any of the employees to have been redeployed within such entities.
[12] The Commissioner noted that there was no evidence that any operational impact would arise if the Xstrata group were to adopt an “activist redeployment process” involving directions for one enterprise in the group to employ surplus employees of another in the group.
[13] The Commissioner rejected Ulan’s contention that it would not have been reasonable to redeploy those employees who took no or insufficient steps to apply for available positions.
“I find that a failure to pursue job opportunities where they may have been competing against all comers is not on point. It would only be relevant if any available positions had been restricted to those retrenched and any applicant had not shown sufficient interest.” 3
[14] The Commissioner also rejected Ulan’s submission that redeployment would not have been reasonable, given the distances of some mine sites from Ulan. “This might only be valid if on being offered a position, an employee had declined to take it up. Or, if any applicant had made it clear that they would not be prepared to travel...” 4
[15] The Commissioner concluded that it would have been reasonable in all the circumstances for most of the employees to have been redeployed in the vacant positions at the other Xstrata mines. He excluded three employees. He found that Mr Murray was reluctant to travel and preferred weekend shifts, Mr M. Butler was also unwilling to travel and Mr C. Butler, who was a farmer, preferred to work around Mudgee.
The submissions
[16] Ulan submitted that the Commissioner had failed properly to construe the meaning and effect of s.389(2)(b) of the Fair Work Act. In particular, the Commissioner had erred in construing the subsection as imposing a positive obligation on Ulan or Xstrata to take steps to redeploy an applicant within the enterprise of an associated entity. Ulan also submitted that the Commissioner was in error to the extent that he found that Ulan was required to direct an associated entity to employ any of the employees. He was in error in construing the term “to be redeployed” as requiring a transfer of the employee. The term should have been given what was described as a broad, practical and purposeful meaning, namely, a description of a state of affairs or outcome of employment in the enterprise of the dismissing employer or another employer which is an associated entity of the former employer.
[17] The Commissioner, according to Ulan, failed to give adequate weight to the evidence concerning the circumstances of each of the employees, including evidence that a number of the employees made no effort to apply for alternative positions or seek redeployment and the geographical location of the mines operated by the associated entities.
[18] Ulan submitted that the Commissioner erred in deciding that Mr Oldfield and Mr Michaelides had not been redeployed within the meaning of s.389(2), as they both took up employment with Baal Bone from 25 September 2010.
[19] Messrs Murray, M. Butler and C. Butler submitted that the Commissioner had erred in taking into account the evidence as to their reasons for not applying for new positions in deciding whether it would have been reasonable in all the circumstances for them to have been redeployed within an associated entity. Their failure to pursue job opportunities in competition with outside applicants was not on point. This was because if it was reasonable for them to be redeployed to the positions, the need for them to apply for the positions did not arise.
The nature of the appeals
[20] The appeals are brought pursuant to s.604 of the Fair Work Act. Section 604(2) provides that Fair Work Australia must grant permission to appeal if it is satisfied that it is in the public interest to do so. As indicated already, the applications were made under s.394 which is in Part 3-2 of the Fair Work Act. There are special provisions relating to appeals from decisions under Part 3-2. These provisions are in s.400 of the Fair Work Act. That section is:
(1) Despite subsection 604(2), FWA must not grant permission to appeal from a decision made by FWA under this Part unless FWA considers that it is in the public interest to do so.
(2) Despite subsection 604(1), an appeal from a decision made by FWA in relation to a matter arising under this Part can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact.”
[21] Section 400(1) provides that despite subsection 604(2) the tribunal must not grant permission to appeal from a decision under Part 3-2 of the Act unless it considers that it is in the public interest to do so. Therefore we must not grant permission to appeal unless we consider that it is in the public interest. Section 400(2) provides that an appeal from a decision under Part 3-2 of the Fair Work Act can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact. Therefore, to the extent that this appeal is on a question of fact, unless there is a significant error of fact no appeal lies.
[22] The approach to be taken to an appeal pursuant to s.45 of the Workplace Relations Act 1996 (the WR Act) was outlined in Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (Coal & Allied). 5 The following passage indicates that the powers of a Full Bench of the Australian Industrial Relations Commission (the Commission) were only exercisable under that section in the case of error in the decision at first instance:
“17 Because a Full Bench of the Commission has power under s 45(6) of the Act to receive further evidence on appeal, an appeal under that section is properly described as an appeal by way of rehearing. And because there is nothing to suggest otherwise, its powers under sub-s (7) are exercisable only if there is error on the part of the primary decision-maker. And that is so regardless of the different decisions that may be the subject of an appeal under s 45.” 6
[23] Because there is no relevant difference in the terms of s.604 of the Fair Work Act, this analysis applies equally to an appeal to a Full Bench of Fair Work Australia under that section. Section 400(2) reinforces this construction and adds an additional requirement, namely, that where an error of fact is involved the error must be substantial. The majority in Coal & Allied explained in the following passage how error may be identified where a discretionary decision is involved:
“21 Because a decision-maker charged with the making of a discretionary decision has some latitude as to the decision to be made, the correctness of the decision can only be challenged by showing error in the decision-making process. And unless the relevant statute directs otherwise, it is only if there is error in that process that a discretionary decision can be set aside by an appellate tribunal. The errors that might be made in the decision-making process were identified, in relation to judicial discretions, in House v The King in these terms:
‘If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so [reference omitted].’” 7
[24] For these reasons an appeal under s.604 of the Fair Work Act should be characterised as an appeal by way of rehearing and the authorities in relation to the corresponding WR Act provisions are applicable to appeals under s.604, subject only to the qualification in s.400(2). An appeal cannot succeed in the absence of error on the part of the primary decision-maker and any error of fact must be substantial.
Conclusions
[25] Because these appeals concern the interpretation of an important section of the Fair Work Act which has not been considered by a Full Bench before we consider that it is in the public interest to grant permission to appeal. We turn first to the interpretation of s.389(2) and to the meaning of the term “redeployed”. There are a number of observations to be made at the outset.
[26] First, s.389(2) must be seen in its full context. It only applies when there has been a dismissal. An employee seeking a remedy for unfair dismissal cannot succeed if the dismissal was a genuine redundancy. In other words, if the dismissal is a case of genuine redundancy the employer has a complete defence to the application. Section 389(2) places a limitation on the employer’s capacity to mount such a defence. The defence is not available if it would have been reasonable to redeploy the employee. The exclusion poses a hypothetical question which must be answered by reference to all of the relevant circumstances.
[27] Secondly, it is implicit in the terms of s.389(2)(b) that it might be reasonable for an employee dismissed by one employer to be redeployed within the establishment of another employer which is an entity associated with the first employer. It follows that an employer cannot succeed in a submission that redeployment would not have been reasonable merely because it would have involved redeployment to an associated entity. Whether such redeployment would have been reasonable will depend on the circumstances. The degree of managerial integration between the different entities is likely to be a relevant consideration.
[28] Thirdly, the question posed by s.389(2), whether redeployment would have been reasonable, is to be applied at the time of the dismissal. If an employee dismissed for redundancy obtains employment within an associated entity of the employer some time after the termination, that fact may be relevant in deciding whether redeployment would have been reasonable. But it is not determinative. The question remains whether redeployment within the employer’s enterprise or the enterprise of an associated entity would have been reasonable at the time of dismissal. In answering that question a number of matters are capable of being relevant. They include the nature of any available position, the qualifications required to perform the job, the employee’s skills, qualifications and experience, the location of the job in relation to the employee’s residence and the remuneration which is offered.
[29] It is appropriate to mention some submissions advanced by counsel for Ulan concerning the interpretation of the s.389(2). It was submitted that an employer will not usually have the power or right to transfer an employee to employment by another employer, except in the unusual case where it is provided for in the terms of employment. Accordingly, the use of the term “redeployment” is directed at a broader concept, one which would include employment with the employer or an associated entity at some time after termination for redundancy. It was said that it is appropriate to regard an employee as having been redeployed if the employee is subsequently employed in a different or alternative position by their former employer or by an entity associated with their former employer. While this submission has a number of other implications, it is sufficient to say that it is not consistent with the clear words of the section and would lead to a great deal of uncertainty in its application. As we have already indicated, if an employee is terminated for redundancy but subsequently employed within an entity related to the employer, that might be an indication that the employee could have been reemployed at the time of the termination. But this will not always be the case. Subsequent employment within an associated entity may occur because circumstances have materially altered since the termination. For example, vacancies may have arisen.
[30] In relation to its appeal, and leaving aside the issues of construction we have already dealt with, Ulan submitted that the Commissioner’s decision was wrong because he did not identify the particular positions in a particular enterprise to which each of the six applicants could have been redeployed. He also erred in not taking into account the failure of the employees to pursue job opportunities with the related entities after Ulan had publicised those vacancies. The Commissioner was influenced in this regard by the fact that the employees would have been competing for positions rather than being given some kind of preference. Further, it was submitted that the evidence indicated that the evidence given by four of the applicants did not indicate that at the relevant time they were interested in and ready and willing to take employment away from Mudgee.
[31] The Commissioner found that entities associated with Ulan had vacancies for jobs which were potentially suitable for the dismissed employees and there was no evidence that redeployment from Ulan to the mines operated by these associated enterprises would have any impact on operational efficiency. While the Commissioner decided that some of the employees dismissed by Ulan were encouraged to apply for vacancies at mines operated by associated entities, he also found that neither Xstrata nor its associated entities had a policy of employing persons who might be redundant in other enterprises in the group. In Xstrata’s case, this is despite the fact that it had overall managerial control in relation to the mining operations of the associated entities. These findings were open to him. The Commissioner also found no evidence that any of the relevant employees would have been unwilling to be redeployed to one of the other mines. It must be said that all of the evidence was not one way on this issue and, as Ulan’s submissions indicate, some of the employees in particular did not display a great deal of energy in following up on vacancies which Ulan brought to their attention. Nevertheless we think it was open to the Commissioner to find that if offered redeployment they would have accepted it.
[32] We have concluded that the Commissioner’s decision was open on the evidence and other material before him and did not involve any error in interpretation of the section.
[33] In relation to the appeal by Messrs Murray, M. Butler and C. Butler, we note that in each case the Commissioner found that the employees were not interested in taking up a job far from where they lived. Accordingly he found that it would not have been reasonable for them to have been redeployed to any of the associated entities. These findings also were open on the evidence and did not involve any error in interpretation of the section.
[34] It may be appropriate to make some concluding remarks about the operation of s.389(2). It is an essential part of the concept of redeployment under s.389(2)(a) that a redundant employee be placed in another job in the employer’s enterprise as an alternative to termination of employment. Of course the job must be suitable, in the sense that the employee should have the skills and competence required to perform it to the required standard either immediately or with a reasonable period of retraining. Other considerations may be relevant such as the location of the job and the remuneration attaching to it. Where an employer decides that, rather than fill a vacancy by redeploying an employee into a suitable job in its own enterprise, it will advertise the vacancy and require the employee to compete with other applicants, it might subsequently be found that the resulting dismissal is not a case of genuine redundancy. This is because it would have been reasonable to redeploy the employee into the vacancy. In such a case the exception in s.385(d) would not apply and the dismissed employee would have the opportunity to have their application for a remedy heard. The outcome of that application would depend upon a number of other considerations.
[35] Where an employer is part of a group of associated entities which are all subject to overall managerial control by one member of the group, similar considerations are relevant. This seems to us to be a necessary implication arising from the terms of s.389(2)(b). While each case will depend on what would have been reasonable in the circumstances, subjecting a redundant employee to a competitive process for an advertised vacancy in an associated entity may lead to the conclusion that the employee was not genuinely redundant.
[36] Although we have decided to grant permission to appeal in each case, we dismiss the appeals and confirm the Commissioner’s decision.
PRESIDENT
Appearances:
S Crawshaw SC and A Slevin of counsel for Mr R Murray, Mr M Butler, Mr C Butler, Mr A Honeysett, Mr A Oldfield, Mr C Michaelides, Mr G Atkinson, Mr R Butler and Mr D Dixon.
J Murdoch SC and A Morris for Ulan Coal Mines Limited.
Hearing details:
2010.
Sydney.
September, 28.
3 [2010] FWA 4817 at para [47].
4 Ibid at para [48].
5 (2000) 203 CLR 194.
6 per Gleeson CJ, Gaudron and Hayne JJ.
7 per Gleeson CJ, Gaudron and Hayne JJ.
Printed by authority of the Commonwealth Government Printer
<Price code A, PR502246>