[2014] FWC 3764 [Note: An appeal pursuant to s.604 (C2014/5218) was lodged against this decision - refer to Full Bench order dated 13 October 2014 [PR556505] for result of appeal.]
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009
s.394—Unfair dismissal

Marko Vukoja
v
Toyota Motor Corporation Australia Limited
(U2014/3656)

s.120 - Application to vary re redundancy pay for other employment or incapacity to pay

Toyota Motor Corporation Australia Limited
(C2014/2778)

DEPUTY PRESIDENT LAWRENCE

SYDNEY, 11 JUNE 2014

s.394 Application for relief from unfair dismissal and s.120 application to vary redundancy pay.

Introduction

[1] On 7 January 2014 Marko Vukoja (Mr Vukoja) lodged an application pursuant to s.394 of the Fair Work Act 2009 (the Act) for a remedy for unfair dismissal against Toyota Motor Corporation Australia Limited (Toyota) (U2014/3656).

[2] On 23 January 2014 Toyota lodged an application against Mr Vukoja pursuant to s.120(a)(b)(i) of the Act seeking relief from the redundancy pay that would otherwise have been payable to Mr Vukoja pursuant to s.119 of the Act (C2014/2778).

[3] The s.120 application stated;

[4] C2014/2778 was allocated to me as part of my industry panel allocation. It was listed for conference on 17 February 2014. It because apparent that there was a bigger picture as I was advised that the unfair dismissal application had been lodged.

[5] It was agreed by the parties and, subsequently the Unfair Dismissals Team, that both matters should be allocated to me and heard together.

[6] The conciliation conference scheduled for 27 February did not proceed due to Toyota’s jurisdictional objection.

[7] The matter was listed for programming conference on 26 February 2014 and subsequently for hearing, together with U2014/3656, on Wednesday 16 April 2014.

The Unfair Dismissal Application

[8] Mr Vukoja’s F2 form stated that he was first notified of his dismissal on 27 October 2013 with a termination letter being sent on 10 December 2013. The termination took effect on 31 December 2013.

[9] Mr Vukoja commenced with Toyota on 1 March 2006.

[10] He claimed six month’s salary as compensation for lost income.

[11] Mr Vukoja claimed that the alternative role offered by Toyota was not suitable because it was primarily IT focussed and was only a maternity leave position. He complained about the lack of consultation and Toyota’s failure to honour undertakings given about his role when returning from Thailand. He says he only accepted the Sydney City Toyota secondment because of promises about future positions. Finally, he says that there were suitable alternative positions being advertised with Toyota at the time but he was not considered for them.

[12] Attached to the F2 was the chain of correspondence in November/December 2013.

[13] On 1 November, Toyota’s Divisional Manager, National Parts and Accessories Division, wrote to Mr Vukoja advising him his position of “Business Development Manager” had been made redundant. He was offered an equivalent alternative position with a related entity, Sydney City Toyota (SCT). He was told that if he did not take up this offer he would not receive redundancy pay under the NES, but would still get eight week’s pay in lieu of notice.

[14] It would appear that SCT offer was withdrawn and replaced by Network Information Manager.

[15] Ms McNicol, on behalf of Toyota sent a clarifying email on 6 December which included:

[16] Mr Vukoja wrote to Toyota on 19 December 2013 rejecting that job and stating his understanding that he would be made redundant effective 31 December 2013. He further expressed his understanding that he would receive eight week’s payment in lieu of notice.

[17] On 10 December Toyota wrote to Mr Vukoja affirming that the Information Network Manager role was an appropriate alternative position. They stated that there were no other suitable redeployment positions. Accordingly, he was made redundant effective 31 December 2013. He was to be paid in lieu of notice but not redundancy pay. Toyota foreshadowed the s.120 application. It appears that this was the notification of dismissal letter.

[18] On 30 December Mr Vukoja wrote to Ms McNicol in Toyota Human Resources protesting that alternative positions had never been considered. He also pointed to there being confusion as to which role was being made redundant. Indeed, he asserted that Toyota had not fulfilled its commitments following his return from Thailand.

[19] In its F3 form, Toyota stated that Mr Vukoja’s package was $105,902 ($92,896 salary plus $13,006 superannuation). He also received $18,596 for a vehicle. Further Toyota states:

[20] I issued directions to the parties on 26 February to file by 14 March 2014 and respond by 28 March 2014.

[21] Mr Vukoja relied on:

[22] Toyota relied on:

[23] At the hearing on 16 April 2014, Mr Vukoja represented himself. Toyota was represented by Ms R. Mason of Herbert Smith Freehills and Ms C. Slattery. I granted Ms Mason permission to appear, pursuant to s.596 of the Act.

[24] Following the hearing I invited the parties to make further written submissions and provide other documentary material especially relating to:

[25] Both complied (see above).

Protection from Unfair Dismissal

[26] An order for reinstatement or compensation may only be issued where I am satisfied the applicant was protected from unfair dismissal at the time of the dismissal.

[27] Section 382 sets out the circumstances that must exist for the applicant to be protected from unfair dismissal:

[28] Mr Vukoja had over seven years service so clearly comes within subsection (a). It appears that no award or enterprise agreement applies to him. However, his salary at $124,498 is less than the high income threshold, which is currently $129,300.

[29] Mr Vukoja was therefore protected from unfair dismissal.

Was the dismissal unfair?

[30] A dismissal is unfair if I am satisfied, on the evidence before me, that all of the circumstances set out at s.385 of the Act existed. Section 385 provides the following:

Was the Applicant dismissed?

[31] A person has been unfairly dismissed if the termination of their employment comes within the definition of “dismissed” for purposes of Part 3–2 of the Act. Section 386 of the Act provides that:

[32] There was no dispute that Mr Vukoja was dismissed. Mr Vukoja submits that the dismissal was “not a case of genuine redundancy” and therefore was unfair.

[33] Section 396 provides that the Commission must decide whether the dismissal was a case of genuine redundancy before considering the merits of the application.

[34] “Genuine redundancy” is defined in s.389 as follows:

[35] An employer will not be able to rely on the defence of “genuine redundancy” to an unfair dismissal application if it would have been reasonable, in all the circumstances, for the person to be redeployed within the employer’s enterprise or the enterprise of an associated entity.

Mr Vukoja’s Case

[36] Mr Vukoja points out that the role made redundant in Toyota’s 10 December letter was “Planning and Administration Manager”, a role last held by him in December 2009. Later correspondence on that day changed the position to “Export Sales and Planning Manager” (a role held by him in June 2011). He further points out that he was told on 1 November that the redundant position was “Business Development Manager”.

[37] Mr Vukoja submits that it would have been reasonable for him to be redeployed to a number of other positions other than the one he refused as unsuitable. The fact that there was no consultation by Toyota meant there could be no proper consideration of redeployment alternatives. The job descriptions for all of these positions were attached to his 14 March submission. They include:

All of these positions were Level 4 in the Toyota staff structure.

[38] Mr Vukoja submits that his dismissal was unfair as there was no genuine redundancy. The role described as “redundant” was integrated into a new role of “Accessories and Export Sales Manager” in December 2011 whilst Mr Vukoja was in Thailand.

[39] Further, it was reasonable for him to refuse the alternative role of “Network Information Manager” because it was primarily IT focussed, as opposed to his sales and marketing roles previously held. The previous IT focussed role he had in Toyota (for six months in 2008) did not work out. The role did not match his qualifications skills and experience and was also a 12 month maternity leave role and provided no job security.

[40] Mr Vukoja details the events surrounding his return from Thailand and alleges that Toyota did not treat him appropriately and follow through on commitments made. However, there is no provision in the Global Assignment Contract signed on 2 June 2011, of a return to Australia into Mr Vukoja’s previous job.

[41] In his supplementary submission of 24 April, Mr Vukoja argues that his job as at his termination date was “Business Development Manager” at Sydney City Toyota. This was his return role from Thailand. His role as Export Sales and Planning Manager ended in July 2011. He conceded that employees sent on international transfers within Toyota do not retain a contractual commitment to their previous Australian roles. The Business Development Manager role was still required to be performed at Sydney City Toyota, an associated entity of Toyota. At all times, he remained an employee of Toyota. A new employment contract for the secondment role had been entered into in July 2012.

Toyota’s Case

[42] Toyota submits that the dismissal was not unfair because it was a genuine redundancy within s.389 of the Act. In its 14 March submission, Toyota stated that the redundant role was the “Export Sales and Planning Manager” role. It submitted that it no longer required this role to be performed by anyone because of changes in the operational requirements of the enterprise. See also Ms McNicol’s statement, Exhibit M1 [14] to [16]. Toyota had restructured its business to improve its performance and efficiency in late 2011. There is no award or agreement requirement to consult, but consultation did take place, Exhibit M1 [21] to [31].

[43] Toyota further submits that it complied with s.389(2) by offering Mr Vukoja a suitable alternative position within Toyota which Mr Vukoja rejected. It was therefore not reasonable for Mr Vukoja to be redeployed.

[44] Ms McNicol emphasized Toyota’s rotation policy of its staff. Her witness statement set out the varied roles undertaken by Mr Vukoja with Toyota, see Exhibit M1 [9] to [12].

[45] Ms McNicol states that the original notification that the position of “Business Development Manager” was redundant was an error. Toyota maintains the position that it is the “Export Sales and Planning Manager” job that has been made redundant. Attachment 2 to Exhibit M1 states that the “Export Sales and Planning Manager” role was redundant in December 2011.

[46] Toyota considered that Mr Vukoja would have been well suited to the Network Manager role he was offered Exhibit M1 [24]. Ms McNicol detailed the consultations that had taken place with Mr Vukoja about the positions Exhibit M1 [26] to [32].

[47] In her second witness statement Ms McNicol explains that the Export Sales and Planning Manager role was made redundant in December 2011, not integrated into a new role as Mr Vukoja asserts ([5] to [7]).

[48] With respect to other positions to which Mr Vukoja says he could have been deployed, she says that these were advertised and all employees, including the Applicant, could have applied.

[49] She further says that the errors in the name of the positions identified for redundancy were due to human error. Seventeen other positions in the sales and Marketing division were being made redundant at the same time, including six at Level 4. None of these were redeployed.

[50] In its further submissions of 30 April 2014, Toyota provided additional material on the restructure at SCT which was put forward in support of the withdrawal of the offer of an ongoing role for Mr Vukoja at SCT. Toyota submits that the role at SCT was as secondee and no claim has been made out that Mr Vukoja’s permanent role was with SCT.

Approach of the Commission

[51] There has been considerable litigation recently in the Commission concerning s.389, and especially redeployment, as provided for in subsection (2). In a recent decision of mine, I summarised the cases that I considered relevant. See: Bruce Teterin and others v Resource Pacific Pty Ltd T/A Ravensworth Underground Mine [2014] FWC 1578 (Ravensworth). That decision is currently under appeal. However, I adopt and incorporate the summary contained in paragraphs [60] to [80] of that decision.

[52] The leading Full Bench decisions are Ulan Coal Mines Limited v Honeysett and others [2010] FWAFB 7578 (Ulan Coal) and Technical and Further Education Commission t/a TAFE NSW v L. Pykett [2014] FWCFB 714 (Pykett).

[53] In Ulan the Full Bench decided that redeployment required more than an open selection process, competing against outside applicants, within an associated entity. They held that the circumstances to be considered are those at the time of dismissal. At [34] and [35] they stated:

[54] In Pykett the Full Bench refined the test applied in Ulan. At [36] and [37] they stated:

[55] It will often be difficult to make a decision as to whether redeployment was reasonable in all the circumstances because of lack of evidence. This was the case in many of the single member decisions I refer to in Ravensworth. In that case itself, I found that there was insufficient evidence to determine whether redeployment was reasonable in respect of work being carried out by employees of contractors. I did find, however, that this would be possible.

[56] A Full Bench decision, since the hearing of this matter, should also be referred to: Ventyx Pty Ltd v Mr Paul Murray [2014] FWCFB 2143 (Ventyx). Much of the decision relates to the consultation provisions in the relevant award. However, the Full Bench held that Deputy President Gooley’s decision in which she found that redeployment was reasonable was not supported by the evidence:

Were the Dismissals Genuine Redundancies within s.389(1)?

[57] The Respondent must show that it no longer required the Applicant’s job to be performed by anyone because of changes in the operational requirements of its enterprise and that it complied with the consultation obligations in a modern award or enterprise agreement, if they apply. It was common ground that Mr Vukoja was award free and because of his level, he was not covered by any of Toyota’s agreements. Rather, he was employed under the arrangements Toyota has for its salaried staff. Therefore, the consultation requirement does not arise.

[58] The question of whether there was a redundancy or not was made more difficult than it needed to be because of Toyota’s failure to deal properly with Mr Vukoja upon his return from Thailand or to document what was happening with his employment. This led to a number of different descriptions, on Toyota’s part, of which job was being made redundant.

[59] The test is whether the previous job had survived a restructure or downsizing, rather than a question as to whether the duties have survived in some form: Kekeris v A. Hartrodt Australia Pty Ltd ([2010] FWA 674). A “job” being “a collection of functions, duties and responsibilities, as part of the scheme of the employees’ organisation, to a particular employee” Jones v Department of Energy and Minerals ([1995] QIR 304). The onus is on the employer to prove, on the balance of probabilities that the redundancy was due to changes in operational requirements: Kieselbach v Amity Group Pty Ltd (DP Hamilton, 9 October 2006 PR973864).

[60] Toyota submits that the job made redundant was “Export Sales and Planning Manager”. This was the position Mr Vukoja held when he went to Thailand in July 2011 on an inter-company transfer. The evidence was clear that this job was abolished in a restructure in December 2011. Mr Vukoja submits that this job was not really abolished but absorbed. I find this was not the case. However, Mr Vukoja was not advised of the redundancy formally until November 2013. As is noted in [36] above, Toyota made errors itself in describing the job being made redundant.

[61] Mr Vukoja submits that his job at his termination date was “Business Development Manager” at SCT, an associated entity of Toyota. The evidence does not support that submission. I find that Mr Vukoja’s job was made redundant in late 2011. There was a failure by Toyota to consult Mr Vukoja on his future or to formalise arrangements. He was effectively on “secondment” after he returned to Australia. In late 2013 there were then further market and cost pressures on Toyota which led to a restructuring and a loss of some seventeen jobs, including Mr Vukoja’s.

[62] I find, therefore, that notwithstanding the delay involved, Mr Vukoja’s job with Toyota was redundant. Accordingly, I find that the requirements of s.389(1) are satisfied.

Was it Reasonable for Mr Vukoja to be Redeployed with s.389(2)?

[63] Mr Vukoja must establish this for his dismissal to be decided to be not a genuine redundancy. If this is so, the “defence” of “genuine redundancy” available to the Respondent under s.385 will not apply. A decision will then need to be made as to whether the dismissal was otherwise harsh, unjust or unreasonable. An examination of both the actions of the employer and the employee is required. As to what is considered reasonable will turn on the circumstances of each case.

[64] Obviously, the circumstances in this case are different to those considered above. Mr Vukoja was offered an alternative job of “Network Information Manager” which he declined because he considered it not suited to his experience and qualifications and because it was a “maternity leave” position and therefore not permanent.

[65] I find that, on balance, Mr Vukoja’s position was reasonable in the circumstances for the following reasons:

[66] Toyota relies on the fact that it offered a position that it considered reasonable to demonstrate that it had discharged its redeployment responsibilities. He had performed a role which had an IT component earlier in his career. Therefore Toyota had some reasonable grounds for its decision. However, the reasonableness of Toyota’s redeployment offer needs to be considered within the overall circumstances.

[67] I have already outlined the reasons that make Mr Vukoja’s position reasonable in my view. I now deal with other aspects of Toyota’s case.

[68] There is no evidence that Toyota properly considered the other redeployment options raised by Mr Vukoja. Ms McNicol’s evidence was as follows:

[69] Mr Vukoja said:

[70] Toyota says that Mr Vukoja could have applied for the positions. However, Ulan is authority for the proposition that redeployment requires more than an open selection process competing against all applicants. It seems clear that Toyota decided it would offer Mr Vukoja the Network Information Manager role as the only option it would consider.

[71] The Full Bench in Pykett, quoted in [54] above, stated that there should be evidence “canvassing the steps taken by the employer to identify other work which could be performed by the dismissed employee”. There is no evidence provided here as to Toyota’s decision making process.

[72] I accept, as the Full Bench states in Ventyx quoted above, that s.389(2) does not require an employer to redeploy an employee to any vacant position. Circumstances, on a case by case basis, will determine what is reasonable. Ventyx carried out an investigation of redeployment options in an open manner. I find that the evidence in this case supports a conclusion that Toyota did not do so.

[73] This conclusion is supported by the withdrawal of the offer of a permanent position at SCT without any real explanation at the time. A general assertion of “severe cost pressures at SCT” is now made (see Toyota’s written submission of 30 April 2014 at [31]). Toyota fell back on the submission that this was “due to matters outside of my client’s control” (PN325). Yet, Ms Mason conceded that SCT was an “associated entity within the provisions of the Act” of Toyota (PN326).

[74] I do not accept the submission made by Toyota in its 30 April 2014 submission, at [49], that by signing the Secondment Agreement which stated that Mr Vukoja would “be provided with a Level 4 role which is equivalent in salary at the Executive Level 4”, he “expressly acknowledged that the Network Information Manager role was reasonable”. Reasonableness depends on an analysis of all the circumstances.

[75] Toyota submits that it has “exercised its managerial prerogative to look at available roles and offer the appropriate role to the appropriate employee” (30 April 2014 submission, [58]). I accept that as a general proposition. However, in the circumstances of this case I find that there is no evidence of an appropriate decision making and consultation process by Toyota which considered all reasonable offers for redeployment for Mr Vukoja before the final decision was taken to offer him a position and, ultimately dismiss him.

[76] I find therefore, that there was a job, position or other work within Toyota’s enterprise (or that of an associated entity), at the date of dismissal, to which it would have been reasonable in all of the circumstances to deploy Mr Vukoja.

Conclusion

[77] I find that it would have been reasonable in all the circumstances for Mr Vukoja to be redeployed in accordance with s.398(2). Accordingly, I find that his dismissal was not a genuine redundancy within s.389(1).

[78] This case has dealt with the jurisdictional objection of “genuine redundancy” to the unfair dismissal application. It follows, from my decision, that the s.120 application has no basis.

[79] No submissions have been made as to whether the dismissal was otherwise harsh, unjust or unreasonable and on the matters which must be taken into account pursuant to s.387.

[80] As well, no submissions have been made by Toyota as to remedy if the dismissal of Mr Vukoja is ultimately decided to be unfair. Mr Vukoja does not seek reinstatement but rather, six month’s salary as compensation.

[81] The appropriate course is for the parties to explore the possibility of settlement with respect to these matters. I will provide a reasonable period for this to occur and then relist the matter for further programming in the light of those discussions.

[82] I direct that Toyota and Mr Vukoja meet to discuss the implications of this decision. The matter will be listed for report back on Wednesday 23 July 2014.

DEPUTY PRESIDENT

Appearances:

M. Vukoja self represented;

R. Mason with C. Slattery for Toyota.

Hearing details:

2014

Sydney:

February 26, Telephone conference;

April 16, Hearing.

Final written submissions:

Applicant:

April 30;

May 7.

Respondent:

April 30

May 7

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