| [2014] FWC 5606 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mrs Ruoh-Sheue (Rose) Chang
v
Mega International Commercial Bank Co. Ltd
(U2013/13395)
COMMISSIONER RIORDAN |
SYDNEY, 25 SEPTEMBER 2014 |
Application for relief from unfair dismissal.
[1] This decision is in relation to an application for an unfair dismissal remedy by Ms Ruoh-Sheue (Rose) Chang, pursuant to section 394 of the Fair Work Act, 2009 (the Act).
[2] Ms Chang was made redundant from Mega International Commercial Bank Co Ltd (Mega ICBC) on 30 August 2013.
[3] At the time of her termination, Ms Chang had over 18 years continuous service with Mega ICBC and was the Assistant Manager of the Business Division. Ms Chang holds a Bachelor of Commerce in Banking. She is 61 years of age and earns approximately $52,000 per annum.
[4] Mega ICBC is a large Taiwanese Bank which operates globally and has Australian offices/branches in Sydney, Melbourne and Brisbane. Mega ICBC has approximately 42 employees in Australia.
[5] Ms Chang was represented by Mr Cheung from Rutland Law Firm. Mega ICBC was represented by Mr O’Sullivan of Counsel and Berrigan Doube Lawyers.
Brief History
[6] Ms Chang was employed on 21 April 1995 and has had a long career without any issues of discipline or poor performance.
[7] In early August 2013, Mr Tsui held a discussion with Mr Lu (Manager IT/Human Resources) and Ms Lien (Manager Business Division) to advise them that there was a need to cut further costs from the business. Ms Lien advised Mr Tsui that she believed that she could reduce staff in her department by an additional employee due to an overlap of tasks. She advised that Ms Chang could be made redundant. Mr Tsui adjourned the meeting to consider the issue.
[8] On 15 August 2013, Mr Tsui advised Ms Lien that he approved of her proposal. He asked Mr Lu to advise Ms Chang as soon as possible and to undertake the task properly.
[9] Mr Lu sought the advice of Berrigan Doube Lawyers. Ms McGing provided the advice and she was engaged to conduct the consultation meetings.
[10] In the morning of 22 August 2013, Ms Chang sent an email to Mr Tsui seeking a salary review. She argued that she had received good performance reviews for her performance yet her salary had stalled over the last three years. She also sought an analysis of each of the clerical positions in a attempt to do an assessment of the classifications with the Award.
[11] In the afternoon of 22 August 2013, Ms Chang received correspondence inviting her to a meeting to discuss the proposed restructure at 5pm the following day.
“Dear Ms Chang,
Re: Notification of Proposed Restructure of Mega ICBC
Over the past few months Mega International Commercial Bank Co. Ltd (the Company) has been reviewing its business requirements and as a result of these reviews has recently made the decision to implement a restructure. The restructure is likely to have a significant effect on your employment.
The planned restructure mean that:
We further note that we have received a letter from you this morning requesting a reassessment of your salary. We regret that as a result of the above planned restructure, no reassessment of your salary will be possible at this time.
Should you have any questions, please do not hesitate to contact me...
Yours sincerely
Chin-Tao Tsui” 1
[13] During the meeting the following day, Ms Chang continuously stated that Mr Tsui did not have the authority to make such a decision and asked if Head Office had approved the restructuring proposal.
[14] Following the meeting, Ms Chang made contact with a number of senior representatives at the Head Office of Mega ICBC in Taiwan, namely, Mr Hong Gi Hsu (Vice President Human Resources), Ms Hua Lu Shea (Assistant Vice President Human Resources) and the Secretary of the General Manager (Ms Kelly Ding). These senior representatives were not aware of the proposed restructure. Despite promising to do so, no one ever made reply contact with Ms Chang.
[15] The follow up meeting with Ms Chang took place on 30 August 2013. Ms Chang continued to assert that Mr Tsui did not have the authority to undertake the restructure. Ms Chang provided no additional information as to why she should not be made redundant and was duly terminated. I note that Ms McGing did all of the talking for Mega ICBC. Ms Chang was provided with a letter in the following terms:
[16] “Dear Ms Chang
Re: Termination of your employment by reason of redundancy
We refer to our letter dated 22 August 2013 and to our earlier meeting.
As you are aware Mega International Commercial Bank Co. Ltd (“the Company”) has been reviewing its business requirements and has made the decision to implement a restructure. As part of that review, the company has determined that your role as ‘Division Manager - Business Division’ is redundant to the needs of the company and your position will therefore be terminated by reason of redundancy. This decision is not a reflection on your performance.
We have considered whether any suitable alternative position is available for you, given your skills and experience. However, no such position has been identified.
The terms of your redundancy are as follows:
We require the return of any company property in your care. If you are holding any company property offsite please advise us so we can make arrangements to have them returned.
On behalf of Mega International Commercial Bank Co. Ltd, I would like to thank you for your service and contribution you have made to our business and wish you the very best for the future.
Yours sincerely
Chin-Tao Tsui
SVP & General Manager” 2
Contentions
[17] The Applicant submitted that she was the victim of an unfair dismissal because:
a) Mr Tsui did not have the requisite authority to make the decision to dismiss Ms Chang;
b) Ms Chang’s termination was not due to a genuine redundancy; and
c) Mega ICBC had failed to comply with s117(i) of the Act in relation to the issue of Notice.
[18] The Respondent submitted that the termination of Ms Chang was a genuine redundancy on the basis that:
a) Mega ICBC no longer required the Applicant’s job to be performed by anyone;
b) Mega ICBC had complied with the consultative obligations under the Award; and
c) Mega ICBC had unsuccessfully explored suitable redeployment opportunities within the enterprise and associated entities.
Statutory Requirements
[19] When dealing with unfair dismissal related issues, I am required to take into account any number of provisions of the Act, namely:
(1) The object of this Part is:
(a) to establish a framework for dealing with unfair dismissal that balances:
(i) the needs of business (including small business); and
(ii) the needs of employees; and
(b) to establish procedures for dealing with unfair dismissal that:
(i) are quick, flexible and informal; and
(ii) address the needs of employers and employees; and
(c) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.
(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a “fair go all round” is accorded to both the employer and employee concerned.
385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
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.”
[20] There is no argument that Mega ICBC is a National System Employer (s380) or that Ms Chang met the criteria to be a person protected from unfair dismissal (s382).
[21] Ms Chang’s employment was regulated by the Banking, Finance and Insurance Award 2010 (BFIA).
[22] Section 8 of the BFIA states:
“8.1 Employer to notify
(a) Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must notify the employees who may be affected by the proposed changes and their representatives, if any.
(b) Significant effects include termination of employment; major changes in the composition, operation or size of the employer’s workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs. Provided that where this award makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.”
8.2 Employer to discuss change
(a) The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 8.1, the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and or their representatives in relation to the changes.
(b) The discussions must commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in clause 8.1.
(c) For the purposes of such discussion, the employer must provide in writing to the employees concerned and their representatives, if any, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matter likely to affect employees provided that no employer is required to disclose confidential information the disclosure of which would be contrary to the employer’s interests.” 3
Evidence
[23] Ms Chang provided two witness statements. Whilst there was some confusion in relation to the status of the “bundle of documents” attached to the original application, those documents were allowed in as evidence.
[24] Mega ICBC relied on multiple witness statements from Mr Allan Lu (Manager IT/Human Resources), Mr Albert Tsui (General Manager), Ms Jessica Lien (Manager - Business Division) and Ms McGing (Solicitor, Berrigan Doube Lawyers).
[25] Mega ICBC has a comprehensive Human Resources Policy. Relevant sections of the HR Policy include:
“ A Overview
This Human Resources Policy (“HRP”) has been developed to guide the actions and govern the rights of employees at Mega International Commercial Bank Co, Ltd - Australian Branch (“Mega ICBC”). The HRP contains fundamental guidelines for the workplace of Mega ICBC along with associated procedures and updates which are amended from time to time.
It is each employee’s responsibility to be familiar with the HRP as amended from time to time as the HRP is intended to promote transparency in the employment relationship and seeks to avoid any potential conflicts which may occur as a result of uncertainty or ambiguity in procedures in the workplace or employee’s responsibilities, obligations and entitlements.”
“1.1 Legislation
The conditions of employment are dependent on a number of factors, including the occupation, applicable awards, enterprise agreements and geographical location. The following source documents provide the employment framework to determine conditions of employment for all employees:
Employees are to receive entitlements and be paid in accordance with the provisions of the Banking Award (where applicable), or in accordance with the specific terms of their employment contract.”
“1.5 The Human Resources Policy
The HRP reflects the relevant content of the employment framework source documents. The HRP may also include content that is not included in the source documents.
New policies, information, guidelines or procedures may be developed to update or facilitate the implementation of the HRP by way of written memorandum. Written memorandums are issued by the General Manager of Mega ICBC and will be forwarded to all employees either electronically or by posting at a common area of the workplace within 7 days of the date of issue.
All employees are required to be familiar with the written memorandums as they are amended or updated from time to time.”
“1.6 Other Internal Policies and Guidelines
Mega ICBC may, from time to time, introduce other policies and guidelines implemented in the workplace. The HRP is to be read in conjunction with these policies and guidelines as they complement one another to promote transparency in the employment relationship.”
“2.2 Remuneration
2.2.1 Overall Approach
An employee’s remuneration level will be determined from time to time in accordance with relevant laws.
Remuneration levels are reviewed annually and determined by guidelines established under the Banking Award. In addition, remuneration levels may be adjusted in light of individual performance and Mega ICBC’s demand for particular skills and/or experience.
External factors such as the performance of Mega ICBC and the greater economic environment may also be factored into the review of an employee’s remuneration level.
For further information regarding Remuneration for certain functions, please refer to the Remuneration Policy.”
“2.4 Promotions
Employees will be promoted in accordance with the business and operational requirements of Mega ICBC. Candidates for promotions will be determined based on the employee’s performance, work experience and other relevant factors as determined by Mega ICBC and subject to approval from Head Office in Taiwan.”
“3.4 Redundancy
An employee may be made redundant if Mega ICBC no longer requires the employee’s job to be performed by anyone because of changes in Mega ICBC’s operational requirements.
An employee terminated due to redundancy will not be entitled to redundancy pay based on the employee’s period of continuous service is less than 12 months.”
“6 Adequacy of Human Resources
The Country Head will assess the adequacy of the Human Resources at Mega ICBC in Australia on an annual basis. This assessment will include consideration of:
The Annual Report on Adequacy of Human Resources will be presented to the AMC for acknowledgement and approval.
An update report on Adequacy of Human Resources will be presented to the AMC by the Country Head on a quarterly basis. This report will provide an update on any changes in the matters reviewed in the annual assessment.” 4
(my emphasis)
[26] In June 2009, Mega ICBC admitted to AUSTRAC (Australian Transaction Reports and Analysis Centre) that it had breached the Financial Transaction Reports Act, 1988 (FTR) and the Anti Money Laundry and Counter Terrorism Financing Act 2006 (AML/CTF) by not complying with the reporting obligations under the various Acts. As a result, Mega ICBC voluntarily entered into an Enforceable Undertaking (EU) with AUSTRAC. It’s processes and procedures were placed under review of the Australian Prudential and Regulatory Authority (APRA).
[27] Entering into the EU has significantly increased the operating costs of Mega ICBC due to the on-going costs of compliance. Mr Tsui advised that this cost was currently “in the millions”, and “ongoing” due to the engagement of external resources.
[28] It was accepted evidence that the introduction of the EU resulted in Mega ICBC’s deposits dropping by 75%. Mr Tsui testified that this had a significant negative effect on the workload of the Business Division.
[29] The Australian Management Committee (AMC) was established as part of Mega ICBC’s risk management system to deal with the governance risks of the Australian satellite branch.
[30] Version 1.1 of the AMC Charter formed part of Exhibit C1. Relevant provisions of the Charter include:
“6 Objectives of AMC
The objectives of the Australian Committee (AMC) are to:
1. Ensure the Australian Branch operation has an appropriate corporate governance structure
2. Ensure the Australian branch operation complies with the requirement of the single banking licence by Australian Government.
3. Define the Australian branch operation’s risk appetite and ensure the robustness of risk management systems;
4. Monitor the operations of the sub-branches so as to present an integrated APS 310 Declaration to the Australian Prudential Regulation Authority (APRA);
5. Serve as a link between the Australian branch operation and the Senior Officer Outside Australian so that Head Office directives are applied consistently across the three Australian sub-branches;
6. Provide periodic reports/Minutes to the SOOA on the Australian branch operations business activities and risk management systems; and effective controls at each branch are in place and facilitate communications/exchange of information between Australian branches.
7. Being aware of and, where appropriate, reviewing any litigation, actions, transactions and issues, papers and reports to external/third parties that may impact on the Australian branch operation and may attract adverse public, government, regulatory or other interest.”
“7 Responsibilities of AMC
The AMC is responsible for:
1. Implementing Head Office’s Strategic/Business Plans;
2. Overseeing the day to day management of Australian branch operation;
3. Implementing Head Office budget goals and parameters;
4. Making budgetary recommendations to the SOOA;
5. Approving policies and procedures recommended by the Risk & Compliance Committee and forwarding them to the SOOA for approval;
6. Making suggestions for changes in the Australian branch’s organisational structure;
7. Ensuring high standards for the Australian branch operation’s corporate governance;
8. Overseeing the adequacy, integrity and timeliness of statutory, financial and other reporting;
9. Receiving and considering reports from the Risk and Compliance Committee, the Australian Credit Committee, the Head of Risk & Compliance, and Heads of Business, treasury, Marketing, Accounting and Administration sections; .
10. Overseeing the External & Independent Internal Auditor relationship;
11. Reviewing and approving risk management strategies and compliance controls;
12. Approving a Code of Conduct for senior managers and employees;
13. Ensuring that legal, regulatory and prudential requirements/obligations are met;
14. Reviewing and approving the Country Head’s annual APS 310 Declaration and recommend it to the SOOA for endorsement; and
Receiving and considering business reports and taking appropriate actions on them.”
“9 Meetings
9.1 Scheduled Meetings
The AMC will meet at least 10 scheduled meetings a year.
While face-to-face meetings are more effective, meetings may be conducted by means of videoconference or teleconference facilities so that Members from other branches can attend and participate during the meetings of the AMC.
9.2 Other Meetings
The Chair may call Emergency or Extraordinary meetings provided that sufficient notice is given to all Members.”
(My emphasis)
[31] It is accepted that the AMC was not consulted in relation to the restructure of the Business Division, even though Mr Tsui could have called an extraordinary meeting. I have taken this into account.
[32] Mr Tsui’s authority to manage the Australian operations of Mega ICBC emanates from a Power of Attorney dated 8 September 2011. Relevantly the Power of Attorney states:
“(1) To manage the BRANCH OFFICE of the Bank in Sydney, Australia, and do all things necessary or expedient to do for properly and efficiently conducting the business of the Bank at the Branch.
(2) To engage, suspend and dismiss employees, accountants, brokers, solicitors, counsels, notaries and other agents or sub agents as may be required for efficiently carrying on the business of the Bank and for doing all or any of the acts and things which by these presents the Manager is empowered to do.” 5
Consideration
[33] In determining this matter, I have taken into account all of the detailed evidence and submissions that have been presented by the parties.
[34] The HR Manager of Mega ICBC, Mr Lu, is a HR Manager in name only. Mr Lu admitted that he had not read the BFI Award. He also stated that he did not have a good knowledge of the Mega ICBC HR Policy. The competence of the internal HR Manager is a matter for Mega ICBC but it is an important issue that I have taken into account in determining this matter.
[35] Ms Lien is the Manager of the Business Division. Ms Chang, as the Assistant Manager, reported to Ms Lien directly. From the evidence, it would appear that Ms Lien made the decision that Ms Chang could be made redundant purely on the basis that she filled in for Ms Chang for two weeks whilst she was on annual leave. The fact that she did not have to work overtime during these two weeks whilst performing both roles led her to believe that the Assistant Manager’s role was not a full time role.
[36] Under cross examination, it became very evident that Ms Lien did not perform the full range of Ms Chang’s duties during this two week period. Ms Lien does not have the required knowledge or expertise in the anti-money laundering sphere. To base a decision to terminate a loyal and long serving employee on the experience of a two week “fill-in” is difficult to understand. After experiencing the constraints of the Enforceable Undertaking and understanding the reason why the Enforceable Undertaking was implemented, it would have been appropriate and prudent for a proper structural review to have been undertaken, including the preparation of a business case and an analysis of the effects of the proposed redundancy on the Bank, with a subsequent report to the AMC for their consideration. The decision to dismiss Ms Chang lacks the required “internal scrutiny” of an organisation with governance issues.
[37] The evidence of Mr Tsui was quite compelling and informative. I regard Mr Tsui as an honourable man and a trustworthy witness. I accept his evidence that there was a need to reduce the costs of the Business Division. I accept his evidence that he endorsed the recommendation of Ms Lien after careful consideration. I accept his evidence that, as the Australian Manager, there were no vacancies or appropriate redeployment opportunities in Sydney, Melbourne or Brisbane for Ms Chang.
[38] I accept his evidence that no-one has been employed to perform the role of Ms Chang since her termination and that her functions have been distributed to other staff in the Business Decision.
[39] In Jones v Department of Energy and Minerals 6 the Industrial Relations Court of Australia (Ryan J) said:
“...However, it is within the employer’s prerogative to rearrange the organizational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions...
...What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organization, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant...”
[40] Following the principle of this decision, it is evident that Ms Chang’s position was redundant.
[41] I do not accept the submission that Mr Tsui did not have the authority to dismiss Ms Chang. I cannot differentiate between the authority to dismiss an employee or the capacity to decide to make an employee redundant. They are one and the same. If Mr Tsui was acting outside his delegated authority, I am confident that his supervisors in Taiwan would have stopped Ms Chang’s termination after Ms Chang had contacted them directly.
[42] I do not accept that the redundancy was a sham arrangement. The Business Division has suffered a 75 percent reduction in deposits since the Enforceable Undertaking. Such a significant decline in business must necessarily correlate to staff reductions in the appropriate divisions of the Bank.
[43] I do not regard the issue concerning the involvement of Berrigan Doube Lawyers as being of relevance. If Ms Chang has a private issue with that firm then there are appropriate channels for her to take up her complaint. I have seen no evidence to suggest that Berrigan Doube Lawyers were in any way involved in identifying Ms Chang as the appropriate candidate for redundancy.
[44] The fact that the meeting on 30 August 2013, went past Ms Chang’s normal finishing time is of no relevance. I do not accept the argument that Mega ICBC has breached s117(i) of the Act, because she received her termination letter after 5pm. If anything, Ms Chang may have a claim for a small amount of overtime.
[45] The consultative provisions of the BFI Award are quite clear and concise. The employer is required to;
“...notify the employees who may be affected by the proposed changes...”
“...discuss... the introduction of changes...”
“...the effects of the changes...”
“...measures to avert or mitigate the effects the changes...”
[46] This did not happen. No meetings were called of the Business Division to consult about the restructuring. No meetings were called to discuss the possible ramifications of the restructure with the affected employees. Whilst Mr O’Sullivan claimed that all of the duties, in the short term, were to be performed by Ms Lien and therefore the provisions of the Award had been satisfied, the evidence of Ms Lien does not support such an assertion. Also, I am not satisfied that the transfer of some of Ms Chang’s functions to her employees only after they have received appropriate training extinguishes the obligation to “notify and discuss” under the Award.
[47] Ms Chang was entitled to sit in a meeting with her colleagues from the Business Department (all of whom would be affected by the restructure) and employees from the Governance Department to discuss the proposed restructure. The Governance Department went from having an employee with a detailed knowledge of the AML/CTF Act, who was ready willing and able to assist, to an employee with a very limited knowledge of the Act. There was no opportunity for the affected employees to discuss the issues and offer alternative solutions to satisfy the financial concerns of Mr Tsui.
[48] I support the views of Roe, C in Ball v Metro Train 7s where he described consultation;
“...as being ‘a genuine opportunity to influence the decision maker’ and was not satisfied that the employee had been afforded such an opportunity consistent with the applicable enterprise agreement.”
[49] Ms Chang was not afforded that opportunity. Ms Lien, in her original discussion with Mr Tsui, identified Ms Chang as being redundant. In my view, this discussion prejudiced the whole process. Mr Tsui agreed to make Ms Chang redundant on 15 August 2013, based on the recommendation of Ms Lien. Put simply, Mega ICBC had determined that Ms Chang would be the employee to be made redundant before any consultation process had commenced.
[50] In the Full Bench Decision in UES (Int’l) Pty Ltd v Leevan Harvey 8 the majority concluded that the selection process in identifying the redundant employee was not a relevant consideration in determining whether a dismissal was a genuine redundancy. I agree with this rationale as long as there is a transparent process in place. Such a process, examining each employee’s skill, competence and training did not occur. If it had, then Ms Chang may have been found to have superior knowledge and competency then some of her colleagues.
[51] Ms Chang was entitled to be treated in accordance with the provisions of the BFI Award, the Mega ICBC Human Resources Policy and the AMC Policy. Clearly she was not.
[52] Proper consultation is a fundamental and necessary component of any redundancy process. I accept the proposition from Mr O’Sullivan that the process does not have to be “best practice” but merely “appropriate”. I find that the consultation undertaken by Mega ICBC fails the “appropriate” test. By failing to consult in an appropriate manner, Mega ICBC has failed to meet the tests associated with the genuine redundancy provisions.
[53] I find that Mega has not consulted in accordance with section 8 of the Banking Finance Insurance Award 2010.
[54] As a result Mega ICBC has failed to satisfy the definition test in section 389(1)(b). I find that the termination of Ms Chang was not a case of genuine redundancy.
[55] I am therefore required to look to the provisions of s387 of the Act to determine if the dismissal was harsh, unjust or unreasonable.
[56] 387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that the FWC considers relevant.
(a) Valid Reason
[57] Mr Tsui repeatedly stated that the termination of Ms Chang was not due to her capacity or performance. Therefore this factor is not relevant.
(b) Notified of Reason
[58] It follows that this factor is not relevant.
(c) Opportunity to Respond
[59] This factor is not relevant to Ms Chang’s termination.
(d) Support Person
[60] The Respondent invited Ms Chang to bring a support person to the final meeting. Ms Chang rejected the offer.
(e) Warning re Unsatisfactory Performance
[61] Ms Chang’s termination did not related to unsatisfactory performance so this reason is therefore not relevant.
(f) Size of Employer
[62] Mega ICBC is a large Taiwanese Bank which operates throughout the world. It has 42 employees in Australia. It has in place procedures and policies to deal with human resource issues.
(g) Dedicated Human Resource Management
[63] Mega ICBC has a dedicated HR team operating in Taiwan that would have been available to the part time HR manager in Australia, Mr Lu. Also, Mr Lu consulted extensively with Ms McGing from Berrigan Doube Lawyers who conducted and chaired the relevant consultation meetings.
(h) Any Other Issues
[64] Mega ICBC has a HR Policy which it failed to follow. Mega ICBC has an AMC Charter which it failed to follow. Mega ICBC is bound by the BFI Award, which it failed to follow. I note that Ms Chang is 61 years of age and remains unemployed. I have taken this into account.
[65] However, the termination of Ms Chang has not resulted in Mega ICBC breaching any governance or reporting requirement with APRA. Nor has it led to a decline of services to customers of the Bank or needed the employment of any individual to perform the duties previously undertaken by Ms Chang. I have taken this into account.
[66] The Consultation provision of an Award or Enterprise Agreement provides a required safety net for both employers and employees. Application of the provisions are compulsory for the parties and cannot be satisfied by poorly resourced and inadequately reasoned processes. I have taken this into account.
[67] Ms Chang contacted three senior managers in Head Office immediately after the meeting on 23 August 2013. Under the HR Policy, she was entitled to a response, even by email; Silence was not an option. I have taken this into account.
[68] It is also undisputed that Mr Tsui had made up his mind to terminate Ms Chang, based on the advice of Ms Lien, on 15 August 2013. The consultation process with Ms Chang did not commence until the afternoon of 22 August 2013. I have taken this into account.
[69] I accept that Ms Chang was given an opportunity to make suggestions or comments in the week of 23-30 August 2013. However, she was of the view that the actions of the Bank were being undertaken without the appropriate authority. That point should have been clarified by senior managers in Taiwan. I have taken this into account.
[70] The rates of pay within the Business Division are very similar. There may have been an individual in the Business Department who wanted to take Voluntary Redundancy; thereby allowing Ms Chang to move to the vacant role. Ms Chang was the most experienced employee in the Sydney Office and had worked in a number of roles and different Departments. She had trained any number of her fellow employees. Ms Chang has an acceptable command of the English language. Her ability to read and comprehend English is far superior to that of either Mr Lu or Ms Lien. I have taken this into account.
[71] Ms Chang was entitled to be treated in accordance with the policies of Mega ICBC. The AMC is authorised to give advice in relation to any restructure. Whilst I accept that the Committee can only provide Mr Tsui with a recommendation about any proposed restructure there is an obvious implied requirement for the AMC to be consulted. There was no consultation with the AMC. I have taken this into account.
[72] Based on my analysis of section 387 of the Act, I find that the dismissal of Ms Chang to be harsh, unjust and unreasonable.
Remedy
[73] Having found that the termination of Ms Chang’s employment was harsh, unjust or unreasonable I now turn my attention to the issue of remedy.
[74] Section 390 of the Act sets out when the FWC may order a remedy for unfair dismissal as follows;
390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) The FWC may make the order only if the person has made an application under section 394.
(3) The FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.
[75] Reinstatement would be an obvious remedy in this situation because there is no damage to the employment relationship. However, I am conscious of the economic situation of the Australian operation of Mega ICBC. Ms Chang was terminated on 30 August 2013, and her position has not been filled. Mega ICBC had a real need to reduce costs. Reinstatement is therefore not an option as the position no longer exists. Compensation is the appropriate remedy.
[76] The criteria relevant in determining the amount of compensation are set out in section 392(2);
392 Remedy—compensation
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.
(a) Viability of the Employer
[77] Mega ICBC is one of the largest, if not the largest, bank in Taiwan. Mega ICBC’s capacity to pay compensation is not in question.
(b) Length of Service
[78] Ms Chang has been a dedicated and loyal employee of Mega ICBC for 18 years.
(c) Remuneration that would have been received
[79] I have taken note of the decisions in Murrihy v Mechanical Services Pty Ltd 9 and Maswan v Escada Textilvertrieb t/a Escada10. However, these cases can be distinguished on the basis that the selection of the redundant person in these cases appears to have been a “feit accompli”. I am not convinced of that same scenario in this circumstance.
The Full Bench decision in UES v Harvey is of significance in this matter. I support the reasoning of the majority in that decision in relation to the payment of appropriate compensation based on the time that should have been taken in undertaking an appropriate consultation process.
As such, I have decided to award Ms Chang 10 weeks pay as compensation. The restructuring proposal should have been put before the AMC. The proposal should have been the subject of a proper business case analysis rather than a whim based on an ad hoc 2 week temporary role. All of the skills and responsibilities of Ms Chang and her colleagues should have been considered, allocated and discussed rather than simply transferred by a directive. Consultation should also have occurred with the Compliance Department to discuss whether the role of Ms Chang could be undertaken by another employee. Done properly, the consultation process should have taken at least 6 weeks.
Ms Chang played an important role in the on-going governance of Mega ICBC in relation to the AML/CTF legislation. Mega ICBC’s assets and attention to this legislation remains under the purview of APRA. As such, Mega ICBC should have advised APRA of its intention to “modify” the expertise of its internal governance resource by replacing Ms Chang with Ms Lien. Having had previous experience with APRA (which, from my dealings, is an overworked and under resourced entity), I have estimated that this process would have taken at least four weeks.
(d) Loss Mitigation
[80] Ms Chang remains unemployed. I am advised that she has been actively looking for work.
(e) Remuneration Earned
[81] I understand that Ms Chang did not receive any remuneration during the ten week period following her termination.
(f) Income reasonably likely to be earned
[82] I do not regard this provision as being relevant to this proceeding.
(g) Any other matters
[83] I have taken into account Ms Chang’s age and her future employment prospects.
[84] Ms Chang was not guilty of any form of misconduct (s.392(3)). The remedy awarded is less than the compensation cap (s.392(5)).
Conclusion
[85] I accept that there were operational reasons behind the restructuring of the Business Division of Mega ICBC which resulted in the termination of Ms Chang due to the position in which she occupied being made redundant. However, this decision and the subsequent restructure bring an obligation to consult in an “appropriate” manner with all employees affected by the proposed restructure. Mega ICBC failed to administer this obligation.
[86] It is disappointing that an organisation that was required to enter into an Enforceable Undertaking due to inadequate governance processes would fail to apply the appropriate governance steps when terminating a dedicated and long serving employee.
[87] As a result, I have found that the termination of Ms Chang was harsh, unjust or unreasonable and for the reasons stated above, order that Ms Chang be paid 10 weeks compensation ($9,903.80) plus 9.25% superannuation on this amount ($916.10).
[88] An Order is attached.
COMMISSIONER
1 Exhibit C4
2 Exhibit C4
3 Banking, Finance and Insurance Award 2010 - MA000019
4 Exhibit C3
5 Exhibit M4
6 (1995) 60 IR 304 at 308
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