[2017] FWC 2357
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.394—Unfair dismissal

Jason Corcoran
v
The Trustee for the Express Parts Trust T/A On Time Group of Companies Pty Ltd
(U2016/12936)

DEPUTY PRESIDENT BULL

PERTH, 15 MAY 2017

Application for relief from unfair dismissal, consultation obligations under award, redeployment, genuine redundancy.

[1] Mr Corcoran has made an application under s.394 of the Fair Work Act 2010 (the Act) for an unfair dismissal remedy alleging that his dismissal by The Trustee for the Express Parts Trust T/A On Time Group of Companies Pty Ltd (the respondent/Ontime Group) was harsh, unjust or unreasonable. Mr Corcoran had been employed as an Ontime Site Supervisor based at the AMCAP site at Welshpool in Western Australia.

[2] The respondent filed an objection to the unfair dismissal application on the ground that the dismissal of the applicant was a case of genuine redundancy.

[3] The respondent provides local transport solutions for its clients across Australia.

[4] The Ontime Group has 19 employees including its directors and operates around 500 owner drivers across all capital cities. 1

[5] The AMCAP site is owned and operated by AMCAP which is a fully owned business of the Automotive Holdings Group (AHG) which is a publicly listed company.

[6] AMCAP is a specialist provider of third-party logistics services (3PL) which involves managing operations between different traders by an independent company. AMCAP work with companies to outsource their warehousing and distribution activities and manage the logistics concerned with storage, transportation and distribution. 2

[7] AMCAP contracts the Ontime Group to provide transport services from its automotive parts distribution centre in Welshpool, Western Australia.
[8] Covs Parts Pty Ltd (Covs Parts), another wholly owned subsidiary of AHG, also operated from the Welshpool site. 3

[9] Mr Corcoran was employed by the Ontime Group to manage or supervise its operations on AMCAP’s site, which included providing distribution services for both AMCAP and Covs Parts. The Ontime Group did not own or lease any office accommodation at the site and Mr Corcoran worked from a desk with a terminal in the AMCAP dispatch office.

[10] Mr Corcoran represented himself and Mr Ryan from the Victorian Transport Association appeared on behalf of the respondent.

Applicant’s Submissions

[11] Mr Corcoran did not call any witnesses to support his application and relied on his own evidence and submissions.

[12] Mr Corcoran commenced employment with the respondent on 11 March 2015.

[13] On 14 October 2016, the applicant was verbally advised by the WA State Manager that his position had become redundant and that there were no other positions available that he could be offered within the company. Confirmation of the applicant’s redundancy was provided in writing on 17 October 2016, in a letter dated 14 October 2016. The correspondence stated in part:

Termination of your employment by reason of redundancy

[14] The applicant submits that despite the comments in the termination letter, his position was not genuinely made redundant as the majority of tasks he was required to perform still remain and are being performed by the ‘new Site Supervisor’. 5

[15] Mr Corcoran stated that there was never any discussion regarding a requirement to reduce staffing levels at the worksite. He was not provided with an opportunity to apply for the job of Team Leader that was given to a contractor, Mr Yuan (Sam) Shen. Although Mr Shen was employed as a contractor, Mr Corcoran states that he was fully qualified to perform this role. 6 Mr Corcoran also submits that the contractor position is not technically that of a contractor.7

[16] The applicant submits that he was covered by the Road Transport and Distribution Award 2010 and that his job role as a Site Supervisor equates with the classification of Distribution Facility Employee Level 2 under the Award. 8 The Award has a consultation provision at clause 9 which requires the employer to discuss with employees the effects that a major change in the organisation will have on employees once a definite decision has been made to introduce the major change.

[17] The applicant’s position was that the redundancy occurred as a result of a workplace injury he sustained in May 2015 and his request to know why he was not paid superannuation or had accrued annual leave during time spent with a host employer as part of his workplace injury rehabilitation. 9

[18] Based on his position being filled by Mr Shen and that he was not offered that position or any other position, Mr Corcoran maintained that his termination of employment was not a genuine redundancy.

[19] Much of Mr Corcoran’s case related to his workers compensation claim and the employer’s response which he did not agree with and had resulted in his weekly payments being stopped. 10

Respondent’s submissions

[20] It is put by the Respondent that the Applicant’s termination was the result of a genuine redundancy. 11 It was submitted that AMCAP own and operate the Welshpool distribution facility at which the applicant was employed as the respondent’s site supervisor.

[21] In support of its position the respondent called Mr Walter Scremin, the respondent’s General Manager, and Mr Chad Keeshan, the WA State Manager, to give evidence.

Evidence of Mr Scremin

[22] At the Perth Welshpool site the respondent had provided distribution services for two companies of AHG being AMCAP and Covs Parts. Mr Scremin stated that as the General Manager for the respondent, he was ultimately responsible for the Perth operations. 12

[23] Mr Scremin stated that in October 2016, the National Logistics Manager of AMCAP requested that he consider whether or not a site supervisor position should be retained after the sale of Covs Parts, which was to become effective 1 November 2016. This was because, as a result of the sale of Covs Parts, there would be eight drivers less for the site supervisor to supervise. 13 Mr Scremin’s evidence was that no other site required a Site Supervisor.

[24] Mr Scremin stated that following discussions with the Perth management team and a review of site procedures, he determined that a restructure would provide the respondent and AMCAP with a more efficient outcome. 14

[25] Mr Scremin’s evidence was that he reviewed all positions within the Ontime Group but was unable to find another position for the applicant. Following the unsuccessful review of available positions, Mr Scremin advised the WA State Manager Mr Chad Keeshan of his decision and requested that he terminate the applicant as his job was redundant and no longer required to be performed as his duties would be reallocated to other staff in WA. 15

Evidence of Mr Chadwick Keeshan

[26] Mr Keeshan is the WA State Manager for the Ontime Group of companies. Mr Keeshan recalled discussions with AMCAP and Covs Parts where the need for the role of Site Supervisor continuing was raised.

[27] It was Mr Keeshan’s evidence that AMCAP advised the respondent that the role does not completely fulfil its intended purposes nor suit AMCAP’s current needs and that additional driving/checking resources would be their preference. AMCAP also advised that a restructuring of their own staff duties overlap with the duties of the Site Supervisor and that they felt they were not getting the desired value from the Site Supervisor’s position and that their preference would be to directly deal with Mr Keeshan as State Manager and not the Site Supervisor. Further, new technology being introduced would reduce significantly the need for on-site supervisor support. 16

[28] Mr Keeshan stated that Covs Parts had raised that the restructure of the business after its sale was going to greatly reduce the contract work on site and therefore they did not require a supervisory presence from the respondent to be located permanently on site. The restructure within the business meant that the new owner and Covs Parts managers would play more of a part in day to day management and supervision of drivers. 17

[29] Following the discussions with AMCAP and Covs Parts, Mr Keeshan states that he met with Mr Scremin and concluded that the drivers’ rosters and management could just as easily be handled by the client services team in the office due to site management changes. Further, that the Site Supervisor role was not providing the intended on-site support, driver training and customer service that was planned; instead it could be better filled by providing additional driving resources. 18

[30] Mr Keeshan stated that he met with Mr Corcoran on 14 October 2016, and advised him that unfortunately Ontime, AMCAP and Covs Parts had made a business decision that his role was no longer necessary and that there were unfortunately no other suitable roles within the company that they could offer Mr Corcoran. 19

[31] The respondent submitted that the applicant’s redundancy, which resulted from a restructure, arose from the clients’ request for greater operational assistance and the flexibility of an additional driving resource. The additional driving resource provided by a senior owner driver would have, for example:

[32] It was determined by the respondent that this flexibility was preferable to having a Site Supervisor whose duties were a combination of largely administrative and supervision/monitoring of contractors with a minority of operational work. 20

[33] The respondent submitted that its decision to provide AMCAP with more assistance and flexibility resulted in the replacement of the applicant’s Site Supervisor role with that of an additional owner driver on site who spends their time on the warehouse floor and dispatch area when not driving on the road. Most of the administrative and supervisory functions previously undertaken by the applicant were allocated to staff in the respondent’s Victoria Park office. 21

[34] In addition to this, the previous role of Site Supervisor was for both AMCAP and Covs Parts which were located on the same site and until recently both owned by AHG. Covs Parts, being the second client of the respondent, was sold and no longer required the services of a Site Supervisor thus reducing that workload for the Site Supervisor position. 22

[35] The respondent submits that the change has provided the benefit that was sought and that the replacement senior owner driver continues to perform work outside of the AMCAP role as well as filling in for AMCAP drivers when required. 23

Relevant statutory provisions

[36] Section 394(1) of the Act provides that a person who has been dismissed may apply to the Fair Work Commission (the Commission) for an Order under Division 4 granting a remedy for unfair dismissal.

[37] Section 385 of the Act provides as follows:

(My emphasis)

[38] Section 396 of the Act requires that before considering the merits of an application for an unfair dismissal remedy, the Commission must decide a number of threshold issues:

(My emphasis)

[39] As discussed above, the respondent submits that the applicant’s termination was the result of a genuine redundancy.

[40] One effect of s.396 of the Act is that if a dismissal is the result of a genuine redundancy, the Commission need not determine whether the dismissal was harsh, unjust or unreasonable. 24

Genuine redundancy

[41] Section 389 of the Act sets out the meaning of genuine redundancy which is not restricted to whether an employee’s job is no longer required:

(My emphasis)

[42] In this matter there is a dispute as to whether the applicant’s employment was covered by an award, being the Road Transport and Distribution Award 2010 (the Award), and thus whether any redundancy consultation obligations were required to be complied with.

Conclusion

[43] The Explanatory Memorandum to the Fair Work Bill 2008 says the following in respect of s.389: 25

[44] The respondent’s jurisdictional defence that the termination of the applicant is a genuine redundancy as defined in s.389 of the Act rests on meeting all three of the following tests:

Whether position was redundant

[45] It is clear from the evidence of the respondent’s General Manager, Mr Walter Scremin and that of the WA State Manager, Mr Chadwick Keeshan, that a restructure of its operations at AMCAP’s Welshpool site resulted in a decision that the position of Site Supervisor was no longer required. This decision was made following a request from the respondent’s client at the site, AMCAP, to provide it with greater operational assistance and flexibility. Secondly, the sale of Covs Parts by AHG had reduced the workload of the Site Supervisor due to there being eight drivers less to supervise.

[46] The replacement of the Site Supervisor role with the an additional owner driver on site, who spends time on the warehouse floor and dispatch area when not driving on the road, was a decision taken by the respondent based on sound efficiency grounds and in response to its client, AMCAP, raising concerns that the role of Site Supervisor was no longer needed or of little value to AMCAP. Mr Corcoran’s duties were either reallocated to other staff within the respondent’s business, no longer performed, or performed by a senior owner driver.

[47] Despite Mr Corcoran’s concerns that his position was made redundant due to his work-related injury, other than this submission there was no evidence put before the Commission to support this assertion. The respondent has demonstrated to the satisfaction of the Commission that the position of Site Supervisor was no longer required to be performed and thus had validly become redundant.

Consultation

[48] As discussed above, the respondent must also have complied with any obligations under an applicable award or enterprise agreement to consult about the redundancy. No party suggested that an enterprise agreement had application to the applicant; however Mr Corcoran submitted that he was covered by the Road Transport and Distribution Award 2010. The Award, while containing a clause relating to redundancy, does not oblige the employer under this clause to consult with an employee where a redundancy is to occur. 26

[49] Under clause 9 - Consultation of the Award, an employer is obliged to discuss with employees where a definite decision has been made to introduce major changes in production, program, organisation, structure or technology likely to have significant effects on employees. The relevant terms of the clause are extracted below:

[50] While the respondent acknowledges that it did not follow the process outlined above, it submits that there was no requirement to do so on the basis that the applicant is not covered by the Award. 27

[51] Coverage under the Award is determined by clause 4.1 which describes the Award covering employers in the road transport and distribution industry in Australia and their employees listed in the classifications contained in the Award.

[52] Accepting, as put by Mr Corcoran, that he performs the duties of a Distribution Facility Employee Level 2 as described under the Award at Appendix B, Schedule B - Classification Definitions for Distribution Facility Employees, the respondent submits that as the applicant is not employed at a Distribution Facility as defined by the Award, the Award has no application to the applicant.

[53] A Distribution Facility is defined under the Award at clause 3.1 in the following manner:

[54] As was submitted by the respondent, the work site at Welshpool is owned and operated by AMCAP not the respondent. The respondent neither owns nor leases any property at the Welshpool site however the applicant was able to utilise a desk to perform his role within the AMCAP dispatch office.

[55] To meet the definition of Distribution Facility, the facility must be operated by the employer as part of or in connection with a road transport business of the employer. The respondent points out that the distribution facility where the applicant worked was not operated by the Ontime Group, but operated and owned by AMCAP. The Award requires a distribution facility to be operated by an employer in connection with a road transport business of that employer. As the Ontime Group does not operate the Distribution Facility the applicant cannot be a Distribution Facility Employee for the purposes of the Award.

[56] I accept the submissions of the respondent that, given the natural and ordinary meaning of the words in the Award, where there are two separate and unrelated employers, one operating the Distribution Facility and the other providing the road transport business, the definition of distribution facility in respect of the applicant is not met. On this basis the Award has no application to Mr Corcoran.

[57] Despite the above finding, even if the Award has application, it is arguable whether clause 9 Consultation is invoked where an individual employee is made redundant. This position arises from the Full Bench decision of Nick Tsiftelidis v Crown Melbourne Limited 28 where it was held that the meaning of ‘major workplace change’ in a consultation clause in an enterprise agreement did not capture individual redundancies on the basis that individual redundancies do not constitute a “major change” to the employer’s operations that impact upon a collective of employees. The Full Bench stated:

[32] Clause 24.2 of the Agreement provides that the purpose of the consultative committee is to consult about issues and matters arising from a “collective nature.” This indicates that a matter is more likely to be a major change if it affects a collective group of employees, rather than being a matter that impacts upon an individual. This indication is supported by the evidence in exhibit A and exhibit B. For example, in exhibit A, Ms Gleeson confirms that clause 24 is enlivened for collective matters only and not for individual redundancies. Similarly, in exhibit B, Ms Szalay agrees with Ms Gleeson and says that clause 24 is enlivened only for collective matters. The weight of the evidence therefore supports the conclusion that clause 24 of the Agreement, and the additional consultation requirements imposed on the Respondent therein, are not enlivened by cases that are not of a collective nature, such as individual redundancies.

[33] The frequent referral to the plural “employees” rather than “employee” in clause 24 further indicates that the clause captures changes to the Respondent’s workplace that impacts upon a group of employees rather than an individual. We are satisfied that it follows that clause 24 does not capture individual redundancies on the basis that individual redundancies do not constitute a “major change” to the Respondent’s operations that impact upon a collective of employees.

[34] As such, and applying Golden Cockerel, we prefer the Respondent’ submission that the text of the Agreement, read as a whole, leads to the finding that the Appellant’s redundancy did not enliven clause 24 of the Agreement. We reject the argument that the Appellant’s redundancy constituted a “major change” that impacted upon employees as a “collective” pursuant to clause 24. It follows that the argument that the Appellant’s redundancy enlivened clause 24 is to be rejected, and, therefore, the Respondent was not required to comply with the additional consultation obligations prescribed in the clause with regards to the Appellant’s dismissal.

[35] In light of this, we are satisfied that the Respondent was not required to comply with the additional consultation requirements prescribed in clause 24 of the Agreement.”

[58] The wording in the Award at clause 9.1(a):

is close to identical to the wording in the enterprise agreement in Nick Tsiftelidis v Crown Melbourne Limited :

[59] Based on the Full Bench decision in Nick Tsiftelidis v Crown Melbourne Limited it is at least arguable that a single employee redundancy is not what is contemplated by the words ‘Where an employer has made a definite decision to introduce major change … ’ in the Award, but I do not need to determine this point having found that the Award has no application to Mr Corcoran.

Redeployment

[60] The applicant argues that it was reasonable that he be redeployed into the senior owner driver position that undertook some of the duties of his previous role. Mr Corcoran was an employee on a salary of $70,000 per annum he was also entitled to paid leave and other statutory benefits provided by the National Employment Standards for employees.

[61] As correctly pointed out by the respondent, the Act only requires the employer to redeploy the applicant where reasonable within the employer’s enterprise or that of an associated entity of the employer. The position of owner driver, a subcontractor position which is not a salaried position of the employer, it is not a position within the respondent’s enterprise or that of an associated entity of the respondent. On this basis there is no obligation on the respondent to consider terminating the applicant’s employment and offering him a subcontractor position.

[62] Based on my conclusions, I am not required to consider the application under s.387 as the termination is the result of a genuine redundancy pursuant to s.389 of the Act and thus is excluded from the s.385 definition of unfairly dismissed.

[63] Had I not determined that the respondent was not bound by the Award consultation provisions, it would not have necessarily followed that the termination was unfair. As Watson VP stated in Mr Jamil Maswan v Escada Textilvertrieb T/A ESCADA at 39:

[64] Where a redundancy satisfies the definition of “genuine redundancy” as per s.389 of the Act, the fairness of the termination is not relevant. This is the clear effect of s.385 of the Act, as outlined in the Explanatory Memorandum at Items 1546-1553 extracted above.

[65] In this case the decision to make the applicant redundant was open for the respondent to make. To that end, fuller consultation would not have negated the operational reasons for the redundancy. I am further not satisfied that the positions of ‘owner drivers’ are not contractors in the proper sense of the word as was submitted by Mr Corcoran. 33

[66] Accordingly the applicant’s claim for an unfair dismissal remedy must be dismissed as the dismissal of the applicant was a case of genuine redundancy.

al of the Fair Work Commission with member's signature

DEPUTY PRESIDENT

Appearances:
Mr. J Corcoran on his own behalf.
Mr. P Ryan Victorian Transport Association on behalf of the Respondent.
Hearing details:
2017.
Perth:
30 Jan
29 March with video link to Melbourne

 1   Exhibit R1, Respondent’s Outline of submissions, at [11]

 2   Exhibit R5, Respondent’s supplementary submissions dated 17 /2/17, at [4] – [5]

 3   AMCAP provides tailored logistics solutions to the automotive, commercial vehicle and industrial sectors.

Covs Parts supplies automotive, mining and industrial supplies

 4   Exhibit A2, Applicant’s Outline of Submissions dated 23/1/17, Attachment A

 5   Exhibit A2 at [1]

 6   Exhibit A2 at [3]

 7   Exhibit A1, Applicant’s Outline of Submissions dated 17/2/17, at [7]

 8   Exhibit A1 at [6]

 9   Exhibit A2

 10   Exhibit A2 at [1]

 11   Exhibit R1

 12   Exhibit R2, Witness Statement of Walter Scremin, at [8]

 13   Exhibit R2 at [9]

 14   Exhibit R2 at [12]

 15   Exhibit R2

 16   Exhibit R4, Witness statement of Mr. Chadwick Keeshan at [6]

 17   Exhibit R4 at [7]

 18   Exhibit R4 at [8]

 19   Exhibit R4 at [13]

 20   Exhibit R1 at [15]

 21   Exhibit R1 at [17]-[18]

 22   Form F3 at 3.2

 23   See employer response to unfair dismissal application Form F3

 24   UES (Int’L) Pty Ltd v Harvey [2012] FWAFB 5241

 25   See Acts Interpretation Act 1901 in using Explanatory Memorandum to confirm the meaning of words in an Act.

 26   Clause 14 of the Award

 27   Exhibit R5

 28   [2016] FWCFB 4675

 29   (2005) 222 CLR 241

 30   (1996) 149 CLR 337

 31   [2014] FWCFB 7447

 32   [2011] FWA 4239

 33   Exhibit A1 at [7]

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