[2017] FWC 2531


Fair Work Act 2009

s.394 - Application for unfair dismissal remedy

Mr Leon Mallard

Mr Steven Bolton

Mr Bernard Stonehouse

Mr Jason Wood

Parabellum International Pty Ltd T/A Parabellum International
(U2016/15319, U2016/15175, U2016/15241, U2017/311)


PERTH, 15 MAY 2017

Termination of employment - unfair dismissal, whether genuine redundancy, meaning of ‘job’ in 389(1) of Fair Work Act 2009.

[1] In this application:

(the applicants) claim that they were unfairly dismissed by Parabellum International Pty Ltd T/A Parabellum International (the respondent). As the applications concern the same factual and legal circumstances, by consent they have been dealt with together.

[2] The respondent has raised a jurisdictional objection to the claims of unfair dismissal claiming that each applicant was terminated on the ground of genuine redundancy.

[3] The parties agreed that the matter could be dealt with by way of written submissions, there being no facts in dispute concerning the jurisdictional argument raised by the respondent. 1


[4] The respondent provides emergency response services to its major client Chevron Australia Pty Ltd T/A Chevron on the Gorgon Project on Barrow Island off the NW coast of Western Australia and has done so since 2012. Each applicant was employed in the position of Emergency Services Officer by the respondent.

[5] The applicants’ employment was subject to the terms of an enterprise agreement known as the Parabellum International Emergency Response (Firefighting/Aviation Rescue Firefighting) Enterprise Agreement 2012 – 2016 (the Agreement) and a written contract of employment. 2

[6] The respondent submitted that during the second half of 2016, Chevron sought to reduce its contract prices with the respondent. As a result of the reduced contract price, the respondent was faced with difficulties meeting its financial commitments. As a result the respondent determined that it would need to undergo an operational restructure and reduce costs across its operations in order to maintain the viability of its business. 3 Part of the restructure included the need to reduce the current salaries of its workforce.4

[7] Each applicant received correspondence from the respondent which set out the reasons for their termination of employment. As an example Mr Bolton’s termination letter was dated 18 November 2016 and stated as follows:

[8] The other three applicants received similar correspondence and due to their length of service they also received redundancy payments.

[9] The question that the Commission has been asked to determine in the first instance arises from the defence available under the Fair Work Act 2009 (the Act) to an employer where an unfair dismissal claim has been filed, that the dismissal was a case of genuine redundancy. In this instance the applicants were asked to agree to a variation in their employment contracts resulting in a salary reduction of approximately 13%. The applicants declined the offer of a variation and as a consequence, the respondent deemed their positions to be redundant having considered there being no other suitable available positions.

Relevant statutory provisions

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

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

[12] Section 396 requires that before considering the merits of an application for an unfair dismissal remedy the FWC must decide a number of threshold issues.

[13] One effect of s.396 is that if a dismissal is the result of a genuine redundancy as put by the respondent, the Commission does not need to determine whether the dismissal was harsh, unjust or unreasonable. 5

Genuine redundancy

[14] 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.

Respondent’s submissions

[15] The respondent submits that it has met and complied with the requirements set out in ss. 389(1) and (2) and therefore its defence of a genuine redundancy has been made out. 6

[16] There has been no issue raised by the applicants that any obligations to consult arising from a modern award or enterprise agreement have not been met or that it was reasonable for the applicants to be redeployed elsewhere within the respondent’s business. The argument is reduced to the meaning of s.389(1)(a) above, determining whether the respondent required the applicants’ positions to be performed by anyone because of changes in operational requirements of the respondent.

[17] The respondent states that the Commission should adopt a wide view of the words:

‘the employer no longer requires the person’s job to be performed by anyone’

when interpreting this section of the Act. 7

[18] It is submitted by the respondent that the Commission should view the wording of “the person’s job” to include all contractual arrangements that the employer has entered into including the terms and conditions of employment which must include an employee’s remuneration. 8

[19] The respondent submits that the concept of a job must be read as being inclusive of remuneration, thus when the remuneration in an employee’s job is varied and the position is no longer required to be performed under the previous wage/salary, that position/job is then no longer required by the respondent be performed by anyone. In the case of the applicants, despite the tasks and responsibilities remaining the same, as their salaries were varied substantially a new job came into existence and the previous jobs became redundant. 9

[20] Further, the respondent states that each of the applicants was subject to a written contract of employment which provided for a salary well in excess of the salary provided for in the Agreement. The respondent submitted that the proposed salary reductions for the applicants still maintained wage levels above those in the Agreement. 10

Applicants’ submissions

[21] The applicants state that between October and November 2016 they were asked by the respondent to vary their employment contracts resulting in approximately a $21,000 (13%) per annum salary reduction. On declining this request the applicants’ positions as Emergency Security Officers were declared redundant. The applicants (where entitled) received redundancy payments. 11

[22] It is submitted that as the ‘jobs’ continue to be performed by others newly appointed to the positions, albeit on the lower salaries, their positions are not redundant. As a result the dismissals are unfair. The applicants submit that the reference to the word ‘job’ in s.389(1)(a) of the Act means “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employer’s organisation, to a particular employee.” 12

[23] The applicants submit that the Commission should not adopt the respondent’s ‘expanded’ meaning of the word ‘job’ to include contractual terms dealing with an employee’s remuneration. To do so would be contrary to the wording in the Act as this refers to the ‘job’ to be performed and is inconsistent with the common law understanding of redundancy. 13

[24] To adopt the respondent’s view, it is submitted, would allow an employer to make an employee redundant simply because they can find another employee to do the job with less remuneration which would undermine the Act’s unfair dismissal provisions. 14

[25] As the replacement employees are performing the same tasks performed by the applicants prior to their redundancies, it is submitted that the lower rate of pay received by the new employees does not result in the applicants’ positions becoming redundant. 15

Jurisdiction to interpret the Act

[26] The Commission is not empowered to deal with the interpretation of statutes or industrial instruments with a view to solely determining rights and obligations unless it is undertaken as a step in the process of resolving a dispute that is capable of being resolved by arbitration. As an administrative tribunal, the Commission cannot exercise the Commonwealth’s judicial power. 16

[27] In the decision of the Full Court of the Federal Court in Construction, Forestry, Mining and Energy Union v Wagstaff Piling Pty Ltd and Others the majority, Buchanan and Katzmann JJ, stated:

[28] Whether an application invites the use of judicial power depends upon the circumstances. As was said in by a Full Bench of the Australian Industrial Relations Commission in Construction, Forestry, Mining and Energy Union v Geelong Grammar School:

[29] In this matter the Commission is required to determine the meaning of the s.389(1)(a) of the Act and in particular the word ‘job’. This task must be undertaken before the gravamen of the claims, being whether the applicants were dismissed unfairly, can be further progressed. It is an essential exercise for the Commission to form a view about the meaning of the words in the Act for the purpose of ascertaining whether the unfair dismissal claims are within the Commission’s jurisdiction.

Interpretation of the Act

[30] A well-established principle of statutory construction is that:

[31] The application of the Acts Interpretation Act to the Act is specifically dealt with in s.40A of the Act, which provides:

[32] As at 25 June 2009, s.15AA of the Acts Interpretation Act 1901 stated:

[33] Further, at s.15AB Use of extrinsic material in the interpretation of an Act, it states that the explanatory memorandum may be used to assist in ascertaining the meaning of a provision in a statute:

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


[35] The Act’s reference to a person’s dismissal being a case of genuine redundancy at s.389(1) where “the 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; … ” is consistent with what has be long been ascribed by courts and tribunals in providing a common law meaning. For example, in Jones v Dept of Energy and Minerals Ryan J stated when describing how a redundancy may take place:

[36] The definition of redundancy as articulated by Bray CJ in R v Industrial Commission of South Australia; Ex parte Adelaide Milk Supply Co-Op Ltd, is often cited as the classic description of redundancy. His Honour made the following remarks in relation to the concept:

[37] Beazley J observed in Quality Bakers of Australia Ltd v Goulding:

[38] The Macquarie On Line Dictionary provides the following definitions of the noun ‘job’:

[39] The reference above to “a piece of work of defined character undertaken for a fixed price” is not in my view a reference to the annual salary attached to the role performed by an employee.

[40] In the present circumstances the respondent submits that due to price restructuring by its major client Chevron which included a reduced contract price, it could no longer maintain the previous salary cost structure. In the respondent’s own words the proposition it put to employees to accept a salary reduction was made to “avoid redundancies where possible.” 26 This logic is somewhat circuitous as employees who accepted the reduced salary and continued to perform their same role were not considered redundant and were offered ‘new’ jobs. 27 It was only where an employee declined the salary reduction that their position was deemed redundant by the respondent. Those employees that accepted the reduced salary had their contracts varied and were placed into ‘new’ jobs with exactly the same functions but at a reduced salary.

[41] It is clear that the circumstances said by the respondent to equate to a redundancy, that is, that the roles are to be remunerated at a lesser rate, are not those that are provided in the Explanatory Memorandum or given as examples in any judicial consideration of the term redundancy. I note also that the Australian Taxation Office Ruling TR 2009/2 Income Tax Genuine Redundancy Payments provides numerous examples of what is considered a genuine redundancy, none of which involve an employee’s dismissal due to a failure to accept a reduction in remuneration with the same work performed by a new employee at a lower rate.

[42] There has been no reduction in the responsibility or tasks allocated to the position of Emergency Services Officer, the positions have not been abolished, the functions have not been split among other staff or some of them given to other staff. The positions are not in excess of the requirements of the respondent.

[43] While the respondent submits that the term ‘job’ in the Act must be read to include the remuneration of the particular job, no authority has been provided to support this ‘wide’ view. 28

[44] The respondent referred to the decision of the Full Court of the Federal Court in Dibb v Commissioner of Taxation 29 holding that an employee may still be genuinely redundant when there are aspects of the employee’s duties still being performed by other employees. The circumstances of that matter involved the employer re-distributing the duties previously performed by its District Managers and at the same time, adding further duties. The job, described by reference to its duties as previously performed, ceased to exist. The employer no longer wished to have that job performed by anybody. The work was to be differently distributed. Those circumstances do not exist in the present applications before the Commission.

[45] In my view the ‘person’s job to be performed’ as stated in the Act, are the functions, duties and responsibilities associated with the job. The remuneration is the value placed on performing the job by the employer. A significant variation of the remuneration to be paid either by way of a salary increase, which is a common variation, or decrease, does not equate to the employer no longer requiring ‘the job’ to be performed.

[46] A job is redundant when the functions, duties and responsibilities formally attached to the job are determined by the employer to be superfluous to the current needs and purposes of the employer.

[47] The positions of Emergency Services Officer have not been reduced in number requiring the tasks of one or more Officers to be undertaken by existing staff, nor have the roles been altered such that the functions, duties or responsibilities no longer reflect the roles occupied by the applicants. While a position may be redundant where the role is still being undertaken by others, this is not the same as advertising the positions with identical duties on a lower wage to new prospective employees.

[48] This conclusion does not address the validity or otherwise of the economic imperatives the respondent said it faced in terminating the applicants’ employment and whether such action amounted to a case of unfair dismissal as per the Act in respect of each of the applicants.

[49] The jurisdictional argument of the respondent is dismissed and the merits of the unfair dismissal claims will be listed for future direction.

al of the Fair Work Commission with member's signature



WG McNally Jones Staff - Solicitors on behalf of the Applicants

Clayton Utz - Solicitors on behalf of the Respondent

Written Submissions:


Applicants 20 March

Respondent 7 March, 23 March

 1   See s.397 of the Fair Work Act 2009

 2   F3, Annexure 1; Statement of Navin Vij at [17]. (It is not obvious where the classification “Emergency Services Officer” appears in the Agreement)

 3   Respondent’s Outline of Submissions 7 March 2017 (no actual financial details are provided), at [16] – [17]

 4   Respondent’s Outline of Submissions 7 March 2017, at [20]

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

 6   Respondent’s Outline of Submissions 7 March 2017, at [27]

 7   Respondent’s Outline of Submissions 7 March 2017, at [8]

 8   Respondent’s Outline of Submissions 7 March 2017, at [8]

 9   Respondent’s Outline of Submissions 7 March 2017, at [33] and [40]

 10   Statement of Mr Vij at [17]

 11   Applicants’ Outline of Submissions, 20 March 2017, at [9]. The Commission has not been advised that any redundancy payments have not been accepted by the applicants

 12   Jones v Department of Energy and Minerals (1995) 60 IR 304 at 308; Ulan Coal Mines Ltd v Howarth (2010) 196 IR 32 at [17]

 13   Applicants’ Outline of Submissions 20 March 2017, at [21]

 14   Applicants’ Outline of Submissions 20 March 2017, at [23]

 15   Applicants’ Outline of Submissions 20 March 2017, at [25]-[26]

 16   Re Cram; Ex parte Newcastle Wallsend Coal Co Pty Ltd (1987) 163 CLR 140 and authorities referred to therein.

 17   (2012) 203 FCR 371 at 377

 18   For an analogous case concerning a local coal authority under the Coal Industry Act 1946-1957 (Cth) see R. v Lydon; Ex parte Cumnock Collieries (1960) 103 CLR 15 at 22

 19   Waterside Workers Federation of Australia v JW Alexander Ltd (1918) 25 CLR 434 at 463

 20   Re Cram; Ex parte The Newcastle Wallsend Coal Co. Pty Ltd (1987) 163 CLR 140 at 149

 21   (2002) 123 IR 216

 22   Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; (2009) 239 CLR 27

 23   (1995) 60 IR 304

 24   (1977) 16 SASR 6 at 8

 25   (1995) 60 IR 327 at 332

 26   Respondent’s F3

 27   See Letter to Mr Bolton Variation of your employment contract SB 1 of Mr Bolton’s Statement 20 March 2017

 28   Respondent’s Outline of Submissions 7 March 2017, at [8] and [9]

 29   (2004) 136 FCR 388 at 404 - 405

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