Unfair dismissal and consultation under the Code

This is a portion of a decision by the Fair Work Commission dealing with whether or not the employer had the capacity to plead as a jurisdictional defence compliance with the Small Business Fair Dismissal Code.

 

“Consideration

 

[78] I turn now to a consideration of the criteria set out in s.389 of the Act. For Ms AB’s dismissal to be a case of genuine redundancy, the Respondent must meet each of the criteria set out in s.389 of the Act.

s.389(1)(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

 

[79]    The test to be considered where there has been a reorganisation or redistribution of duties is whether the employee has any duties left to discharge.1

 

[80]    Where there is no longer any function or duty to be performed by an employee, his or her position becomes redundant even where aspects of that employee’s duties are still being performed by other employees.2

 

[81]    The decision in Kekeris v A. Hartrodt Australia Pty Ltd T/A a.hartrodt3 considered this point and established the test of whether the previous job has survived the restructure or downsizing, rather than a question as to whether the duties have survived in some form. The Full Bench in Ulan Coal Mines Limited v Howarth and others4 considered and applied the decision of Ryan J in Jones v Department of Energy and Minerals,5 and said:

 

“[17] It is noted that the reference in the statutory expression is to a person’s ‘job’ no longer being required to be performed. As Ryan J observed in Jones v Department of

Energy and Minerals (1995) 60 IR 304 a job involves ‘a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees’ organisation, to a particular employee’ (at p. 308). His Honour in that case considered a set of circumstances where an employer might rearrange the organisational 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 newlycreated positions. In these circumstances, it was said that:

 

‘What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, 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… (at p.308)’

 

This does not mean that if any aspect of the employee’s duties is still to be performed by somebody, he or she cannot be redundant (see Dibb v Commissioner of Taxation (2004) FCR 388 at 404-405). The examples given in the Explanatory Memorandum illustrate circumstances where tasks and duties of a particular employee continue to be performed by other employees but nevertheless the ‘job’ of that employee no longer exists.”

 

[82]    Ms AB largely addresses her application as to whether it was appropriate or necessary for Mr XY to have made her position redundant, or whether there was an imperative financial reason to do so.  That is not the test before the Commission.  The Commission is not tasked with determining if the decision made by the Respondent was a sensible one or a financially prudent one.

 

[83]    On the evidence before the Commission, Mr XY determined that the duties that Ms AB had been performing could be performed by himself with some assistance of the administration employee.  That constitutes a change in the operational requirements of the business and resulted in the Respondent determining that it no longer required Ms AB’s job to be performed by anyone.

 

[84]    The criterion in s.389(1)(a) of the Act is satisfied.

 

s.389(1)(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

 

[85]    The obligation on an employer to consult about redundancy only arises when a modern award or enterprise agreement applies to an employee and that modern award or enterprise agreement contains requirements to consult about redundancy.

 

[86]    It is not disputed that Ms AB’s employment was covered by the Award.

 

[87]    Whether the cessation of an employee from a small group of employees constitutes significant effects on employees for the purposes of clause 38 of the Award, including major change, and therefore an obligation to consult in accordance with the provisions of the Award must be determined.

 

[88]    In Port Kembla Coal Terminal Ltd v CFMEU (Port Kembla),6 Jessup J observed that “the forced redundancy of three employees out of a workforce of about 98 did not of itself constitute a major change within the meaning of cl 7.1.”7 However, as White J noted in Port Kembla, a simple comparison between the number of employees to be dismissed and the number of employees in the workforce overall is not conclusive of whether there are major changes.8 Much depends upon the circumstances of a case.

 

[89]    Paragraph 1548 of the Fair Work Bill 2008 (Cth) Explanatory Memorandum to the Act sets out as follows:

 

“The following are possible examples of a change in the operational requirements of an enterprise: a machine is now available to do the job performed by the employee; the employer’s business is experiencing a downturn and therefore the employer only needs three people to do a particular task instead of five; or the employer is restructuring their business to improve efficiency and the tasks done by a particular employee are distributed between several other employees and therefore the person’s job no longer exists.”

 

The consultation clause within the Award requires that there be discussion, and this did not occur, despite Ms AB requesting in her correspondence on 4 September 2023 that there be discussions regarding her role and the proposed redundancy.”

 

B v Company Z  [2024] FWC 1565 delivered 17 June 2024 per Hunt C