Unfair dismissal and what is a genuine redundancy

A Full Court of the Federal Court of Australia has upheld a decision of a Full Bench of the Fair Work Commission concluding that that the dismissal of 22 employees was not a “genuine redundancy” and thus not a jurisdictional defence to a number of unfair dismissal claims because was reasonable for the employer to redeploy the affected employees to positions occupied by independent contractors.

Here is most of the decision.

A Full Court of the Federal Court of Australia has upheld a decision of a Full Bench of the Fair Work Commission concluding that that the dismissal of 22 employees was not a “genuine redundancy” and thus not a jurisdictional defence to a number of unfair dismissal claims because was reasonable for the employer to redeploy the affected employees to positions occupied by independent contractors.
Here is most of the decision.
THE STATUTORY SCHEME
16. Section 394 of the FW Act confers upon a “person who has been dismissed” the right to apply to the FWC for an order under Div 4 of Pt 3 2. That division commences with s 390, which relevantly provides (and provided) as follows:
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).

17. It is not in dispute that each of the employee respondents was “protected from unfair dismissal”. At issue in each of the applications that was made under s 394 was whether each applicant had been “unfairly dismissed”. On that score, s 385 of the FW Act provides (and provided) as follows, namely:
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.


18. For present purposes, only the fourth of those four criteria is relevant. Nonetheless (for reasons that will become apparent later), it is prudent to map out what the FW Act says about the others.
19. Section 386 identifies the circumstances in which a person “has been dismissed”. Dismissal, in that context, includes (subject to exemptions that are not presently relevant) the termination of a person’s employment at the initiative of that person’s employer. Although nothing turns upon it in this matter, there appears to have been no question in the FWC that each of the employee respondents qualified as someone who “ha[d] been dismissed”.
20. Section 387 of the FW Act identifies criteria that the FWC must take into account in assessing whether a dismissal was “harsh, unjust or unreasonable”. It provides (and provided):
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.


21. Section 388 of the FW Act concerns the application of what is known as the Small Business Fair Dismissal Code and is irrelevant for present purposes.
22. “Genuine redundancy” is a defined term in the FW Act. The definition appears in s 389, which provides (and provided):
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.
Importantly for present purposes, the FW Act does not define what it means for a “person to be redeployed”.
23. Certain matters must be considered in advance of any decision on the merits of an application. Section 396 provides (and provided) as follows:
Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:
(a) whether the application was made within the period required in subsection 394(2);
(b) whether the person was protected from unfair dismissal;
(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d) whether the dismissal was a case of genuine redundancy.
24. For the most part (and for present purposes), the jurisdiction of the FWC is exercisable by a single member: FW Act, s 612. A person aggrieved by a decision made by such a member in the exercise of that jurisdiction may, with permission, appeal it: FW Act, s 604. That appellate jurisdiction is exercisable by a “Full Bench” of the FWC: FW Act, s 613(1). A “Full Bench” must comprise no fewer than three members of the FWC, at least one of whom is the President, a Vice President or a Deputy President: FW Act, s 618. In exercising its statutory appellate jurisdiction, the FWC may take account of such information as it wishes (including fresh evidence, if it admits any); and is empowered to confirm, quash or vary the decision from which an appeal is brought, to make a further decision in relation to the matter that is its subject, and/or to refer that matter for determination by a FWC member: FW Act, s 607.
25. For appeals from decisions made under Pt 3 2 of the FW Act, s 400 erects additional hurdles. Relevantly for present purposes, one of them is that an appeal from such a decision “can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact”: FW Act, s 400(2).
THE FWC DECISIONS
26. As has been noted, there have been four decisions of the FWC as to whether the employee respondents’ dismissals were “case[s] of genuine redundancy”: two first instance decisions of Commissioner Riordan (each decided against the applicant); and two appeals (the first decided in favour of the applicant, the second against it). The end point of those decisions distils to an acceptance, by the FWC, that none of the dismissals was “a case of genuine redundancy”.
27. Although the present application takes aim at all four decisions, it is only the second Full Bench appeal decision (the “Full Bench Decision”) that matters as it is the only one of the four decisions that has (or purports to have) operative or legal effect: Plaintiff M174/2016 v Minister for Immigration and Border Protection [2018] HCA 16; (2018) 264 CLR 217, 242 at [70] (Gageler, Keane and Nettle JJ), 246 247 at [92] (Edelman J); Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union & Ors [2016] FCAFC 169; (2016) 247 FCR 138, 147 at [39] (Barker, Rangiah and Wigney JJ).
28. The Full Bench Decision stemmed from an application made by the applicant under s 604 of the FW Act to appeal the second of Commissioner Riordan’s decisions. It is to be recalled that, by that decision, the Commissioner accepted a submission advanced on behalf of the employee respondents—and, thus, was relevantly satisfied for the purposes of s 385(d) of the FW Act (as engaged by s 396(d))—that the dismissals were not “case[s] of genuine redundancy”. That was so, the Commissioner reasoned, because in the circumstances that prevailed when the dismissals occurred it would have been reasonable for the applicant to redeploy each of the employees to roles or positions that were then being undertaken within the Helensburgh Mine by employees of Nexus and Mentser. In other words, Commissioner Riordan accepted that it would have been reasonable to reduce the work available to contractors and to redeploy the employee respondents to undertake the work thereby created.
29. The applicant’s appeal proceeded upon five grounds, only three of which remain relevant. Although lengthy, it is convenient to replicate them verbatim:
1. Failure to apply the correct test
(a) The Commissioner failed to apply the test required under s.389(2) of the Fair Work Act which requires a determination as to whether redeployment into work was reasonable in all of the circumstances.
(b) Instead, the Commissioner erroneously applied a test which appears from the reasons to be a combination of the following considerations rather than consideration of whether it would have been reasonable in all of the circumstances for any of the Applicants to be redeployed:
(i) Whether the work being carried out by Nexus and Mentser (Contractors) was ‘specialist work’ in accordance with an assessment by one of the Respondent’s witnesses (Reasons at [102] to [105], noting that the conclusion in paragraph [105] appears to contain a typographical error).
(ii) Whether terminating the Applicants and keeping the Contractors was reasonable (Reasons at [105]).
(iii) Whether it was ‘feasible’ for Peabody to insource some of the work of the Contractors (Reasons at [95] – [96]). [Note: it is accepted that this issue is a relevant consideration as per the reasons of the Full Bench at [70], [86] and [91] however it is not in itself the correct test].
(iv) Whether the approach of Peabody to make an antecedent decision to outsource the belt maintenance and improvement work to Mentser, with the subsequent result (as the Commissioner found, although erroneously), that 8 or 9 operators lost their jobs with Peabody, was unreasonable and unfair (Reasons at [103]).
2. Having failed to apply the correct test, the Commissioner failed to identify or alternatively failed to appropriately take into account in the application of the correct test the following circumstances:
(a) In relation to the work being carried out by Mentser:
(i) Peabody’s decision to outsource the belt maintenance and improvement work to Mentser reflected a deliberate strategy which was taken following a serious safety incident, which indicated a reasonable need for a different strategic approach to the issue, and following a deliberative process of considering what approach to the work would deliver optimum operational, efficiency, cost and safety outcomes for the operation.
(ii) In the assessment of the responsible manager, a previous strategy which involved Peabody’s employees carrying out the work had failed to manage the risk associated with the work in an effective way, and that the engagement of Mentser had resulted in very positive results in relation to their work at the Mine.
(iii) The responsible manager, who held a statutory responsibility in relation to the safe operation of the Mine, was genuinely concerned that a return to the previous strategy in relation to the work was inconsistent with optimum safety compliance.
(iv) Critical aspects of the service provided by Mentser for conveyor management had never been performed by Peabody and could not practically be done by a ‘crew’ of Peabody employees.
(v) The engagement of Mentser to perform the belt improvement and management work had resulted in a saving of approximately $600,000 to Peabody in accordance with the unchallenged assessment of one of Peabody’s witnesses.
(vi) Mentser owned and deployed proprietary software in the work which was advantageous in the efficient and effective disposition of the work which was not available to Peabody.
(vii) Mentser had developed a specialist training programme for its employees deployed to the work which was advantageous in the efficient and effective disposition of the work which was not available to Peabody in relation to the training of its own employees.
(viii) None of the Applicants had completed the Mentser training or any comparable training, in particular training in polymer processing which was specialist training directed to specialist belt technicians.
(ix) Removal of work from Mentser would have had a significant adverse impact on its business and its employees engaged at the Mine in circumstance where they had committed to and invested in the delivery of the services for an extended period and there was no change proposal which affected the work they were contracted for and employed to carry out.

(b) In relation to the work being carried out by Nexus:
(i) As part of the change process, and in response to issues discussed during consultation, Peabody had already given detailed consideration to the creation of redeployment opportunities within its enterprise, and had agreed to remove a number of contractor employees Including employed by Nexus) from the operation in order to create redeployment opportunities.
(ii) The Nexus work which was retained represented project work which had never been carried out by Peabody’s employees, which had finite duration, which had been budgeted and approved as such, and which in the reasonable assessment of Peabody was most efficiently carried out by and under the supervision of a contractor.
(iii) Pursuant to the contract between Peabody and Nexus in relation to the work, Peabody enjoyed considerable advantages in terms of flexibility, risk assumption and accountability for quality which would not be available if the work was insourced in order to create redeployment opportunities.
(iv) Insourcing the work would have required the work to be supervised by Peabody, which would have required the recruitment of additional supervisors or the diversion of supervisory resources away from core work.
(v) Accepting (as Peabody did) that many of the individual tasks being carried out by the Nexus employees could have been carried out by the Applicants (or some of them), the allocation of that work to Applicants was reasonably assessed by Peabody’s witnesses as requiring a level of retraining, coordination and supervision which was not reasonable in the circumstances which prevailed, which included the above as well as the financially distressed status of the Mine.
(vi) Removal of work from Nexus would have had a significant adverse impact on its business and its employees engaged at the Mine in circumstances where they had committed to and invested in the delivery of the services and there was no change proposal which affected the work they were contracted for and employed to carry out.
(c) Generally, that the Mine was in a distressed and loss making situation, and it was imperative that production was reduced, costs were reduced, and the operation of the Mine was as cost effective and efficient as possible.
3. In relation to the work being carried out by both Contractors, the Commissioner erred in finding:
(a) That the impact of an insourcing decision in order to create a redeployment opportunity would have an adverse impact on the relevant contractor was beyond the purview of the Commissioner’s consideration (implicit in the Reasons at [68(d)]).
(b) That the fact that Peabody had obligations to its employees and not to those of contractors had the consequence that the effect of a redeployment decision on contractor employees was an irrelevant, or, alternatively, an immaterial or subordinate consideration (implicit in the Reasons at [68(f)]).

30. In its reasons for decision, the Full Bench noted that the decision of the Commissioner was “of a discretionary nature”. Citing the well known observations of the High Court in House v The King (1936) 55 CLR 499 (House v The King), it continued (at [28]):
…Usually, such a decision can only be successfully challenged on appeal if it is shown that the discretion was not exercised correctly. It is not open to an appeal bench to substitute its view on the matters that fell for determination before the Commissioner in the absence of error of an appealable nature in the decision at first instance….
31. Later, the Full Bench identified the central issue addressed by the Commissioner:
… [T]he Commissioner was required to determine if it would have been reasonable in all the circumstances for the person to be redeployed. If the answer to this question is “yes” the dismissal cannot be a genuine redundancy.
32. The Full Bench then turned to the grounds of appeal. The Full Bench addressed grounds 1 and 2 together. It observed (at [46] [47], references omitted):
We do not agree that the Commissioner applied the wrong test or that he failed to take into account relevant considerations in reaching his decision.

There were a number of relevant matters for the Commissioner to consider before deciding if redeployment was reasonable in all of the circumstances. We set out some of those in the first appeal decision. These were set out by the Commissioner at paragraph [66] of the Decision. We do, however, consider it worthwhile to reiterate that:
• There are no binding rules in the application of s.389(2)(a) and the reasonableness of redeployment must be determined “in all the circumstances” taking into account the available work; and
• There is no binding principle established in relation to the consideration of the work of contractors and redeployment to such work.
33. Later (at [68] and [71]), the Full Bench observed:
The determination of the feasibility of insourcing work being performed by a contractor is one step required of the Commission in reaching a final conclusion as to whether redeployment was reasonable in all of the circumstances. It would be wrong however to conclude that the feasibility of insourcing was the only consideration. The Commissioner clearly considered, in his reasons, the skills of the Respondents and their capacity to undertake the work of the contractors. He considered the specialist nature of the work and scope of the work of the contractors and the training necessary to do the work. He considered the “operational impracticality of insourcing” but did not consider this insurmountable. Taking all of these matters into account the Commissioner reached the conclusion he did. The Commissioner was not narrowly focussed in his investigation and, having considered all of the circumstances, including the feasibility of insourcing, concluded that redeployment was reasonable in all of those circumstances.

We find no appealable error of the approach and range of considerations of the Commissioner. Appeal grounds 1 and 2 must therefore fail.
34. As to the applicant’s third ground of appeal, the Full Bench parted ways with the Commissioner. It observed (at [73] [74]):
We do not agree that the contracts between the Appellant and Mentser and Nexus and the need for resolution of any contractual dispute was an irrelevant consideration to the determination of whether insourcing was feasible as suggested in paragraph [68](d) of the Decision. Clearly, financial or other penalties that might apply with the early termination of an existing contract are highly relevant as to the feasibility of insourcing work. The Commissioner should have directed his attention to whether there was anything in the contractual relationship between the Appellant and the respective contractors that was an impediment to insourcing the work. If it is that the Commissioner did give consideration to this matter his reasons for dismissing it or finding it not relevant is unclear.

Likewise, to the extent the Commissioner did not consider the effect of insourcing on employees of the contractor was relevant to the matter before him, he was in error. In the first appeal decision the Full Bench indicated that “displacing existing occupants of positions may not be appropriate.” The Commissioner was addressing this matter at paragraph [68](f) of the Decision. To the extent it may be seen that the Commissioner dismissed this as an irrelevant matter we do not consider the reasons given disclose why he reached this conclusion. The inquiry we found was required in the first appeal decision is not who may have applied for relief from unfair dismissal and against which employer, but how the insourcing may have an effect on the breadth of workers impacted by the decision. It was not suggested in the first appeal decision that the task confronting the Commissioner in deciding if insourcing work from a contractor was an easy task – reaching a conclusion requires a balancing of a range of factors which must be weighed on the path to reaching a decision. The Full Bench in the first appeal decision did not say that this factor was determinative of the matter, and we accept that there may be circumstances where it is not relevant. By not giving apparent consideration to this matter the Commissioner failed to consider the totality of issues before him. The responsibility on the Commissioner was to consider the issue if it was relevant and set out his reasons for reaching his conclusion.
35. Those observations, the Full Bench went on to conclude (at [75]), did not:
[raise] sufficient doubt as to the correctness of the Decision when considered as a whole such as to provide grounds for the granting of the appeal. We accept that the Commissioner should have turned his mind to matters under each of these items and that he failed to do so or articulate sound reasons for not doing so. While constituting an error on the Commissioner’s part, we are not satisfied that the appeal should be allowed on this ground alone. We reach this conclusion as the inquiry of the Commissioner is wide ranging with many factors being taken into account with weight given to each of these as seen appropriate. These two items were not matters of great weight in the evidence or submissions of the Appellant before the Commissioner below such that the Decision should be set aside on this ground.
36. The Full Bench concluded as follows (at [87] [89]):
It is clear, from a reading of the Decision as a whole that the Commissioner considered the matters he was directed to in the first appeal decision. He considered whether insourcing the contracted work was feasible and the skills of the employees seeking redeployment and whether the employees had the skills necessary to perform that work before reaching the conclusion that redeployment was reasonable in all of the circumstances.

Further, while we accept that there are some factual errors in the Decision we do not consider these to be “significant errors of fact” such that they demonstrate appealable error.

While the ultimate conclusion that redeployment was reasonable in all the circumstances is not stated as clearly as it might be, it is implicit in the Decision. We do note that this Decision arose from our [first] appeal decision and a second hearing with further evidence and submissions of the parties. This added to the lengthy period of time over which the matter has been heard and perhaps was a contributing factor to some lack of attention to detail in the Decision.
37. The underlying unfair dismissal applications were, thus, remitted to Commissioner Riordan “for further programming” (and, presumably, for consideration of the other criteria for which s 385 of the FW Act provides—in particular, whether the dismissal of each of the employee respondents was “harsh, unjust or unreasonable”).
THE PRESENT APPLICATION
38. The present matter was commenced in the Court’s original jurisdiction under s 39B of the Judiciary Act 1903 (Cth). Section 562 of the FW Act confers equivalent (if not, for present purposes, identical) jurisdiction, which is exercisable by the Court’s Fair Work Division: FW Act, s 563(b).
39. The relief the applicant seeks is available only if the decisions that are challenged were affected by jurisdictional error. In contending that each of them was an error of this kind, the applicant advances the following grounds:
Ground One

The FWC in [2020] FWC 5756, [2021] FWCFB 2871, [2021] FWC 6414 and [2022] FWCFB 166:
(a) misconstrued the statutory criterion in s 389(2) of the Fair Work Act 2009 (Cth) (FW Act) as one that permits or contemplates the redeployment of an employee to a role, within the relevant enterprise, which was already filled at the relevant time by others whose services were provided under a contract;
(b) thereby erred in law, in a way which resulted in a wrong question or issue being considered, such that the FWC exceeded its authority or powers in a way which invalidated the decisions.
Ground Two

The FWC in [2020] FWC 5756, [2021] FWCFB 2871, [2021] FWC 6414 and [2022] FWCFB 166:
(a) misconstrued the statutory criterion in s 389(2) of the FW Act by failing to construe the test of what ‘would have been reasonable’ by reference to the purpose and context of the provision, so that:
(i) the test is applied from the perspective of a person in the position of the employer;
(ii) the test is applied in light of the actual ‘operational requirements’ which had been adopted by that employer, including the requirements for particular roles to be served by other employees, contractors or employees of contractors;
(iii) the test is applied by considering whether, in all the circumstances, there was a role which was available for the employee to which they should reasonably be appointed.
(b) thereby erred in law, in a way which resulted in a wrong question or issue being considered, such that the FWC exceeded its authority or powers in a way which invalidated the decisions.
Ground Three

In the alternative to grounds one and two, the Full Bench of the FWC in [2021] FWCFB 2871 and [2022] FWCFB 166:
(a) misconstrued ss 385(d) and 389(2) of the FW Act as requiring the exercise of a discretionary judgment;
(b) misconstrued its role under ss 604 and 607 of the FW Act, on appeals from decisions under ss 385(d) and 389(2) of the FW Act, as requiring the identification of an error in the exercise of a discretion in accordance with the principles in House v King (1936) 55 CLR 499;
(c) failed to:
(i) conduct an appeal by way of rehearing to determine, in accordance with the principles of Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531, whether there were any material errors in the judgments under appeal;
(ii) upon finding errors, make a further decision in relation to the matter which quashed the decision under appeal and dismissed the proceedings.
(d) thereby erred in law, in a way which resulted in a wrong question or issue being considered, such that the FWC exceeded its authority or powers in a way which invalidated the decisions.
Ground Four

In the alternative to ground three, and in relation to [2022] FWCFB 166:
(a) having identified that the FWC did not take account of material considerations (at [74] and [75]);
(b) the Full Bench failed to consider whether, had the material considerations been taken account of by the FWC, there was a realistic possibility of a different outcome;
(c) the Full Bench thereby erred in law, in a way which resulted in a wrong question or issue being considered, such that the FWC exceeded its authority or powers in a way which invalidated the decisions.
SOME PRELIMINARY OBSERVATIONS
40. As we observed earlier, although the applicant seeks to impugn all four of the relevant FWC decisions, it is the case that only one of them—namely, the Full Bench Decision—purports to have any operative or legal effect. That does not foreclose the possibility that prerogative relief might extend beyond that decision. This Court has accepted that, insofar as the only operative (or arguably operative) decision is one that is made:
(1) in the improper exercise of an appellate jurisdiction; and
(2) by way of affirmation of a first instance decision that was similarly a product of jurisdictional error,
it may be appropriate to grant relief not only in respect of the appeal decision but also in respect of what was affirmed: Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union v Abigroup Contractors Pty Ltd [2013] FCAFC 148 at [171], [174], [199] [200] (Katzmann and Rangiah JJ, Buchanan J dissenting in the result but not on that point); Australian Rail, Tram and Bus Industry Union v Busways Northern Beaches Pty Ltd (No 2) (2022) 291 FCR 93, 113-114 at [93] [94] (Snaden J, Bromberg and Wheelahan JJ relevantly agreeing).
41. Nonetheless, if the Full Bench Decision was not a product of jurisdictional error, then the analysis ends there. In the absence of some occasion to interfere with the operative legal effect of the only decision that purports to have any operative legal effect, the Court need not concern itself with any of the other three decisions of the FWC.
42. The Full Bench would have fallen into jurisdictional error only if it had misconceived its role, misunderstood the nature of its jurisdiction, misconceived its duty, failed to apply itself to the questions it was required to answer or misunderstood the nature of the opinion it was obliged to form: Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 209 (“Coal and Allied”), 208 209 at [31] (Gleeson CJ, Gaudron and Hayne JJ).
43. The Court’s task on judicial review:
…is not simply to assess whether an administrative tribunal was right or wrong in its conclusions, or whether it made errors in its analysis. The task is not to correct perceived errors made within jurisdiction. The task is to examine whether the tribunal misconceived its role or otherwise failed to exercise its jurisdiction so that its decision should not be seen as a true exercise of the power committed to it at all.
See Toms v Harbour City Ferries Pty Ltd [2015] FCAFC 35; (2015) 229 FCR 537, 551 at [59] (Buchanan J, with whom Allsop CJ and Siopis J agreed); and, to similar effect, Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2020] FCAFC 50; (2020) 275 FCR 385, 403 at [90] (Flick, White and Perry JJ).
44. An appeal to a full bench of the FWC under s 604 of the FW Act is an appeal by way of rehearing: ALDI Foods Pty Ltd v Shop, Distributive and Allied Employees Association [2017] HCA 53; (2017) 262 CLR 593, 621 at [100] (Kiefel CJ, Bell, Keane, Nettle, Gordon and Edelman JJ, with whom Gageler J agreed). A full bench may only interfere with a decision on appeal if it is satisfied that there was error on the part of the primary decision maker: Coal and Allied, 203 at [14] (Gleeson, Gaudron and Hayne JJ) and Australian Commercial Catering Pty Ltd v Fair Work Commission [2015] FCAFC 189; (2015) 235 FCR 441, 445 at [15] (Tracey, Barker and Katzmann JJ).
45. With those observations made, we turn to the applicant’s individual grounds of challenge.
GROUNDS 1 AND 2: ALLEGED MISCONSTRUCTION OF S 389(2)
46. It is convenient to address grounds one and two together, as the parties did. The contention that the applicant advances is straightforward. It claims that s 389(2) of the FW Act, insofar as it contemplates a dismissed employee’s potential for redeployment, does not authorise consideration of potential redeployment to roles that are already filled by others. Thus, by asking whether there were other employees (namely, Mentser and Nexus employees) whose engagement at the Helensburgh Mine could be brought to an end, the FWC misunderstood the nature of the inquiry that it was authorised (indeed, required) to make.
47. That is said to be so for four reasons.
48. First, the applicant submits that “redeploy”, understood by reference to the ordinary meaning of the word, means to deploy again to another position. Necessarily, it is said, one can only be redeployed to a position that exists; which is to say, one that is vacant or available.
49. Second, the applicant points to the statutory context within which s 389(2) sits. Necessarily, a case of genuine redundancy requires that there first be “changes in the operational requirements of the employer’s enterprise”: FW Act, s 389(1)(a). The reasonableness of such changes is irrelevant: if they are established, then, subject to the other aspects to which the section gives voice, the statutory criteria in s 385(d) cannot be made out. The applicant submits that is a strong contextual indicator that the concept of redeployment in s 389(2) was not intended to contemplate the creation of positions via the manipulation of other operational requirements.
50. Third, the applicant submits that the “genuine redundancy” carve out which was introduced by the FW Act should be understood to have been intended as an enactment of the considerations that had historically guided the FWC (or its statutory forebears) in considering whether a redundancy related dismissal was “harsh, unjust or unreasonable”. Historically (which is to say, under predecessor unfair dismissal regimes that did not contain any analogue of the carve out for which s 389 of the FW Act now provides), the potential availability of redeployment in the case of dismissals effected for operational reasons was a factor that was apt to inform whether a particular dismissal was “harsh, unjust or unreasonable”. The jurisprudence developed by the FWC and its predecessors did not, the applicant submits, contemplate inquiries into whether or not an employer’s enterprise ought to have been reorganised so as to create a position for an otherwise redundant employee. The applicant contends that there should be no reason to construe ss 385(d) and 389 of the FW Act in a way that expands upon that jurisprudence.
51. Finally, the applicant submits that a construction of those provisions which authorises inquiries into whether or not an employer ought to create redeployment opportunities would be one that sits uneasily with the object to which they are evidently directed. It submits that the concept of “genuine redundancy” was introduced to strike “…a balance between the needs of business and the needs of employees and the need for procedures which are ‘quick, flexible and informal’ ([FW Act] s 381)”. To construe s 389(2) of the FW Act as the Full Bench did would, it is said, be “…apt to defeat these objects, because it introduces a significant and unhelpful degree of complexity into unfair dismissal proceedings”.
52. Something should be said about the principles that govern the task of statutory construction upon which the applicant’s contentions turn. They are well settled and not materially disputed. Fundamentally, the Court must strive to “…give meaning to the legislative command according to the terms in which it has been expressed”: Northern Territory v Collins [2008] HCA 49; (2008) 235 CLR 619, 623 at [16] (Gummow A-CJ and Kirby J). That task begins with a consideration of the meaning of the words in which a provision is expressed: Australian Education Union v Department of Education and Children’s Services (2012) 248 CLR 1, 13 at [26] (French CJ, Hayne, Kiefel and Bell JJ). If those words (read in their proper context) are unambiguous, then they should be accorded their natural, clear meaning: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; (2009) 239 CLR 27, 46 47 at [47] (Hayne, Heydon, Crennan and Kiefel JJ); Saeed v Minister for Immigration and Citizenship [2010] HCA 23; (2010) 241 CLR 252, 265 266 at [34] (French CJ, Gummow, Hayne, Crennan and Kiefel JJ).
53. In Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503, 519 at [39], the High Court (French CJ, Hayne, Crennan, Bell and Gageler JJ) relevantly observed:
…Understanding context has utility if, and so far as, it assists in fixing the meaning of the statutory text. Legislative history and extrinsic materials cannot displace the meaning of the statutory text….
54. Thus, if the words of a statute, either by themselves or when read in their proper context, are obscure or capable of sustaining more than one meaning, the Court must embark upon a search for which of those meanings most accords with the intention that should be presumed to have animated their enactment. The Court’s task is to identify and give effect to that construction.
55. There can be little doubt that s 389 of the FW Act—and, more broadly, the significance of “genuine redundancy” to s 385(d)—was intended to narrow the circumstances in which an employee might be said to have been “unfairly dismissed”; and, thereby, to afford employers a defence in circumstances involving dismissals for operational reasons (as opposed to reasons of conduct or capacity). A dismissal that is a “case of genuine redundancy” is immune from relief under Pt 3 2. That is so even if it might unambiguously qualify as “harsh, unjust or unreasonable”.
56. There is, then, some force to the applicant’s contention. The proper construction of s 389(2) of the FW Act will be one that takes account of the facilitative character of the immunity that is inherent in s 385(d) of the FW Act.
57. That immunity, however, is not absolute. Indeed, s 389(2) serves unambiguously to qualify it and it is the scope of that qualification, rather than the immunity itself, that falls to be construed. That task begins and ends with an analysis of the words in which the qualification is expressed: Alcan at [47]; SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 262 CLR 362, 374 at [37] (Gageler J). On any view, they contemplate a qualification of some width: specifically, redeployment that “in all [of] the circumstances” would have been “reasonable”.
58. Those words do not appear in s 389(1) of the FW Act. A case of genuine redundancy may arise if a dismissal is the consequence of changes in the operational requirements of an employer’s enterprise. The FW Act does not contemplate any inquiry into the reasonableness of such changes, neither “in all [of] the circumstances” or at all. Subject to s 389(1)(b) and 389(2), any change in operational requirements will suffice.
59. Section 389(2), by contrast, requires that the possibility of redeployment should be assessed according to what “would have been” reasonable. That necessarily envisages some analysis of the measures that an employer could have taken in order to redeploy an otherwise redundant employee. In its proper context, “redeployed” can only refer to the prospect that an otherwise redundant employee might be taken from a position no longer required and deployed to the discharge of other tasks. If, in a given case, there were measures that could have been taken and which, in all of the circumstances, could reasonably have led to redeployment, that will suffice to engage the exemption to the immunity.
60. Given the undeniable width of the text in which the exemption is couched, there is no reason to excise from “all [of] the circumstances” the possibility that an employer might free up work for its employees by reducing its reliance upon external providers. The existence of that possibility in any given case is a circumstance that is capable of informing whether redeployment “would have been reasonable”.
61. Unquestionably, a construction consistent with that observation introduces a measure of complexity that would be absent if “redeployed” were read as “redeployed to a position not currently occupied”. Nonetheless, it is inherent in the existence of the exemption to immunity from relief for unfair dismissal that a measure of complexity was intended. The challenge for the applicant is to establish that there was a limit to that intention and that the construction favoured by the Full Bench goes beyond that limit.
62. That is a burden that cannot be discharged given the unmistakeably broad terms that s 389(2) employs. If there were circumstances that were intended to be inapt to inform whether, in any given case, “redeployment would have been reasonable”, the legislature would not have used the qualifying phrase, “in all [of] the circumstances” (emphasis added).
63. The applicant’s contention to the contrary was undermined somewhat by its concession during the hearing—properly given, we add—that s 389(2) of the FW Act might be understood to contemplate that dismissals will not amount to “case[s] of genuine redundancy” in circumstances where employees could be maintained in their employment for a short period if that would obviate the need for dismissal. With respect, that must be right. There is no reason to think that s 389(2) could not cover circumstances in which an employer dismisses employees on operational grounds where those employees could be redeployed to positions which are not currently available but are about to become available, for example, where it knows that other employees are soon to retire or that a contract with a third party for the performance of work is soon to expire.
64. A similar analysis would apply to an employer who preferred dismissal over retraining. If, in a given case, there is a position to which an otherwise redundant employee might be redeployed; but for which he or she is unqualified for want of appropriate training, the possibility that he or she might undertake that training (and, thereby, obtain that qualification) is a circumstance that is apt to inform whether the alternative of dismissal would qualify as “a case of genuine redundancy”. The fact that there might be some barrier that makes redeployment more difficult or more involved than it otherwise could be—whether that barrier takes the form of a need for retraining or, as here, the pre existing occupation of roles by contractors—is not to the point. Whether redeployment “would have been reasonable in all [of] the circumstances” requires analysis of what an employer could have done apart from dismissing the employee.
65. That being so, the immediate unavailability of a position to which a redundant employee could conveniently have been redeployed does not necessarily inoculate an employer against a charge that a dismissal was “not a case of genuine redundancy”. Naturally, it is a circumstance that, in any given case, might well favour a conclusion that redeployment would not have been reasonable. Whether that is so, however, will depend upon “all [of] the circumstances”.
66. It is for the FWC, as a specialist statutory tribunal, to determine whether redeployment would have been reasonable in any given case. Within the wide bounds of what is legally reasonable, that assessment is to be made having regard to such matters as the FWC thinks are apt to assist it. If, in a given case, there is reason to think that an employer could have taken steps that would have enabled redeployment in preference to dismissal, that possibility may fairly be brought to bear upon the FWC’s assessment of what “would have been reasonable in all [of] the circumstances”.
67. That is what occurred here. By proceeding on that premise, neither the Full Bench nor Commissioner Riordan misunderstood what s 389 of the FW Act contemplates. The state of satisfaction that s 385(d) of the FW Act requires the FWC to form was formed in a manner consistent with what the FW Act authorised; and the refusal or failure by the Full Bench to conclude otherwise was not in error.
68. It follows that the applicant’s first and second grounds of review must fail.
GROUND 3: STANDARD OF APPELLATE REVIEW
69. The applicant’s third and fourth grounds of review concern the exercise by the Full Bench of the appellate jurisdiction that s 604 of the FW Act conferred upon it.
70. By ground 3, it is said that the Full Bench incorrectly approached the second of Commissioner Riordan’s decisions as though it were one that involved the exercise of a discretion, the correction of which on appeal required some demonstration of discretionary (or House v The King) error. Instead, the applicant maintains, it ought to have approached the question of whether the dismissals were “case[s] of genuine redundancy” on the footing that there was a right answer and a wrong answer; and that anything short of the right answer was demonstrative of error and liable to appellate correction.
71. As a preliminary observation, the employee respondents were at pains to point out that, before the Full Bench, the applicant itself described Commissioner Riordan’s (second) decision as one involving an exercise of discretion. Howsoever that might be, it is not dispositive of the contention now advanced in this court, which, plainly enough, goes to whether or not the FWC’s appellate jurisdiction was properly exercised. It is upon that question that attention must necessarily focus.
72. It is to be recalled that the applicant’s appeal to the Full Bench was akin to an appeal by way of rehearing and that, in an appeal by way of rehearing, the Full Bench may only interfere with a decision insofar as it considers that it was the product of error. There can be no question that the Full Bench understood that that was so. In considering whether it should grant relief of the kind for which the applicant had moved, it was plainly concerned to identify whether Commissioner Riordan’s (second) decision could be impugned in the way that the applicant sought to impugn it.
73. As history records, the Full Bench was not satisfied that the Commissioner’s decision was a product of error. Whether it was right or wrong so to conclude is not for this Court to second guess; at least not in the absence of any suggestion that its conclusion was legally unreasonable. If it wrongly arrived at its conclusion that Commissioner Riordan’s decision was untainted by error, that incorrect assessment would be “…an error within jurisdiction not an error as to the nature of the jurisdiction which the Full Bench was required to exercise”: Coal and Allied, 209 at [32] (Gleeson CJ, Gaudron and Hayne JJ); Toms v Harbour City Ferries Pty Ltd [2015] FCAFC 35; (2015) 229 FCR 537, 558 at [97] (Buchanan J, with whom Allsop CJ and Siopis J agreed.).
74. In any event, we are not persuaded that the Full Bench here erred by regarding the Commissioner’s decision as one that was “of a discretionary nature”, the correction of which on appeal should turn upon the identification of error within the kinds most famously described in House v The King.
75. The applicant relied on Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; (2018) 264 CLR 541 in which the High Court held that a decision as to whether an administrative decision was legally unreasonable was not a discretionary decision and the principles in House v The King do not apply (552 at [18] (Kiefel CJ); 574 575 at [85]–[87] (Nettle and Gordon JJ). But this is not a decision of that kind.
76. The Full Bench approached its task in accordance with the principles expounded in Coal and Allied, 204 205 at [18]–[22] (Gleeson CJ, Gaudron and Hayne JJ). That case was concerned with a decision by the Australian Industrial Relations Commission (AIRC) to terminate a bargaining period for a proposed agreement under s 170MW of the Workplace Relations Act 1996 (Cth) (WR Act), the predecessor of the FW Act. As their Honours explained at [2], the AIRC had a discretion to suspend or terminate a bargaining period if and only if it was satisfied as to one of a number of circumstances. One of those circumstances, contained in s 170MW(3), was that:
industrial action that is being taken to support or advance claims in respect of [a] proposed agreement is threatening:
(a) to endanger the life, the personal safety or health, or the welfare, of the population or of part of it; or
(b) to cause significant damage to the Australian economy or an important part of it.
77. At [19]–[21], their Honours explained the concept of “a discretionary decision”:
“Discretion” is a notion that “signifies a number of different legal concepts”. In general terms, it refers to a decision-making process in which “no one [consideration] and no combination of [considerations] is necessarily determinative of the result”. Rather, the decision-maker is allowed some latitude as to the choice of the decision to be made. The latitude may be considerable as, for example, where the relevant considerations are confined only by the subject matter and object of the legislation which confers the discretion. On the other hand, it may be quite narrow where, for example, the decision-maker is required to make a particular decision if he or she forms a particular opinion or value judgment.

In the present case, the decision by Boulton J to terminate the bargaining period involved, in effect, two discretionary decisions. The first was as to his satisfaction or otherwise that the industrial action being pursued posed a threat for the purposes of s 170MW(3) of the Act. Although that question had to be determined by reference to the facts and circumstances attending the industrial action taken in support of claims with respect to a certified agreement, the threat as to which his Honour had to be satisfied was one that involved a degree of subjectivity. In a broad sense, therefore, that decision can be described as a discretionary decision. And if Boulton J was satisfied that there was a threat for the purposes of s 170MW(3), that necessitated the making of a further discretionary decision as to whether the bargaining period should be terminated.

Because a decision-maker charged with the making of a discretionary decision has some latitude as to the decision to be made, the correctness of the decision can only be challenged by showing error in the decision-making process. And unless the relevant statute directs otherwise, it is only if there is error in that process that a discretionary decision can be set aside by an appellate tribunal. The errors that might be made in the decision-making process were identified, in relation to judicial discretions, in House v The King in these terms:
“If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so.”
(Emphasis added.)
78. The question whether it would have been reasonable in all of the circumstances for the employee respondents to be redeployed in the applicant’s enterprise was a discretionary question in this sense. That is because “no one [consideration] and no combination of [considerations] is necessarily determinative of the result” and “the decision-maker is allowed some latitude as to the choice of the decision to be made”. Like the decision made by Boulton J in Coal and Allied about the threats posed by the union’s industrial action, the decision made by Commissioner Riordan involved “a measure of subjectivity or value judgment” and would only involve appealable error if an error of the kind described in House v The King had been made (see Coal and Allied, 208 at [28] per Gleeson CJ, Gaudron and Hayne JJ). Contrary to the applicant’s submission, there is no uniquely correct answer to that question.
79. Section 604 of the FW Act was modelled on the appeal provisions in the WR Act (and its predecessors). It is apparent from the Explanatory Memorandum to the Fair Work Bill 2008 at [2320] that there was no intention to introduce a new test for appellate review of decisions of this kind:
This provision … is intended to maintain the existing jurisprudence in relation to AIRC appeals, in particular the decision of the High Court in Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194.
80. The formation under s 385(d) of the FW Act of a state of satisfaction that a particular dismissal was or was not a “case of genuine redundancy” involves an evaluative determination that rests upon value judgments or opinions that are untethered from fixed standards: Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490, 502 (Gibbs CJ, with whom Stephen and Mason JJ agreed). The “correct approach” to the review of such a decision on appeal is that “…the principles that govern appellate review of discretionary decisions should apply”: Singer v Berghouse (1994) 181 CLR 201, 212 (Mason CJ, Deane and McHugh JJ).
81. It was in deference to the broad evaluative process which Commissioner Riordan was required to undertake that the Full Bench considered that his decision was “of a discretionary nature”. The Commissioner was not satisfied, for the purposes of s 385(d) of the FW Act (as engaged by s 396(d)), that the dismissals with which he was seized were “case[s] of genuine redundancy”. He formed that view based upon his assessment of what “would have been reasonable in all [of] the circumstances”. It cannot be doubted that that was an assessment in respect of which there was considerable scope for differing views; but so to acknowledge is to underline, contrary to the applicant’s submission, that the Commissioner’s decision concerned a question that did not have a definitively right answer.
82. Whether the Full Bench was correct to describe the Commissioner’s decision as being “of a discretionary nature” doesn’t much matter. Though consistent with the High Court observations replicated above, that nomenclature may or may not be apt. What is more important, however, is that the Full Bench recognised that it should only interfere with the decision insofar as it discerned error in a House v The King sense. It was right to do so.
83. It follows that the third ground of review must fail.
GROUND 4: MATERIALITY
84. The applicant’s fourth ground of review focuses upon the observations of the Full Bench extracted at [34] [35] above. It is to be recalled that the Full Bench took issue with two discrete findings made by Commissioner Riordan. It concluded that the Commissioner had—or, perhaps, might have—erred by forming his view as to the reasonableness of redeployment without properly taking account of the considerations identified. It went on to conclude, however, that such error as there was (or may have been) was not (or would not be) sufficient to warrant appellate interference with the Commissioner’s decision.
85. The applicant submits that, having identified error as it did, the Full Bench was obliged to address it “…by applying the correct test of materiality”; and that its failure to do so amounts to a failure to discharge its appellate function, which is an error going to jurisdiction.
86. We reject the submission.
87. As has been noted twice already, the applicant’s appeal from Commissioner Riordan’s (second) decision was an appeal by way of rehearing. Amongst other things, the Full Bench was empowered to confirm, quash or vary the Commissioner’s decision: FW Act, s 607(3)(a). Whether or not (and the extent to which) it might do so was dependent upon it first identifying that the decision was a product of error: Coal and Allied, 209 at [32] (Gleeson CJ, Gaudron and Hayne JJ).
88. The applicant’s reliance upon “the correct test of materiality” is misplaced. It is not to the point that, had he taken account of the matters to which the Full Bench pointed, Commissioner Riordan might conceivably have made a different decision. The powers of the Full Bench on appeal were conditioned by the presence of error, not “material” error. What fell for consideration by the Full Bench, having identified what it considered were minor, discrete errors in the Commissioner’s reasoning, was whether it should interfere with his ultimate conclusion. That is precisely the question to which the Full Bench directed itself (see above at [35]).
89. Having concerned itself with the right question, the Full Bench was not obliged to exercise its powers under s 607(3) of the FW Act in any particular way. Even upon concluding that the Commissioner’s decision was tainted by discrete errors, it was open to the Full Bench to affirm it on the footing that, despite those errors, a different result was not warranted. Again, that is what occurred here and proceeding in that way involved no misunderstanding by the Full Bench of its appellate jurisdiction. The fourth ground of review must fail.
90. None of that is to deny that the passage at [75] of the reasons of the Full Bench is open to criticism. An appellate body that discerns error in the exercise of a discretion would say so; and then, if able, would generally proceed to re exercise the discretion afresh. Such a re exercise might well result in affirmation of the decision under appeal.
91. If that is what the Full Bench should be understood to have done, it could have made that clearer. Regardless, the reasoning of the Full Bench at [75] does not reveal jurisdictional error. In other words, if there was an error in this regard it was an error within jurisdiction.
CONCLUSIONS
92. The Full Bench Decision was not a product of jurisdictional error in any of the forms that the applicant propounds. Accordingly, the originating application must be dismissed. The respondents accept that s 570 of the FW Act precludes the Court from making an order for costs.”

 

Helensburgh Coal Pty Ltd v Bartley [2024] FCAFC 45 (5 April 2024)