This unfair dismissal case from the Fair Work Commission is a very good example of how an employer may satisfy the genuine redundancy jurisdictional defence to an unfair dismissal claim by amongst other things satisfying one of the requirements namely whether the employer complied with the consultation requirements of an applicable modern award or enterprise agreement.
“Introduction
[1] Ms Taleece Ajarne Paki (Applicant) has filed a Form F2 with the Fair Work
Commission (Commission), being an application for an unfair dismissal remedy
(Application). By way of that Application, the Applicant asserts that her dismissal by the
Howley Group Pty Ltd (Respondent) was “unfair” within the meaning of Part 3-2 of the Fair
Work Act 2009 (Act).
[2] The Respondent says that the Applicant’s dismissal was a case of “genuine redundancy”
within the meaning of s.389 of the Act, and otherwise denies that the dismissal was unfair.
[3] Following the receipt of submissions and evidence in accordance with directions made,
I held a hearing to resolve the Respondent’s genuine redundancy objection.
[4] At the hearing, the Applicant was represented by her father, Mr Reihana Paki. Mr Ferris
Howley, Director of the Respondent, appeared for the Respondent.
[5] Having regard to the evidence tendered, and the submissions of the parties, I have
determined that the Applicant’s dismissal was a case of “genuine redundancy” within the
meaning of s.389 of the Act. My reasons for this decision follow.
[2023] FWC 466
DECISION
[2023] FWC 466
2
Relevant law
[6] Section 385 of the Act qualifies a claim for unfair dismissal:
“385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal
Code; and
(d) the dismissal was not a case of genuine redundancy.
Note: For the definition of consistent with the Small Business Fair Dismissal Code:
see section 388.”
[7] Before the Commission can consider issues of harshness, etc, s.396(d) of the Act
requires that the Commission decide whether the dismissal was a case of genuine redundancy:
“396 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.”
[8] Section 389 provides the statutory definition as to what qualifies as a genuine
redundancy:
“389 Meaning of genuine redundancy
(1) A person’s dismissal was a case of genuine redundancy if:
[2023] FWC 466
3
(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”.
[9] In view of s.389 of the Act, there are three questions that need to be answered:
(a) Was the Applicant’s job no longer required to be performed by anyone because
of changes in the operational requirements of the Respondent’s enterprise?
(b) Did the Respondent comply with any obligation in a modern award or enterprise
agreement that applied to the employment to consult about the redundancy?
(c) Would it have been reasonable in all the circumstances for the Applicant to have
been redeployed within the Respondent’s enterprise, or an associated entity of the
Respondent?
Was the Applicant’s job no longer required to be performed by anyone because of changes
in the operational requirements of the Respondent’s enterprise? (s.389(1)(a))
[10] Sub-section 389(1)(a) of the Act provides that a person’s dismissal is a case of genuine
redundancy if the person’s employer no longer requires the person’s job to be performed by
anyone because of changes in the operational requirements of the employer’s enterprise. These
words have long been used and applied in industrial tribunals and courts as a practical definition
of redundancy.1
[11] The Explanatory Memorandum to the Fair Work Bill 2008 provides examples as to
when a dismissal will be a case of genuine redundancy:
“1547. Paragraph 389(1)(a) provides that a person’s dismissal will be a case of genuine
redundancy if his or her job was no longer required to be performed by anyone because
of changes in the operational requirements of the employer’s enterprise. Enterprise is
defined in clause 12 to mean a business, activity, project or undertaking.
- The following are possible examples of a change in the operational requirements
of an enterprise:
[2023] FWC 466
4
- 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 or duty 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”.
[12] The basis upon which “operational requirements” can be said to give rise to change is
extremely broad. A change in operational requirements does not only arise where a business
has excess labour, is running over budget, unprofitable, losing customers, or down on revenue/s.
As Lee J stated in Nettlefold v Kym Smoker Pty Ltd2
(Nettlefold), the phrase “operational
requirements” encompasses change arising from both internal and external factors, including
via the consideration of matters (over the short, medium and/or longer terms) such as “the past
and present performance of the [business], the state of the market in which [the business]
operates, steps that may be taken to improve the efficiency of the [business] by installing new
processes, equipment or skills, or by arranging for labour to be used more productively, and the
application of good management to the undertaking”.3
Indeed, changes to operational
requirements might arise because an efficient and/or profitable business proposes or desires to
become even more efficient and/or profitable.
[13] It equally follows that modifications to a business that might be said to be required or
necessary, because of changes to operational requirements, are extremely varied and broad. In
other words, the nature and extent of any modifications to a business flowing from changes in
its operational requirements are essentially matters of managerial discretion. Such discretion
might be exercised to make changes that are, in the opinion of the relevant decision-maker,
required or necessary. The fact that others, for example, an employee, customer, shareholder,
or stakeholder affected by a decision, or an unaffected member of the public, might consider a
particular decision to be bad, or wrong, or consider that another alternative and better (or more
appropriate) decision ought to have been made, is not to the point. Persons in managerial roles
(in the for-profit, or not-for-profit, sectors) are tasked with the responsibility to make decisions
in respect of how a business is run to achieve stability and/or growth over the short, medium
and/or longer terms. It is certainly not the role of the Commission to stymie or interfere with
operational decisions made on a bona fide basis within the extremely broad bounds of
managerial discretion. As was stated by Vice President Hatcher in Low v Menzies Group of
Companies4
:
“It is not the function of the Commission, in determining whether a dismissal is a case of
genuine redundancy, to form a view about the merits of the decision to make a position
redundant. Whether it was objectively fair or justifiable to decide to abolish a position
is beside the point, as long as the employer acted as it did because of changes in its
operational requirements.”5
[2023] FWC 466
5
[14] It has been held that a job involves “a collection of functions, duties and responsibilities
entrusted, as part of the scheme of the employer’s organisation, to a particular employee”.
Relevantly, the test is not whether the person’s duties or responsibilities (or some of them)
survive or remain. Rather, the test is whether the whole of the job previously performed by an
employee (unmodified) still exists.6 Focus is to be placed upon the job, not the duties involved
in that job, or the individual performing that job (or a new/modified job). Importantly, as
broadly stated in Dibb v Commissioner of Taxation7
, an employee may still be genuinely made
redundant when there are aspects of the employee’s duties still being performed by another
employee, or other employees.8
[15] The Respondent operates Pandora jewellery retail stores.
[16] The Applicant was employed by the Respondent (commencing 22 March 2022) in the
‘new’ full time (Tuesday to Saturday) role of Sales Training Officer (STO role) pursuant to an
employment contract between the parties dated 8 March 2022 (Employment Contract). There
was no challenge to the validity of the Employment Contract or any of its express terms by any
party to these proceedings. Importantly, the Employment Contract applies to the Applicant’s
employment with the Respondent irrespective of any change to her location, duties, position or
reporting lines.9
[17] Under the Employment Contract, the location of the STO role is “field based”, provided
that the Applicant may be directed to perform duties at other locations after consultation.10
Travel is an inherent requirement of the STO role.11
[18] The duties of the STO role encompass organising staff inductions, meeting with new
hires, transitioning new employees into sales roles, and working with Sales Managers instore
to facilitate requisite sales training.
12
Under the Employment Contract, the Applicant’s duties
may be amended by the Respondent from time to time.13
[19] The Applicant was the only employee employed by the Respondent in a STO role.
[20] The Applicant submits (in summary) that despite her dismissal for reasons of
redundancy (by way of letter of termination dated 30 November 2022), her role was still
required to be done in that sales training across all stores for new and existing sales employees
still needed to occur.14
[21] The Respondent does not dispute that sales training across its stores still needs to be
done, however, says that it no longer required such sales training to be performed by a
standalone role. In other words, such sales training can be facilitated or undertaken by instore
management or other instore sales staff, saving the overall business the costs associated with
the STO role. The Respondent’s evidence discloses that whilst in the first half of 2022 the
Respondent undertook a mass recruitment drive to fill gaps that arose from positions vacated
during the COVID-19 pandemic and related lockdowns, the last quarter of 2022 saw a reduction
in sales and customer numbers, driven by rising interest rates, price hikes and inflation, causing
the Respondent to determine that it would not require new or additional staff (beyond ordinary
labour turnover) to be employed into the foreseeable future.
[2023] FWC 466
6
[22] In response, the Applicant submits that the Respondent would clearly require the STO
role to continue in that there would be a “massive intake of new casual staff members” during
the Christmas (December 2022) and Mother’s Day (May 2023) periods.15
[23] In my view, it is beyond argument that the Respondent’s determination, that it no longer
required a standalone STO role in its business, was based upon a genuine change in its
operational requirements (in the Nettlefold sense).
16
Again, the fact that the Applicant might
consider the Respondent’s decision to abolish the STO role to be bad, or wrong, or consider
that another alternative and better (or more appropriate) decision ought to have been made
(because training is still required), is not to the point. It is the Respondent’s business, and the
Respondent is thus the one to decide what operational changes it wishes to make.
[24] All in all, I find that the evidence discloses that the Respondent had genuine operational
reasons to make changes to its business, and that such changes (as determined on a bona fide
basis by the Respondent) resulted in the Applicant’s job in the STO role no longer being
required to be performed by anyone. I thus find that the Respondent satisfies s.389(1)(a) of the
Act.
Did the Respondent comply with any obligation in a modern award or enterprise
agreement that applied to the employment to consult about the redundancy? (s.389(1)(b))
[25] The Applicant made extensive and detailed submissions asserting a failure by the
Respondent to consult with her (or consult with her appropriately) in respect of its decision to
make the STO role redundant.17
[26] The statutory requirement under s.389(1)(b) requires a finding of fact, whereby the
section “is not made out unless the various requirements of the relevant consultation clause are
demonstrably discharged by the employer”.18
[27] The parties accept that the Applicant was covered by the Clerks – Private Sector Award
2010 (Award).
[28] Clause 38 of the Award relevantly requires consultation after an employer “makes a
definite decision to make major changes in production, program, organisation, structure or
technology that are likely to have significant effects on employees”. The phrase “significant
effects” is relevantly defined to include “termination of employment”.
[29] The consultation requirements under clause 38 of the Award are conditional upon the
relevant change being a “major” one that is likely to have “significant effects on employees”.
Determination of whether a change falls within this definition appears to be one of fact and
degree. As White J said in Port Kembla Coal Terminal Ltd v CFMMEU19:
“I do not regard a simple comparison between the number of employees to be terminated,
and the number of the employees in its workforce overall … as being necessarily
conclusive of the question of whether a change is “major”. Much may depend on the
[2023] FWC 466
7
circumstances of a given case including, for example, the seniority and importance of
the employees…, the extent to which… employees work in an integrated or
disconnected manner; the consequences for the continuing employees of the
redundancies and consequent terminations, as well as other matters”.20
[30] It has been said that reference to the plural “employees” rather than “employee” in
similarly worded clauses 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.21
[31] In this case, there was only one redundancy, i.e. the Applicant’s STO role.
[32] Mr Paki (relevantly) made the following oral submissions at the hearing as to whether
the redundancy of the Applicant was a major change having significant effects upon employees:
“We can only say that Taleece’s role was a fundamental connection between head office
and the stores to support staff with new product information, sales statistics and training
in this role and any operational changes that would necessitate making this role
redundant required systems, tools and other individuals to take parts of the role in order
to replace Taleece. This, logically, either requires, (a), a period of lead time to
implement these operational changes that limits risk and increases the probability of
success or, (b), no change in the process at all and let the chaos work itself out.”22
…
“Second, case law points to a single redundancy as insufficient to trigger consultation, so,
Deputy President, thank you for pointing that out. This cannot be considered the sole
indicator of major workplace change. In Khoury v Vaughan, it’s clear the applicant did
not work in an area critical to the business. In contrast, Taleece’s role was exclusively
connected to supporting retail staff in stores, clearly the most important people in any
retail business.
This was not only a major workplace change that ended Taleece’s employment; there
was also a change in the way training and sales support was provided in stores on an
ongoing basis. This may have only been one redundancy, but the operational changes
will have implications for every employee of the business, whether the respondent
chooses to acknowledge them or not, for example, how and when new product training
would be completed by sales staff, and not, incidentally, on whose time that training is
likely to be conducted, the compilation and sharing of store and sales statistics and what
that means for ongoing training and support of people in-store, the coordinating of larger
groups of people about the additional requirements they will have to take on once
Taleece had been or would be dismissed and, finally, training and support of staff on
new computer systems that would replace elements of Taleece’s role.
Just because it is only one redundancy does not indicate in this case the ongoing impact
those changes will have. It’s only reasonable to expect that this sort of change should
[2023] FWC 466
8
have required consultation, communication and ongoing management across the
business in stores, in head office and also with Taleece directly. Only, in this case, it
was withheld from her.”23
[33] Mr Paki’s submissions, whilst no doubt well-articulated, are unsupported by relevant
evidence as to the specific impacts upon other staff in the business of the removal of the STO
role. The Applicant chose not to cross-examine Mr Howley on this topic.
[34] The Applicant’s role was a new role in the Respondent’s business, and at the time of the
Applicant’s dismissal, had only been in existence in the business for around seven months.
There is no suggestion that the Respondent’s business was unable to cope, in terms of the
provision of training to its staff, prior to the commencement of the STO role. Nor is there any
evidence that the arrangements put in place (or to be put in place) post the removal of the STO
role from the business, would impact upon staff (i.e. beyond the instore management tasked
with facilitating or undertaking such training).
[35] In my view, on the evidence, and even by way of strained inference, the effect of the
STO role being made redundant (and removed from the business) is, in all the circumstances of
this case, not a major change, i.e. other staff may have to pick up sales training functions, but
this can hardly be said to be a seismic shift in their day-to-day priorities, functions, duties or
responsibilities. Further, there is no evidence before me that the reallocation, or the picking up,
of sales training functions by other relevant employees in the Respondent’s business is likely
to have any, or any significant impact, upon such other employees collectively. In other words,
even if the redundancy of the STO role is not a minor change, it is equally not a major change.
[36] I do not accept, on the evidence before me, in the circumstances of this case, that
s.389(1)(b) of the Act is enlivened for consideration in these proceedings. In this regard, I find
that, on the terms of clause 38 of the Award, by reference to the case law set out in this decision:
- a) the redundancy of the STO role in the Respondent’s business:
- was not a “major change”;
- did not have “significant effects” upon the Respondent’s remaining
employees on a collective basis; and
- b) the Respondent has satisfied its Award obligations as to consultation concerning the
Applicant’s redundancy in that no Award consultations obligations arise for
determination in these proceedings.
[37] In her evidence and submissions, the Applicant has sought to intermingle (or mix
together) issues going to s.389(1)(b) of the Act, with issues under s.389(2) of the Act.24 I have
previously pointed out the difficulty with such an approach:
“… an inadequate consultation process does not automatically lead to a finding or
conclusion that s.389(2) of the Act cannot be satisfied. Sections 389(1)(b) and 389(2)
[2023] FWC 466
9
are separate and individual limbs. Different issues arise in respect of relevant findings
to be made as to compliance or non-compliance with each limb. Whilst non-compliance
with one limb gives rise to a redundancy not being genuine under s.389 of the Act, it
will not always (or even usually) be the case that a failure to consult will mean that
redeployment would have been reasonable. Indeed, in many cases, no matter how much
consultation could or should have occurred, there was never a reasonable basis for
redeployment.”25
Would it have been reasonable in all the circumstances for the Applicant to have been
redeployed within the Respondent’s enterprise? (s.389(2))
[38] Sub-section 389(2) of the Act provides that a person’s dismissal cannot be a case of
genuine redundancy if it would have been reasonable in all of the circumstances for the person
to have been redeployed within the employer’s enterprise, or an associated entity of the
employer. The Respondent in this matter does not have any associated entities.
[39] The highest binding interpretation of s.389(2) remains that stated in Ulan Coal Mines
Limited v A. Honeysett & Ors26 (Honeysett):
“[26] [Subsection 389(2)] must be seen in its full context. It only applies when there has
been a dismissal. An employee seeking a remedy for unfair dismissal cannot succeed if
the dismissal was a genuine redundancy. In other words, if the dismissal is a case of
genuine redundancy the employer has a complete defence to the application. Section
389(2) places a limitation on the employer’s capacity to mount such a defence. The
defence is not available if it would have been reasonable to redeploy the employee. The
exclusion poses a hypothetical question which must be answered by reference to all of
the relevant circumstances.
…
[28] … [T]he question posed by s.389(2), whether redeployment would have been
reasonable, is to be applied at the time of the dismissal. If an employee dismissed for
redundancy obtains employment within an associated entity of the employer sometime
after the termination, that fact may be relevant in deciding whether redeployment would
have been reasonable. But it is not determinative. The question remains whether
redeployment within the employer’s enterprise or the enterprise of an associated entity
would have been reasonable at the time of dismissal. In answering that question a
number of matters are capable of being relevant. They include the nature of any
available position, the qualifications required to perform the job, the employee’s skills,
qualifications and experience, the location of the job in relation to the employee’s
residence and the remuneration which is offered”.
(emphasis added)
[40] It can been seen from the foregoing extract from Honeysett, that the reasonableness of
redeployment for the purposes of s 389(2) of the Act is to be assessed as at the time of the
[2023] FWC 466
10
relevant dismissal.27
Further, in assessing the reasonableness of redeployment, it is necessary
to identify the position or other work to which the employee could have been redeployed,28 and
determine whether that position or other work is, for want of a better term ‘the right fit’ (or
reasonable) for both the employer and the employee. Relevantly, s.389(2) of the Act does not:
- a) interfere with the right or ability of an employer (such as the Respondent in this
case) to require that the selection criteria (as to skills, qualifications or experience)
for a relevant vacant position be met by an employee seeking to be redeployed;
- b) require an employer to fit a square peg into a round hole. In other words, simply
because a vacant position exists at the time of an employee’s dismissal
(redundancy), does not mean that an employer is required to bend, twist, ignore,
delete, water down or otherwise amend selection criteria to so as to enable the
redeployment (of such redundant employee) to occur; or
- c) create an obligation upon an employer to redeploy an employee into a role that the
employer does not accept is suitable (i.e. because the employee does not hold the
requisite skills, qualifications and/or experience that the employer requires). Indeed,
such an obligation could hardly be said to be reasonable.
[41] The conclusion of the Full Bench in Teterin v Resource Pacific Pty Ltd t/a Ravensworth
Underground Mine29, as to the interaction between s.389(2) and s.385(d) of the Act, are also
worth drawing attention to, as follows:
“The manner in which the Deputy President expressed his conclusions may be justified
by reference to s.385(d), which requires that for a person to have been unfairly
dismissed, the Commission must be satisfied that the dismissal was not a case of genuine
redundancy. It must follow that the applicant in an unfair dismissal case bears the risk
of failure if the state of satisfaction required by s.385(d) cannot be reached. If the Deputy
President considered the evidence insufficient to allow him to determine whether
redeployment was reasonable under s.389(2), then (there being no issue with respect to
the s.389(1) matters) he could not be satisfied that the dismissals were not genuine
redundancies, meaning that the applications before him had to be dismissed.”30
[42] Similarly, in Jain v Infosys Ltd31, the Full Bench said:
“… in the context of the question whether a dismissal was an unfair dismissal in which
there is also agitated whether the dismissal was a case of genuine redundancy, to the
extent that there is a legal onus of proof or something analogous thereto, it rests with the
applicant in the sense that the applicant bears the risk of failure if the satisfaction
required by s.385 including paragraph (d) is not reached.”32
[43] The evidence before me is that:
[2023] FWC 466
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- a) at the time of the Applicant’s dismissal, the Respondent only had available (for
redeployment) sales roles (noting that Mr Howley pointed out that the only fieldbased roles in stores within the Respondent’s business are “sales” roles);33 and
- b) the Applicant was offered three different sales roles to redeploy into within the
Respondent’s business or overall enterprise, namely:
- Full time Assistant Manager, Warringah Mall store;
- Acting Sales Manager (Maternity leave relief), Merrylands store; and
iii. Casual Sales Assistant, Merrylands store.
[44] The Applicant declined the role at the Warringah Mall store because of travel time. She
declined the casual role as it was not full time, and she declined the Acting Sales Manager role
because it was a temporary maternity leave cover position. The Applicant’s overarching
position as to redeployment was that she was not interested in taking up a retail sales role (which
each of the three roles offered to her were).
34
[45] At the hearing, the Applicant was unable to identify any specific role or roles that, at the
time of her dismissal, were available (vacant) for her redeployment (i.e. beyond the three roles
that were already being offered to her by the Respondent that she had already rejected).
35 In
my view, this is fatal to the Applicant’s contention that the Respondent has failed to comply
with s.389(2) of the Act. In other words:
- a) How can the Commission assess whether or not it would have “been reasonable in
all the circumstances for [an employee] to be redeployed” into another role at an
employer’s enterprise (at the time of his/her dismissal) when the employee has not
identified exactly what the relevant role (or asserted lost opportunity) was? And
- b) How can an employer be held to a redeployment requirement or standard when the
relevant employee pressing for such a requirement or standard to be observed has
not identified the role to which such requirement or standard applies?
[46] The short answer to both of the foregoing questions is that it is not for the Commission
to speculate or infer as to redeployment options. Nor is it up to an employer to ‘shadow box’
in their evidence or submissions about such matters. A vacant position, at the time of an
employee’s redundancy, that would have been reasonable in all the circumstances (objectively
considered) for redeployment into, either exists or it does not, and its existence is a matter for
evidence. In this case there is simply no evidence, let alone a suggestion, that there was a vacant
role (beyond the three roles that were already offered to, and rejected by, the Applicant)
available (at the time of the Applicant’s dismissal) for the Applicant to be redeployed into.
[47] In view of my findings set out in paragraphs [43] to [46] of this decision, I find that the
Respondent has satisfied s.389(2) of the Act.
[2023] FWC 466
12
Summary of findings
[48] Having regard to the evidence and submissions of the parties, I have made the following
findings:
(a) As at the time that the Respondent made the decision to make the Applicant’s
STO role redundant, this job was genuinely no longer required to be performed by
anyone because of changes in the operational requirements of the Respondent’s
enterprise (s.389(1)(a) of the Act).
(b) The Respondent has satisfied its obligations as to consultation under the Award
in that no Award consultations obligations arise for determination in these proceedings
(s.389(1)(b) of the Act).
(c) There were suitable positions at the Respondent that the Applicant could have
reasonably (in all the circumstances) been redeployed into at or about the time of her
dismissal, which were offered to the Applicant, but she chose to reject such
redeployment options. The Applicant’s rejection of such suitable and reasonable
redeployment options, as offered to her by the Respondent, results in the Respondent
having complied with the requirements of s.389(2) of the Act.
Conclusion
[49] The Respondent has made good its case as to genuine redundancy. Accordingly, the
Applicant’s dismissal is not one which the Commission has the power to interfere with under
the Act. Her Application is therefore dismissed. An order to this effect will follow the
publication of this decision.”
Paki v Howley Group Pty Ltd (23023) FWC 466 delivered 24 February 2023 per Boyce DP