Unfair dismissal, redundancy and consultation

For an employer to be able to rely in an unfair dismissal case upon the jurisdictional defence that the termination of employment of an employee arose as a “genuine redundancy” a number of factors need to be established including that the employer complied with the consultation requirements of any applicable award or enterprise agreement. This is often an onerous requirement, thus;.

“Did the Respondent comply with any consultation obligations – s 389(1)(b)?

[81] Whether the Respondent was required to comply with particular consultation obligations turns on whether the Applicant was covered in his employment by a modern award or an enterprise agreement and whether such applicable modern award and/or enterprise agreement contains consultation provisions. It is not in dispute that the Applicant was covered by an enterprise agreement (the Agreement) which includes a clause dealing with consultation obligations at ‘Clause 9 – Consultation Regarding Major Workplace’ of the Agreement which is set out above at [58].

[82] The Applicant submits that the Respondent failed to comply with the consultation obligations under the Agreement, which he says must lead to a conclusion that his dismissal was not a genuine redundancy by reason of the requirements of s 389(1)(b) not being met. He relies on the following points in support of that contention. Firstly, there was a lack of genuine consultation as the decision to remove the AHM role was already made and irreversible at the point of the first meeting with him on 9 September 2022. Secondly, the relevant union (VAHPA) were not notified of the ‘major change’ as required by clause 9.1.1 of the Agreement. Finally, he was not offered redeployment where it would have been reasonable to do so in circumstances where he had the skills and qualifications to perform the Grade 3 roles that were being created.

[83] Before turning to whether the Respondent complied with the relevant consultation obligations it is necessary for me to make factual findings as to what steps the Respondent did take to consult with the Applicant and the relevant union. I am satisfied that the followings steps were taken;

  • The Respondent issued directions to a number of its hospitals during August 2022 following which Ms Hopkins and Ms Byers-Tymms reviewed the Holmesglen Hospital structure to determine the best means of achieving the required FTE reductions, that plan being finalised and approved in the second half of August 2022;
  • the Applicant was notified in a meeting on 9 September 2022 with Ms Byers-Tymms and Ms Hopkins of the definite decision made by the Respondent to restructure the Allied Health Department and remove the AHM role;
  • the Applicant was provided with details of the restructure in writing by way of a Change Impact Statement and other documents following the 9 September 2022 meeting;
  • the relevant union (VAHPA) was notified by email by the Respondent’s General Manager Workplace Relations, Mark Nelson, on 6 September 2022 of the Respondent’s definite decision to make major changes to its organisational structure at various hospitals, the details of which were included in four Change Impact Statements attached to the email, although those supplied Change Impact Statements did not include the Holmesglen Hospital changes;
  • Mr Nelson offered to meet with and subsequently met with VAHPA officials on 8 September 2022 to discuss the changes, although the substance of what was discussed in that meeting was not in evidence before me as Mr Nelson was not called to give evidence;
  • meetings were also held with the Applicant on 14 and 26 September 2022 during which various matters were discussed, and relevantly included a discussion on the potential for redeployment, although no specific roles were identified or offered to the Applicant; and
  • the Applicant was sent a link to the Respondent’s internal vacant positions database on 16 September 2022 and was invited to interrogate and advise of any roles he was interested in applying for.

[84] Returning to Clause 9 of the Agreement I will now turn to the various obligations and whether they have been complied with by the Respondent.

[85] Clause 9.1.1 requires the Respondent to advise affected employees following a definite decision having been made to introduce major change that is likely to have significant effects, which relevantly includes termination of employment (clause 9.1.1). It is not contested that the Respondent had made a definite decision to restructure the Allied Health Department and remove the AHM role, that meeting the definition of ‘major change.’ As I have found above, the Applicant who was affected by the definite decision and was notified of the ‘major change’ on 9 September 2022.

[86] The Applicant submits that the consultation was not genuine as the decision had already been taken to make his position redundant by the time he was notified on 9 September 2022 and that such decision was irreversible, as confirmed by the evidence of both Ms Byers-Tymms and Ms Hopkins. The Applicant’s submission on this point must be rejected. The fact that a ‘definite decision’ had been made by the Respondent to remove the AHM role following which it notified the Applicant is entirely consistent with its obligations. The Applicant may feel aggrieved that he was not engaged by the Respondent and consulted over other means to achieve the necessary FTE reductions in the Allied Health Department prior to a decision being made. The decision however of the Respondent not to engage with the Applicant in the circumstances was clearly within the remit of the Respondent and it was under no obligation to ‘negotiate’ with the Applicant over the removal of the AHM role. I am satisfied the Respondent has complied with the employee notification requirement pursuant to clause 9.1.1.

[87] Clause 9.2.1 requires that the Respondent must discuss with the Employees affected and the Union, the introduction of the change, the effects those changes are likely to have on the employees and measures to avert or mitigate the adverse effects of the changes. The Applicant was the only affected employee in the Allied Health Department and the changes were discussed with him initially in the 9 September 2022 meeting and then in further meetings on 14 & 26 September 2022. He also received a Change Impact Statement on 9 September 2022. The potential for redeployment was discussed in the 14 September 2022 meeting with the Applicant responding in that discussion by seeking to obtain a casual Grade 3 role following his redundancy.

[88] Following the 14 September 2022 meeting, a link to the Respondent’s vacant jobs list was then provided to the Applicant. A number of other matters were also discussed in the three meetings held with the Applicant and/or subject to various email communication in the period. Issues included the provision of a requested reference, the timing and content of the announcement of his redundancy, the calculation of the Applicant’s redundancy payment, outstanding overtime and allowance entitlement claims, issues the Applicant was anxious to resolve prior to his departure from the organisation. I am satisfied based on the steps taken by the Respondent that it discussed the change, the likely effects on the Applicant and measures to mitigate the adverse effects of the change.

[89] I am not however satisfied that the Respondent has complied with its obligation to discuss the changes with the Union. While I accept that Mr Nelson wrote to VAHPA on 6 September 2022 advising that it had made a definite decision to introduce major changes across its hospitals, it did not include any Change Impact Statement for the Holmesglen Hospital. I further accept that Mr Nelson met with VAHPA officials on 8 September 2022 although there is no evidence as to what was discussed in that meeting. In the absence of evidence from Mr Nelson as to what was discussed in the 8 September 2022 meeting, I am not satisfied that the Holmesglen restructure, including changes to the Allied Health Department, were discussed with VAHPA as required by clause 9.2.1. My view on this is fortified by the lack of inclusion of a Change Impact Statement for Holmesglen Hospital changes in the attachments to Mr Nelson’s 6 September 2022 email to VAHPA officials. For the sake of completion on this point I do not accept that restructuring information provided by the Respondent to VAHPA by way of Change Impact Statements for other hospitals meets the requirement to discuss the changes as they impacted the Holmesglen Hospital.

[90] It follows from the foregoing that while I am satisfied that the Respondent discussed the change with the Applicant it did not do so with the Union, meaning that it has failed to comply with clause 9.2.1 of the Agreement.

[91] Turning now to clause 9.2.2, discussions referred to above in respect of clause 9.2.1 (with affected employees and the Union) are required to commence as early as practicable after a definite decision has been made by the Respondent. Insofar as discussions occurred with the Applicant, I am satisfied they occurred as early as practicable given the decision to proceed with the restructure of the Allied Health Department as proposed by Ms Hopkins and Ms Byers-Tymms was approved in the second half of August 2022.

[92] Clause 9.2.3 requires that for the purpose of discussions with affected employees, the Respondent is required to provide in writing to affected employees and their representative all relevant information about the changes, the nature of the changes, expected effects and any other matters likely to affect the employees. The obligation to provide the information to ‘representatives’ in writing only arises in circumstances where an employee has a representative. In the present case the Applicant gave evidence that he was not a union member and that VAHPA declined to represent him, a point I will return to later in this decision. Nor did the Applicant seek any other representation. In these circumstances the Respondent was only required to provide the information in writing to the Applicant, which they did on 9 September 2022 by way of a letter from Ms Hopkins, a Change Impact Statement and information on career transition support services. I am comfortably satisfied the Respondent complied with Clause 9.2.3 of the Agreement.

[93] Clause 9.2.4 requires that where surplus positions are identified, opportunities for redeployment will be investigated and offered. For the purpose of establishing whether the Respondent complied with its consultation obligations under clause 9 of the Agreement it is not necessary for me to determine whether it would have been reasonable in the circumstances to redeploy the Applicant, as that is a further matter to be considered pursuant to s 389(2) of the Act which I will shortly turn to. Rather, it is necessary for me to establish if surplus positions were identified and whether the Respondent investigated and offered such position/s to the Applicant.

[94] It is not disputed that at the time of the Applicant’s dismissal there were no comparable roles available in Victoria to that of the AHM role held by the Applicant at Holmesglen Hospital. This was confirmed when the Applicant was sent a link to vacant positions on 16 September 2022, which on the Applicant’s evidence, contained no vacant Allied Health positions in Victoria. While this is unsurprising in circumstances where the Respondent was in the midst of an organisational restructure there were in fact however two vacant positions at the time of the Applicant’s redundancy, those being the two Grade 3 roles in the Allied Health Department at Holmesglen Hospital.

[95] The Respondent had commenced a process to fill those two Grade 3 positions in July 2022, had conducted interviews on 16 August 2022 and had identified two preferred candidates, Mr Whitfield who was an internal candidate for the sub-acute Grade 3 role and Mr Moria who was an external candidate for the acute Grade 3 role. Formal offers to the two candidates were not however made until early October 2022. As the process for filling the two Grade 3 roles had not been completed those two roles were ‘surplus’, which the Applicant was aware of at the time of the 14 September 2022 meeting. No steps were taken by the Respondent to identify those positions as surplus for the purpose of discussions with the Applicant, nor investigate whether there was an opportunity to redeploy the Applicant into one of those roles or offer one of the roles to the Applicant. That is said to be because the Applicant stated that he would not consider a ‘lesser role’ during the meeting on 14 September 2022, a statement the Applicant claims was taken out of context.

[96] While the Respondent submits there were no suitable alternate roles I do not accept that submission even though there were no comparable AHM roles available at the time. The Respondent concedes the Grade 3 roles were not filled until early October 2022 and therefore remained open. I note that while the Grade 3 roles were at a lower classification level than the AHM role, the actual difference in weekly rate of pay for the Applicant based on his experience was approximately $53.00.

[97] Significantly, at or about the same time as the Applicant was notified of his redundancy, the Respondent halted the near complete recruitment for a vacant OT role in the Allied Health Department at the Holmesglen Hospital as a consequence of the required restructure. This indicates that while the Respondent had identified the two preferred candidates for the Grade 3 roles, the Applicant could have been considered for one of those ‘surplus’ roles and been offered a Grade 3 role as an alternative to the Respondent proceeding with an external recruitment. That did not occur for the previously stated reason that the Applicant is said by the Respondent to have stated he had no interest in a lesser role.

[98] Having regard to the above and notwithstanding the Respondent’s witness evidence that the Applicant was not interested in a ‘lesser role’ to that of the AHM role which I will deal further with below, I am not satisfied that the Respondent took steps to comply with the requirements of clause 9.2.4 of the Agreement.

[99] Turning to clause 9.2.5, the Applicant contends that his redundancy payment was not calculated on the correct basis in that he claims it ought to have been calculated on his average earnings rather than his base rate of pay, a claim refuted by the Respondent. The Applicant also complains that the final calculation quote for his redundancy payment was delayed until 6 October 2022, several days after his termination of employment took effect. The latter complaint is conceded by the Respondent with the reason for the delay attributed to delays in head office processing. In any case there is no dispute that the Applicant received a redundancy payment of 4 weeks pay and pay in lieu of notice of 4 weeks, those entitlements being consistent with the requirements of clause 9.2.5. While clause 9.2.5 of the Agreement does not appear to be a ‘consultation’ step, I am nonetheless satisfied the Respondent has complied with the requirements of clause 9.2.5 of the Agreement

[100] For the sake of completion, I make no finding, and nor am I required to, on whether the calculation of the Applicant’s redundancy payment was on the correct base as it is irrelevant to the matter before me. The claimed underpayment may be pursued by the Applicant in a court of competent jurisdiction if necessary.

[101] For the reasons set out above, I am not satisfied that the Respondent has complied with its consultation obligations set out in clause 9 of the Agreement. Specifically, it failed to discuss the ‘major change’ of the restructure of the Allied Health Department at Holmesglen Hospital with VAHPA as required by clause 9.2.1 of the Agreement. The Respondent also failed to investigate and offer the surplus positions of the vacant Grade 3 roles to the Applicant as required by clause 9.2.4 of the Agreement.”

Zhang v Healthscope Operations Pty Ltd (2023) FWC 195 delivered 24 January 2023 per Masson DP