What is a genuine redundancy?

The following passages from a recent unfair dismissal case in the Fair Work Commission are a very good analysis of the legal principles involved in determining whether the termination of the employment of an employee occurred in circumstances which constituted a genuine redundancy and therefore a complete jurisdictional defence to an unfair dismissal claim.

“Consideration

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

s.389(1)(a) – the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise

[229] The test to be considered where there has been a reorganisation or redistribution of duties is whether the employee has any duties left to discharge.3 Where there is no longer any function or duty to be performed by an employee, his or her position becomes redundant even where aspects of that employee’s duties are still being performed by other employees.4

[230] The decision in Kekeris v A. Hartrodt Australia Pty Ltd T/A a.hartrodt5 considered this point and established that the test is whether the previous job has survived the restructure or downsizing, rather than a question as to whether the duties have survived in some form. The Full Bench in Ulan Coal Mines Limited v Howarth and others6 considered and applied the decision of Ryan J in Jones v Department of Energy and Minerals7 and said:

“[17] It is noted that the reference in the statutory expression is to a person’s “job” no longer being required to be performed. As Ryan J observed in Jones v Department of Energy and Minerals (1995) 60 IR 304 a job involves “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees’ organisation, to a particular employee” (at p. 308). His Honour in that case considered a set of circumstances where an employer might rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions. In these circumstances, it was said that:

“What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant…” (at p.308)”

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

[231] I am satisfied that the Respondent’s decision to undertake Project Brigalow was extremely well thought out, careful and considerate of all impacted employees, and considered by the Shell group of companies to be necessary.

[232] It is the employer’s prerogative to determine its appropriate staffing levels required. Following all relevant redeployment of impacted employees, it resulted in the loss of 26 employees. While it would certainly be seen to be unfortunate that 26 employees lost their jobs, it is for the Respondent to determine the most suitable staffing levels it requires to adequately and safely operate.

[233] Mr Desertiaux’s evidence and submissions that he considers that he was purposely targeted to lose his particular role and not be redeployed, and that his redundancy has been orchestrated, is a nonsense. While it appears to have come as a shock to Mr Desertiaux in November 2020 to learn of the Respondent’s decision to move forward with only one QMI Technician (Midstream), he was, it seems, perfectly comfortable with the Respondent’s decision so long as he was the one chosen to remain.

[234] When he learned that his direct peer, who had not applied for the role was selected to retain the one position that had been reduced from two, Mr Desertiaux oscillated between shock, disbelief and ultimately by his letter of 11 March 2021, endorsement of the colleague being the appropriate choice.

[235] I am satisfied there was no agenda to target Mr Desertiaux’s role of QMI Technician (Midstream) for redundancy. On the evidence before the Commission, it is an appropriate decision the Respondent has chosen to make for its own operational reasons. Where the work of more than one person is required, it occasionally calls upon another qualified colleague to assist, which amounts to on average, two days per month. This clearly demonstrates that the Respondent has not required anybody to perform the role previously performed by Mr Desertiaux. I am satisfied that the additional assistance provided by Mr Purdon is ad hoc and incidental to his other role and there is nothing preventing the Respondent from calling upon him to perform that work.

[236] It matters not that the other QMI Technician (Midstream) did not apply for the one role that would exist following the implementation of Project Brigalow. The Respondent had decided against offering voluntary redundancies. Simply not applying for a role does not entitle a second person, in this case Mr Desertiaux, to have a right to the role. The Respondent is entitled to staff its one role with the most proficient person.

[237] I am satisfied that, following the changes in the operational requirements of the Respondent’s enterprise, the Respondent no longer required Mr Desertiaux’s job to be performed by anyone else. The criterion in s.389(1)(a) of the Act is satisfied.

s.389(1)(b) – the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy

[238] I have considered the relevant consultation term within the agreement covering Mr Desertiaux’s employment.

[239] While the Respondent first communicated the matter of Project Brigalow to its affected employees in late 2020 when Mr Desertiaux was on paid personal leave, by the time he returned to work in mid-October 2020, he was aware of the project. His evidence is that he learned of it through discussing with others. That does not satisfy the Respondent’s obligations within the agreement, nor does the text exchange between Mr Desertiaux and Mr Buckingham on 24 September 2020, however I am satisfied that Mr Desertiaux knew about the project from late October 2020.

[240] He was specifically consulted about the potential impact on his role in the meeting held with him on 19 November 2020. Relevant communications sent to affected employees and included in Mr Desertiaux’s evidence before the Commission detail the lengths the Respondent went to in order to properly explain the effects of Project Brigalow on employees. I have had particular regard to the Q&A document provided to employees.

[241] Mr Desertiaux had around 3.5 months of consultation to understand the effects of the Respondent’s decision to downsize its workforce. Mr Desertiaux asked lots of questions, lodged grievances, and held meetings with influential people within the business. He knew all about Project Brigalow and what it would mean to his future with the Respondent if he could not be found a role.

[242] I am satisfied the Respondent has complied with its obligation within the agreement covering Mr Desertiaux’s employment to consult about the redundancy. The criterion in s.389(1)(b) is satisfied.

s.389(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.

[243] Whether redeployment of an employee is considered reasonable will depend on the circumstances that exist at the time of the dismissal.8

[244] In Hallam v Sodexo Remote Sites Australia Pty Ltd,9 a Full Bench of the Commission stated the following:

“…..Subsection 389(2) states that 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. Subsection 389(2) places no obligation on an employer to redeploy, or to do everything possible to achieve a redeployment outcome. The exception is applied at the time of dismissal. It operates so that a dismissal that would otherwise be a case of genuine redundancy under subsection 389(1) will not be so if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise, or with an enterprise of an associated entity of the employer.”

[245] As the Full Bench observed in TAFE NSW v Pykett,10 to show that it would have been reasonable for the Respondent to redeploy Mr Desertiaux, it is not necessary to identify a particular job or position in which Mr Desertiaux could have been redeployed. However, the Commission must be satisfied on the balance of probabilities, and based on the evidence, that there was a ‘job or a position or other work’ to which it would have been reasonable to redeploy Mr Desertiaux.

[246] By the very nature of the spill and fill effect of Project Brigalow, there are particular roles which must be analysed to determine if Mr Desertiaux could have been redeployed.

[247] While Mr Desertiaux’s evidence and submissions has tossed and turned on various aspects, and was made extremely unhelpful by his oral evidence disowning large chunks of his 11 March 2021 letter, Mr Desertiaux effectively ruled out some of the available positions as being deservingly appointed to incumbents. He finally did so with respect to the QMI Technician (Midstream) Role, Lead Maintenance Technician and also to the LNG Control Systems Technician (Midstream) Roles.

[248] I am satisfied that these roles were not available for redeployment to Mr Desertiaux where the Respondent responsibly and carefully, having regard to its internal panel’s views, appointed skilled and experienced employees into the role who happened to be incumbents.

Control System Engineer

[249] Regarding the Control System Engineer Roles of which there were four, I have had regard to the evidence of both Mr Golding and Mr Desertiaux. Mr Golding was the hiring manager for the particular role, and where there four applicants for the four roles, the panel decided against all four candidates.

[250] With respect to Mr Desertiaux’s experience, I prefer the evidence of Mr Golding to find that Mr Desertiaux did not have the skills, experience or technical competency to perform the role. Mr Golding considered Mr Desertiaux’s evidence on this issue and provided a supplementary statement detailing his consideration as to the large gaps Mr Desertiaux had. He considered that Mr Desertiaux could not perform the role and I accept his evidence on this.

[251] Further, the role would have been a promotion for Mr Desertiaux. I accept that the Respondent was not minded to promote Mr Desertiaux on the basis of his large gap in skills to perform the role.

[252] The Respondent relies on contractors to perform the roles, as is its prerogative. Having satisfied itself that it did not have the competency among its displaced workforce, it chose not to redeploy Mr Desertiaux into one of these positions. It was entitled to make that decision and I find it was a correct decision. I accept that it would not have been reasonable in the circumstances to redeploy Mr Desertiaux into this role.

QMI Technician (Upstream)

[253] Regarding the QMI Upstream Role, on the evidence before the Commission, the role had been vacant since February 2020. Mr Golding considered and recommended Mr Desertiaux for redeployment into the role, however this was effectively vetoed by the panel considering his redeployment.

[254] Mr Golding’s evidence is that Mr Desertiaux was technically competent to perform the work, however, it was at one grade lower, and Mr Desertiaux’s pay rate would remain at the higher grade. Ms Au was on the panel considering Mr Desertiaux’s potential redeployment into the role. I consider that she provided a considerable amount of influence in the decision not to appoint Mr Desertiaux to the role.

[255] I consider that the panel considering placing Mr Desertiaux into the upstream role was influenced by three things;

(a) The role was one level down and the Respondent ordinarily does not like to downgrade while grandfathering an employee’s pay rate;

(b) Mr Desertiaux’s performance review was not entirely complimentary; and

(c) Mr Desertiaux was orally discussed within the panel as a person with some interpersonal issues in the workplace.

[256] I consider that the panel was, to some degree, prejudiced against Mr Desertiaux with respect to the alleged interpersonal issues. The performance review report to the panel did not detail Mr Desertiaux’s alleged interpersonal issues, and Mr Desertiaux had no ability to influence what had been discussed. The performance review did not provide any specificity as to what interpersonal issues Mr Desertiaux experienced in the workplace. I consider the discussion about Mr Desertiaux was somewhat unfair where his alleged negative attitude was generally discussed, but not specific examples of unacceptable behaviour were ever squarely put to Mr Desertiaux.

[257] However, in his letter of 11 March 2021, Mr Desertiaux made some very clear, strong and heart-felt admissions to Mr Buckingham regarding his failings within the last year or so. His admissions included:

(a) “I can accept I lost perspective of what was realistically possible within the bounds of my current employment and probably caused yourself and others distress, please accept my apologies for this and extend them to all others I have affected. I am happy to do this face to face if given the chance, as I sincerely do wish to make amends and if at all possible, continue my employment with Shell.”

(b) “I understand now the lower rating given to me, is a reasonable response to behaviours displayed. I also understand why I didn’t get selected for my current role. I simply didn’t deserve it. I am pleased [name] got the role. I’m sure he’ll do a great job and I’m happy to support you both for as long as I’m able.”

(c) “I understand we have had our differences over the performance rating but I hope you can now see a little better, after reading this far, why I was having trouble accepting the rating given. If I were to rate myself today I’d go with ‘acceptable’ but I do see that is not reflective of the entirety of the 2020 journey. I’d like to have the chance to improve further in 2021 and return to strong, which brings me to my request.”

(d) “In essence, I’m asking for a second chance. I don’t honestly know if I deserve it but for the good of my family, I feel compelled to ask.”

[258] It seems to me that Mr Buckingham did have issues with Mr Desertiaux in recent years but did not properly address the issues with Mr Desertiaux. Mr Desertiaux knew generally about the issues, as is clear from his letter. Mr Buckingham, it seems, grouped all issues together and failed to deal with issues as each of them arose. This is clear from [179] where, following the performance review in December 2020, Mr Desertiaux said that he was going to have a long, hard look at himself if there have been recent negative behaviours demonstrated by him, it would be appreciated if they could be detailed.

[259] Mr Desertiaux had been subject to a PIP from 8 March 2021. In these proceedings he now disputes the PIP, but he was accepting of it at the time and in his letter of 11 March 2021 demonstrating significant self-awareness of his workplace failings. Notably, Mr Desertiaux signed all three PIP reviews, including the second and third reviews on 22 March 2021 and 15 April 2021 respectively. The second and third reviews noted that there had no deviations and his relationships had been positive.

[260] The oral evidence that he gave during the hearing were quite extraordinary, and he essentially said that the letter of 11 March 2021 was largely a lie, and he didn’t believe most of it. Regrettably, I am of the view that the letter of 11 March 2021 was fair and accurate, and Mr Desertiaux’s mental illness might have affected the oral evidence given during the hearing. I do not consider that Mr Desertiaux was untruthful in his oral evidence given during the hearing, however he was unable to reflect upon the stark difference between his admissions given in March 2021 and his oral evidence. I consider that his condition clouded his oral evidence.

[261] Where the Respondent was carefully and painstakingly reducing roles within its business, I am satisfied that the Respondent was entitled to determine it unsuitable to have a higher graded employee with some performance issues and a PIP in place perform a lower graded role while still receiving the salary of a higher graded employee.

[262] I am satisfied that the determining factor for the panel in deciding to withdraw the role was the fact that it had not been substantially filled for one year. I am not satisfied that the decision against redeploying Mr Desertiaux into the role was spiteful, vexatious or unwarranted, or a deliberate attempt to leave him without a role. I accept that it would not have been reasonable in the circumstances to redeploy Mr Desertiaux into this role.

Production Technician (Prelude)

[263] Regarding the Prelude role, I have had regard to Ms Fei’s evidence and the fact that Mr Desertiaux was not even in the top seven of short-listed employees. I have also taken into consideration the fact that no employees were ultimately placed into the roles as the Respondent determined that none of its employees had the required skills and experience. Mr Desertiaux’s suggestion that the withdrawal of the roles was because he had applied, and the withdrawal of the roles makes it suspicious is rejected. I accept that it would not have been reasonable in the circumstances to redeploy Mr Desertiaux into this role.

Determination of s.386(2)

[264] On the evidence before the Commission, I am satisfied that it would not have been reasonable in all the circumstances for Mr Desertiaux to have been redeployed within the Respondent’s business or any of its associated entities.

Conclusion

[265] The jurisdictional objection that the dismissal was a case of genuine redundancy requires two affirmative elements and one negatory element which must be satisfied, so as to establish whether a dismissal was or was not a case of genuine redundancy.

[266] For all of the reasons set out above I am satisfied that Mr Desertiaux’s dismissal was a case of genuine redundancy because, as of 30 April 2021, when the employment ended:

  • The Respondent no longer required Mr Desertiaux’s job to be performed by anyone because of changes in the operational requirements of its enterprise;
  • The Respondent complied with its obligation to consult with Mr Desertiaux pursuant to the agreement he was covered by; and
  • It would not have been reasonable in all the circumstances for Mr Desertiaux to be redeployed within the Respondent’s enterprise or the enterprise of an associated entity.

[267] The application is dismissed.”

Desertiaux v QGC Pty Limited (2021) FWC 6579 delivered 10 December 2021 per Hunt C