s.394 - Unfair dismissal

[1] Mr Danny Yeung has made an application to the Fair Work Commission for relief from unfair dismissal. Mr Yeung was employed by DCA Technologies Pty Ltd (DCA or the Respondent) in the position of Senior IT Infrastructure Engineer and Enterprise Architect. His role was to "maintain the availability and performance of the information systems, to manage the lifecycle of our IT infrastructure, to manage our technology suppliers/partners and to design and oversee our technology architecture, security and compliance frameworks."[1]

[2] Mr Yeung commenced employment with the Respondent in November 2018. His employment was terminated on 27 February 2018 with effect from 28 February 2020.

[3] The Respondent objects to the application of Mr Yeung on the grounds that it says the dismissal was a case of genuine redundancy. Mr Yeung says it was not a genuine redundancy and he has been unfairly dismissed.

[4] It was agreed by the parties that the application should be dealt with by determinative conference.

[5] DCA (formerly Tenix Solutions Pty Ltd) is an organisation that provides business process outsourcing services for parking infringement management and processing.

[6] The Respondent was acquired by DCA Cities Holdings Pty Ltd on 1 November 2018. The ultimate holding company is Sarb Management Group Pty Ltd (referred to in proceedings as the "Associated Entity"). All three entities share the same company directors and are part of the DCA Group of companies.

[7] Through this acquisition, the Respondent came under the governance and management of new senior management. The senior management had a policy of managing acquired companies in a "business as usual" approach for at least 6 months, after which, the Associated Entity would consider the structure of the acquired company (in this case the Respondent) and the Associated Entity with a view to consolidating common resources to achieve greater business efficiency.

[8] Mr Yeung began his employment with the Respondent, then known as Tenix Solutions (Tenix)) in November 2018. This became the Respondent following the acquisition as described above. In June 2019 Mr Yeung was advised that, as part of the consolidation process, he had been transferred to the DCA ICT Netadmin Team and would report to Mr Stephen Walker, ICT Manager (DCA).

[9] Mr Davenport, General Manager Commercial and Human Resources for the Respondent said that the Respondent has been "undertaking restructuring for operational reasons since 1 July 2019 which included areas of Finance, Commercial/HR, ITS and Customer & Client Services. Some of the restructuring has leveraged off efficiencies gained through combining Employer [Respondent] and Associate Entity's activities." The changed reporting line for Mr Yeung reflects this change. Ultimately these changes resulted in a number of redundancies from the Respondent's business as well as the creation of some new positions.

[10] In February 2020 the Respondent relocated its operations from William Street in Melbourne to South Wharf.

[11] Stephen Toal is the Director, Development for the Respondent. He gave evidence that in early November 2019 he authorised a restructure within the Associated Entity's ICT Team which combined members of the Respondent's Infrastructure Team and the Associated Entity's ICT Team so that the combined team would service the combined businesses. In doing so, some duties and responsibilities of a number of positions were redistributed across the team. Mr Toal said that:

• On 14 November 2019 he received feedback from Mr Yeung that he did not accept the proposed restructure of the ICT team and, specifically, a new position description for his role. Mr Toal subsequently deferred finalisation of that proposal while considering alternatives.

• None of the restructure within the ICT Corporate Services area of the Respondent's Infrastructure Team and the Associated Entity's ICT Team contemplated in November 2019 was enacted.

• On 24 January 2020 he revisited the issue and determined to combine services with the Associated Entity's ICT Team. The consequence of this was:

  • the Respondent's Test Team reported to the Associated Entity's Testing Manager;

  • the Application Service Desk and IT Project Managers reported to the Associated Entity's Technical Services Manager; and

o the Respondent's Developers reported to the Associated Entity's Development Manager.[2]

[12] On 1 February 2020 Mr Yeung apparently continued to occupy the position he had previously held, that of Senior IT Infrastructure Engineer and Enterprise Architect.[3]

[13] As a result of the restructure determined by Mr Toal in January 2020 but enacted in early February 2020 many of the functions performed by Mr Yeung were redistributed or absorbed into other positions in the organisation.[4]

[14] Mr Toal's evidence is that in February 2020 he had discussions with HR about Mr Yeung's position and duties. Ultimately he determined to proceed with the restructure, resulting in Mr Yeung being made redundant. On 27 February 2020 Mr Toal determined to proceed with the restructure. That day he had a meeting with Mr Yeung along with the Associated Entity General Manager Human Resources. The restructure was discussed with Mr Yeung and available positions within the Respondent and Associated Entity advised to Mr Yeung.

[15] Mr Yeung was also provided with details of redundancy entitlements and final payments. Mr Yeung indicated that he wished to leave the Respondent that day and this was accommodated.[5]

[16] Mr Toal's evidence is that the number of positions prior to the restructure was 12 and this reduced to 8 following the restructure.

[17] Mr Toal agreed that on 14 November 2019 he had a discussion with Mr Yeung about changed responsibilities and a new position description. Mr Toal said that this was part of the consideration he had with respect to the restructure in November 2019 that was subsequently deferred.

[18] Ms Shikha Punj is a Human Resources Officer with the Associated Entity. She gave evidence that as at 11 June 2019, the Respondent's and Associate Entity's combined ICT Team included:

• ICT Manager.

• Network and Systems Administrator.

• ICT Support Officer.

• Contractor (who performed ICT Support Officer like duties).

• Support Technician (casual).

• Senior IT Infrastructure Engineer & Enterprise Architect (employed by the Respondent but seconded to the Associated Entity - Mr Yeung's position).

• Server Administrator (employed by the Respondent but seconded to the Associated Entity).

• Systems Administrator (employed by the Respondent but seconded to the Associated Entity).

[19] Personnel movements within the Respondent's and Associate Entity's combined ICT Team for the period 12 June 2019 - 2 March 2020 were:

• Appointment of Systems and Database Administrator, Team Lead Hosting Services commencing on 29 July 2019.

• Appointment of an ICT Support Officer, commencing on 29 July 2020.

• Departure of the Support Technician (casual) on 20 September 2019.

• Internal transfer of an ICT Support Officer to an unrelated role within the Associated Entity from 1 February2020.

• Appointment of an ICT Support Officer, commencing on 10 February2020 (replacing the ICT Support Officer internally transferred, see above).

• Departure of the Respondent's Senior IT Infrastructure Engineer & Enterprise Architect (Mr Yeung) on 28 February 2020 due to redundancy.

• Appointment of a Graduate ICT Support Officer, commencing on 2 March 2020.[6]

[20] Mr Yeung gave evidence that he considered that his redundancy was manufactured because of his poor relationship with his manager, Mr Walker.

[21] Mr Yeung said that his functions and duties still exist but that the Respondent determined to employ lower paid workers to do the work that he had done. He said that he did not believe that the Respondent had the resources or skills within those staff to undertake the work required to be done by the IT team. Mr Yeung in this respect referred to an email he had sent in November 2019 where he raised resourcing issues.[7]

[22] Further, Mr Yeung said that his duties extended beyond those duties mapped by the Respondent.[8] Mr Yeung said that his tasks [at the time he commenced in late 2018] initially consisted of:

• Problem and Incidents: 15%.

• System administrator tasks: 60%.

• Corporate administration: 10%.

• Project tasks: 10%.

• Infrastructure solutions Design and Architecting: 5%.

[23] Mr Yeung said that from April 2019 to June 2019, his group lost two IT technical resources such that he had to take on extra responsibilities. During this period his daily tasks were:

• Problem and Incidents: 30%.

• System administrator tasks: 50%.

• Project Tasks: 5%.

• Corporate administration, and managing external vendor: 10%.

• Solutions design and Architecting focus to tendering for new businesses: 5%.

[24] Mr Yeung said that from June 2019 to 27 February 2020 his daily tasks were as follows:

• Problem and Incidents: 30%.

• System administrator tasks: 0%.

• Project Tasks: 50% (migration work).

• Corporate administration, and managing external vendor: 10%.

• Solutions design and Architecting focus to tendering for new businesses. 10%.

[25] Mr Yeung further said that, if his position was redundant, he should have been considered for redeployment into other positions with the Respondent. In this respect Mr Yeung said he should have been considered for redeployment into positions filled in November 2019, February 2020 and March 2020.

[26] Mr Yeung agreed that there had been discussion in October 2019 about his changing role and that he was told he would take on these duties in February 2020 when the Respondent co-located with the Associated Entity. He said he wanted to take on that role but was waiting to receive the duty statement to ensure the workload was manageable. He said he followed up on this in December 2019 and January 2020 when he was told it would be completed with the co-location.

[27] Mr Yeung's evidence is that the next he was aware of anything to do with his revised duties was when he was advised on 27 February 2020 that he was being made redundant.

[28] Section 396 of the FW Act specifies those matters that must be considered prior to a consideration of the merits of an application for unfair dismissal. Section 396 of the FW Act states that:

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.

[29] It is not in dispute, and I find, that Mr Yeung made his application within the specified time period, that he was protected from unfair dismissal (see s.382 of the FW Act) and that the Small Business Fair Dismissal Code does not apply.

[30] It is argued by the Respondent however that the dismissal of Mr Yeung is a genuine redundancy.

[31] Section 389 of the FW Act sets out those matters necessary to determine if a redundancy is a genuine redundancy for the purposes of the unfair dismissal provisions of the FW Act. Section 389 of the FW Act states as follows:

(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:

(b) the enterprise of an associated entity of the employer.

Job no longer required because of changed operational circumstances

[32] Mr Yeung agrees in his submissions that the operational circumstances of the Respondent had changed. However, he does not agree that his job was no longer required to be performed by anyone.

[33] In support of this Mr Yeung relies on his assertion that the team could no longer cope with the workload and that the Respondent had recruited 2 new staff members. He says that one of the new employees commenced on 10 February 2020 (Marco) and had replaced Wilkin who was transferred to another part of the business. The second employee, Lucas, commenced on 2 March 2020 and replaced Evan, a contractor who only worked two days per week. Mr Yeung said that Lucas was recruited into Mr Yeung's position although he did not take on Mr Yeung's role or responsibilities.

[34] That others were doing his duties, Mr Yeung submits is evidence that his job was still required to be performed and hence was not redundant.

[35] Somewhat contradictory to earlier evidence, Mr Yeung submits that from October 2019 he was performing desktop and service desk functions and that these functions are now done by Lucas.

[36] The Respondent relies on the table[9] showing the reallocation of Mr Yeung's duties in support of its submission that Mr Yeung's duties were either re-allocated to employees, to contractors who are called on from time to time or are no longer required to be done.

[37] On the appointment of Lucas the Respondent said that this was done to replace a long term departing contractor (Evan) who worked two days per week on a regular basis but also worked additional days when the workload required it of him. The Respondent agreed that Lucas was employed on full-time basis but at an entry level as he was not tertiary qualified.

[38] In Jones v Department of Energy and Minerals[10] Justice Ryan held that:

His Honour's description was cast in terms of a "job" in the sense of a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employer's organization, to a particular employee. However, it is within the employer's prerogative to rearrange the organizational 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. It is inappropriate now to attempt an exhaustive description of the methods by which a reorganization of that kind may be achieved. One illustration of it occurs when the duties of a single, full-time, employee are redistributed to several part-time employees. What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organization, 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...[11]

[39] That is, the critical inquiry is not if the tasks performed by Mr Yeung are still performed by others but whether the job performed by Mr Yeung - that is, the collection of tasks - is still required to be performed as a single job.

[40] The relevant inquiry is whether another individual is doing the same or substantially the same job as that done by Mr Yeung.

[41] Whilst Mr Yeung made a number of assertions in relation to how the Respondent is now conducting its IT area I am not convinced that Mr Yeung's job continues to be performed by anyone. I do accept that a substantial proportion of the tasks that Mr Yeung performed continue to be performed however I am satisfied, on the basis on the evidence filed by the Respondent[12] and not disputed by Mr Yeung that the tasks he was performing are now spread amongst a number of employees of the Respondent and/or the Associated Entity.

[42] Whilst Mr Yeung suggested that others have been employed in the period from November 2019 to March 2020 I am not satisfied, on the basis of the evidence before me, that any of these employees were engaged to perform the job Mr Yeung did prior to his dismissal.

[43] Given these circumstances I am satisfied that the job performed by Mr Yeung was no longer required to be performed by anyone. The tasks he performed have been distributed amongst others.

[44] Mr Yeung accepted, as do I, that the operational requirements of the business had changed. I am satisfied that this occurred as a result of the acquisition of the Respondent by the Associated Entity and its wish to integrate functions across its operations. I am satisfied that it was as a result of this changed operational needs that resulted in the restructure that then led to the redundancy of Mr Yeung.

[45] Mr Yeung also submitted that the process by which he was selected for redundancy was not fair and the Respondent should have embarked upon a "last on - first off" approach to redundancy.

[46] There are two things to say of Mr Yeung's submission on this point. Firstly it is clear that the method of selection for redundancy is not intended to be a matter to consider in determining if the redundancy was genuine. The Explanatory Memorandum to the Fair Work Bill clearly states that "Whether a dismissal is a genuine redundancy does not go to the process for selecting individual employees for redundancy."[13] This statement is unequivocal and settles the matter. In any event there is no general rule that says that "last on - first off" is how selection for redundancy should occur. It is inherently fraught with difficulties, including its potential to unlawfully discriminate.

[47] I am therefore satisfied that the job that was performed by Mr Yeung was no longer required to be done by anyone as a result of the changed operational needs of the Respondent.

[48] Mr Yeung agreed with the Respondent that there was no award or enterprise agreement that applied to his employment. Mr Yeung says however that a good employer would consult with employees before making anyone redundant.

[49] The Respondent submits that, as there is no award or enterprise agreement that applied to Mr Yeung's employment, there was no requirement to consult and the provisions of s.389(1)(b) do not apply.

[50] While I accept the submissions of both parties that no award or enterprise agreement applied and that, therefore, there was no requirement to consult under such instruments, the process embarked upon by the Respondent was neither clear nor transparent. The evidence before me would not support a conclusion that consultation had occurred had it been necessary to meet the requirements of the FW Act. There is nothing to indicate that Mr Yeung or any other employee was advised that redundancy was a potential outcome of the process embarked upon by the Associated Entity. Mr Yeung was given no advance warning that his job may become redundant and was not consulted on any things that might be done to mitigate the effects of the restructure.

[51] Whilst consultation was not a requirement in this particular circumstance for the purposes of the genuine redundancy provisions on s.389 of the FW Act, they are steps that you would expect a reasonable employer to undertake. That the Respondent did not do so is of little comfort or, in this case, assistance to Mr Yeung in his claim that the redundancy was not genuine. It is matter the Respondent should consider addressing in future.

[52] There being no award or enterprise agreement that either party said applies, there is no consultation obligation that applies. Section 389(1)(b) therefore does not apply.

[53] Mr Yeung says that he should have been redeployed into either of the position now occupied by Marco or Lucas.

[54] The Respondent said that neither of these positions was vacant at the time Mr Yeung was made redundant. In any event it submits that these positions were filled at levels well below that of Mr Yeung. In addition, the Respondent says that, at the time he was made redundant Mr Yeung was advised of vacancies with the Respondent and rejected these as not suitable.

[55] The Respondent submits that Marco commenced in his position on 10 February 2020. He replaced Wilkin in a desktop support role when Wilkin moved to another position within the Associated Entity. Lucas commenced on 2 March 2020 in an entry level position and was employed due to the imminent retirement of Evan (who was a long term contractor) on health grounds.

[56] At the conclusion of the hearing of this application I requested further information from the Respondent in relation to the circumstances by which Lucas came about his position. The information provided indicates that the position Lucas occupies was advertised either late in 2019 or early 2020. Lucas applied for the position on 7 January 2020 and commenced in it on 2 March 2020.

[57] Mr Yeung was given an opportunity to provide further submissions in relation to this material supplied at my request, in particular as to whether the position occupied by Lucas and the salary paid to Lucas would have made the position suitable for redeployment to Mr Yeung.

[58] Mr Yeung said that he performed all of the duties undertaken by Lucas "based on the reassignment of work in late October 2019 at the Associated Entity".[14] Mr Yeung also said that "if the employer was going to maintain my wages...I would have expected that they would be utilising my skills to perform other functions...such as IT infrastructure backend, cyber security work and other systems work". Mr Yeung also suggested that a consideration of what Lucas was being paid is not relevant as wages should be based on "skills, experiences and what an employee can offer an employer."

[59] The Respondent does not agree that Mr Yeung performed the duties undertaken by Marcus as it says the proposed changes of October 2019 were not implemented because of resistance by Mr Yeung to the changes. In this respect the Respondent submits that the duties of Mr Yeung at the time his employment was terminated are as set out in the table showing the re-allocation of his duties.

[60] Even if Mr Yeung did perform some of the functions undertaken by Lucas the decision to advertise the vacancy created by the retirement of Evan occurred in late 2019 or early 2020. This is evident from the date of Lucas' application of 7 January 2020. Whilst it is not apparent when the position was actually filled, that Lucas commenced on 2 March 2020 - 2 working days after Mr Yeung had his employment terminated, allows a reasonable inference to be drawn that Marcus was advised of his successful application some time prior to Mr Leung being advised of the decision to terminate his employment on the grounds of redundancy.

[61] Further, I prefer the evidence of Mr Toal to that of Mr Yeung with respect to the attempt to restructure the work area in October or November of 2019 and the ultimately aborted attempt to develop a new position and associated position description with Mr Yeung. I accept that, as a result of this no restructuring occurred in 2019 and that this was (at least in part) attributable to the resistance of Mr Yeung. For this reason I am not satisfied that Mr Yeung was doing the desktop and service functions in early 2020 but rather, that he continued to perform his role as Senior IT Infrastructure Engineer and Enterprise Architect.

[62] With respect to the position occupied by Marco, he commenced in this position on 10 February 2020, again prior to Mr Yeung being advised of his redundancy.

[63] On the evidence before me, and the submissions of Mr Yeung, I do not consider it reasonable that Mr Yeung could have been redeployed into either of these two positions. Neither position was vacant at the time Mr Yeung was advised of his redundancy. Further, the tenor of Mr Yeung's submissions appear to be that he, Mr Yeung, could have been placed in either of the positions but that he would continue to do the job that I have found above no longer exists and that he would continue to be paid his existing salary in doing so. That is, his sense of redeployment is not that he would do the job required in either of those positions at the level required of the Respondent but rather that these were vacant positions and he should continue his job at his rate of pay but in one of those positions.

[64] Further, I accept that the changes in job functions mooted in November 2019 by Mr Load did not proceed - in part because of resistance from Mr Yeung. Had Mr Yeung shown flexibility in the changes proposed by Mr Load the outcome in 2020 may have been somewhat different although this is, at this stage, purely speculative. For this reason however I also do not accept that Lucas was doing the job previously performed by Mr Yeung.

[65] In the meeting of 27 February 2020 when he was advised that his position was redundant Mr Yeung was also advised of vacancies with the Respondent and Associated Entity at that time. Mr Yeung rejected those positions. No criticism is made of him for doing so. The positions were put forward as alternatives to redundancy, but he did not consider them realistic.

[66] I am therefore satisfied that it would not have been reasonable in all the circumstances for Mr Yeung to be redeployed with the Respondent or in the Associated Entity.

[67] For these reasons I am satisfied that the dismissal of Mr Yeung was a genuine redundancy.

[68] Section 385 of the FW Act establishes when a person has been unfairly dismissed. Section 385 of the FW Act states that:

A person has been unfairly dismissed if the FWC is satisfied that:

(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.

[69] As I have found that the dismissal of Mr Yeung was a genuine redundancy he cannot be found to have satisfied s.385(d) and hence cannot have satisfied s.385 of the FW Act. It must therefore follow that Mr Yeung has not been unfairly dismissed within the meaning of the FW Act.

[70] The application of Mr Yeung must therefore be dismissed. An order[15] to this effect will be issued in conjunction with this decision.

[1] Respondent's documents - Appendix 6.

[2] Exhibit R2, Statement of Stephen Toal.

[3] Respondent's documents - Appendix 10.

[4] Respondent's documents - Appendix 6, cross-examination of Mr Toal.

[5] Respondent's documents - Appendix 14.

[6] Exhibit R3, Statement of Shikha Punj.

[8] Respondent's documents - Appendix 6.

[9] Respondent's documents - Appendix 6.

[10] (1995) 60 IR 304.

[12] Respondent's documents - Appendix 6.

[14] Applicant's email dated 13 July 2020.

[15] PR721059.

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