(U2009/11892, U2009/11904, U2009/11909, U2009/11913, U2009/11916, U2009/11918, U2009/11919, U2009/11920)

Termination of employment - was dismissal a case of genuine redundancy s.385(d) - redeployment and s.389(2).

[1] On 7 September 2009 the Construction, Forestry, Mining and Energy Union - Mining and Energy Division (the Union) lodged applications on behalf of several of its members (Messrs Henry Jon Howarth; Anthony Honeysett; Aaron Oldfield; Christopher Michaelides; Graham Atkinson; Ray Murray; Craig Butler; Rodney Butler; Mark Butler; Daniel Dixon) alleging that their termination by their former employer on 25 August 2009 was unfair.

[2] Section 385 of the Fair Work Act 2009 (the Act) provides:

A person has been unfairly dismissed if FWA 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"

[3] On 23 September 2009, the employer, Ulan Coal Mines Limited (Ulan) responded to each application by stating that the termination was a case of genuine redundancy.

(1) A person's dismissal was a case of genuine redundancy if:

(a) the person's employer no longer required the person's job to be performed by anyone because of changes in the operational requirements of the employer's enterprise; and

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

(2) A person's dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

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

[5] This decision is concerned with determining whether or not the terminations were cases of genuine redundancy. If they were, then the applications will not fall within the definition of unfair dismissal.

[6] Questions going to section 389(1) are no longer in issue. This decision concerns whether or not the circumstances are covered by the exclusion under section 389(2).

[7] Both the Union and Ulan provided written submissions in June 2010 and relied on evidence from earlier proceedings.

[8] The Union put firstly that work was being carried out at the mine by contractors and that overtime is being worked. In the circumstances, it would have been reasonable for the applicants to be redeployed to perform such work carried out by contractors. It was also implied that some of the overtime worked by the remaining employees might have been better allocated to the applicants.

[9] Ulan put that it is not appropriate to consider the question of redeployment to work which Ulan has determined to contract out for operational reasons.

[10] As to overtime, Ulan responded that its use was limited to cover unscheduled fluctuating or unusual work needs. There was no evidence that jobs might be available for some of the applicants.

[11] The decision by Ulan to increase the use of contractors was one that it took based on its operational requirements.

[12] In an earlier decision [ [2010] FWA 167 (PR992496)] I found that terminations resulting from the introduction of contractors could be described as instances of genuine redundancy (at [20]). In all the circumstances I do not find that it would have been reasonable for the applicants (or any of them) to be redeployed into work at Ulan where such work is being carried out by contractors.

[13] I also find that there is insufficient evidence that overtime worked could easily be translated into work for the applicants (or any of them).

[14] I find that it would not have been reasonable in all the circumstances for the applicants (or any of them) to be redeployed within Ulan (section 389(2)(a)).

[15] As to whether redeployment would have been reasonable within the enterprise of an associated entity of Ulan, more complex considerations apply.

[16] Ulan and a number of other mines are part of Xstrata Coal Pty Limited (Xstrata). It was not disputed that Ulan and a number of companies which operate such mines within the Xstrata group are associated entities of Ulan.

[17] The Union put that such associated entities include the Baal Bone, Bulga, Beltana/Blakefield South and Ravensworth mines. At the time of the retrenchment, positions were available at the Baal Bone, Bulga and Beltana/Blakefield South and Ravensworth mines.

[18] Although the mines referred to may have fallen within different divisions of Xstrata's geographical operations and had separate direct management structures, they were headed by four general managers. Those general managers regularly attended meetings together, chaired by Mr Cribb, the chief operations officer of Xstrata in New South Wales. Mr Cribb, separately or with the four general managers made decisions concerning Xstrata's operations in New South Wales.

[19] At the time of the retrenchment of the applicants, Xstrata was in a position to require any of the aforementioned mines that had vacancies to engage them.

[20] While some of the ex-Ulan employees found jobs at other Xstrata mines, they had to apply for such positions. Those engagements do not constitute redeployment.

[21] Nor was the redeployment obligation satisfied by merely informing employees of vacancies existing or soon to arise at other associated entities.

[22] For its part, Ulan submitted that "redeployed" should be given a broad, practical and purposeful meaning. It was important to focus on the outcome rather than the act by which employment occurs.

[23] Given that, the new employment does not need to be simultaneous with retrenchment or on the same terms or status as with the former employer.

[24] Ulan pointed to the following outcomes (according to the evidence) concerning the ten former Ulan employees:

• Mr Aaron Oldfield saw an advertisement for Beltana vacancies on a notice board at the mine and applied for one. Mr Oldfield applied successfully for employment at Baal Bone Colliery. He has in fact been redeployed in an associated entity. There was a relatively short gap between his dismissal by Ulan and commencement at Baal Bone. Mr Oldfield has been redeployed with an associated entity - so the s.389(2) exception is not applicable.

• Mr Daniel Dixon applied for various jobs. He was aware of jobs at Baal Bone but chose not to apply. It cannot be concluded that it would have been reasonable in all the circumstances for Mr Dixon to have been redeployed with an associated entity.

• Mr Rodney Butler was aware of jobs at Blakefield. It seems he did not apply for a job at Baal Bone or at Blakefield. He chose to go on holidays rather than attend the 7 August 2009 information session meeting for employees. It cannot be concluded that it would have been reasonable in all the circumstances for Mr Butler to be redeployed with an associated entity.

• Mr Christopher Michaelides became aware of jobs at Baal Bone via word of mouth from a person working there. He saw vacancies posted up at the control room for jobs at Baal Bone, BHP Billiton and Walters. Mr Michaelides was aware that there had been contact with Blakefield and consequently an extension of time for applications. At the 7 August 2009 meeting Mr Michaelides was given a piece of paper listing job opportunities which included the companies and contact details for persons to talk to, the number of positions and how long the work would be for. He applied for five or six jobs and was successful with an application at Baal Bone. Mr Michaelides had been redeployed with an associated entity - so the s.389(2) exception is not applicable.

• Mr Graeme Atkinson saw information about vacancies at Baal Bone and elsewhere. He saw a union person put up an advertisement for a contractor doing secondary support work at Baal Bone. He applied for jobs with Garth Short Mining. He applied for work with Walters/WDS Mining and is currently working at Integra Coal near Singleton. There is no evidence that Mr Atkinson applied for any vacancy at Baal Bone, Blakefield or any other associated entity. It cannot be concluded that it would have been reasonable in all the circumstances for Mr Atkinson to have been redeployed with an associated entity.

• Mr Anthony Honeysett took no action to make enquiries of the Respondent or his union about job opportunities. There is no evidence that he applied for vacant positions at Baal Bone or Beltana/Blakefield. He attended an interview at Ravensworth. Since retrenchment he has applied for jobs at Ravensworth, Donaldson Coal and Walters. He saw the Ravensworth job on the internet on a website listing vacancies within the Xstrata Coal organisation. He applied for a job at Ravensworth and was interviewed but was not successful. He could not say when he applied for the Ravensworth job. He gave no evidence to suggest that Ravensworth acted unreasonably in not offering him employment. He does not say that he would have accepted employment at Ravensworth had it been offered. It cannot be concluded that it would have been reasonable in all the circumstances for Mr Honeysett to have been redeployed with an associated entity.

• Mr John Howarth was aware of vacancy advertisements on the union notice board. He has major restrictions on his work capacity due to injury. He is currently limited to light duties without a clear prognosis. It cannot be concluded that it would have been reasonable in all the circumstances for Mr Howarth to have been redeployed with an associated entity.

• Mr Ray Murray saw job opportunities on notice boards at the mine. He applied for an apprenticeship at Wilpinjong mine, and jobs at ResCo, Airlie (which is not an associated entity) and L & L Contractors. He obtained a job with Blue Fire Mining but did not accept it due to a job offer with GSM Contracting which then fell through. He prefers weekend night shift because his wife works at a Mudgee club and Mr Murray looks after his children while his wife is at work. Many of the jobs on the notice boards were at pits you would have had to travel to "which I couldn't do at the time". There is no evidence that he applied for vacant positions at Baal Bone or Beltana/Blakefield. It cannot be concluded that it would have been reasonable in all the circumstances for Mr Murray to have been redeployed with an associated entity.

• Mr Mark Butler applied for a variety of jobs at Airlie, Moolarben, National Parks etc. All in the "local area". Mr Butler wanted weekday shifts for family reasons as his wife works afternoons. There are limits on how far he can travel. A feasible job needs to be within driving distance from home on a daily basis. There is no evidence that he applied for vacant positions at Baal Bone or Beltana/Blakefield. It cannot be concluded that it would have been reasonable in all the circumstances for Mr Butler to have been redeployed with an associated entity.

On 21 December 2009 he was offered and accepted employment with Ulan.

• Mr Craig Butler heard about jobs going at Baal Bone by word of mouth. He began working for SBD two weeks after dismissal. He has not applied for other jobs because he had a start with SBD. He did not make enquiries about jobs prior to 24 August because he knew there were plenty of jobs at SBD. His preference is for weekday afternoon shift because that provides him with more time to work on his farm. He prefers to work "around here" (i.e. Mudgee) because of commitments to his farm. There is no evidence that he applied for vacant positions at Baal Bone or Beltana/Blakefield. It cannot be concluded that it would have been reasonable in all the circumstances for Mr Butler to have been redeployed with an associated entity.

[25] Ulan put that because the Xstrata mines were all separate operating companies and employers in their own right, Ulan or Xstrata could not dictate to the other companies who they should employ. Nor did Ulan have the power or right to unilaterally transfer employment of the displaced employees from it to another.

[26] Given the independent operations and management at the relevant mines, it is reasonable that those mines determine who they are to engage and the terms of such engagement.

[27] In considering the reasonableness of any potential redeployment action, it is necessary to recognise that most of the associated mines were lengthy distances from Ulan. The closest was Baal Bone, about 100 kilometres distant. Indeed the relevant certified agreement operating at Ulan, provides exceptions to redundancy payments only if alternative employment is arranged by the employer and is within the district. Only Baal Bone would fall within such category.

[28] Notwithstanding the matters of law and principle discussed above, it is clear from [24] that in fact positions were found for many of the ten applicants. Where employment has been secured it satisfies the expansive and practical application of the concept of redeployment. Where alternative positions have not been secured, this was due to the action or inaction of the employees concerned. It can not be said that redeployment would have been reasonable for this latter group of employees.

[29] It put that the reasonableness of Ulan's action had to be considered by looking at whether there were vacancies, whether any applicant applied for such and then if the associated entity had not been reasonable in engaging the employee.

[30] The circumstances point to an absence of any basis for satisfaction that any further redeployment within the associated entity was reasonable.

[31] In response, the Union challenged Ulan's expansive definition of the term redeployment. In its view, Ulan's approach equates redeployment to no more than an opportunity to apply for employment.

[32] It is not in dispute that the mine operators of the Xstrata mines at Baal Bone, Bulga, Beltana/Blakefield and Ravensworth are associated entities of Ulan. Consequently, in determining whether the terminations were not cases of genuine redundancy one must determine if it would have been reasonable in all the circumstances for the applicants to have been redeployed within any of those Xstrata mines.

[33] In approaching that determination, I have noted that vacancies existed at or about the time of the retrenchments at Ulan for positions as mineworkers at the Baal Bone, Bulga, Beltana/Blakefield and Ravensworth mines.

[34] Given that, at least the potential of the obligation was triggered.

[35] Ulan's reaction to this potential obligation was to point to either the fact that in reality redeployment had occurred or that it was not reasonable to redeploy. The latter was largely based on the conduct of the applicants.

[36] A stark point of difference between the parties concerns what is meant by "redeployment". I do not accept the definition put forward by Ulan. It says one must give the word a broad, practical and purposeful meaning. Its argument results, in effect, to mean employment in an associated entity. In my view, to suggest that redeployment equates to employment elsewhere is not to take an expansive view of the word redeployment. It is to alter its meaning.

[37] The Macquarie Dictionary defines "employ" in this way:

"verb (t) 1. to use the services of (a person); have or keep in one's service; keep busy or at work: this factory employs thousands of workers.

2. to make use of (an instrument, means, etc.); use; apply.

3. to occupy or devote (time, energies, etc.): I employ my spare time in reading.

- noun 4. Employment; service: to be in someone's employ."

"verb (t) 1. to rearrange, reorganise, or transfer (a person, department, military unit, or the like), as in order to promote greater efficiency.

-verb (i) 2. to carry out a reorganisation or rearrangement.

[38] It is hardly worth labouring the point. They are different words with different meanings particularly in industrial usage.

[39] If the Parliament had meant section 389(2) to be about employment within an associated entity, it would have said so.

[40] It has long been common for there to be exemptions from redundancy or severance payments where an employer has found acceptable alternative employment for an employee (e.g. the Termination Change and Redundancy cases, [(1984) 9 IR 115] and [(1984) 8 IR 34] (or clause 23.4 of the Agreement). At its highest, that is what Ulan may have done (or it may not even have done that, if the employees can be said to have been largely responsible for securing their new employment). But that is not what section 389(2) requires. Redeployment as envisaged by s.389(2), requires a transfer of the employee. This is so even if it also might mean the entering into a new contract of employment.

[41] Any action of Ulan to make some job vacancies known to employees, taking steps to have associated entities delay closing employment opportunities and then with those associated entities offering employment following an open selection process is not redeployment. It is merely assisting in the gaining of employment.

[42] Given my view as to what is meant by redeployment it is necessary to look at the situation of each individual in order to determine whether there was redeployment. In that task, I have relied on Ulan's submissions concerning each applicant's circumstances. I note that in its reply the Union has not taken issue with those facts.

42.1 It can not be said of Mr Oldfield, that because he successfully applied for employment at Baal Bone that he was redeployed to that mine. Nor did any redeployment occur as a result of his seeing an advert for vacancies at Beltana and applying for a job there.

42.2 It can not be said that Mr Michaelides's success with his application for a job at Baal Bone following his applications for five or six jobs is a case of redeployment. This is not altered by the fact that job vacancies and contact details may have been provided to him by Ulan.

42.3 I do not consider Mr Mark Butler's successful application for a vacancy at Ulan in December 2009 amounts to redeployment. I consider that the length of time between his termination in August 2009 and his engagement in December 2009 cannot be said to be part of redeployment following the August 2009 terminations.

[43] I find that there has been no redeployment of any of the applicants within the enterprise of an associated entity of Ulan.

[44] One then needs to consider whether it would have been reasonable for any applicant to have been redeployed within such entities.

[45] In arguing against such, Ulan raised several matters. Firstly, it put that the various Xstrata mines are separate enterprises which employed their own miners. Mineworkers were not employed by Xstrata. Rather, they are employees of Ulan or one of the associated entities. It was not the policy of either Xstrata or its individual mine enterprises for there to be directions for another enterprise to employ surplus employees of another in the group.

[46] I am not persuaded by such argument. Apart from it being a policy, and the entities being separate employers, there is no evidence that such reticence to have a more activist redeployment process somehow impacts on operational needs. The fact that some of the ex-Ulan miners in fact secured employment at these associated entities or were told of or encouraged to apply for vacant positions at these other mines tells against any persuasive impact of Ulan or Xstrata's policy.

[47] Ulan made broad criticism of those applicants who took no or insufficient steps to apply for available positions. This, it said, pointed to redeployment not being reasonable in those circumstances. I find that a failure to pursue job opportunities where they may have been competing against all comers is not on point. It would only be relevant if any available positions had been restricted to those retrenched and any applicant had not shown sufficient interest.

[48] I also reject Ulan's point that some redeployment would not have been reasonable, given the distances of some mine sites from Ulan. This might only be valid if, on being offered a position, an employee had declined to take it up. Or, if any applicant had made it clear that they would not be prepare to travel, a matter I will return to.

[49] Finally, as to Ulan's submission that it cannot unilaterally redeploy such applicants to enter into the employment with another, this is correct. But it does not answer a bilateral preparedness to enter into a new contract of employment. In any case, I do not take Ulan to be suggesting that they were prepared to redeploy the applicants, but decided not to because of any anticipated resistance from the employees concerned.

[50] I have therefore considered Ulan's objections and have rejected them. I note the availability of suitable positions at the enterprises of associated entities of Ulan. In my view it would have been reasonable in all the circumstances for the applicants (excepting those I further discuss below) to have been redeployed in the vacant positions at the other Xstrata mines, and I so find. In making this finding I accept that there is no precision as to which vacancy ought to be assigned to which applicant. There is no ability to determine such, particularly given the passage of time. However, in my view the legislation anticipates such difficulties. It refers to redeployment within "the enterprise" not to a particular position/job within the enterprise. In any case, the section is not aimed at directing conduct. Rather, it is concerned with the consequences of failing to perform certain conduct.

[51] I exclude from such finding, Mr Howarth. He is incapacitated due to injury. He is on light duties without a clear prognosis. I am unable to find that it would have been reasonable in the circumstances of his health for Mr Howarth to have been redeployed to any of the other mine sites.

[52] I note from the evidence that Mr Murray was reluctant to travel and preferred weekend shifts. Mr Mark Butler said that there were limits on how far he would travel. Mr Craig Butler, a farmer, preferred to work around Mudgee. As the vacancies at or around the time of the terminations were at some distance from Ulan, I consider that, given the evidence of these three applicants, it would not have been reasonable to have redeployed any of them and I so find.

[53] On the basis of my finding that it would have been reasonable in all the circumstances for the applicants (excepting Mr Howarth, Mr Murray, Mr Mark Butler and Mr Craig Butler) to have been redeployed within the other Xstrata mines referred to, each dismissal, other than of these latter four applicants, was not a case of genuine redundancy as defined under the Act and I so find.

S. Crawshaw SC with A. Slevin of counsel and P. Pasfield, solicitor for the applicants.

J. Murdoch SC with A. Morris and T. Ross, solicitors for the respondent.

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