s.394 - Unfair dismissal

Application for an unfair dismissal remedy - genuine redundancy - corporate restructure - meaning of job - job v duties - reallocation of duties - selection for redundancy based on skills and experience - stepped findings - job was redundant - consultation requirements met - not reasonable to redeploy - complete defence - application dismissed.

[1] On 18 April 2023 Ms Jun Lei Kang made an application to the Fair Work Commission under s.394 of the Fair Work Act 2009 (Cth) (FW Act) for a remedy, alleging that she had been unfairly dismissed from her employment with Shriro Australia Pty Limited.

[2] Shriro Australia says that the dismissal of Ms Kang was a case of genuine redundancy.

[3] For the reasons that follow I find that Ms Kang's dismissal was a case of genuine redundancy.

[4] Ms Kang accepts that Shriro Australia has made a number of employees redundant for business reasons. Ms Kang's real complaint is that Shriro Australia made her position redundant ahead of other positions. In her view, Shriro Australia changed the requirement of Ms Kang's position of store person to require a forklift licence at the same time that she was dismissed. Ms Kang does not have a forklift licence.

"No training was offered to me during my 5+ years working at Shriro. Some of my co-workers remain in the team even without a licence ... I believe Shriro did not fairly communicate to me the requirements of my role. In particular, I was never informed of needing a forklift licence until three days prior to notice. My position in the team has been filled by other workers, some of whom also do not possess a licence.

[6] Further, Ms Kang injured her ankle in January 2022 and at the time of her dismissal could carry loads of up to 2kg. This limitation could be accommodated because Ms Kang was responsible for handling and packing Casio watches. In her application Ms Kang said:

"... it is unfair that my health limitations were the main reason for dismissal. This is in view that the forklift licence requirements were never mentioned during my time working there. I've worked within the limits of my injury to the best of my ability and was an active member of the team."

[7] Shriro Australia offered voluntary redundancy across the whole warehouse and several employees took up this option. Ms Kang was the only employee in the Casio team who was chosen to be made involuntarily redundant. In fact Ms Kang was the only store person in the Chullora warehouse who was involuntarily redundant.

[8] Ms Kang alleged that Shriro Australia used the restructure as an excuse to make her redundant. She said that:

"During the end of February, I was called into a meeting to discuss return to work with managers Peter Worrel, Andreas, Lucas and Rubie Borean. Peter said to me "you should work full time, if you aren't back full time your colleagues are doing the job for you". At the time I was still recovering from my injury. I responded that I'd like to come back full time but I intended to follow my doctor's advice on how many hours to work. Peter said something along the lines that my doctor was "shelter[ing]" me. I replied that my family doctor knows my situation best, and was making decisions based on advice from the specialist doctor, who I was unfamiliar with before my injury."

[9] Ms Kang seeks reinstatement or redeployment.

[10] Ms Pearl Stuart is the Head of HR at Shriro Australia. Ms Stuart gave evidence regarding Shriro Australia's decision to restructure its business nationally and how that restructure was implemented. Shriro Australia operated an Appliances Division that was responsible for 40% of Shriro Australia's revenue but was not sufficiently profitable and was not maintainable in the long-term. Ms Stuart was told on 23 March 2023 that the Appliances Division was going to be discontinued. This restructure was announced to the market on 24 March 2023.

[11] Ms Stuart gave evidence of the process undertaken by Shriro Australia in its restructure following the announcement:

(a) on 24 March 2023 the CEO, Mr Tim Hargreaves led a 'town hall' meeting to all staff on Microsoft teams to advise of the restructure;

(b) after the town hall meeting Ms Stuart began working with the CEO and CFO to review the organisational structures and consulted with divisional managers and general managers to identify roles that may be surplus to requirements;

(c) 46 roles were identified as surplus to operational requirements nationally, including five roles at the Chullora warehouse where Ms Kang worked;

(d) the Melbourne warehouse was scheduled to close in June 2023 and the Perth warehouse is scheduled to close at a later time;

(e) consultation team meetings were arranged to provide more details of the restructure and how it affected specific teams;

(f) further team meetings were arranged for managers with affected staff to meet with staff on an individual basis;

(g) communications for all staff and specifically affected staff were prepared;

(h) a skills matrix was prepared for the Chullora warehouse by Mr Lucas, the Warehouse Manager, which identified Ms Kang's role to be made redundant in addition to four employees at Chullora accepting voluntary redundancy;

(i) three roles were identified for redeployment opportunities: HR business support, marketing manager for the Seasonal Division and IT business analyst. Ms Kang did not have the skills or experience to be deployed to any of these roles; and

(j) further consultation meetings took place with Ms Kang.

[12] Ms Stuart described the decision that Shriro Australia no longer required Ms Kang's job to be done by anybody as follows:

"Prior to the restructure there were two job descriptions for the role of store person in the Chullora warehouse ... These job descriptions covered four teams (four separate roles) of store persons under the supervision of Mr Lucas. The roles were delineated by the type of product handled by the workers performing the roles. Under the proposed structure the four teams and their separate roles were merged into one. Under the proposed structure the applicant's role was not required to be performed by anyone. The purpose of restructuring the operation was to provide more flexibility with how the work was performed in the warehouse with the workers expected to be proficient in working across all areas."

[13] Mr Peter Worrell is the Head of Strategic Planning, Distribution for Shriro Australia. As such he is responsible for the management of all warehouses in Australia and New Zealand. Mr Worrell first learned of the restructure on 24 March 2023.

[14] Mr Worrell said that the restructure announced on 24 March 2023 resulted in the closure of the Melbourne warehouse. He said that the Chullora warehouse is the biggest warehouse in Shriro Australia's business and that as a result of the restructure 5 out of 20 store person positions in the Chullora warehouse were identified as surplus to requirements.

[15] He conducted a meeting on Microsoft Teams on 27 March 2023 with Chullora, Melbourne and Perth warehouse staff. At this meeting Mr Worrell called for volunteers for redundancy.

[16] Mr Worrell gave the following account of his meeting with Ms Kang on or around 29 March 2023:

"On or around 29 March 2023 I had a consultation meeting with the applicant and Mr Lucas but I am not sure of the exact date. Mr Lucas also attended this meeting. In the meeting I repeated the comments from the group meeting that staff could volunteer for redundancy. I explained to the applicant that the team had to lose some people as there will not be enough work to maintain the current levels of staffing. I informed her that we had put together a skills matrix which would aid in selection of any candidates for redundancy if we did not get enough volunteers. I explained the details of the matrix. I told the applicant that as part of the restructure the current product based storeperson roles would be merged into one storeperson role handling tasks from across the warehouse. The role would change to require work across the various functions of the existing roles. I informed her that holding a forklift license was desirable but that it was not essential. She reiterated that she was good at her job and people like her. She raised her injury and I said "it is not about your injury, the business needs to cut numbers and it is about who has the right skill sets to move forward". She did not put forward any alternatives to redundancy. At the time of this meeting the final decisions on who would be made redundant had not been made as I did not know which or how many employees would accept voluntary redundancies."

[17] Mr Andreas Lucas is Shriro Australia's Warehouse Manager at the Chullora site.

[18] Mr Lucas said he first learned of the restructure in a 'town hall' meeting with the CEO, Mr Hargreaves. Mr Lucas described the restructure of store persons roles at the Chullora warehouse as follows:

"Within the warehouse the workers' roles were broken up into groups depending on which products they worked on. There were four roles of storeperson being, "appliances", "Casio", "spare parts" and "seasonal" (being barbeques) which is also combined with "EMI" (being keyboards and electric pianos). Under the new structure this would be condensed so that there was one storeperson role with the workers performing all the duties across the former groups."

[19] Ms Kang's role in the warehouse was in the Casio team. Ms Kang did not require a forklift licence to perform this role. Ms Kang's role usually involved assisting in packing orders and repacking products to meet specific client requirements. Mr Lucas said that Ms Kang "did very little order picking and as such she did not need the licence. Other workers that received forklift training needed it for their work because they did more picking tasks."

[20] Mr Lucas said that Shriro Australia now requires its workers to be "flexible to work across a broader range of warehouse tasks":

"Although the applicant's duties are still required to be performed, the role has changed such that the team members need to be flexible to work across a broader range of warehouse tasks. There is not enough work left to do in the warehouse to support the same level of staffing prior to the restructure. The applicant's role ceased to exist under the new structure as it was not required to be performed by anyone."

[21] Mr Lucas denies that Ms Kang was selected for redundancy because of her injury or her work performance. He said that "it was about skillset and experience."

[22] Genuine redundancy is a complete defence to an unfair dismissal application. If the dismissal was a case of genuine redundancy as defined in s.389 of the FW Act, then the dismissal cannot be an unfair dismissal under s.385:

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."

(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."

[23] The explanatory memorandum to the FW Act includes the following informative summary:

1546. This clause sets out what will and will not constitute a genuine redundancy. If a dismissal is a genuine redundancy it will not be an unfair dismissal.

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.

1548. The following are possible examples of a change in the operational requirements of an enterprise:

• 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.

1549. It is intended that a dismissal will be a case of genuine redundancy even if the changes in the employer's operational requirements relate only to a part of the employer's enterprise, as this will still constitute a change to the employer's enterprise.

1550. Paragraph 389(1)(b) provides that it will not be case of genuine redundancy if an employer does not comply with any relevant obligation in a modern award or enterprise agreement to consult about the redundancy. This does not impose an absolute obligation on an employer to consult about the redundancy but requires the employer to fulfil obligations under an award or agreement if the dismissal is to be considered a genuine redundancy.

1551. Subclause 389(2) provides that a dismissal is not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer's enterprise, or within the enterprise of an associated entity of the employer (as defined in clause 12).

1552. There may be many reasons why it would not be reasonable for a person to be redeployed. For instance, the employer could be a small business employer where there is no opportunity for redeployment or there may be no positions available for which the employee has suitable qualifications or experience.

1553. Whether a dismissal is a genuine redundancy does not go to the process for selecting individual employees for redundancy. However, if the reason a person is selected for redundancy is one of the prohibited reasons covered by the general protections in Part 3-1 then the person will be able to bring an action under that Part in relation to the dismissal."

[24] I am required to decide whether the dismissal was a case of genuine redundancy before considering the merits of the application (per s.396).

[25] Section 389 requires a series of stepped findings:

(a) firstly, whether Ms Kang's job is redundant;

(b) secondly whether the employer complied with any applicable consultation obligations under a modern award or agreement; and

(c) thirdly whether it would have been reasonable to redeploy Ms Kang in another role.

[26] There must be an appropriate evidentiary basis for these stepped findings and the relevant facts are usually particularly within the knowledge of the employer respondent rather than the dismissed applicant.

[27] Section 389(1)(a) of the FW Act refers to an employer making a decision about an employee's "job". A job involves a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees' organisation, to a particular employee.

[28] The test is not whether the functions or duties themselves continue, but whether the "job" itself survives. What is said to be critical for the purpose of identifying a redundancy is whether the employee has any duties left to discharge after the re-organisation. If there is no longer any function or duty to be performed by that employee, his or her "job" is redundant.

[29] In this matter Ms Kang's duties and functions continued - Casio watchers are still being distributed but the jobs or positions of five storeworkers were made redundant. The employer decided that it no longer required the jobs of five storeworkers to be done by anyone.

[30] I am satisfied that the first element in s.389 is satisfied insofar as Shriro Australia has decided that it no longer requires Ms Kang's job to be performed by anyone because of changes in the operational requirements of the employer's enterprise.

[31] Shriro Australia accepted that Ms Kang's employment was covered by the Storage Services and Wholesale Award 2020. I am satisfied that Shriro Australia complied with the consultation requirements under that award. Ms Kang and her peers were all told of Shriro Australia's need to restructure, Shriro Australia held meetings in relation to the restructure, and called for volunteers. Once Shriro Australia had identified Ms Kang's position to be involuntarily redundancy it consulted with her individually.

[32] I am also satisfied that it would not have been reasonable to redeploy Ms Kang. Ms Stuart's evidence was that three roles were identified as redeployment opportunities: HR business support, marketing manager for the Seasonal Division and IT business analyst. Ms Kang did not have the skills or experience to be deployed to any of these roles.

[33] Overall I am satisfied that Ms Kang's dismissal was a genuine redundancy as defined in s.389. Therefore Ms Kang's dismissal cannot be an unfair dismissal and Ms Kang's claim cannot continue.

[34] Throughout the proceedings Shriro Australia made it very clear that Ms Kang was a well-liked and highly regarded employee - which is to Ms Kang's credit. Shriro Australia's decision to discontinue its appliances division and make 5 of 20 warehouse positions at Chullora redundant had nothing to do with Ms Kang's work performance, Ms Kang's conduct at work, her injury or that she did not have a forklift licence.

[35] Shriro Australia called for volunteers and then needed to make one position involuntarily redundant. Ms Kang's case centred upon on Ms Kang being selected for redundancy instead of other employees. It is well established by many decisions of the Commission and its predecessors that if the genuine redundancy exclusion applies then the fairness or unfairness of selection for redundancy cannot be challenged in the unfair dismissal jurisdiction. It is unfortunate that Ms Kang lost her job however the dismissal was not an unfair dismissal under the Fair Work Act 2009 (Cth).

[36] I have separately made an order that Ms Kang's application is dismissed (PR765059)

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