Claims outside s 340: redundancy entitlement under s 119
265 I turn now to consider whether, separately from the adverse action claim, an entitlement arises under s 119. In relation to the redundancy, I am satisfied Mr Milardovic is entitled to a redundancy payment under s 119 of the Fair Work Act. Section 119(1)(a) provides, broadly, that an entitlement arises where an employee's employment is terminated "at the employer's initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour".
266 The concept of redundancy was considered by the Supreme Court of South Australia in R v The Industrial Commission of South Australia; Ex Parte Adelaide Milk Supply Co-operative Limited (1977) 16 SASR 6. At 8, Bray CJ stated:
I agree with Bright J that the concept of redundancy in the context we are discussing seems to be simply this, that a job becomes redundant when the employer no longer desires to have it performed by anyone. A dismissal for redundancy seems to be a dismissal, not on account of any personal act or default of the employee dismissed or any consideration peculiar to him, but because the employer no longer wishes the job the employee has been doing to be done by anyone.
267 Bright J at 21 stated:
The word "redundant" does not occur in the Act. In its industrial sense it is not defined in the Oxford Dictionary. The application which I have already set out attempts a definition for the purpose of the proposed award. A consideration of the cases leads me to think that the question of the redundancy of an employee is linked to the question of the continued utility of the job which he is performing. In other words it does not relate to the personal competence of the employee in the job which he is performing. If I am right in this, then in its widest form the concept of redundancy connotes that an employee becomes redundant whenever (and for whatever reason) his employer no longer desires to have performed the job which that employee was doing.
268 As the Full Court in FBIS International Protective Services (Aust) Pty Ltd v Maritime Union of Australia [2015] FCAFC 90; 232 FCR 1 at [9]-[10] explained, the scheme of a general entitlement to severance pay for employees whose employment was terminated because of redundancy, now found in s 119 and the other provisions of Subdiv B of Div 11 of Pt 2-2 of the Fair Work Act, was first introduced for federal awards through the decision of the Australian Conciliation and Arbitration Commission in Termination, Change and Redundancy Case (1984) 8 IR 34 and its supplementary decision in Termination, Change and Redundancy Case (1984) 9 IR 115. Both those decisions referred to Bray CJ's exposition of the concept of "redundancy". In Amcor Limited v Construction, Forestry, Mining and Energy Union [2005] HCA 10; 222 CLR 241 at [42]-[44], Gummow, Hayne and Heydon JJ said:
In 1981, the Australian Council of Trade Unions made claims that led, ultimately, to the making of awards providing terms governing the termination of employment, providing for consultation about major changes likely to have significant effects on employees, and providing for terms governing what was to happen in cases of redundancy. The Commission first published reasons determining issues of principle. Having heard further submissions from the parties, the Commission then published a supplementary decision in which it settled the form of order to be made.
The Commission said, in its supplementary decision, that it had "some difficulty in finding a suitable expression" to make its intention clear about what constituted "redundancy". In its earlier decision, it had referred to a number of definitions of redundancy. Chief among those was the decision by Bray CJ in R v Industrial Commission (SA); Ex parte Adelaide Milk Supply Co-operative Ltd which was understood as emphasising that redundancy refers "to a job becoming redundant and not to a worker becoming redundant".
For present purposes, what is important is that the Commission appears to have been seeking a form of words that would accommodate two features. First, as was said in the Commission's supplementary decision, it "did not intend the redundancy provisions to apply where an employee is dismissed for reasons relating to his/her performance, or where termination is due to a normal feature of a business". Secondly, the Commission did not intend redundancy provisions to be engaged by the transmission of a business. In its earlier decision, the Commission had emphasised that it did "not envisage severance payments being made in cases of succession, assignment or transmission of a business". That is, the Commission regarded termination of employment by a particular employer as not sufficient to engage the redundancy obligations, even if that employer was ceasing any participation in the particular business. The focus of the provision was upon the work undertaken by the employee (the "job"), not upon the identity of either the employee or the employer. The relevant inquiry was whether employment in a particular kind of work then being undertaken was to come to an end. If that employment was to come to an end, it was necessary to consider why that was to happen. Was it because the employer no longer wanted the job, then being done by the employee, done by anyone? Or was it "due to the ordinary and customary turnover of labour"? And, as the Commission's evident concerns about drafting show, these alternatives were not, and are not to be, understood as exhausting the cases that might have to be considered.
(Citations omitted.)
269 In Amcor, the High Court held that there had been no redundancy where the employer terminated the employment of all employees in its paper business, which business had been sold to a wholly owned subsidiary of the company, and at the same time the subsidiary made a written offer of employment to each of those employees offering employment on the same terms and conditions and with all benefits to be preserved. At [14], Gleeson CJ and McHugh J held:
Redundancy of position is not a legal or industrial term of art, although there are many cases which examine the concept of redundancy, usually for the purpose of distinguishing it from other causes of retrenchment. In the present case, Amcor was originally the parent company of a group that carried on two kinds of business. The group was split up so that each business would in future be conducted separately. The businesses continued and the employees continued to do the same work, on the same terms and conditions, as before, and with their accrued entitlements preserved. Their new employer was the company that had owned and operated the particular business in which they worked before the split. In the circumstances, the positions did not become redundant.
(Citations omitted.)
270 See also Short v F W Hercus Pty Ltd [1993] FCA 72; 40 FCR 511 at 520-522; Jones v Department of Energy and Minerals (1995) 60 IR 304 at 308-309 and Quality Bakers of Australia Ltd v Goulding (1995) 60 IR 327 at 332-333, each of which was considered by the Full Court of this Court in Dibb v Commissioner of Taxation [2004] FCAFC 126; 136 FCR 388 at [33]-[42]. The Full Court observed at [41]-[42]:
In Jones Ryan J observed that a job involves "a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employer's organisation, to a particular employee". We accept that view. Ryan J then observed that where such duties are reassigned, the question is whether any function or duty remains to be performed by the employee. We do not understand his Honour to have meant that if any aspect of the employee's duties is still to be performed by somebody, he or she cannot be redundant. His Honour's meaning appears clearly from the following paragraphs at 308-9:
In this case, the respondent led evidence of the major changes which were made to the Department between September 1993 and late 1994. According to Mr Downie, the applicant's former position as Director, Mining Inspectorate, was abolished and the duties attached to it were combined with those of the previous Director, Environmental Management. In addition to a number of other, newly-created functions, those pre-existing duties were to be performed by a newly created General Manager, Mineral Operations. Thus, it is clear that although some of the tasks previously assigned to Mr Jones still had to be carried out, the employer's rearrangement of its operational structure had the consequence that they be combined with other functions and performed by the holder of a new, more generally-oriented position.
On this basis, it appears that Mr Jones' former position was rendered "generally redundant". When it became apparent that he could not be redeployed, Mr Jones was found to be surplus to the respondent's personnel needs. This amounted to a reason for dismissal which was clearly based on his employer's operational requirements.
As Beazley J observed in Quality Bakers:
A redundancy will arise where an employer has labour in excess of the requirements of the business; where the employer no longer wishes to have a particular job performed; or where the employer wishes to amalgamate jobs ...
271 The respondents in this proceeding do not dispute Mr Milardovic's position was split in two, but contend that no redundancy arose on the facts because Mr Milardovic did not apply for either of the positions which replaced his position and were available to him. They contend no redundancy arose given that options were made available to Mr Milardovic to take redeployment.
272 I do not accept the respondents' contentions. I accept the applicant's submission that the evidence discloses neither Mr Barry nor Ms Finnigan offered the applicant any redeployment. To the contrary, their evidence was clear that what they offered him was the opportunity to apply for one (or perhaps both) of the two new positions of Senior Estimator and Bid Manager in a competitive and open appointment process. They also admitted that the position as they explained it to Mr Milardovic was that if he was unsuccessful, his employment would be terminated on the basis of redundancy. There is no analogy of the kind on which the respondents rely with the circumstances in Amcor Limited. When and if the two new positions were filled by successful applicants then it was no longer the case the applicant could continue to do the same work, on the same terms and conditions as before, and with his accrued benefits preserved: see Amcor at [14] per Gleeson CJ and McHugh J.
273 In cross-examination, when challenged that there was no position for Mr Milardovic at Vemco after successful applicants had been appointed in July and August 2014, Mr Barry said:
There is always options for redeployment. He had skills which would have been still valuable in the business.
274 As an explanation of why Mr Milardovic's position was not redundant, I do not accept that evidence. I find that is a reconstruction by Mr Barry.
275 Mr Barry, on behalf of the first respondent and in his own mind, I find, did not intend that the applicant would continue in employment with Vemco in another position if he did not succeed in a competitive process to obtain one of the two newly created positions. There was no proposal or intention to redeploy the applicant: either he would apply for and be successful in securing one of the two new positions, or his employment would be terminated on the basis of redundancy. That is precisely the explanation given to the applicant in May 2014 by Mr Barry and Ms Finnigan and I find that was in fact the situation. The timing of Mr Milardovic's termination was delayed after he made a WorkCover claim but the uncertainty which existed about his employment status between July and November 2014 was due to the somewhat confused handling of that WorkCover claim. The factual situation remained that Mr Milardovic could not return to Vemco to do the same work, on the same terms and conditions, with accrued benefits preserved, as he had been doing prior to 13 May 2014.
276 In this proceeding, the respondents did not suggest that redundancy pay should be reduced because Vemco had obtained "other acceptable employment" for Mr Milardovic, in the sense of s 120(1)(b)(i) of the Act: see FBIS and Allman v Teletech International Pty Ltd [2008] FCA 1820; 178 IR 415. In any event, the proper forum in which to seek to rely upon s 120 is through an application to the Fair Work Commission, which may determine that the amount of redundancy pay be reduced, including to nil: s 120(2). In Allman, Marshall J considered similar severance pay provisions in certain Australian Workplace Agreements which on their terms did not apply where the employer was "able to arrange alternative employment with another employer that is comparable in wages, terms and conditions of current employment". As Marshall J observed at [9], rather than providing that an employer must approach an industrial tribunal to be exempted from paying severance pay, the relevant AWAs had "inbuilt exemptions to the severance pay clause". Considering the test "able to arrange alternative employment", Marshall J held at [18]:
Teletech facilitated its staff applying for jobs with Telstra in circumstances where they competed on their merits with existing Telstra employees and fellow Teletech employees for the available positions. The encouragement and facilitation of a process is not the same as doing everything possible to ensure a result. Arranging alternative employment means bringing about that employment should the employee choose to accept it. Anything short of that, such as competing with competitor applicants (albeit limited to two categories of applicant: existing Telstra and Teletech employees) does not meet the test provided by the relevant sub-clause in the AWAs.
277 Although expressed in a different context, I consider Marshall J's reasoning confirms my conclusion that there is no basis for finding Mr Milardovic's position had not been made redundant merely because Vemco invited him to apply for one of two new positions opened up to a competitive process.
278 Therefore, the situation as I find it to have been is:
At some time during April and May 2014, the applicant's full-time position of Bid Manager/Senior Estimator ceased to exist and was replaced with two newly created full-time positions of Senior Estimator and Bid Manager. This was a conscious restructuring decision made within Vemco, and Mr Barry was one of the lead decision-makers, but not the only decision-maker. The announcement of the new structure was made on 12 May 2014.
Those two new positions were advertised internally and externally.
The applicant was invited to apply for either, or both, of the positions. Ms Finnigan gave him a deadline for any such application of 30 May 2014.
Ms Finnigan's invitation by letter dated 26 May 2014 (that is, after the applicant went on sick leave but before Ms Finnigan was aware the applicant had made a WorkCover claim) stated that if Mr Milardovic did not wish to take up one of the roles:
then you will be made redundant from the Vemco Group. Alternatively you can view other suitable roles within the Group on our website …
He did not apply for either position, however it appears Ms Finnigan continued to encourage him to consider doing so even after 30 May 2014 (suggesting an extension until mid-June 2014 on the basis Mr Milardovic said he had not previously received the position descriptions).
I find Mr Milardovic did not have any confidence that if he applied for one of the jobs he would be successful. In that sense, in my opinion, he resisted applying for the new positions, and instead chose to hold out for what he considered he was entitled to under his WorkCover claim. He correctly understood that the position he held at Vemco prior to 13 May 2014 no longer existed.
Appointments were made to both positions in July and August 2014.
Subsequently, one of the appointees left, but the position (the Bid Manager role) was filled by a person engaged as a contractor rather than as an employee.
279 The generality of, and gaps in, the evidence does not enable me to make findings which are any more precise than this, in terms of dates on which events occurred. The parties' submissions were also often pitched at a high level of generality in terms of the facts.
280 It is unclear from the evidence what the explanation is for the respondents not following through on the sequence of events they had foreshadowed to Mr Milardovic. That is, when he did not apply for either of the positions, and appointments were made in July and August 2014, there was no evidence led to explain why his employment was not terminated on the grounds of redundancy at that point, as the respondents had said would occur.
281 It seems, as I have noted, that the hiatus had something to do with the progress of the WorkCover claim but this was not clearly explained in the evidence. No submissions were made by the respondents to the effect that the first respondent was obliged not to terminate the applicant's employment during the currency of the WorkCover claim, and indeed of course the first respondent did eventually do just that, in November 2014.
282 On the first respondent's own statements (by Ms Finnigan) to Mr Milardovic, his employment should have been terminated by reason of redundancy on and from shortly after 30 May 2014, or at the end of the week of 8 June 2014, when he did not apply for either of the two positions. Inexplicably, from this point on the respondents appear to have treated Mr Milardovic as if he was an employee who had a position to return to, when he did not. This is despite Ms Finnigan admitting in cross-examination that Mr Milardovic would never again perform all of the duties he had been performing in his role as Bid Manager/Senior Estimator, and that his duties now existed in the two new roles.
283 Inexplicably, in a letter dated 31 October 2014, shortly before Mr Milardovic's employment was terminated, Ms Finnigan said:
As noted on numerous occasions we have been committed to your safe and successful return to work for your normal working hours in the role of Bid Manager/Senior Estimator.
284 The role Ms Finnigan referred to did not exist, and on the evidence before me, it appears to be the case that at 31 October 2014 two other individuals were performing (one perhaps on contract, although the timing of this is unclear on the evidence) the two new roles announced in May 2014.
285 Equally inexplicably, in the letter of termination on 11 November 2014, Ms Finnigan states:
… this letter is to inform you that unfortunately we can no longer hold your position open.
286 Again, there was no position for the first respondent to "hold" for Mr Milardovic. When, later in the letter, Ms Finnigan referred to the first respondent having "considered whether any alternative role might be available", it is difficult to understand to what this was intended to refer, given the restructure several months previously. In her evidence, Ms Finnigan could not explain any of these inconsistencies, and appeared to accept her letter of 31 October 2014 was incorrect.
287 In my opinion, the real reason for the termination of the applicant's employment was that his position with Vemco was redundant, and given he had not applied for either of the two new roles and others had been appointed, Mr Barry, acting on behalf of Vemco, simply had no employment for him, did not attempt to appoint him to any other position, and was not troubled by the prospect of Mr Milardovic not returning to work at Vemco.
288 That being the case, Mr Milardovic's dismissal on 11 November 2014 is in my opinion properly to be characterised as a redundancy, which was known by the first respondent to be such from approximately July and August 2014 when the appointments to the new positions were made. The applicant is entitled to payments in accordance with s 119 of the Fair Work Act. Having so found, it is unnecessary to determine Mr Milardovic's alternative claim in contract against Vemco for failing to pay his redundancy entitlements.
289 As with the notice of termination issue, I do not see how a failure to make an applicable redundancy payment falls within s 342(1), Item 1(c) as adverse action, since it occurs after the termination of employment. I find it is a separate contravention under s 119.