issued by Senior Deputy President Richards on 25 May 2007

[[2007] AIRC 413]

s.643 - application for relief in respect of termination of employment

Appeal - termination of employment - whether termination of employment for genuine operational reasons - notice of motion dismissed - availability of appeal - whether error in decision under appeal - Workplace Relations Act 1996 ss.120(1) and (2), 643(1)(a), 643(8) and (9), 649, 685(1) and (2).

[1] On 1 March 2007 Mr Acworth made an application for relief in relation to the termination of his employment by Boeing Australia Limited (Boeing). The application, made pursuant to s.643(1)(a) of the Workplace Relations Act 1996 (the Act), alleged that the termination was harsh, unjust or unreasonable. On 21 March 2007 Boeing filed a notice of motion to dismiss the application for want of jurisdiction. In due course the motion was heard and determined by Senior Deputy President Richards. He issued a decision in which he dismissed the motion on 25 May 2007. [1] Boeing has lodged a notice of appeal from that decision.

[2] The Senior Deputy President's decision and this appeal concern one principal issue, namely: was Mr Acworth's employment terminated for genuine operational reasons or for reasons that included genuine operational reasons. If that question is answered in the affirmative Mr Acworth's application for relief is not a valid application and must fail.

[3] Section 643(1)(a) permits an application for relief in respect of termination of employment on the ground that the termination was harsh, unjust or unreasonable. Section 643(8) provides, however, that an application must not be made on those grounds if the employment in question was terminated for genuine operational reasons or for reasons that include such reasons. Section 643(8) reads:

"(8) An application under subsection (1) must not be made on the ground referred to in paragraph (1)(a), or on grounds that include that ground, if the employee's employment was terminated for genuine operational reasons or for reasons that include genuine operational reasons."

[4] The term "operational reasons" is defined in s.643(9) as follows:

"(9) For the purposes of subsection (8), operational reasons are reasons of an economic, technological, structural or similar nature relating to the employer's undertaking, establishment, service or business, or to a part of the employer's undertaking, establishment, service or business."

[5] A respondent employer wishing to contend that an application for relief on the grounds in s.643(1)(a) should be dismissed because the termination was for genuine operational reasons or for reasons that include genuine operational reasons may move for the dismissal of the application. Section 649 governs the manner in which such motions are to be dealt with. It reads where relevant:

"649 Dismissal of application relating to termination for operational reasons

(a) an application is made, or is purported to have been made, under subsection 643(1):

(i) on the ground referred to in paragraph 643(1)(a); or

(i) the respondent has moved for the dismissal of the application on the ground that the application is outside the jurisdiction of the Commission because the employee's employment was terminated for genuine operational reasons or for reasons that include genuine operational reasons; or

(ii) it appears to the Commission, on the face of all the materials before it, that the employee's employment may have been terminated for genuine operational reasons or for reasons that include genuine operational reasons;

the Commission must hold a hearing to deal with the operational reasons issue before taking any further action in relation to the application, other than dealing with a matter on the papers as provided by section 645, 646, 647 or 648.

(2) If, as a result of the hearing, the Commission is satisfied that the operational reasons relied on by the respondent were genuine, the Commission must:

(a) if subparagraph (1)(a)(i) applies - make an order dismissing the application; or

(b) if subparagraph (1)(a)(ii) applies - make an order dismissing the application to the extent that it is made on the ground referred to in paragraph 643(1)(a).

(3) Subject to any right of appeal to a Full Bench of the Commission, a finding by the Commission that it is not satisfied that the operational reasons relied on by the respondent were genuine is final and binding between the parties in any proceedings before the Commission.

[6] When a respondent employer moves for the dismissal of an application pursuant to s.649(1)(b)(i), s.649(2) requires the Commission to examine the operational reasons relied on by the respondent employer and to decide whether those reasons were genuine. It follows that the focus of the inquiry is two-fold. It requires the identification of the reasons relied upon by the employer and an evaluation of their genuineness. In a forensic sense reasons relied on by the employer might not be genuine because they were not real reasons for the termination or, while being genuine reasons, they may not be operational ones.

[7] In considering whether a termination was for genuine operational reasons the employer's reasons for dismissal are the critical consideration. In Cruickshank v Priceline [2] (Priceline) the Commission drew attention to the particular importance of the reasons advanced by the decision-maker. The Full Bench said:

"[10] Speaking generally the reasons for termination of employment are the reasons of the decision-maker. In many cases the decision-maker will be easily identifiable. In other cases the situation may not be straight forward. For example the decision may have been taken by a group such as a committee. In any event the evidence of the decision-maker, or decision-makers if there are more than one, will be pivotal.

[14] . . . To ascertain the reasons for an employer's decision to terminate an employee's employment, it is necessary to focus on the reasons, if any, advanced by the decision-maker. It is clear that the credibility of evidence given by the decision-maker may be put in issue in some cases. If this occurs the Commission will be required to evaluate the evidence given by the decision-maker against the other evidence and the circumstances overall in the usual way."

[8] Before turning to the facts of the case and the application of the genuine operational reasons exclusion it is convenient to deal with a preliminary issue concerning the appeal provisions. The issue was said to arise from the interaction between the term "any right of appeal" in s.649(3), set out above, and the appeal provisions in s.120.

[9] Sections 120(1) and (2) provide where relevant:

"120 Appeals to Full Bench relating to matters arising other than under the Registration and Accountability of Organisations Schedule

(1) Subject to this Act, an appeal lies to a Full Bench, with the leave of the Full Bench, against:

(a) an award or order made by a member of the Commission; and

(2) A Full Bench shall grant leave to appeal under subsection (1) if, in its opinion, the matter is of such importance that, in the public interest, leave should be granted."

[10] It was submitted on Mr Acworth's behalf that for the most part the Act does not provide a right of appeal. Pursuant to s.120(1) an appeal lies only if leave is granted. The only "right of appeal" is that provided by s.120(2) in that the Full Bench is required to grant leave to appeal if it is of the opinion that the matter is of such importance that, in the public interest, leave should be granted. It follows, it was submitted, that if the matter is not of such importance there is no right of appeal in the s.649(3) sense.

[11] This submission is based on a view of the words of the section which is too narrow. The purpose of s.649(3) is to establish the binding effect of the decision in question. There is no indication in the words used that the operation of the appeal provisions is to be cut down so that s.120(1) has no application. The use of the word "any" indicates that the term "right" is to be interpreted widely. In our view the composite expression "any right of appeal" includes a right acquired by the exercise of the discretion to grant leave pursuant to s.120(1).

[12] We reject the submission. Where an appeal is lodged against a finding of the type referred to in s.649(3), subject to its competence in other respects, the appeal is to be dealt with according to s.120 in the normal way.

[13] Mr Acworth is by training a computer software engineer. He commenced employment with Boeing in Brisbane on 27 May 2004 as a Process Improvement Engineer on a project known as the High Frequency Modernisation Project (HFMOD Project). The terms of his contract of employment contemplated that he might be reassigned and that Boeing might require him to work with another "department/team/project, business unit and/or at another location to meet the needs of the business." [3] It is common ground that Boeing's Redeployment and Redundancy Policy applied. The policy included the following:

"The Policy requires every attempt be made to redeploy an employee who has completed an assignment to other work. The first step in the process requires Boeing to identify a 'comparable position' of employment, by reference to:

(b) Whether the position is at the same or a different location;

(d) Whether the position is one the employee could perform with suitable training."

[14] During Mr Acworth's employment he was reassigned several times. The last reassignment to take effect was to a team working on the completion of a particular part of the HFMOD Project known as the Modem Characterization Test Tool (the Modem Tool assignment). He was engaged on this activity at the time of the termination of his employment. He apparently commenced the Modem Tool assignment in March 2006. Completion was originally scheduled for January 2007 but later revised by Boeing to March 2007. Mr Acworth testified that at the time his employment ended, 12 February 2007, there may still have been work for another one or two months after March to fully complete the Modem Tool assignment. Boeing's evidence was that while there may have been some further work after March it would have been more limited than Mr Acworth suggested.

[15] It is clear that well before March 2007 Boeing gave attention to Mr Acworth's assignment after the completion of the Modem Tool assignment. Commencing in September 2006 it consulted him about positions potentially available to him after March 2007. Two positions were identified. Neither was persisted with. On 2 January 2007 a third position was identified, referred to as an "Engineer-Systems Engineering (Product Characterization Engineer/Systems Engineer)." The position as originally described was said to be based in Canberra and Brisbane. Mr Acworth expressed concern that he was not qualified for the role and that it required relocation. Despite this, on 24 January 2007, Boeing reassigned Mr Acworth and sought his confirmation of the reassignment. It was indicated at that time that the job was primarily based in Brisbane. On 31 January 2007 Mr Acworth rejected the reassignment. Thereupon Boeing gave him 24 hours to reconsider his position. Mr Acworth made no recorded reply to this ultimatum. It is common ground that Boeing terminated Mr Acworth's employment by letter dated 12 February 2007. Mr Acworth was escorted out of the building almost immediately, apparently in accordance with Boeing's risk management policy. Boeing gave him 4 weeks pay but declined to make any severance payments under its redundancy policy.

[16] The only evidence from Boeing concerning the reasons for termination of Mr Acworth's employment is the evidence given by Mr Robinson, the Project Manager for the HFMOD Project, and Boeing's letter of 12 February 2007. Mr Robinson's first statement contains the following passage:

"30. Mr Acworth informed us on 31 January 2007 that he did not accept the reassignment position. A copy of his letter is annexure PR4. This was also confirmed by Mr Acworth verbally to Melissa Davidson (Human Resources Manager) and me on 7 February 2007. Mr Acworth expressed a preference that instead of accepting the reassignment, he would just 'go back to his job' in the SAIT. I attempted to explain to him that the job he was currently doing was almost at an end, but he asserted that he would just continue doing his job.

31. Mr Acworth was then given 24 hours to reconsider his position.

32. Mr Acworth did not accept the reassignment within that period.

33. Accordingly, his employment was terminated by letter signed by Marc Nance (Division General Manager for Integration Systems Development, dated 12 February 2007. A copy of this letter is annexure PR5.

34. The letter refers to Mr Acworth's 'resignation' which is perhaps not an accurate description of what occurred, but reflected our position that by his own refusal to accept an alternative role he himself had made his continuing employment with Boeing impossible.

35. Mr Acworth employment was terminated because:

(a) his assigned role was about to come to an end and Boeing had no further use for an employee in that role; and

(b) Mr Acworth had failed to accept any of the alternative positions available to him, and had insisted that the only role he would undertake was the role which was ending."

[17] The letter of termination referred to in paragraph 33 of Mr Robinson's statement reads in relevant respects as follows:

"It is with regret that I acknowledge that you have not accepted your 1 March 2007 reassignment as stated in your correspondence of 31 January 2007 confirmed verbally to Ms Davidson and Mr Robinson on 7 February 2007.

I note that you were given a period of 24 hours until COB 8 February 2007 to reconsider your position and that you have made no contact with Boeing in that time.

I therefore accept your resignation from Boeing Australia Limited effective immediately. The required notice period will be waived by the company and four week payment in lieu of notice will be made in to your nominated bank account. All other monies owed to you will also be deposited into that account. You are required to return all company property and undertake a security debrief prior to your departure."

[18] In the circumstances can it be said that Mr Acworth's employment was terminated for genuine operational reasons or for reasons that included genuine operational reasons?

[19] Boeing having moved for the dismissal of the application, the Senior Deputy President heard the motion and declined to dismiss Mr Acworth's application. He approached the matter by looking at the cause of the termination. That can be seen in the following paragraphs:

"[45] But in the circumstances of the matter now before the Commission the test of the genuineness of the operational reason and the discovery of the operational reason itself require some further characterisation of the relevant factual matrix.

[46] It appears that the operative reason for the termination of the Employee's employment was the result of his refusal to accept his reassignment, which embodied the further work the Employer wished him to perform pursuant to his contract of employment.

[49] In view of this, it cannot be said that the Employee's employment was terminated for an operational reason relevant to the skills requirements of the structure of the Employer's business. Rather, the proper characterisation of the reason for the termination was the conduct of the Employee in not acceding to his Employer's direction to undertake the required reassignment."

[20] In focusing on the sequence of events leading to the termination, and in particular upon Mr Acworth's refusal to be reassigned, the Senior Deputy President was able to conclude that there was no genuine operational reason for the termination:

"[61] In my view, therefore, properly characterised, the reason for termination of the Employee's employment was his refusal to carry out a reasonable and lawful direction, consistent with the terms of the contract of employment, given by the Employer for purposes of a further assignment of duties, and not the operational requirements of the business as such. From this dispute all else followed, consequentially."

[21] To find, as the Senior Deputy President did, that Mr Acworth's refusal to carry out a direction was the reason for the termination of his employment is true in one sense because absent the refusal there would have been no termination. But the termination was the result of a deliberate decision made by Boeing. Evidence as to the reasons for that deliberate decision are the ones which are relevant under s.643(8). As we indicated earlier in referring to Priceline, the reasons for termination are the reasons of the employer and, in particular, the reasons of the decision-maker. Where evidence is given by the employer of the reasons for termination, an analysis of the sequence of events is only relevant to the extent to which it tends to confirm or to undermine that evidence. In this case the starting point for the analysis should have been Boeing's evidence as to the reasons for termination. That evidence, which we have already set out, consisted of Mr Robinson's statement of the reasons for the termination and the letter of termination itself. Although Mr Robinson's evidence does not indicate in terms that he made the decision to terminate the employment it was not suggested that anyone else had made the decision and the cross-examination proceeded on the basis that he had. In the circumstances his evidence should be accepted as that of the decision-maker.

[22] Mr Robinson's evidence was that because of Mr Acworth's refusal to be reassigned there would be no work for him to do on the imminent completion of the Modem Tool assignment. The letter of termination, while not couched in the same terms, is not inconsistent with Mr Robinson's evidence. There is no suggestion that Mr Robinson lied or that for any other reason his evidence should be disbelieved. Mr Robinson agreed in cross-examination that Mr Acworth's refusal to cooperate with the reassignment was fundamental to the decision to terminate the employment. He also testified that the role which Boeing was offering Mr Acworth was a good match and that his declining the reassignment indicated that he was no longer interested in employment with Boeing. This evidence simply confirms Mr Robinson's evidence-in-chief that Mr Acworth's rejection of the assignment was part of the reason for the decision to terminate his employment, along with the fact that there would be no role for him to perform when the Modem Tool assignment concluded. In the circumstances the Senior Deputy President should have accepted that evidence as establishing Boeing's reasons for the termination. The question which then arises is whether the reasons were or included genuine operational ones.

[23] In our view the reasons advanced by Boeing clearly did include genuine operational ones. While there was undoubtedly a dispute about Mr Acworth's next assignment, in the situation which had developed Mr Robinson believed that there was no ongoing role for Mr Acworth at Boeing. The latter at least was an operational reason. Where an employer terminates the employment of an employee with particular qualifications and experience because no suitable assignment can be found for an employee with those qualifications and that experience, the termination is for an operational reason. The reason is structural in nature. Such a decision is akin to a decision to terminate employment for redundancy arising from technological change, for example. While in this case Boeing's reaction to Mr Acworth's refusal to accept the proffered assignment was no doubt part of the reasons for the decision to terminate his employment, Mr Robinson's belief that there was no suitable assignment was a genuine operational reason, even if it was not the exclusive reason, for the decision.

[24] We note that the Senior Deputy President did examine some of the evidence relevant to Boeing's decision-making process. He considered whether Boeing was mistaken in concluding that the position to which it sought to reassign Mr Acworth was an appropriate one in light of his abilities and his contract of employment. The Senior Deputy President concluded as follows:

"[73] Those functional managers who may have given evidence in this regard were not called by the Employer, and the Commission cannot conclude on the evidence brought before it as to whether or not the Employee refused to accept the position as he assumed it to be "on paper", or as the Employer understood it to be, on the basis of its "experience".

[74] In such circumstances, and notwithstanding the findings above, the Commission has difficulty determining whether or not the Employer was on sound footing in relation to the request as made of the Employee to accept the further assignment. This is because the Commission has not been able to conclude on the evidence that the Employer properly constructed the factual matrix upon which its own decision to terminate the Employee's employment resided, either directly or consequentially."

[25] It can be seen that the Senior Deputy President ultimately made no finding on the appropriateness of the reassignment. That may be significant because a finding that the reassignment was inappropriate might have undermined the credibility of Mr Robinson's evidence. In particular it might have grounded an inference that the reassignment was a sham and that there was some other reason for terminating Mr Acworth's employment. In the absence of any such finding, however, Mr Robinson's evidence should have been accepted. It is also significant that Mr Acworth's counsel conceded on appeal that the reassignment which Mr Acworth rejected was nevertheless an appropriate one. The concession was made in the course of a submission with which we now deal.

[26] Counsel for Mr Acworth contended before us that there was no genuine operational reason for the termination because there was work for Mr Acworth to do within the Boeing structure - namely the work to which Boeing wished to reassign him. As we have just indicated this contention involved a concession that the reassignment was an appropriate one. In the circumstances, it was contended, the termination flowed simply from Mr Acworth's intransigence. The nub of the submission was that it would be artificial to treat the termination as based on a structural reason when in fact there was work for him to do but that Mr Acworth would not agree to do it.

[27] This contention ignores Mr Robinson's evidence as to Boeing's reasons for deciding to terminate the employment. Boeing might have decided to terminate the employment solely because of Mr Acworth's refusal to be reassigned but, on the evidence, its reasons were not so limited. The submission invites us to ignore that evidence without advancing any reason for doing so. As we have already indicated, that evidence should have been accepted.

[28] With respect, it appears that the Senior Deputy President's analysis focused on questions of cause and effect rather than on the evidence as to the reasons for Boeing's decision to terminate the employment. It is also possible that he may have concluded that the reasons advanced by Mr Robinson did not include genuine operational ones. Whichever is the case, the Senior Deputy President fell into error. There was no reason to reject Mr Robinson's evidence as to the reasons for the decision to terminate Mr Acworth's employment and those reasons included genuine operational ones.

[29] Before concluding we should also mention that in the event both parties to the appeal submitted that in one respect or another the Senior Deputy President had fallen into error in characterizing the reasons for Mr Acworth's termination. We have dealt with those submissions to the extent necessary in the conclusions we have expressed and no good purpose would be served by going further.

[30] Leave should be granted to appeal and the appeal upheld. Section 649(3), which we have set out earlier, provides that, subject to any right of appeal, a finding by the Commission that it is not satisfied that the operational reasons relied on by the respondent were genuine is final and binding between the parties in any proceedings before the Commission. Accordingly, the Senior Deputy President's dismissal of Boeing's notice of motion was an order for the purposes of s.685(1). It was not suggested otherwise. Section 685(2) provides that an appeal may be made only on the grounds that the Commission was in error. As indicated, we have concluded that there was error in this case. We shall order that leave be granted to appeal and that the Senior Deputy President's order dismissing Boeing's notion of motion be quashed. We shall make an order pursuant to s.649(2)(a) dismissing Mr Acworth's application.

J Murdoch SC of counsel with D Williams, solicitor for Boeing Australia Limited_._

[1] [2007] AIRC 413, 25 May 2007.

[2] [2007] AIRC FB 513, 27 June 2007.

[3] Employment contract between Boeing and B Acworth dated 27 May 2004.

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