Sensis Pty Ltd v Gundi

the facts 1 The respondent (the respondent or Mr Gundi) started work with the appellant (the appellant or Sensis) in 2008. He was employed to sell advertising services by making "cold calls" to potential customers. In October 2011, the respondent was offered and accepted the position of "Media Sales Advisor", which also involved selling the appellant's advertising services. The terms of his employment were contained, in part, in a contract of employment dated 6 October 2011 (the October 2011 contract of employment). The respondent worked under a "mobile operating model", which meant that he spent much of his working day visiting customers. 2 The respondent's employment was also governed by an enterprise agreement, called the Sensis Enterprise Agreement 2014 (the enterprise agreement). The parties agreed that, because the October 2011 contract of employment contained an "entire agreement" clause, the enterprise agreement was not incorporated into that contract. Rather, the two agreements were intended to be, and are, to be read together. 3 Clause 17 of the enterprise agreement provided relevantly as follows: 17.2 Redundancy 17.2.1 Employees employed by Sensis prior to the Commencement date (a) An employee's position is redundant if Sensis no longer requires the "position" to be done by anyone because of changes in the operational requirement of Sensis. (b) Where an employee's position is made redundant, Sensis will take steps to redeploy the employee to a Reasonable alternative position, if available. (c) If an employee's position is made redundant, and the employee is not redeployed to a Reasonable alternative position, then the employees employment will be terminated as a result and the employee will receive: i. 5 weeks' notice or pay in lieu of notice; and ii. outplacement services by a provider nominated by Sensis; and redundancy pay calculated as detailed below: Period of continuous service on termination Redundancy pay entitlement Up to and including 1 year 4 weeks For each subsequent completed year of continuous service 3 weeks Total maximum payment 52 weeks

(d) An employee is not entitled to the redundancy payments specified in this clause if: i. there is a transfer of employment in relation to the employee as defined in the Act; or ii. the employee is offered and does not accept a Suitable Position; or iii. Sensis redeploys the employee to any position within Sensis or an associated entity. 4 The two relevant terms in cl 17.2 - "Reasonable alternative position" and "Suitable Position" - are defined in cl 1.2 respectively as: (1) "[a] comparable role to the role being performed by the employee before their position was made redundant taking into account remuneration, seniority, skills, experience"; and (2) "[a]n offer of employment that is on terms and conditions substantially similar to, and considered on an overall basis, no less favourable than, the relevant employee's current terms and conditions of employment, and which recognises the relevant employee's service with Sensis for the purpose of calculating entitlements under the Act".

The respondent's position description prior to February 2016 5 As at the beginning of 2016, the description of the respondent's position was contained in two documents: (i) the October 2011 contract of employment; and (ii) a "Role Clarity Statement". 6 The October 2011 contract of employment relevantly provided that Sensis could re-assign Mr Gundi "at any time to any role for which [he was] suitably qualified" and that "[a]s a consequence of any re-assignment … [he] may be required to perform different duties…". 7 The Role Clarity Statement for the respondent's position as a Media Sales Advisor provided that the purpose of his position was to "retain and grow a portfolio of clients …". Relevantly, it provided that a "Key Result Area" was "New Business", which was to be given a "20% weighting". That task was described as: "Actively source, wash (sic, watch) and log new business via competitor media and local observation"; "Actively seek new business through referrals"; and "Maintain new business pipeline with active or closed status updated and regular communication with AD". 8 Commencing from February 2015, the respondent's commission payments were calculated by reference to revenue growth rather than a flat commission per sale, which was the basis of the calculation of commission prior to that time. 9 The respondent's day-to-day activities included attending meetings with existing and prospective customers, proposing and implementing new advertising programs and completing administrative tasks. The position also included a requirement that the respondent seek new business. At the hearing before the primary judge the respondent agreed that the description of his role under the heading "New Business" in the Role Clarity Statement was a fair description of some of the things he was required to do before February 2016. He also gave evidence, which the primary judge accepted, that prior to February 2016 he actually devoted about half an hour a week to "new business". The remainder of his time was spent selling services to his existing clients (who numbered between 160 and 170) and other tasks. For those reasons, the primary judge found that the respondent's "work as Media Sales Advisor had always included an amount of new business".

The respondent's position description after mid-February 2016 10 Following a meeting on 15 February 2016, Mr Salter, the Sensis Account Director for Geelong and Mornington, sent an email to the respondent which attached a revised position description for the role of Media Sales Advisor. Relevantly it described the role of Media Sales Advisor as follows: This role is required to maintain and grow customer portfolios. The role could involve: 1. Acquiring as many new business opportunities as possible and/or 2. Maintaining and growing an existing portfolio of SME customers using solution selling techniques. You may be required to do either of these functions or a combination of both at any point during the sales cycle to meet the sales operating model process and overall business objectives. 11 Mr Salter explained to the respondent in an email attaching the revised position description that as part of the restructuring of the appellant's business he would "no longer be allocated a list of customers at the beginning of a sales cycle that … [he would] be required to service, allowing ample time and opportunity to spot new business and grow other leads". Mr Salter, explained that his new title would be Media Sales Advisor - Business Development Consultant; that there would be "no change to [his] core role"; and that he had "always [been] required … to acquire a level of new customers … as well as grow and maintain existing customers revenue …". 12 The primary judge, on the basis of evidence given at the hearing before him, accepted that the respondent's portfolio of clients as at February 2016 "had not been won by" the respondent, but rather they had been allocated to the respondent by the appellant. The primary judge also accepted "that it was a matter for Sensis as to how it 'decided to divide the revenue pool'" and that the respondent "had no right to those customers from one sales cycle to another". 13 The respondent was unhappy with the proposed changes to his position description. In a meeting on 15 February 2016 with Mr Salter, the respondent complained that the revised position would constitute a demotion, that he would suffer financial loss due to lower commissions and that the role was therefore unsuitable. 14 On 24 February 2016 the respondent took personal leave. He never returned to work.

THE Proceeding below 15 In June 2016, the respondent commenced a proceeding in the Federal Circuit Court of Australia (FCCA). In his statement of claim, he alleged that he was employed as a Media Sales Advisor pursuant to the October 2011 contract of employment and that by directing him "to accept the role of Business Development Consultant" on 15 February 2016, Sensis had repudiated the October 2011 contract of employment, which repudiation the respondent accepted as terminating it. He alleged that he was entitled to a redundancy payment of $42,132.12 for breach of cl 17.2.1(c) of the enterprise agreement and s 50 of the Fair Work Act 2009 (Cth) (which provides that "[a] person must not contravene a term of an enterprise agreement"). The respondent also sought the "maximum penalty" pursuant to s 546 of the Fair Work Act 2009 (Cth) for breach of s 50, being a civil remedy provision within the meaning of the Fair Work Act 2009 (Cth). 16 Sensis filed a defence in which it pleaded that the respondent's position was not redundant; that the Media Sales Advisor - Business Development Consultant role was, in any event, either or both a "Reasonable alternative position" or a "Suitable Position" within the meaning of the enterprise agreement. Sensis also pleaded terms of the October 2011 contract of employment, as follows: [The October 2011 contract of employment] provided, amongst other things, that the Respondent may re-assign the Applicant at any time to any role within the Respondent for which the Applicant is suitably qualified on a temporary or permanent basis, with different duties, location or reporting relationships; The contract provided that in the event of such re-assignment the Applicant's employment will otherwise continue on the terms set out in the agreement. 17 The trial of the proceeding before the primary judge took place over two days in March 2017. Judgment was delivered on 27 June 2017. The primary judge found for Mr Gundi; entered judgment against Sensis for $42,132.12; and directed the parties to file submissions on the questions of any penalty sought pursuant to s 546 of the Fair Work Act 2009 (Cth) and interest. Sensis then appealed to this Court, seeking an order that, in lieu of those orders, the proceeding be dismissed. The operation of the primary judge's orders was stayed in the meantime. 18 The primary judge accepted that there was, as a result of what occurred, no change in Mr Gundi's employment in relation to his title, location, classification, salary, reporting line or overall commission opportunity. 19 The primary judge, however, held that those considerations in relation to the matters in which there had been no change to Mr Gundi's employment "distract[ed] attention from the central enquiry, which is whether the position was made redundant" (at [178], emphasis in the original). He held that "[o]n any view, Mr Gundi's responsibilities were in fact redistributed amongst other employees and his position no longer existed" and that "the position was made redundant" ([178]). 20 His Honour reasoned as follows: 173. To adapt the observations in Amcor v [Construction, Forestry Mining & Energy Union (2005) CLR 222 CLR 241], in this claim the question of redundancy arises by reason of a change in the tasks that were required to be undertaken by Mr Gundi. I accept that during the meeting held on 15 February 2016, Mr Gundi was directed by Mr Salter that Sensis had determined that he would best be suited to undertake the Business Development role. I also accept that Mr Gundi contested that direction for the reasons that he gave: (a) the new role was akin to the role he had occupied when he commenced employ in 2008; (b) the ability to earn commissions in the new role would be compromised by the removal of the responsibility for an established portfolio of 160-170 existing customers. 174. I conclude that Sensis no longer wanted anyone to undertake the role that was being undertaken by Mr Gundi. To the contrary, as Mr Salter confirmed in evidence, the portfolio of 160-170 existing customers was distributed amongst other Media Sales Advisors and personnel designated as the Sensis Telephone Sales Service Team. In that sense this claim was one falling within that category of redundancy claims where the duties being performed by the employee remained to be performed by others within Sensis' business. As concerned Mr Gundi, the net effect of the restructure announced on 5 February 2016 was that his duties were redistributed to others. 175. Putting to one side the defences that Mr Gundi was offered a Reasonable alternative position, or a Suitable Position, as concerned his existing role Mr Gundi was left with no duties to perform. If he was not redeployed in the manner provided for by sub-para's 17.2.1 b) and d), his position had, in my view, become surplus to requirements. However, the conclusion that his position had become surplus is to be distinguished from a conclusion that other issues had arisen between Sensis and Mr Gundi such that his employer determined he should be no longer employed … 176. If I am wrong in that conclusion, I consider that Sensis had determined to amalgamate the job being performed by Mr Gundi in a manner that effected a substantial change in his duties and responsibilities. I accept Mr Gundi's evidence that, before 2016, he was not spending more than about half an hour each week spotting for new business and that he spent the majority of his time on the road, as suggested by Mr Salter, because he was attending to the management of the portfolio of existing customers that had been allocated to him. The implementation of the decision by Sensis to create three new roles abolished or largely stripped the functions and responsibilities out of the position being performed by Mr Gundi … 177. The submission that Mr Gundi's reassignment to new business acquisitions merely represented a change in focus or a rebalancing of the role is rejected. I find that it was neither. Mr Salter's email transmitted on 16 February 2016, coupled with his viva voce evidence, confirmed that Mr Gundi was being reassigned to the role of Media Sales Advisor (Business Development Consultant) and that he would no longer be allocated a list of customers that he would be required to service. For all practical purposes the role that Mr Gundi had been performing no longer existed. Instead of spending perhaps 30 minutes each week on spotting for new business or making cold-calls, Mr Gundi's responsibility was to be dedicated to such activity on a full time basis. 178. Sensis submitted that there was no change in Mr Gundi's employment in relation to his title, location, classification, base salary, reporting line or overall commission opportunity. So much may be accepted. However, in my opinion, this approach distracts attention from the central enquiry, which is whether the position was made redundant. On any view, Mr Gundi's responsibilities were in fact redistributed amongst other employees and his position no longer existed. In my conclusion, neither the existence or terms of the role clarity statement nor the position description address the anterior question: was Mr Gundi's position made redundant? I find that the position was made redundant. (Emphasis added.)

The Appeal 21 The appellant appeals on four main grounds, namely that the primary judge erred in finding that: (i) the respondent's position was made redundant; (ii) the respondent was not redeployed to a Reasonable alternative position; (iii) the respondent was not offered a Suitable Position; and (iv) the respondent was entitled to a remedy for breach of contract. The appellant also said that the primary judge erred because he reversed the onus of proof when considering questions (ii) and (iii). 22 The parties accepted that the principles summarised in the following passage in Fox v Percy (2003) 214 CLR 118 at [25] apply to this appeal: Within the constraints marked out by the nature of the appellate process, the appellate court is obliged to conduct a real review of the trial and, in cases where the trial was conducted before a judge sitting alone, of that judge's reasons. Appellate courts are not excused from the task of 'weighing conflicting evidence and drawing [their] own inferences and conclusions, though [they] should always bear in mind that [they have] neither seen nor heard the witnesses, and should make due allowance in this respect'. In Warren v Coombes (1979) 142 CLR 531 at 551, the majority of this Court reiterated the rule that: '[I]n general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge but, once having reached its own conclusion, will not shrink from giving effect to it.' As this Court there said, that approach was 'not only sound in law, but beneficial in ... operation'. See too s 27 of the Federal Court of Australia Act 1976 (Cth), which provides that, in an appeal, the Court shall have regard to the evidence given in the proceedings out of which the appeal arose, and has power to draw inferences of fact.

Redundancy 23 On the hearing of this appeal, counsel for both parties agreed that the relevant question was whether the appellant no longer required the position of Media Sales Advisor to be done by anyone because of changes in the operational requirement of Sensis within the meaning of cl 17 of the enterprise agreement. 24 They were correct to do so. It is of critical importance in cases such as this, where the relevant agreement contains a definition of "redundancy", that the question of whether a redundancy has occurred within the meaning of the agreement is not to be distracted by a consideration of cases decided by reference to other definitions in the cases, or by reference to cases in which the governing agreement contains no definition of the word. 25 The definition of redundancy in this case contained in cl 17 of the enterprise agreement requires an assessment of what the respondent's position was before and after 16 February 2016. 26 The starting point for that enquiry is the fact that, as the primary judge found, there was no change in the respondent's employment in relation to his title (Media Sales Advisor), location (Geelong), classification, salary, reporting line or overall commission opportunity. 27 The position of Media Sales Advisor, before and after 16 February 2016, required the respondent to sell the appellant's advertising services to a combination of new and old customers. The "mix" was different, no doubt. According to the Role Clarity Statement, 20% of the respondent's role was intended to be comprised of "new business". The respondent testified that the reality of the matter was that he spent about half an hour per week on new business prior to the change in the description of his position. Either way, however, the position both before and after 16 February 2016 required him to sell advertising services to a mix of existing and new customers. Commissions were calculated on the same basis (revenue growth) and revenue growth could occur both by making sales to existing customers or to new customers. Once it is understood that the only relevant change to the position of Media Sales Advisor was the mix of "new" and "existing" business, the proposition that the appellant no longer required the position of Media Sales Advisor to be done by anyone because of changes in operational requirements is, with respect, unsustainable. 28 It follows that the primary judge was wrong to have concluded, as a basis for finding that the respondent was redundant that: (1) the appellant no longer wanted anyone to undertake the role that was being undertaken by the respondent; (2) the respondent's claim was one falling within that category of redundancy claims where the duties performed by the employee remain to be performed by others within the appellant's business; (3) the net effect of the restructure was that the respondent's duties were redistributed to others within the appellant's business; (4) the respondent was left with no duties to perform; (5) the respondent's position had become surplus to requirements. 29 As the appellant submitted, on the basis of the facts as the primary judge found them, he "should have found that, after February 2016, [the respondent] did have duties to discharge, namely selling to a mix of new customers and existing customers" as described in his position descriptions both before and after 16 February 2016. 30 Accordingly, the respondent was not redundant within the meaning of the enterprise agreement because the appellant required the respondent's position to be performed. 31 That is sufficient to warrant the appeal being allowed. I turn now to the other grounds of appeal.

Reasonable alternative position or Suitable Position

Onus 32 The learned primary judge held that in deciding whether, on the assumption that the respondent had been made redundant, he was nonetheless not entitled to a redundancy payment under the terms of the enterprise agreement because he had been offered either a "Reasonable alternative position" or a "Suitable Position" within the meaning of cl 17 of that agreement, the appellant bore an onus of proof. His Honour reasoned as follows: Onus 198. Sensis submitted that Mr Gundi bore the onus of satisfying the court that Sensis did not offer him a 'suitable alternative position' (a composite phrase which I draw from the written submissions). In my opinion, this was not an accurate way of approaching the matter. Nor was it accurate to say that Mr Gundi bore the onus of establishing that he had not been offered (and so could not accept) a Suitable Position … 199. As a matter of construction, to the extent that para's 17.2.1 b)-d) employ the defined terms 'Reasonable alternative position' or 'Suitable Position' respectively, I conclude that it was for Sensis, not Mr Gundi, to establish that any such position was available and fell within the definition. Further, I conclude that once Sensis adduced evidence bringing the identified new position within the relevant definition, the onus shifted to Mr Gundi to respond to that case. In [Clothing & Allied Trades Union of Australia v] Hot Tuna Pty Ltd (1988) 27 IR 226 at 230-231 the Full Bench held that where questions of alternate employ were raised in answer to a redundancy claim, the consideration of matters such as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and other matters may be relevant. The Full Bench expressed no doubt that an onus was cast on the employer in relation to such issues (however, the reasons are complicated by the reference to cl. 51(c) of the subject award at p. 231 of the report when it seems clear that one intended reference was to cl. 51(e): see at pp.227-228). The Full Bench held, in the circumstances (where employees had in fact accepted alternative employment), that: ... in the absence of positive evidence going to the unacceptability of that employment, including unacceptable features of it, then the Commission is entitled to hold the employment as an acceptable alternative and relieve the employer of the obligation under cl. 51(c) of the award. (p.231) The reasoning supports conclusions that the employer bears the primary onus of bringing the proposed alternative employ within the subject provisions of the enterprise agreement and of a shifting onus to the employee to adduce evidence why the alternative employ - including features of it which may have a significant impact on the personal circumstances of the individual - should be held to be unacceptable. An objective evaluation of the issue remains to be undertaken throughout. 33 With great respect to the primary judge, this reasoning is incorrect. It was for Mr Gundi to prove that he had not been offered a position meeting the definitions of "Reasonable alternative position" or "Suitable Position", because it was necessary for him to do so to make good his cause of action. The decision of the Australian Conciliation and Arbitration Commission in Clothing & Allied Trades Union of Australia v Hot Tuna Pty Ltd (1988) 27 IR 226, upon which the primary judge relied, does not support the primary judge's reasoning. It concerned an application by an employer to vary its liability to make severance payments. Because the employer was the applicant for the relief sought, it bore the relevant onus of proof, just as Mr Gundi did in this case. 34 Because of the manner in which the primary judge approached the question of onus, he also did not have regard to the fact that Mr Gundi sought the imposition of a civil penalty for breach of the enterprise agreement under ss 50, 539(2) (Item 4) and 546 of the Fair Work Act 2009 (Cth). 35 Section 140 of the Evidence Act 1995 (Cth) provides: 140 Civil proceedings: standard of proof (1) In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities. (2) Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account: (a) the nature of the cause of action or defence; and (b) the nature of the subject-matter of the proceeding; and (c) the gravity of the matters alleged. 36 When contraventions alleged are contraventions of civil remedy provisions of the Fair Work Act 2009 (Cth) they are to be regarded as "quasi-criminal": see Australian Building and Construction Commissioner v Hall [2017] FCA 274 at [18] per Flick J. Because the standard of proof referred to in s 140(2) is a re-statement of the standard of proof referred to by Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336 it, follows that "[f]indings as to a contravention of the Fair Work Act are not findings lightly to be made": Australian Building and Construction Commissioner v Hall [2017] FCA 274 at [19] and [20]. 37 In those circumstances, not only was the onus on the respondent to establish the relevant facts, but the primary judge was obliged in dealing with the case to give due regard to the gravity of the matters alleged, which he did not, because he incorrectly placed the onus with respect to the questions of "Reasonable alternative position" and "Suitable Position" on the appellant. 38 The primary judge should have found that the role to be performed by the respondent after 16 February 2016 was "[a] comparable role to the role being performed by the employee before [February 2016] … taking into account remuneration, seniority, skills [and] experience", within the meaning of the definition in cl 1.2 of the enterprise agreement, and that therefore the respondent had been offered such a Reasonable alternative position, with the consequence that he was not entitled to any redundancy payment in any event. The fact that, as the primary judge found, there was no change in the respondent's employment in relation to his title, location, classification, salary, reporting line or overall commission opportunity was, in my view, sufficient to have required the primary judge to have found that the respondent had been offered a Reasonable alternative position. 39 For similar reasons, the primary judge ought also to have found that the respondent had been offered a "Suitable Position", namely "[a]n offer of employment that is on terms and conditions substantially similar to, and considered on an overall basis, no less favourable than, the relevant employee's current terms and conditions of employment, and which recognises the relevant employee's service with Sensis for the purpose of calculating entitlements under the Act" within the meaning of cl 1.2 of the enterprise agreement. 40 The primary judge, correctly, accepted that the appellant's 16 February 2016 offer of employment was on terms and conditions substantially similar to his then current contract and that the new offer recognised the respondent's service with the appellant for the purpose of calculating his entitlements under the Act. It follows that the only remaining question was whether the new terms and conditions "considered on an overall basis, [were] no less favourable than [the respondent's] [then] current terms and conditions of employment". In my view, there was no basis upon which it was open to the primary judge to find that, considered overall, the respondent's new terms and conditions were less favourable than his then current terms and conditions, and he erred in so finding.

No contractual remedy 41 The primary judge also held as follows: 256. In failing to pay the redundancy payments, Sensis committed a serious breach of the [October 2011 contract of employment]: Westen v Union des Assurances des Paris ((1996) 88 IR 259, 261 (Madgwick J). The breach was accepted by Mr Gundi. Upon termination, both parties were discharged from further performance but rights which had accrued to that point and causes of action that accrued from the breach continued unaffected: McDonald v Dennys Lascelles Ltd [1933] HCA 25; (1933) 48 CLR 457, 476-7 (Dixon J). Although the second contract was terminated with effect from April 2016, Mr Gundi held a good cause of action for enforcement of the right to payment of the redundancy payments. The breach of that obligation sounded in damages in a sum equal to the amount of those payments. 257. In light of those damages being for the same sum as the entitlement to redundancy payments no question arises as to Mr Gundi exercising an election between the two remedies. 42 The appellant submits that the primary judge erred in holding that the appellant had breached the terms of the October 2011 contract of employment because Mr Gundi did not advance any such case before the primary judge, nor was it supported by any evidence or legal principle. I am bound to accept that submission, and counsel for the respondent did not seek to contend otherwise.

Conclusion 43 The appeal will accordingly be allowed, the orders of the primary judge set aside and, in lieu of the orders made by the primary judge, an order will be made that the proceeding be dismissed. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice O'Callaghan.