[1] This decision determines a jurisdictional challenge to an unfair dismissal application under s 394 of the Fair Work Act 2009 ('the Act'), by Mr Joe Solari ('the applicant') following the termination of his employment by RLA Polymers Pty Ltd ('the respondent') on 29 January 2010. The matter was unable to be resolved at a conciliation conference on 25 February 2010 and was subsequently referred to me for determination as to whether the applicant's termination of employment was a genuine redundancy. If that question is determined in the affirmative, then the applicant's claim for relief from unfair dismissal must be dismissed for want of Fair Work Australia's (FWA's) jurisdiction under s 385 of the Act.

[2] The applicant's letter of termination was expressed as follows:

This letter serves to confirm our discussions today where we advised you that unfortunately your position has become redundant due to commercial and operational reasons. As a result, effective the 29th January 2010, your services are no longer required.

In addition to the above notice you will receive severance pay in accordance with the Rubber, Plastics and Cable Making Award - NSW which states that for over 10 years service, you shall receive 12 week's pay. Week's pay shall mean the ordinary time rate of pay for the employee concerned.

You are also entitled to any accrued Long Service and Annual Leave you may have. A detailed summary of your entitlements will follow shortly.

I have looked at the possibility of alternative work for which you may be suitable however there are no positions available at this time. I intend to keep your personal details on file and notify you of any suitable future positions which may occur within 3 months of your termination.

I would like to assist you in finding suitable alternative employment with another employer and would be happy to assist you in the preparation of a curriculum vitae and provide you with a reference on request.

Please advise me if there is any other way that I can assist you.

[3] The applicant commenced employment as the respondent's Factory Manager at its Wetherill Park site in 1994. When the respondent acquired another site at Pendle Hill, the applicant transferred to that site as Dispatch Manager. After two years at Pendle Hill, the applicant returned to Wetherill Park as a Team Leader. He said he managed both sides of the respondent's liquid and powder compound business, supervising six other employees. He said that liquid compounding is still carried out at the Pendle Hill site.

[4] The applicant was advised on 3 December 2009 that the Wetherill Park site was to close, although discussions about the likelihood of closure had occurred in late October and early November 2009. The applicant was given the option of working out nine weeks of notice until 29 January 2010, or receiving five weeks salary in lieu of notice. The applicant chose to work out his notice. During January 2010, the Managing Director, Mr David Preston, visited the site and expressed his sorrow to the applicant for his redundancy and thanked him for his loyal service. The applicant mentioned to him that he would be willing to take a lesser position at Pendle Hill and Mr Preston raised this possibility with Mr Steve Etches, General Manager, Operations. However, Mr Etches said that he had examined every position on offer at Pendle Hill, but none met the skills set of the applicant.

[5] The applicant strongly contested the respondent's view that no other position could be found for him at Pendle Hill or that his skills did not match the requirements of any available role. He said that he was the only employee out of five who transferred who was not offered a position at Pendle Hill, nor had he been offered any alternative position or retraining. He would have been happy to accept a lesser position. The applicant said that five casual staff were taken over to Pendle Hill in various jobs that he was more than capable of performing, including as a forklift driver.

[6] The applicant said it was unfair, that after 16 years of loyal, conscientious service and with his various skills, he could not be found an alternative position, particularly now that he is aged 60. He agreed the respondent had been good to him, but he queried why they could not keep him on for a few more years until his retirement. Despite getting nine weeks notice, he had worked out his notice as a loyal 'Company' man.

[7] The applicant said there was no real consultation with him as to the possibility of alternative positions.

[8] Mr Etches acknowledged that while the respondent did transfer a number of operators to Pendle Hill, all, bar one, were casuals employed through an agency. The one permanent employee was more skilled than the applicant as a plant operative in powder production. Mr Etches said various roles had been considered for the applicant. There were no longer any team leader positions and the only operator position for his skills was not run from New South Wales. The respondent did not believe that the applicant had the appropriate skills as an operator in the Ceramic Tile Adhesives (CTA) and Levelling side of the business. The applicant had struggled with these duties at Wetherill Park, so much so that the New South Wales Production Supervisor had to relocate to Wetherill Park to assist him. Other options had been considered, but given the depressed state of the industry, there were no roles for him in the short to medium term.

[9] In oral evidence, Mr Etches said that the casual staff were initially engaged to set up the additional operations at Pendle Hill and their numbers were being progressively reduced until there may be one or two casuals engaged to only cover absences and the leave of permanent employees. This was all part of the upgrading of the plant as part of the business restructure and the plan is to not retain any casuals on a regular basis. Mr Etches said the respondent was more than happy to have the applicant engaged as a casual, if he is registered with the agency, and his skills are required on a short term basis. Mr Etches added that of the four casual employees who did transfer over, three were no longer engaged.

[10] Mr Louis Parma, the respondent's Commercial Director, said that the applicant had been a good and loyal employee for many years. The plant in New South Wales has been automated and rationalised. On the CTA side, by the end of August, employee numbers will reduce from 13 to five. This did not leave much scope, so the skill set of employees was very important. Unfortunately, the applicant did not have these skills. He said the respondent cannot hold on to people for the sake of it; that would risk the sustainability of the jobs of the respondent's 130 other employees. The respondent holds the applicant in high esteem. However, his arguments were emotive and emotional.

[11] Section 385 of the Act defines an unfair dismissal and is expressed as follows:

A person has been unfairly dismissed if FWA is satisfied that:

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.

The meaning of genuine redundancy is found at s 389 of the Act:

(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.

[12] There is a long line of authority in this Tribunal, its predecessor and other industrial tribunals as to the meaning of redundancy. Shortly stated it means that the employer, either for economic reasons or the introduction of new technology or company restructure, no longer requires the job to be performed by anyone. In a recent decision of FWA in Ulan Coal Mines Limited v Henry John Howarth and others [2010] FWAFB 3488, the Full Bench considered the new legislative regime as to the test of a genuine redundancy. At paras [15] to [20] said this:

15] These were the circumstances in which it was necessary to consider the meaning and application of the relevant statutory provisions and, in particular, the expression "the person's employer no longer required the person's job to be performed by anyone" in s.389(1)(a) of the Act. These words have long been used and applied in industrial tribunals and courts as a practical definition of redundancy (see e.g. R v Industrial Commission of South Australia; Ex parte Adelaide Milk Supply Cooperative Limited (1977) 16 SASR 6; Termination, Change and Redundancy Cases (1984) 8 IR 34 and (1984) 9 IR 115; Short v F.W. Hercus Pty Limited [1993] FCA 51; (1993) 40 FCR 511). They have also been adopted in the National Employment Standards provided under the Act in dealing with entitlements to redundancy payments (see s.119).

[16] The Explanatory Memorandum to the Fair Work Bill 2008 provides examples as to when a dismissal will be a case of genuine redundancy:

"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."

[17] It is noted that the reference in the statutory expression is to a person's "job" no longer being required to be performed. As Ryan J observed in Jones v Department of Energy and Minerals (1995) 60 IR 304 a job involves "a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees' organisation, to a particular employee" (at p. 308). His Honour in that case considered a set of circumstances where an employer might rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions. In these circumstances, it was said that:

"What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant…" (at p.308)

This does not mean that if any aspect of the employee's duties is still to be performed by somebody, he or she cannot be redundant (see Dibb v Commissioner of Taxation (2004) FCR 388 at 404-405). The examples given in the Explanatory Memorandum illustrate circumstances where tasks and duties of a particular employee continue to be performed by other employees but nevertheless the "job" of that employee no longer exists.

[18] In Kekeris v A. Hartrodt Australia Pty Ltd [2010] FWA 674 Hamberger SDP considered whether a dismissal resulting from the restructure of a supervisory team was a case of genuine redundancy. As a result of the restructure, four supervisory team leader positions were replaced by three team leader positions. The Senior Deputy President said:

"When one looks at the specific duties performed by the applicant prior to her termination they have much in common with those of two of the new positions in the new structure. The test is not however whether the duties survive. Paragraph 1548 of the explanatory memorandum makes clear that it can still be a 'genuine redundancy' where the duties of a previous job persist but are redistributed to other positions. The test is whether the job previously performed by the applicant still exists." (at par [27])

[19] In the present case, the Commissioner appears not to have drawn an appropriate distinction in his reasoning between the "jobs" of the mineworkers who were retrenched and the functions performed by those mineworkers or take proper account of the nature of the restructure at the mine which led to an overall reduction in the size of the non-trades mineworker workforce. The Company restructured its operations in various ways including by outsourcing certain specialised, ancillary and other work and increasing the proportion of trade-qualified mineworkers in underground development and outbye crews. As a result, it was identified that there were 14 non-trades mineworker positions which were surplus to the Company's requirements. The mineworkers whose employment was to be terminated were determined according to the seniority principle as provided in the Agreement. This did not mean that the functions or duties previously performed by the retrenched mineworkers were no longer required to be performed. It also did not mean that the positions of some of these mineworkers (e.g. in underground crews) did not continue, although those positions might after the restructure be filled by more senior non-trades mineworkers transferred from other parts of the operations or by trade-qualified mineworkers. However fewer non-trades mineworker jobs were required overall at the mine as a result of the operational changes introduced and, for this reason, the jobs of the 14 mineworkers selected for retrenchment could be said to no longer exist.

[20] These circumstances readily fit within the ordinary meaning and customary usage of the expression in s.389(1)(a) of the Act where a job is no longer required to be performed by anyone because of changes in the operational requirements of the employer's enterprise.

[13] As mentioned above, the Act specifically recognises that a redundancy may not be genuine in circumstances where the employer fails to meet its obligations to employees who are facing redundancy under the terms of the applicable Award. In Shop, Distributive and Allied Employees' Association, New South Wales, and WH & HO Wills Holdings Ltd [2000] NSWIRComm 98, I described these obligations as follows:

1. give reasonable notice to employees and/or their Unions;

2. adequately consult with employees and/or their Unions on the impact of the proposed changes;

3. explore genuine alternative options for redundancy, such as redeployment or relocation;

4. ensure such options are fairly offered to the affected employees;

5. provide reasonable standards of redundancy benefits;

6. provide appropriate ancillary services, such as time off to seek alternative work, retraining opportunities, outplacement services or financial planning;

7. ensure employees nominated for redundancy are fairly selected on an objective and unbiased basis.

There are also obligations on employees facing redundancy, but these are not relevant to the present case.

[14] In my view, the question before FWA in this case, is relatively straightforward. The applicant did not seriously, or at all, dispute the respondent's evidence that it had undergone a significant rationalisation of its New South Wales operations resulting in the closure of one of its two plants.

[15] It is perfectly understandable that the applicant would feel hurt, upset and even betrayed by the respondent's decision to make him - and only him - redundant. It is also understandable that he believes he has the skills to perform the work of the other permanent employees. Most employees after 16 years service would feel they have the experience and knowledge to perform work across the broad spectrum of a company's operations. This is a natural human reaction. However, when compared to others, this might not always be the reality. Ultimately however, it is the prerogative of Management to manage its business as it sees fit; subject to treating its employees fairly and honestly.

[16] Given the applicant's 16 years of loyal and conscientious service (which I accept unreservedly), and the respondent's genuine expressions of regret over the applicant's redundancy (which I also accept), I have a great deal of sympathy for the applicant. However, sympathy alone does not overrule the legal position or the policy intent of the Act, which denies access to an unfair dismissal remedy where an employee's termination of employment is a genuine redundancy, as defined. Any forced redundancy is always most regrettable and likely to have a severe impact on an employee and his/her family, particularly someone of the applicant's age. This is, after all, why all employees are protected, in part, by redundancy payments under their relevant Award or Agreement and why minimum redundancy standards are now a legislated feature of the National Employment Standards (NES). I have no doubt that the respondent acted appropriately in that regard and, in fact, provided a greater period of notice than the Award provides.

[17] Further, I am satisfied, based on the state of the respondent's evidence, that the applicant's redundancy was genuine and, in particular, I note and accept the following propositions:

1. The respondent had warned the applicant of the possibility of redundancy in October / November last year;

2. The respondent attempted to find an alternative position for the applicant;

3. The Managing Director instructed his Operations Manager to explore alternative options for the applicant, but none were available in New South Wales; and

4. In truth, only one permanent employee was transferred to Pendle Hill and the applicant did not dispute the respondent's evidence that the other employee's skills were superior to his own;

5. The respondent had a difficult choice to make on the basis of its operational requirements and its undoubted knowledge of the applicant's skills and experience;

6. The number of casual or agency staff at Pendle Hill have been progressively reduced and, in the future, and are only likely to cover short term absences or the leave of permanent employees;

7. The respondent genuinely regretted the circumstances of the applicant's termination of employment and the applicant acknowledged that the respondent had treated him well during his employment. There is no reason to doubt the respondent's bona fides in that regard.

[18] In my opinion, the respondent's conduct and actions were appropriate in all the circumstances. I can find no basis to conclude that the applicant's termination of employment was not a genuine redundancy. In particular, I do not consider it to be reasonable, in all the circumstances, to have re-deployed the applicant to 'an associated entity of the employer' being the site at Pendle Hill. Accordingly, this application under s 394 of the Act for an unfair dismissal remedy is beyond the jurisdiction of the Tribunal and must be dismissed. An order giving effect to that conclusion is published with this decision.

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