Mr D Gardner, solicitor, Bartier Perry (Respondent)
File Number(s): 2018/00179332
[2]
DECISION
This is an unfair dismissal application pursuant to section 84 of the Industrial Relations Act 1996 by Yu Tang, a former employee of Woollahra Municipal Council. In her application, which was filed in the Office of the Industrial Registrar on 8 June 2018, the applicant stated as follows:
As an Accounting officer, my role was to perform a variety of financial accounting tasks within the operational areas of the Finance Section. The accounting functions and tasks that I performed are essential to any business. All the functions and tasks performed by me in the old Finance Structure have been reallocated to the new positions by the re-structure. Although some positions were made redundant, all the functions and tasks are retained. There is no reduction in workload required, and no reduction either in the Council's business. The re-structure merely reorganizes functions and tasks among the positions.
Termination to the current employees is unnecessary. The Council have to recruit at least as many people as they have terminated in order to perform equivalent functions and tasks (to keep the business running).
Thus, I believe my dismissal by Woollahra Council was unreasonable.
In the employer's reply document which was filed by the respondent, Woollahra Municipal Council, it was stated that the applicant had not been dismissed. She had, on 9 May 2018, the day she signed her unfair dismissal application form, signed a written agreement confirming that she had voluntarily entered into, at her request, a redundancy arrangement where she was to take a period of leave and that her last day of employment with the respondent would be 6 July 2018. This occurred following a process of audit and review of the respondent's Finance Department which identified two occupied positions, including the applicant's position of Accounting Officer, as redundant.
It was stated that the applicant had agreed to redundancy payments, in addition to all accrued entitlements prescribed by the Local Government (State) Award 2017, including five weeks' pay in lieu of notice and 35 weeks' redundancy pay (instead of the award minimum entitlement of 34 weeks) to assist her transition to alternative employment.
The initial issue for determination is whether the applicant was dismissed from her employment as an Accounting Officer with the respondent or, as the respondent has submitted, whether she accepted a redundancy package following a restructure of the respondent's Finance Department.
[3]
Background
The applicant commenced employment with the respondent as a full time Accounting Officer on 16 January 2006. Her role was to perform a variety of financial accounting tasks including to undertake bank reconciliation, agency payment reconciliations and to assist with accounts payable.
In mid 2015, the Accounts Payable Officer resigned and it was decided that that there would be a review of the accounts payable section in the Finance Department. This review was put on hold pending the proposed merger of Woollahra, Randwick and Waverly Councils. Following the abandonment by the State Government of the proposed merger in mid 2017, an external audit of the Finance Department was undertaken by BDO in March 2018. The report produced by BDO in April 2018 contained the following:
2.2 Bank reconciliations and segregation of duties
Observations
While no significant issues were found in the examination and re-performance of a sample of bank reconciliations conducted in February, March and December 2017, the date on the heading of the bank reconciliations was consistently recorded as October 2011. The Finance staff who perform the bank reconciliations need to ensure that the date in the bank reconciliation heading reflects the date of the actual bank reconciliation.
In addition, there are current issues associated with segregation of duties. Currently, the bank reconciliations are being prepared by the Finance staff who also hold responsibilities associated with the processing of accounts payable. We were advised that WMC's Finance Department is currently being restructured. This restructuring will result in the creation of a new position within Finance. Under the new restructure, the role of preparing bank reconciliations will be fully segregated from both accounts payable and accounts receivable.
Risk/Implication
There may be confusion over the dates applicable to the individual bank reconciliations.
There is a current lack of segregation of duties between the responsibilities of staff performing the processing of accounts payable and preparing bank reconciliations.
Recommendations
R2 The Finance Officer who prepares the bank reconciliations needs to ensure that the bank reconciliation heading date reflects the actual dates of the bank reconciliation.
R3 WMC continue with the restructuring of the Finance Department which will result in the appointment of additional staff, which in turn will address the current issues associated with a lack of segregation of duties associated with accounts payable and the performance of the bank reconciliations.
As a consequence of the restructure of the Finance Department, the following positions were made redundant:
- Systems - Finance Officer Part Time (0.6 FTE), position added in 2015/16 budget process;
- Team Leader Corporate Planning Part Time (0.6 FTE);
- Senior Accounts Payable Officer (1 FTE);
- Accounts Payable Officer (1 FTE); and
- Accounting Officer (1 FTE).
The last listed position was that held by the applicant. In addition, the FTEs from the positions made redundant were reallocated to the following positions in the new structure:
- 2 x Finance Officer (2 FTE);
- Management Accountant (1 FTE); and
- Systems Accountant (1 FTE).
At a meeting with Mr Don Johnston, Chief Finance Officer, on 6 April 2018, the applicant was advised that her position was to be made redundant. No suitable alternative positions were identified for the applicant.
By letter dated 4 May 2018, the applicant was formally notified that her position of Accounting Officer had been abolished and that her employment would be terminated on grounds of redundancy. Her last day of employment was to be 8 June 2018.
At the applicant's request, her last day of employment was altered to 6 July 2018. On 9 May 2018, the applicant was provided with the following letter which she signed:
Dear Susie,
Termination on Redundancy
I refer to our letter SC377 dated 4 May 2018.
At your request Council has reviewed arrangements for finalising your employment following your position being declared redundant. It is now agreed that your last day of employment with Council, following a period of leave without pay, will be 6 July 2018.
You have elected not to work your period of notice and it is agreed that for the purposes of calculating your final pay it will include, in addition to all accrued entitlements prescribed by the Local Government (State) Award 2017, five weeks pay in lieu of notice plus one additional week to facilitate your transition to alternative employment.
Having considered your circumstances your application for Leave Without Pay for the period 22 May to 5 July 2018 is approved. Monday 21 May will be your RDO.
Please signify your agreement to these arrangements by signing where indicated below.
Yours sincerely
Ian Mackinlay
Manager Organisational Development and Human Resources
I acknowledge that the arrangements as described above were entered into voluntarily and at my request and have my full agreement.
…………………………….. …………………………….
Signature of Susie Tang Signature of Witness
On the same day, 9 May 2018, the applicant signed the Statutory Declaration attached to her unfair dismissal application form which she filed a month later.
The applicant subsequently requested that the period 22 May to 5 July 2018 be taken as annual leave rather than leave without pay. The respondent agreed to this request.
[4]
Case for the applicant
The applicant asserts that the termination of her employment was not a genuine redundancy. She claimed that other employees of the respondent were given more favourable treatment than her. A witness statement prepared by the applicant contained the following:
5. I have never agreed to terminate my employment, nor did I sign any document to do so. The termination was imposed on me by the Council. The Redundancy Notice letter is simply a statement that I am being terminated. It is not an acknowledgment that I agree with the Council's assessment of the reason for termination. The agreement which I signed on 9 May 2018 merely contained the technical details putting an end to my employment, after the Notice was handed down to me, since my last day with the Council changed from 8 June on the Notice, to 6 July. As far as I understand, the word "voluntary" on the agreement is because it was for my interests that I made the request to change. By entering the agreement, the nature of my redundancy will not be changed. My redundancy remains forced redundancy in nature….
6. Jay Raman (my supervisor, Senior Accounts Payable Officer) has 17 years of service with the Council. He was also dismissed due to the Re-structure. "Re-structure in Finance Department" was the only reason given to Jay for his dismissal. Unless the Council has other reasons for dismissal when restructuring, the Re-structure itself cannot form a reason for dismissal. The Re-structure is merely an event in which dismissal may occur. As no further justification was provided, no reason was actually given to Jay's dismissal. Jay is turning 70 in August. He was not ready to retire yet, but he would have soon made his decision considering his age and health. If the Council leaves Jay's position temporarily unchanged, and reforms it later, when he retires, it would have saved Council's redundancy payout to Jay, since Jay received the maximum termination entitlements.
7. After Jay and I were dismissed, the Accounts Payable function has been performed by two current employees - Hedy and Cameron. This proves that the Council will not survive without an Accounts Payable function. Hedy Davant was a temporary worker. She was converted into a casual worker just before Jay's dismissal. While Jay and I were made redundant, her job was secured by the Re-structure. Cameron Johnston, the son of Don Johnston Finance Manager, has been working part-time as a Finance Officer since November 2016. Although Cameron and I work in the same area, he was not adversely affected by the Re-structure.
8. Two years ago, 19 years old Cameron Johnston started his part-time employment to partially fill the position of Accounts Payable Officer, which had been vacant since Mary Guard's retirement. There was no formal recruitment process conducted beforehand. His current position of Finance Officer was not advertised publicly. The Council failed to follow the Government Sector Employment (General) Rules 2014 when recruiting Cameron Johnston. Furthermore, the Council continue to favour Cameron with an exceptionally high wage considering his age, lack of qualifications and experience. By paying Cameron Johnston's unusual wage, the council failed to comply with the Local Government (State) Award 2017. After the Re-structure of the Finance Department, all three positions in the Accounts Payable Section were abolished. All permanent staff who occupied those positions were dismissed; yet, Cameron Johnston, a part-time employee survived the redundancy.
The Council's claim in the Employer's Response to the IRC that "employees nominated for redundancy were fairly selected on an objective and unbiased basis" is false. The employees nominated for redundancy were selected due to biased reasons, since nepotism has evidently influenced the Council's decisions….
9. Hedy Davant started her part-time temporary employment in March 2017, performing the same functions and tasks as Cameron Johnston. Together, they temporary filled the Accounts Payable Officer position. On 23 April 2018, Hedy Davant became a formal employee of the Council. However, similar to Cameron Johnston's recruitment, there was no formal recruitment process conducted beforehand. Her current position of Causal Finance Officer was not advertised publicly. While the Council abolished all three positions in the Accounts Payable Section, and dismissed all permanent staff who currently occupied the positions, the Council converted Hedy into a formal employee.
10. Given that both Cameron Johnston and Hedy Davant continue their employment with the Council, performing Accounts Payable function, it is evident that the Council requires Accounts Payable staff. This indicates that the Re-structure was designed to eliminate particular staff, selected on a biased basis. Furthermore, the lack of legal compliance in Cameron Johnston's employment shows that this Re-structure was intended to provide family members of management with secured positions within the Council. Therefore, this was not a genuine redundancy.
11. I achieved a Bachelor Degree in Economics 29 years ago. I have been an associate member of CPA (Certified Practising Accountants) since February 1997. I was a qualified accountant before I came to Australia, and I have been working in various accounting roles in Australia for more than 25 years. Even with all these qualifications and experience, I could NOT survive the redundancy.
I have just turned 60 in June. My chances for getting a new job are very slim. I am likely to be unemployed for the next 7 years, before reaching my pension age of 67.
12. If the Council abolished all positions in the area, due to it no longer requiring those functions and tasks, then all current staff should have been dismissed, including Cameron Johnston and Hedy Davant.
If the Council had too many staff in the area, then it should have dismissed Cameron Johnston and Hedy Davant, rather than the permanent staff. This would have been a cost-effective measure, as temporary or casual staff can be sacked at no additional cost. If the Council only dismissed the permanent staff, did not affect Cameron Johnston, and even turned Hedy Davant into formal employee, how could Mr Gardner claim, in the Employer's Response to the IRC, that the Council "ensured employees nominated for redundancy were fairly selected on an objective and unbiased basis"?
13. At the meeting held on 6 April 2018, Mr Don Johnston said "Your position of Accounting Officer which combined Bank Reconciliation with Accounts Payable functions is not good practice".
If my position has existed for over 12 years and has passed multiple audits every year, it must be good practice. The combination of these two functions caused no problems for the last 12 years. There is no evidence that recent changes in regulations, audit requirements or laws directly lead to the Council's decision to abolish my position. There is no reason for Council to fundamentally reform my position of Accounting Officer.
14. Employers are obliged to take any measures to avoid or minimise termination. If a position is made redundant, it is not necessary to make redundant the person who occupies that position. In addition to forcing employees into redundancy, Council have failed to provide training to facilitate movement into the new roles created by the Restructure, or to modify the existing positions to suit "good practice".
15. The letter to Graeme Kelly (General Secretary, United Services Union) by Ian Mackinlay states - "It has become clear through a review of skills and changing demands in Finance from increased compliance to new business processes that additional professional-level staff are required to undertake increasingly complex work. Furthermore, workforce planning has identified that the current Finance structure is vulnerable to workforce change at the senior level exposing Council to potential disruption as there is no obvious succession pathway"….
16. The letter refers to a review of skills. It is not clear which review of skills was referred to, despite its leading to the Council's conclusion that additional professional-level staff ware required. No supporting documentation was provided by the Council with the letter.
17. Cameron Johnston's employment is not mentioned by the letter…, nor reflected on the Finance Structure diagram…. This reflects the Council's intention to cover up the existence of Cameron's employment, therefore allowing Cameron to avoid the redundancy.
18. It is unclear if Cameron Johnston represents the well-qualified "professional-level staff" mentioned by the letter. It is similarly not clear whether the reason for retaining Cameron Johnston's employment is because he is the "professional-level staff" sought by the Council.
19. The letter states that "staff are required to undertake increasingly complex work". While there is no mention who those staff are, it is clear that this refers to AP staff. The Finance Structure diagram indicates that the Accounts Payable Section was the only area affected by the Re-structure, despite the removal of the Team Leader Corporate Planning position (which has been vacant for at least three years). The other major part of the Finance Department, the Revenue Section, remains unchanged. This indicates that the Re-structure is considered necessary due to the AP staff's apparent inability to cope with increasingly complex work.
However, in my 12 years employment at Woollahra Council, I have never experienced any complex work which I could not handle.
20. When management believed that the work had become increasingly complicated, and that consequently AP staff were unable to cope, the Council made all three AP positions redundant and dismissed well-qualified full-time staff members who occupied those positions, while retaining lesser-qualified and non-permanent staff. This is inconsistent to the claim by the letter… that "additional professional-level staff are required to undertake increasingly complex work", and that "the current Finance structure is vulnerable to workforce change at the senior level".
21. Apart from terminating well-qualified permanent staff, the Council did not take any of the myriad of possible measures to handle the issue of increasingly complex work, such as providing re-training and/or redeployment opportunities. Clause 39 (iii) (b) of the Local Government (State) Award 2017, requires employer to take measures to avoid or minimise the terminations of the employee(s) concerned. The Council failed to comply with the Award.
22. The Notice of Redundancy… states "As you are aware the Finance Department Re-structure has been approved and, as foreshadowed in previous correspondence and meetings with you, your position of Accounting Officer has been abolished. Over the past month we have sought to identify potential options for redeployment for you and I have to advise that there are no suitable positions currently available or reasonably foreseeable in the future. As a consequence, Council now formally gives notice that your employment will be terminated on grounds of redundancy."
While the Council claims "no suitable positions currently available or reasonably foreseeable in the future", the Accounts Receivable Officer position in the Revenue Section of the Finance Department has long been vacant. The Council failed to provide this potential option for my redeployment. It is unclear why the Council considers the Accounts Receivable Officer position to be unsuitable, and the specific criterion I do not fulfil.
23. The Accounts Receivable Officer position in the Revenue Section of the Finance Department is a permanent full-time position. The position has been vacant since Jane Blake's retirement two years ago. In July 2018, the Council made significant changes to this position - the Accounts Receivable Officer became part-time position. This amendment was designed to prevent the Commission from awarding this possible position for my re-employment. However, this major amendment was not mentioned by the letter to the Union…, nor reflected on the Finance Structure diagram…. In making this amendment, the Council failed to follow the consultation requirement of the Local Government (State) Award 2017….
24. Please refer to the Finance Structure diagram…, and note that in the area where my role was, four old positions have been abolished, while four new positions have been created simultaneously. The Re-structure results in the same number of positions and the same number of staff required to perform the exact same functions and tasks. It is evident that this Re-structure was unnecessary.
25. At this stage, several reasons and benefits to restructure the Finance Department are evident. One is to provide opportunities for dismissal; and the benefit of the dismissal is to facilitate nepotism and accommodate Cameron Johnston's employment. There are no grounds to terminate staff. Terminations are absolutely avoidable. The Council's decision to re-structure gave them a seemingly sound reason to terminate employees, in a discriminatory manner. The dismissal made room to employ family members of the Council's management.
Since my dismissal by Woollahra Council is unfair and discriminatory, I have lodged my claim to the IRC, and I hereby request to resume my employment.
26. If the Commission awards me with re-employment, I wish to obtain one of the following positions in the following order:
(1) Management Accountant….
(2) Systems Accountant….
(3) Finance Officer….
[5]
Case for the respondent
Two witnesses gave evidence on behalf of the respondent, Thi Thuy Trang Banfield, Acting Chief Financial Officer, and Ian Mackinlay, Manager, Organisational Development.
[6]
Ms Banfield
Ms Banfield rejected the applicant's assertion that the restructure of the Finance Department was a device used by the respondent to effect dismissals. He also rejected the proposition that Cameron Johnston and Hedy Davant were given more favourable treatment than the applicant.
Ms Banfield's affidavit contained the following:
43 The restructure was a reallocation of surplus capacity identified in the three FTEs that undertook accounts payable and bank reconciliation to where it's needed, which is to provide additional experience and qualified professional level staff. The restructure:
43.1 Increased resources required at this level;
43.2 Segregated bank reconciliation from both accounts payable and receivables;
43.3 Mitigate the risk of disruption to business continuity due to workforce changes at the senior level;
43.4 While still maintaining the total FTE at the same level in the Finance Department.
New positions
44. Based on the statistics of staff (permanent, temporary and casuals) over the previous two years period, the CFO and I came to the conclusion that only 1.5 FTE is required to undertake accounts payable function. However, to have adequate coverage in the Finance team, 2 FTE is required, which will include accounts payable function but will also have new duties added that require a higher level skill set.
45. The two new Finance Officer positions require a different and higher level skill set to undertake new duties not previously done by accounts payable staff such as providing training to non finance staff, review and investigate outstanding orders, authorisation of utility accounts and Bpoint refund. It should be noted that:
45.1 Authorisation by Finance Officers for the utility accounts is a significant change. Previously along with other invoices, utility invoices have to be signed off by budget owners who are financially delegated officers. The new Finance Officers will be expected authorise these invoices, identify variations, investigate and explain what causes the variations and take appropriate actions if required.
45.2 The Bpoint refund process has no safety net. The process does not allow for a second check before or at the actual refund moment. Staff undertaking this task will requires attention to detail, there is no room for mistakes. Finance Officers will have ownership of this new duty.
45.3 Finance Officers will be required to go and provide training for one or small group of staff outside of Finance on an ad hoc basis for the purchase order system including the treatment of retention and the accounts payable system.
46. The two new Finance Officer positions will also deal with queries that are currently being handled by the Financial Accountant and myself, and provide end to end resolution (one stop shop). In the previous structure, a query would come to either the Financial Accountant or myself, we would have to understand the background of the query by talking to the relevant staff undertaking accounts payable, advise the customer, then issue instruction to the relevant staff to resolve the issue, and then advise the customer of the outcome. Under the new structure, all queries and issues include complex matters are expected to stay with the Finance Officers.
47. The new responsibilities outside of accounts payable function undertaken by the Finance Officer positions requires a different and higher level skill set. This is reflected in the salary which is approximately $75,000.00 plus superannuation at the top grade. This is much higher than the market rate of an accounts payable position which is on average, $65,000.00 plus superannuation at the top grade.
48. The Accounting Officer position is no longer valid under the new structure as assistance to accounts payable staff is no longer required and bank reconciliation which only requires on average 0.15 FTE per week needs to be segregated from accounts payable (and accounts receivable).
49. Bank reconciliation was reallocated to the new Systems Accountant position for two reasons:
49.1 The position is adequately removed from accounts payable and accounts receivable; and
49.2 Under the old structure, any issues that arise from banking matters was escalated to myself or the CFO. It is intended that the Systems Accountant with the relevant systems skill set will be able to respond and resolve any issues that may arise.
Redeployment not appropriate
50. As previously stated above…, the Applicant was previously advised on several occasions, verbally and via emails, that we were conducting a review of the three positions responsible for accounts payable and bank reconciliation functions.
51. I also indicated to the Applicant (and Mr Raman) that Council believed there was surplus capacity and the review will help with future workforce planning….
52. At the commencement of the restructure implementation, the HR Manager, Mr Ian Mackinlay, verbally enquired with the CFO and myself about possibility of redeploying the Applicant into one of the Finance Officer positions. The CFO and I had advised Mr Mackinlay that the Applicant was not suitable for these positions.
53. In deciding the new structure to address the objectives listed in paragraph 43, the CFO and I had discussed about the possibility of redeploying the Applicant. After due consideration, the CFO and I came to the conclusion that the Applicant would not be suitable for the new Finance Officer positions due to the following reasons:
53.1 Over the last few years, the Applicant did not demonstrate that she would be able to cope with the accounts payable workload if undertaken by 2 full time positions. I note that the Applicant's previous position was only assisting accounts payable.
53.2 The new duties in the Finance Officer positions require significant attention to detail, investigative and problem solving skills. The Applicant had not demonstrated these skills over the years.
53.3 The Finance Officer positions include the provision of training to non-finance staff in regards to the purchasing order system and accounts payable system including explaining how to treat and process retention. The Applicant was not providing any training as part of her role as an Accounting Officer.
54. Once the CFO and I had concluded that we could not redeploy Ms Tang, her employment could not continue as her position was redundant.
55. The bank reconciliation function only takes approximately 0.15 FTE per week and therefore cannot sustain a full time position.
Reemployment not appropriate
56. The two new Finance Officer positions were advertised and applications closed on 29 July 2018. There were 60 applications received, one withdrew and four were automatically culled due to the applicants not having the appropriate rights to work in Australia.
57. The remaining 55 applications were culled by myself and the Recruitment Officer, Ms Lynette Franco.
58. Ms Davant and Mr C Johnston were advised of the jobs being listed and that their employment would be terminated at the end of the recruitment process as they are casuals.
59. Neither Ms Davant nor Mr C Johnston have applied for the listed positions.
60. 11 applicants have been short listed for interviews with the interview dates set for 4 September 2018 and 5 September 2018.
61. The Applicant has applied for the positions but has not been selected for an interview. In a strong field, her application was not competitive as she did not demonstrate in her written application the required skill set for the position.
Additional comments
62. The decision to restructure and make two staff redundant wasn't made in haste or lightly. The review period, due to the proposed merger, went for over two years and it was with due consideration that the restructure and redundancy proceeded.
[7]
Mr Mackinlay
Mr Mackinlay gave evidence about the discussions he had with the applicant in the lead up to her position being made redundant and the signing by her of the letter set out at [11] above. The terms of this letter were subsequently varied at the request of the applicant so that the period 22 May to 5 July 2018 was ultimately treated as annual leave rather than leave without pay.
Mr Mackinlay also confirmed that the abolition of the applicant's position was as a consequence of a restructure of the respondent's Finance Department and was a genuine redundancy. His affidavit contained the following:
10. An external audit of the Finance Department was undertaken by BOO in March 2018. This audit was conducted as part of a regular series of scheduled audits of various Council departments. The findings of this audit referred in part to the need to segregate the bank reconciliation and accounts payable functions. The relevant recommendations were subsequently adopted and included as part of the implementation of the review of the Finance Department. Consistent with BDO audit recommendations and the internal review, Council proposed to make changes in accounting practices and to make five positions within the Finance department redundant, including the role of Accounting Officer then held by the Applicant.
Redundancy of Accounting Officer position
Reasonable notice to employees and/or their Union
11. Written notice regarding the proposed restructure and redundancies was provided to the United Services Union on 3 April 2018….
12. Following this notification, on 6 April 2018, in a meeting with Mr Don Johnston, Chief Finance Officer, the Applicant was advised that the Council was proposing to make her position redundant. During a series of meetings about the review proposal I advised management of the Finance Department of the need to advise all staff about the details of the review and restructure. I understand that meeting took place on 10 April 2018 based on a calendar entry in the Outlook calendar system and verbal comments that were made to me by other staff members who were present at the meeting, including Mr Jay Ramen.
13. I met with the Applicant on 11 April 2018. Mr Johnston was also in attendance. The purpose of this meeting was to explain to the Applicant how the restructure would proceed and the detail of the processes required under the Local Government (State) Award 2017 (Award). I explained in detail the options as they related to redundancy and redeployment. The Applicant asked questions about the redundancy pay-out and the process for recruiting the new positions. During our meeting we had a conversation as follows or with words to the same effect:
Yu Tang: "Can I apply for any of the new positions?"
Ian Mackinlay: "Yes, absolutely. In normal circumstances we would wait a period of 28 days before implementing the re-structure but that we could bring that forward if staff agreed."
Yu Tang: "I'll think about that, maybe I could get the redundancy and then apply for a new position."
Ian Mackinlay: "Well anyone can apply for an advertised position but in your case we have processes and options to explore first. I would strongly advise you seek professional financial advice before making any decisions. If you like, I can arrange an appointment with an adviser from Local Government Super?"
Yu Tang: ''Thank you very much, that would be good."
14. I arranged for Mr Casey Stephens of Local Government Super to meet with the Applicant on the following day, 12 April 2018.
15. On 18 April 2018, the Applicant emailed me (copied to Mr Johnston) stating that she wished the recruitment process for the new positions to begin at the end of the 28 day notice period required by the Award….
16. On 20 April 2018, I was copied on an email from the Applicant to Mr Johnston regarding the reason for the restructure and the position descriptions for the new positions. I was copied into further correspondence between Mr Johnston and the Applicant on 24 April 2018….
17. On 26 April 2018, I received an email from the Applicant requesting further severance payments above what was required by the Award. On 3 May 2018, I received a further email regarding this matter from the Applicant. Later that same day, I responded to the Applicant stating that the Council would comply with the redundancy provisions in the Award….
18. I had a meeting with the Applicant on 3 May 2018 at which we discussed further the possibility of increasing the redundancy pay-out. During this meeting we had a conversation as follows or with words to the same effect:
Ian Mackinlay: "One option which might help you would be to convert your entitlement (to one day off each week to seek employment) to an extra week so that your pay-out was 35 weeks in total"
Yu Tang: "That's a good idea, I like that, can you do that for me please".
Based on that meeting I drafted her termination letter.
19. On 4 May 2018, I provided the Applicant with a written Notice of Redundancy. The letter stipulated that the redundancy was to take effect on 8 June 2018….
20. Later that same day, I received an email from the Applicant (copied to Mr Johnston) advising me that she had elected to accept payment in lieu of notice.
21. On 7 May 2018, I replied to the Applicant's email (copied to Mr Johnston) and informed the Applicant that this would mean her last day with the Council would be 10 May 2018….
22. On 9 May 2018 the Applicant requested a meeting with me after I had invited her to do so several times. During this meeting we had a conversation as follows or with words to the same effect:
Yu Tang: "Can I tell you what I am really after and why?"
Ian Mackinlay: "Of course you can - that is exactly what I have been asking you to do because its very hard to help you if I don't know what you want".
Yu Tang: "Well the reason I have wanted to delay the redundancy is because my financial adviser wants me to have payments made after 1 July otherwise I lose a lot of tax".
Ian Mackinlay: "You should have shared that with me before because we can organise that for you".
23. At the conclusion of the meeting, the Applicant said:
Yu Tang: "I am happy now. Thank you very much for all your help. I have never had a problem with you".
24. We then agreed arrangements which were contained in a letter dated 9 May 2018….
25. On 14 May 2018, the Applicant phoned me. During our telephone conversation we had a discussion as follows or with words to the same effect:
Yu Tang: "I've been thinking - why should I take leave without pay when I have enough annual leave to cover the period to the end of the financial year?".
Ian Mackinlay: "You are right and we can change the arrangement if you send a formal request by email."
[8]
Summary of the respondent's case
The respondent filed a document entitled "Short Summary of the Respondent's Case" which contained the following:
Applicant afforded fair redundancy process
21. The process to be adopted by an employer regarding a redundancy was outlined in Shop, Distributive and Allied Employees' Association, New South v W D & H O Wills Holdings Ltd [2000] NSWIRComm 98 at [66] (WD & HO Willis).
22. The Respondent's evidence amply demonstrates compliance with the approach in WD & HO Willis:
Reasonable notice to employees and/or their Union
20.1 Notice regarding the proposed redundancy was first provided to the United Services Union, being the relevant union for the affected employees, on 3 April 2018.
20.1 A discussion was held with the Applicant and Mr Don Johnston, the Chief Financial Officer regarding the proposed restructure on 6 April 2018.
20.3 Email discussions between the Applicant and the Respondent regarding the restructure and her possible redundancy continued after the initial meeting. The Applicant confirmed by email on 18 April 2018 that she wished for the recruitment process for the new positions to start at the end of the 28 day notice period as required by the Award.
20.4 Between 20 April 2018 and 24 April 208, the Applicant and the Respondent exchanged emails regarding the reason for the restructure and the position descriptions for the new roles.
20.5 On 26 April 2018, the Applicant requested redundancy severance payments above the level stipulated by the Award. The request was followed up by the Applicant on 3 May 2018.
20.6 A written notice regarding the Applicant's redundancy was provided to the Applicant by the Respondent on 4 May 2018 (Notice of Redundancy) with the redundancy to take effect from 8 June 2018. Later that same day, the Applicant informed the Respondent that she had elected to accept payment in lieu of notice.
20.7 As the Applicant's employment did not terminate until 6 July 2018, the Applicant received a total of 3 months' notice of her termination due to redundancy.
Adequately consulted with employees and/or their Unions on the impact of the proposed changes
20.8 A meeting was held with the Applicant and Mr Mackinlay, Manager, Organisational Development on 11 April 2018 regarding her redeployment options. At this time, the Applicant was informed that her redeployment options did not look good.
20.9 Mr Mackinlay met with the Applicant again on 3 May 2018. At this meeting, the Applicant was informed that the Respondent had been unable to identify any redeployment options.
Explored genuine alternative options for redundancy
20.10 Once the restructure had been approved by Director Corporate Services, the Respondent began to identify potential redeployment options with the Respondent's administration, finance and customer services areas. No positions were identified as being available at this time.
Ensured such options were fairly offered to the affected employees
20.11 No suitable redeployment options were identified for the Applicant or Mr Ramen, who was also made redundant as a result of the restructure.
Provided reasonable standards of redundancy benefits
20.12 The Award requires 5 weeks' notice (or pay in lieu thereof) to terminate an employee due to redundancy: cl 40(a)(i) of the Award.
20.13 In the Notice of Redundancy and email correspondence between the Respondent and the Applicant dated 3 May 2018, the Respondent agreed to comply with all Award requirements regarding redundancy payments.
20.14 In a letter from the Respondent to the Applicant dated 9 May 2018 (Revised Notice of Redundancy), the Respondent agreed, at the request of the Applicant on the basis of financial advice she had received, to delay the Applicant's termination of employment to 6 July 2018
20.15 The Revised Notice of Redundancy also stipulated that the Respondent would provide the Applicant with an additional one weeks' payment in lieu of notice so 'facilitate [her] transition to alternative employment'.
20.16 In total, and in response to the requests made by the Applicant, the Respondent agreed to the following as a redundancy payment package:
(i) 34 weeks ordinary pay (in addition to accrued leave entitlements);
(ii) 1 additional week (to facilitate work transition);
(iii) 5 additional weeks (to be considered as pay in lieu of notice);
(iv) a termination date of 6 July 2018 (to conform with the Applicant's financial advice);
(v) a period of approved leave from 21 May 2018 to 6 July 2018; and
(vi) cash payment of $2,558.00 (to assist the Applicant with her employment search).
20.17 As such, the Respondent provided the Applicant with redundancy benefits well above what is stipulated in the Award, in terms of both financial payments and period of notice.
Provided appropriate ancillary services
20.18 The Respondent arranged for the Applicant to obtain professional advice from Local Government Super on 12 April 2018. This occurred the day after the Applicant was first informed that her position may become redundant and eight weeks before the Applicant's redundancy took effect.
Ensured employees fairly selected on an objective and unbiased basis
20.19 Another position was made redundant at the same time as the Applicant was made redundant. The decisions to make these positions redundant were based solely on an objective assessment undertaken in March 2018.
20.20 The Respondent also notes that a failure to properly, or exhaustively comply with each, and every-one, of the obligations suggested in WD & HO Willis does not necessarily warrant an adverse finding against an employer. Each case will be determined on its own particular set of facts and circumstances: Huseyin Arslan and others and Berkeley Challenge (Commercial) Pty Limited and Others [2001] NSWIRComm 45 at [24].
Dispute as disclosed in the Applicant's case
23. The Applicant is alleging that her redundancy was neither necessary or genuine.
24. As submitted above, the Applicant bears the onus to establish these assertions. On the materials filed by the Applicant, her evidentiary case is incapable of proving how her dismissal was anything other than a genuine redundancy.
25. The Applicant's submissions, although concise, reveal the gross inadequacy of her case.
26. Additionally, it is neither open to the Applicant nor is it appropriate as part of these proceedings, to question the legitimacy of the employment of other staff members who were unaffected by the restructure process.
27. Moreover, after fair and adequate consultation, the Applicant entered into a voluntary agreement with the Respondent on 9 May 2018 regarding her redundancy. This agreement delayed the Applicant's termination and was initiated by the Applicant solely to accommodate financial advice she had Applicant received and to place her in the best possible financial position.
28. Furthermore, the Applicant's submissions fail to address the fact that at no point during the redundancy process did she ever object to the redundancy.
29. To the contrary, the Applicant deliberately and with the benefit of independent advice negotiated a more favourable redundancy payment than what would have been available under the Award.
30. At no stage during the process did the Applicant ever question the bona fides of her redundancy. Her failure to do so while continuing to negotiate a more favourable separation package if not deceptive conduct on the part of the Applicant, evidences her contentment and satisfaction with the negotiated arrangements.
31. The Respondent submits that it negotiated the arrangements leading up to the agreement reached with her on 9 May 2018 in good faith. The Respondent relied on the Applicant's representations, made at her initiative and based on her independent financial and tax advice.
32. At no material time did the Applicant take any issue with the redundancy or agreement reached until she commenced these proceedings.
33. The Respondent submits that the Applicant has failed to make out how her redundancy gives rise to a dismissal that was harsh, unreasonable or unjust within the meaning of s 84(1) of the IR Act.
34. The Applicant's application for relief is misconceived and has been instituted without reasonable cause and accordingly be dismissed.
[9]
Case in reply for the applicant
The applicant filed an extensive witness statement in reply to the case put by the respondent. In that statement, the applicant sought to rebut much of the material relied upon by the respondent.
One of the main issues raised by the applicant was that she had not been provided with a copy of the BDO audit report. She stated:
24. Please refer to paragraph 10 of Ian Mackinlay's affidavit. It states: "An external audit of the Finance Department was undertaken by BDO in March 2018. This audit was conducted as part of a regular series of scheduled audits of various Council departments. The findings of this audit referred in part to the need to segregate the bank reconciliation and accounts payable functions. The relevant recommendations were subsequently adopted and included as part of the implementation of the review of the Finance Department. Consistent with BDO audit recommendations and the internal review, Council proposed to make changes in accounting practices and to make five positions within the Finance Department redundant, including the role of Accounting Officer then held by the Applicant."
24.1 In addition to the claim that an external audit was conducted, Ian Mackinlay proved (provided) no audit report to support the assertion - the need to segregate the bank reconciliation and accounts payable functions. Yet, based on BDO audit recommendations (no report provided), a proposal regarding structuring in the Finance Department was made in March 2018.
24.2 The audit recommendation appears to be the primary cause for the Re-structure. Filing of the audit report following the audit is a regulatory requirement (Australian Auditing Standards). While claiming external audit was conducted, the Council provided no audit report showing the relevant recommendations. Either the audit was not conducted, or the relevant recommendations alleged by the Council were not put forth by the report. The submitted material was gross inadequate in the Council's case, yet the relevant recommendations were subsequently adopted and included as part of the implementation of the review of the Finance Department. The Council therefore proposed to make changes in accounting practices and to make five positions within the Finance Department redundant. Considering the resources that the Council contributed to the Re-structure of the Finance Department, it is difficult to understand that a decision impacting the Council on such a large magnitude would have been made with such lack of foresight by senior management of the Council.
24.3 The Council's failure to provide an essential audit report while claiming that "findings of this audit referred in part to the need to segregate the bank reconciliation and accounts payable functions", represents deceptive conduct on the part of the Council's senior management, and strongly suggests that the audit recommendation did not occur.
[10]
The hearing
At the outset of the hearing of the application on 19 November 2018, the applicant, with the assistance of an interpreter, again raised the issue of the BDO audit report:
APPLICANT: In paragraph 10 of the affidavit prepared by Ian Mackinlay, in March this year the council conducted an external auditing and according to the recommendations of the auditors that the two functions of bank reconciliation and accounts payable should be separated and the council has adopted the recommendations proposed by the auditors and promised to implement the restructuring or reform.
As a result five positions of the finance department will be made redundant including my position where I have already served for 12 years. I was not informed by Mr Ian Mackinlay very clearly whether the recommendations from the auditors are coming in a form of oral recommendation or a written recommendation.
May I ask the respondent whether the auditors have just raised an oral recommendation to Mr Mackinlay to actually separate the bank reconciliation function and the accounts payable function within the finance department?
COMMISSIONER: Well the way that can be done is when Mr Mackinlay gives evidence in the witness box, Ms Tang will have the opportunity to ask questions in cross-examination.
INTERPRETER In the affidavit of Mr Ian Mackinlay there has no necessary written auditing report to support his argument so it is a common practise that after the conclusion of each auditing the auditors must, according to the requirements, prepare and produce a standard written auditing report and that in compliance with the Australian Auditing Standards. If there was in fact such an oral recommendation from some of the auditors according to the relevant laws and bylaws of the Australian Auditing Standards such oral recommendations should be incorporated into the auditing report. If such recommendation was not incorporated or included in the auditing report I think it is very fair for me to say that such recommendation does not exist at all.
Even if there was such a recommendation or oral recommendation from the auditors, as a result the council has made such a big move ahead which is the restructuring of the department and also as a result the council has spent quite a number of human resources and financial resources to deliver the restructuring of the finance department and one of the consequences was that I have lost a position that I have already served for 12 years. It is evident that such an oral recommendation from the auditors is of great importance and I think it appears to be very naïve and unbelievable if just merely based on an oral recommendation from an individual person or persons council would make such a major decision. Council has redirected on many occasions that such a decision was made on the recommendations of the auditors but they failed to produce a written auditing report to me which proves the deceptive behaviours or actions of the high executive personnel of the council involved the whole incident. The focal point of the whole incident or my application is the oral recommendation of the auditors, that is, to separate the two functions namely bank reconciliation and accounts payable.
I press my application that the council should produce a written auditing report to prove that such an oral recommendation has been proposed by the auditors. The fact that Mr Ian Mackinlay failed to produce such a written auditing report appears to me and also proves, according to my understanding, that no such recommendations have ever been proposed by the auditors. Such behaviour is of a deceptive feature by Mr Ian Mackinlay. I have been serving my post for more than 12 years. Our finance department has to go through various kinds of auditing on a yearly basis including internal, external, half a year or annual. For the past 12 years my position has successfully passed through the auditing without any questions raised. Why all of a sudden, out of the auditing that happened this March, the auditors would suggest that the bank reconciliation function or the accounts payable function should be separated.
My question is, on what basis did the auditors raise such a recommendation? If there are facts that according to the updated policies, bylaws which have been adjusted or added or amended and as a result the auditors propose such a recommendation this position or this recommendation has a significant bearing and it is entirely within the responsibility of the auditors to include such a recommendation into the auditing report. If the fact was that the auditors only raised such a recommendation on a verbal basis or oral basis but did not incorporate it into the auditing report and I would like to hold those auditors accountable and I think it is now malpractice. Now the council fails to produce such a written report to support their argument that the auditors once even had such an oral recommendation which proves to me that such an oral recommendation or recommendation in all does not exist at all.
My understanding is that the fact is that the auditors have never raised such a recommendation so that is why even an auditing report is going to be produced there will be no mentioning in the auditing report of such an oral recommendation from the auditors. In paragraph 10 of the affidavit prepared by Mr Ian Mackinlay it is based on the recommendations of the auditors that the council decided to make redundant the five positions within the finance department of the council. As a result I was made redundant. It is evident that this such oral recommendation is the cause of the entire incident.
Council has made such a major decision but failed to produce an auditing report which is to me a very important evidence to my application to support their decision which proves that the conduct of the restructuring or restructure is not genuine or is not in good faith. My understanding is the council lied to me that the fact I was made redundant was a result of the recommendations by the auditors. Council has actually deceived me to fire me. My conclusion is that I was suffering from an unfair dismissal.
The applicant's two witness statements were tendered into evidence following which she was cross-examined by Mr Gardner, the respondent's solicitor.
Ms Banfield's affidavit was tendered into evidence. He was not required for cross-examination.
Mr Mackinlay's affidavit was tendered into evidence and he was cross-examined by the applicant. She raised the issue of the BDO audit report:
CROSS-EXAMINATION BY APPLICANT
Q. Why Mr Mackinlay in your affidavit there's no mentioning of the provision of the external auditing report to support your argument?
A. Well I do, I do refer to the BDO report in 10, page 1.
Q. Sorry page?
A. Item 10, page 1 I made reference to the BDO report.
Q. But no actual auditing report was produced as part of your affidavit, is that correct?
A. That's correct.
Q. Why?
A. It was never asked for, I was not aware that it was an issue.
Q. You have provided many evidential materials including email communications between yourself and the applicant but I think the external auditing report is of paramount importance to my application or to this entire application or incident but you failed to produce such an important document so I don't think I'm 100 per cent convinced.
COMMISSIONER: Well Ms Tang you are allowed to ask questions not make submissions, you're given a chance to do that at the end.
Following the close of the respondent's evidentiary case, the following exchange occurred:
COMMISSIONER: Ms Tang, we now go to final submissions, where you have an opportunity to put a submission to me. Now, at the beginning of the case this morning, when you opened up your case, and you put a fairly detailed opening, so it won't assist me if you simply repeat that. But if you have anything in addition that you wish to put, then you will have the opportunity, and then Mr Gardner will have an opportunity to put a submission on behalf of the council.
Now, I have an urgent call I need to make, so if you could gather your thoughts while I'm making that call, I'll be as quick as I can, so that the submission you put to me can be concise, to the point, and not just repetitious of what you've already put to me. Do you understand?
APPLICANT: Yes.
COMMISSIONER: All right, we'll adjourn for a few minutes.
SHORT ADJOURNMENT
COMMISSIONER: Ms Tang.
APPLICANT: I'm asking the council to provide an external auditing report, prepared by BDO in March this year.
COMMISSIONER: Before you proceed, if you go down that path, that will inevitably cause a delay in finalising your application, which will send it over into next year, because the Commission just doesn't have time available this year to finalise your application. So, it's your application, you would normally have the right to issue a summons for production of documents, which you did, but you did not seek production of this particular report and it's very unusual, at the end of a case, to raise a request such as you're raising now for further production of documents.
APPLICANT: Mr Commissioner, I'm self-represented, as you can see; I'm not represented by a legal counsel.
COMMISSIONER: Yes.
APPLICANT: My understanding, after reading the affidavits provided by the other party or by the respondent, was that since there was no production of this external auditing report as any king (kind) of appendix to their affidavit, I took it for granted that they failed to produce such an auditing report. My understanding is after reading the affidavit and found out that there was no production of the external auditing report is that there doesn't exist such a document.
COMMISSIONER: Well, that's not an assumption you can make. This affidavit of Mr Mackinlay was filed on 20 August. The audit report and recommendations were not attached to it then. It's now three months later. If you had have wanted that report produced, you could have sought leave to issue a summons to have it produced, as you did with the other documents that you sought. But the practical position is if you press for production of that report and I allow that, the hearing of this application will go over to next year and there's nothing I can do about that.
APPLICANT: I think it is the onus of the respondent or it is the obligation of the respondent to produce voluntarily any evidential materials that it mentioned in his or her affidavit. And I was accused of not providing relevant evidential fact to support my argument, but I fully appreciate what Mr Commissioner just said, that if there's going to be established to support a simple argument, there needs to be an evidential fact or evidential material to support such a claim.
COMMISSIONER: Well, what the respondent produces by way of evidence is up to the respondent. If there are documents that you had wanted produced that were not produced, you could have sought leave to issue a summons for production, as you did, but include in that summons the particular document that you're now referring to, which you did not include in your summons. What do you say, Mr Gardner?
GARDNER: The question was asked of Mr Mackinlay and he confirmed that there was a written audit report and I agree that at no time, until this morning, did the applicant ever ask us for a copy of it. We actually encouraged the applicant to ask us what she might require and she never asked. My client is concerned about the cost of this issue is a non-issue in its view. What we have, if it assists, is one page of the audit report because it's an otherwise confidential council document. But if it satisfies the applicant, we can show it to her. I mean, there shouldn't be any issue that this document - I mean it exists and there's reference to her position. Mr Mackinlay has confirmed that. If the applicant doesn't believe it, we can show her, I just don't see, we don't want to waste additional Commission time on a summons or process if need be.
COMMISSIONER: All right, the normal way forward, if we were going down a summons path, would be to produce it to the Commission, so do you have any objection to doing that?
Following this exchange, Mr Gardner produced to the Commission and to the applicant an extract from the BDO audit report which was received into evidence and is reproduced at [6] above. The following exchange then occurred:
Is there anything further you wish to say, Ms Tang?
APPLICANT: No objections, Mr Commissioner. I have no further statement or submission to make. Is this my copy?
Mr Gardner then proceeded to put some brief oral submissions on behalf of the respondent, after which the following exchange occurred:
COMMISSIONER: Yes, thank you. Ms Tang, is there anything that you wish to briefly say in response to what Mr Gardner has said? We only have a very limited time, I'm afraid, because I have a matter at 4 o'clock.
APPLICANT: All of the severance pay that was mentioned by Mr Gardner, except for the extra week pay, is standard. It's required by the award.
COMMISSIONER: Yes, I understand that.
APPLICANT: Actually the previous agreement was that I will take my unpaid leave but later it was agreed that the termination of my employment would be delayed to 6 July instead of 18 May, which is my last working day with the council. The previous agreement was that it was unpaid leave and then I mentioned to the council that, "I have already accumulated quite a number of due annual leave that I haven't taken out myself." So I think this kind of arrangement has nothing to do with the severance pay.
COMMISSIONER: Is there anything else?
APPLICANT: The restructuring of the - sorry, as a result of the restructuring process within the finance department of the local council, four previous positions were abolished and four new positions were created. I don't think the council abolished the positions because these positions were not required, because as a result the council created another new positions. So which means to me that these positions are actually needed but I think the council was just playing some jigsaw puzzles here to try to mix the previous positions together and break them apart to create new positions. It's very much like, as the old saying says, that we're putting old drink in a new bottle. So the ultimate goal of council doing that is to try to kick me out of the previous organisation so that Mr Cameron Johnston can acquire his - can obtain the position that he has been longing for so that he can keep a long-term employment with the council.
That would be all, thank you, Mr Commissioner.
Following this, I reserved my decision.
On 27 November 2018, the applicant filed in the Office of the Industrial Registrar a number of documents described below:
(a) A notice of motion seeking "permissions" that:
1. The Commission consent the submission of final statement of the Applicant.
2. Such other permissions as the Commission sees fit.
(b) An affidavit which effectively repeated the grounds and reasons set out in the notice of motion as follows:
1. The last IRC Hearing regarding my unfair dismissal claim was held on 19 November 2018. At the beginning of the Hearing, parties were advised to be concise to allow the matter to conclude that day. If a conclusion was not reached on the day, the earliest next Hearing would be in mid-December. lt was in all parties' interests to conclude the Hearing succinctly, with all parties having fully presented their arguments, to minimise costs incurred and time spent. Further, as there was another meeting scheduled in the same court room at 4pm, the parties were advised that the hearing of the day would end at 4pm.
2. After the Cross-Examination, at about 2.45pm, Mr Gardner (lawyer of the Respondent) began to summarise the case of Respondent. The contents of his speech were largely irrelevant to the matter of my claim. For example, Mr Gardner described in great detail the personal background of Trang Benfield (then acting Chief Finance Officer of Woollahra Council).
3. Mr Gardner continued speaking until 3.50pm, leaving ten minutes for me to summarise my case. With an extremely limited time period, I was unable to cover the main arguments - many crucial points were not presented to the Court. Thus, I would like to take this opportunity to present them as follows:
3.1 During the Cross-Examination, I asked Mr Mackinlay (Manager, Organisational Development and Human Resources of Woollahra Council) why the recruitment process of two Finance Officer positions was delayed for the period of two months (from 4 May 2018 to 10 July 2018), his reply being that it was too busy to recruit at the time as Don Johnston (then Chief Finance Officer of Woollahra Council) had recently been promoted. It should be noted that Trang Benfield was available as acting Chief Finance Officer, immediately succeeding Don Johnston. Thus, the reason of delay in the recruitment process presented by Mr Mackinlay lacks substance and is contrived. It instead indicates that the Council deliberately delayed the recruitment process, with the intention to deny my petition to apply for one of the new positions internally, and to block my redeployment.
3.2 At the meeting held on 11 April 2018, the Council agreed to let me stay in my current position, while seeking recruitment for one of the new Finance Officer positions created by the Re-structure. However, at the end of the 28-day notice period, on 4 May, instead of starting recruitment, the Council issued the Notice of Redundancy. The Redundancy Notice took away my right to stay in my current position applying for the Council's new position (which was to be advertised soon).
Clause 39 (ii) (e) of the Award, requires employers to provide the reason(s) when an employee's request to submit an in-house bid is refused. The Council has failed to provide any reason, verbally or in witting, to comply with the Award.
During the Cross-Examination, I asked Mr Mackinlay as to whether the Council could provide these reasons. Mr Mackinlay replied that an "in-house bid" referred to external project tendering. lt should be noted that the title of Section 39 (Local Government (State) Award 2017) is "Workplace Change", and clauses 39 (ii) encompass an employer's duties when the workplace undergoes change. It is irrelevant to external business tendering. As a Human Resources Manager, Mr Mackinlay should be fully aware that the Award covers only Council employees. ln essence, Mr Mackinlay attempted to obfuscate the truth by denying the Council's failure to comply with the award.
3.3 The Council abolished four positions in the AP area where my role was. The Council simultaneously created four new positions in the same area. Abolition of these positions does not mean the employees were no longer needed. If the positions had become redundant, then new positions would not have been created. Logically, the purpose of creating new positions is to fill them. Prior to the Re-structure, the Finance Department faced a 33% shortage of staff. Even if the Council retained all employees whose positions had been abolished, the shortage of staff would remain the same.
However, the Council only retained Cameron Johnston in the AP area, while dismissing the rest (myself and Jay Raman). By dismissing two FTEs, the Council exacerbated the situation, leading to a 45% shortage of staff in the Finance Department. The Council's claims that the redundancies were made without bias are clearly unsubstantiated by their actions. It is evident that employees nominated for redundancy were selected on a non-objective and biased basis, and the termination of the two FTEs was unnecessary.
3.4 During the Re-structure, all positions in the AP area were abolished and the full-time employees who held these positions were dismissed. Although I worked in the same area as Cameron Johnston, he was not adversely affected by the Re-structure. Cameron Johnston remained in his position as a Finance Officer (casual) until the recruitment of two Finance Officer process had been completed (early October 2018).
At the Cross-Examination, I asked Mr Mackinlay why the Council retained Cameron Johnston, but dismissed myself and Jay Raman. Mr Mackinlay stated that as Cameron Johnston's job was only to assist then-Senior Corporate Accountant Trang Benfield, Cameron Johnston was not working in the area affected by the Re structure and was therefore not dismissed during the Re-structure. It should be noted that Mr Mackinlay's statement is false.
The truth is this, once the two new positions of Finance Officer were advertised, Cameron Johnston and Hedy Davant were advised of the jobs being listed and that their employment would be terminated at the end of the recruitment process (see Paragraph 58 of Trang Benfield's Affidavit). If Cameron Johnston's job was only to assist Trang Benfield, as Mr Mackinlay stated, there was no need to terminate Cameron Johnston's employment at the end of the recruitment process. Because the position was listed as a position of Finance Officer, not a position of Assistant Senior Corporate Accountant. The reason that Cameron Johnston was terminated, according to Trang Benfield's Affidavit, was because the position Cameron Johnston held at the time was listed as the position of Finance Officer. Thus, there is no doubt that Cameron Johnston had been holding the position of Finance Officer, or its equivalent. When his workload was low, Cameron Johnston may have helped Trang Benfield occasionally. But still, Cameron Johnston's official title was Finance Officer, not Assistant Senior Corporate Accountant (no such position exists). Therefore, once the two Finance Officer positions were listed, Cameron Johnston was advised of the termination of his employment.
Thus, Mr Mackinlay's statement at the Cross-Examination, that Cameron Johnston was only assisting Senior Corporate Accountant (Trang Benfield), was a false statement. The reason of retaining Cameron Johnston during the Re-structure which Mr Mackinlay provided was false.
The Council failed to provide the true reason of retaining Cameron Johnston during the Re-structure, indicative of the fact that the Re-structure lacked good faith and that the termination of the two full-time employees was not genuine.
3.5 The Council's strategy to accommodate the employment of Cameron Johnston can be divided into three phases:
First, the AP area was vacated to allow for the employment of Cameron Johnston as a Finance Officer (casual).
Second, the recruitment process for the Finance Officer positions was delayed for the period of two months (from 4 May 2018 to 10 July 2018) as a means of preventing my redeployment while maintaining available positions for the long-term employment of Cameron Johnston.
Third, these vacancies were listed when the Conciliation process (the IRC Directions Hearing on 5 July 2018) did not result in disqualification of my re-employment. Once the positions of Finance Officer were listed, Cameron Johnston was advised of his termination, simply because if the Council give one of the Finance Officer positions to Cameron Johnston, it would strongly support my claim of unfair dismissal. The Council had no choice but to compromise the employment of Cameron Johnston. By listing the Finance Officer positions, the Council also sought to prevent me from being awarded re-employment by the Commission.
3.6 The Council abolished the positions held by myself and Jay Raman. Although the same number of the new positions were created to replace the old positions, the Council failed to provide us with the necessary assistance to move to a new role. Employers have an obligation to provide measures to avoid or minimise the terminations and, measures to mitigate any adverse effects of the termination of the employees, as required by the Award. The Council provided no training or other measures to help me with the redeployment. The Council has failed to comply with the Award.
3.7 The Respondent objected to almost all my statement evidence, but provided no substantive evidence to support their arguments. The Affidavits of the Respondent are largely objectionable and not admissible Most of the statements presented at the Court by the Respondent were not factual statements and, were irrelevant to the matter under discussion.
(c) A second affidavit in which the applicant deposed that she was employed by the respondent as a full time Accounting Officer from 16 January 2006 to 6 July 2018 and that she was currently unemployed.
Chief Commissioner Kite listed the applicant's motion before himself on 3 December 2018 and made certain directions. On 10 December 2018, the respondent filed written submissions opposing the applicant's motion. This prompted a further affidavit from the applicant which was filed on 14 December 2018 in which many of the matters previously raised by the applicant were repeated. The matter was listed before me on 20 December 2018.
On that occasion, I received into evidence, over the objection of the respondent, the applicant's notice of motion filed on 27 November 2018, her two affidavits filed on the same day and the further affidavit filed by the applicant on 14 December 2018.
The applicant then proceeded to identify parts of the affidavits of Ms Banfield and Mr Mackinlay to which she wished to "press my objection". The following exchange then occurred:
COMMISSIONER: We may be at cross purposes. This document, the affidavit of Ms Banfield, has been admitted into evidence, it's in evidence. The paragraphs that you've just identified, do I understand you to be saying that you disagree with the contents of those paragraphs?
APPLICANT: Yes, that's right, I disagree with the content of the paragraphs I mentioned.
COMMISSIONER: I note that. Is there anything else you want to say about those paragraphs?
APPLICANT: Previously the respondent provided their objections to the relevant paragraphs contained in my statement.
COMMISSIONER: Yes.
APPLICANT: But I didn't personally go through that process, so I'm not sure whether today's my opportunity to go through the process again to explain my response to the statement provided by the respondent.
COMMISSIONER: If you wish, you can do that. But, on the basis that those paragraphs are in evidence. I will consider the contents of those paragraphs but I will also consider your response. I take it from what you've already said, you disagree with the contents of those paragraphs. Is there anything else you want to say now about those paragraphs or anything else contained in
exhibit 3?
APPLICANT: Are we talking about exhibit 3 at the moment?
COMMISSIONER: Yes.
APPLICANT: Yeah, I just want to reiterate my objection to those paragraphs that I just identified and the actual reasoning or explanation detailing my objection is actually contained in my latest submission to the Commission.
COMMISSIONER: Which I've read and which I will read again. So, I understand you disagree with those paragraphs, the contents of them. I understand from the material that I've just now admitted into evidence the basis of your disagreement. So, I don't need you to take me through these documents that I've just now admitted. I'll consider those when I'm writing my decision. But this is your opportunity to put anything else you want to beyond what you've already put and what's contained in the exhibits that have just been admitted.
APPLICANT: I just have one more very important piece of information to supplement to the Commission.
COMMISSIONER: Yes?
APPLICANT: In exhibit 4, para 10 -
COMMISSIONER: Just let me find that. This is the paragraph that commences, "An external audit of the finance department"?
APPLICANT: Yes.
COMMISSIONER: Yes, I have that.
APPLICANT: In which in para 10 Mr Mackinlay said that actually the council made the decision of restructuring the whole department after receiving the external audits report from BDO and as a result the council adopted such a recommendation and started the whole restructuring process. However, in the external auditing report provided by BDO, which was identified as exhibit 5, it is clearly stated the council has already informed the BDO and before they actually BDO started the whole external auditing process, that the council has already commenced the restructuring process within the department. In the final part of the recommendations composed by BDO it says such wordings were used in the report that the council should - sorry, council continues with the restructuring of the finance department.
COMMISSIONER: I see that.
APPLICANT: It is evident that the council didn't commence a restructuring process upon receiving the recommendation from BDO. In fact, the council has already started the restructuring process before BDO started the external auditing work. And the council actually started the restructuring process at its free will.
When the affidavit which is identified as exhibit 4 was provided by Mr Mackinlay, the external report was not provided together with the affidavit of Mr Mackinlay at that point in time. In the submission by Mr Mackinlay to the Commission, the respondent said that actually BDO has provided such a recommendation which is restructuring of the finance department to the council. However, BDO denied that actually they have provided such kind of recommendations to the council. Sorry, let me make myself clearer. In fact, in the external report they didn't say in to the exact fact that BDO has didn't propose such a recommendation.
The affidavit provided by the respondent contradicts with the external auditing report provided by BDO and it proves that it is the respondent who deliberately did not provide the external auditing report in the first place. However, my understanding is the respondent is fully aware that they have the responsibility to provide such evidentiary material to support their argument. Without concrete evidential support, they cannot prove that their argument is legitimate, which complies with the basic legal commonsense.
My understanding is respondent had already prepared the BDO external auditing report in three copies and bring them to the court. It is evident that the respondent is fully aware of its obligations or responsibilities which is to provide external auditing report as evidence or proof of what they have done. However, they didn't present it in the first place because by presenting this external auditing report provided by BDO it can only prove that what they have done is wrong.
The report composed by BDO actually is a evidentiary material which is very beneficiary to the applicant's case. My understanding is the respondent would never be willing and would never agree to present such material to prove its wrong doing. They actually presented such in evidence to the court when they have no other choice. The fact about the respondent refused to present the external auditing report by BDO promptly proves that the respondent is deliberately covering the truth. The external auditing report provided by BDO actually provides solid evidence which proves that the respondent has been providing false evidence to try to conceive(as said) the Commission on purpose.
The whole restructuring process was conducted in a biased way and by applying conceiving methods, which proves that my dismissal is unfair. And that is all I would like to submit.
Mr Gardner then put some brief submissions on behalf of the respondent. The following exchange then occurred:
COMMISSIONER: Thank you. Ms Tang, is there anything you want to say in response to what Mr Gardner has just said? And you don't need to repeat things that you have already said or are contained in the material. If there's anything that Mr Gardner has just said that you wish to specifically respond to, then do that now.
APPLICANT: The reason that I didn't ask for the production of the external auditing report provided by BDO in the first place is because I thought it was the responsibility of the respondent should be fully aware of such a responsibility to provide such an important piece of evidence because the restructuring of the finance department is a major position by the council and it should be supported by some external recommendations provided by the third party.
And I think that it is the respondent's responsibility to provide such an important report or evidence. However, during the last hearing, I was accused by the respondent that I didn't put forward such a request with the Commission to ask for the production of the report.
During the process of last hearing, when I learned that there was such a report, I asked for the permission for the production of the evidence and it is until that point in time that the respondent had to have no other options but to provide the external report by BDO.
Mr Gardner just mentioned that the council actually planned the whole restructuring process back in 2016 but the council didn't start to implement the plan immediately after the plan was conceived, due to the reasons that
Mr Gardner just mentioned. I think I may be able to understand that. However, in para 10 of exhibit 4 it is clearly stated that council in fact started the whole process of the restructuring of the finance department based or after the BDO provided the external auditing report and it is then that the council actually started the implementation of the restructuring process.
It is evident that Mr Mackinlay's affidavit runs contradictory to BDO's external auditing report, which proves that Mr Mackinlay was lying in that particular affidavit.
COMMISSIONER: Is that all you wish to say now?
APPLICANT: That would be all from me, thank you.
[11]
Determination
On the basis of the evidence before the Commission, I find that the position of Accounting Officer, which was occupied by the applicant, was made redundant following a review of the respondent's Finance Department. The decision to conduct the review was made in mid 2015 following the resignation of the Accounts Payable Officer. However, it was put on hold pending the proposed merger of Woollahra, Randwick and Waverly Councils. This proposed merger was abandoned in mid 2017.
An external audit of the Finance Department was conducted by BDO in March 2018 and BDO's report was produced in April 2018. One of BDO's recommendations was that the duties associated with accounts payable and accounts receivable be segregated from the performance of bank reconciliations (see [6] above).
It is clear from the respondent's evidence that this proposed segregation of duties had been an issue of concern for some time. The following was contained in the affidavit of Ms Banfield:
13. In early 2015, I was of the view that there was surplus capacity in having three full time equivalent (FTE) positions undertaking accounts payable and bank reconciliation tasks within the Finance Department. Based on oral conversations at the time, the CFO, Mr Don Johnston shared this view.
14. The CFO and I were also conscious of the fact that there was a segregation of duties issue but with the structure as it was, the bank reconciliation function could not be reallocated to another position and had to remain under the Accounting Officer position.
15. In mid-2015, the Accounts Payable Officer tendered her resignation. Her last day with the Council was 20 July 2015.
16. When the Accounts Payable Officer position became vacant in July 2015, there was an opportunity to review the entire Finance Department and determine how much surplus capacity existed, reallocate the surplus capacity to where it's required and, at the same time, segregate the bank reconciliation function from staff undertaking the accounts payable function.
17. The dilemma was that the bank reconciliation function does not require 1 FTE but:
17.1 should be done daily; and
17.2 has to be segregated from accounts payable and accounts receivable.
18. I had previously estimated the bank reconciliation process to be a two hours task per day allowing for any occurrence of issues and 1 hour if there were no issues for that day. This would equate to a maximum of 10 hours per week which is equivalent to 0.3 FTE. The time required may increase marginally around rates instalment dates but these only occur four times per year and are only for a few days at a time.
It is simply wrong to suggest, as the applicant did in final submissions, that it was Mr Mackinlay's evidence that the decision to segregate the bank reconciliation function from staff undertaking the accounts payable function was only made after BDO had provided its audit report. This proposition is not supported by a fair reading of paragraph 10 of Mr Mackinlay's affidavit (see [19] above).
Ultimately, the review conducted by the respondent resulted in the reorganisation of duties within the Finance Department and a number of positions, including that held by the applicant, were made redundant and a number of new positions were created.
Nothing that has been placed before the Commission causes me to doubt the reasons put forward by Ms Banfield for this reorganisation of the department (see Banfield witness statement at paragraphs 43-49 at [17] above).
The applicant contends that the reorganisation of duties and positions within the Finance Department was not genuine and not done in good faith (see [23] and [31] above). I reject this contention.
At the outset of the hearing, the applicant asserted that the recommendation by BDO to separate the bank reconciliation and accounts payable functions did not exist (see [23] above). After being provided with the relevant extract from the report which sets out clearly this recommendation, the applicant then accused Mr Mackinlay of lying at paragraph 10 of his witness statement (see [19] and [35] above). It was not made clear precisely what part of paragraph 10 constituted a lie by Mr Mackinlay but, in any event, as I have indicated at [38]-[39] above, I reject this accusation. I assessed Mr Mackinlay to be a witness of truth who had exhibited a good deal of compassion towards the applicant. Paragraph 10 of his witness statement is entirely consistent with the evidence of Ms Banfield about the reasons for the reorganisation. Nothing the applicant has put would lead me to reject any part of Mr Mackinlay's evidence.
The applicant also submitted that the deletion of her position and that of Senior Accounts Payable Officer, Jay Raman, was done, in effect, to facilitate the retention in employment of two other employees, Hedy Davant and Cameron Johnston (see [14] and [29] above). Upon learning that neither person remains in the employment of the respondent, the applicant submitted that Mr Johnston's employment was terminated because, if the respondent gave one of the Finance Officer positions to him, that would strongly support the applicant's claim of unfair dismissal (see [31] above at paragraph 3.5). There is not a shred of evidence to support this assertion and I reject it entirely.
I also note that there does not appear to have been any issue taken by the United Services Union with the genuineness of the reorganisation.
I find that the termination of the applicant's employment was brought about by a reorganisation of the respondent's Finance Department and constituted a genuine redundancy.
The applicant was offered and accepted a redundancy package. She acknowledged that she had done so voluntarily, at her request and with her full agreement (see [11] above). She then negotiated a number of more favourable terms with Mr Mackinlay (see [20] above at paragraph 20).
Whilst it is clear that the applicant feels aggrieved by the loss of her job, I am unable to discern anything in the termination of her employment that could conceivably support her unfair dismissal application.
Further, I accept the evidence of Ms Banfield as to the applicant's lack of suitability to fill any position in the new structure within the Finance Department (see [17] above at paragraphs 53-61).
[12]
Orders
I make the following orders:
(1) The unfair dismissal application of Yu Tang is dismissed.
(2) These proceedings are terminated.
John Murphy
Commissioner
[13]
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Decision last updated: 22 February 2019