The Principles
118Mr Kimber referred to judgments supporting a broad construction of "redundancy". He relied particularly on a passage in the judgment of the Full Federal Court in Dibb v Commissioner of Taxation (at [43]):
"s 27F [of the Income Tax Assessment Act 1936 (Cth)] speaks of the 'bona fide redundancy of the taxpayer'. We consider that it is more accurate to say that any employee becomes redundant when his or her job (described by reference to the duties attached to it) is no longer to be performed by an employee of the employer, though this may not be the only circumstance where it could be said that the employee becomes redundant. Reallocation of duties within an organisation will often lead the employer to consider whether an employee, previously employed to perform specific functions assigned to a particular 'job', will be able to perform any available 'job' existing after such reallocation. Even if the employee's job, defined by reference to its duties, has disappeared, he or she may be able to perform some other available job to the satisfaction of the employer. In that case, no question of redundancy arises. It is only if the employer considers that there is no available job for which the employee is suited, and that he or she must therefore be dismissed, that the question of redundancy arises. If, in good faith, the employer:
● has reallocated duties;
● considers that the employee is not suitable to perform any available job, defined by reference to those reallocated duties, existing after the re-allocation; and
● for that reason, dismisses the employee,
then, for the purposes of s 27F, the employee is dismissed by reason of his or her bona fide redundancy. In the above discussion we have used the word 'available' as meaning 'vacant', and the word 'suitable' as meaning 'within the employee's capacity'."
119These observations have to be understood by reference to both the legislation under consideration and to the facts of the case. The taxpayer was a District Manager whose employer had acquired staff in excess of business requirements. In consequence, the employer redistributed the duties previously performed by District Managers and added further duties. The Court found (at [44]) that "[t]he job, described by reference to its duties and previously performed by [the taxpayer], ceased to exist" and that the employer "no longer wished to have that job performed by anybody" (emphasis added).
120The judgment of the Court recognises (at [41]) that a person can be made redundant even if some aspect of that person's duties remain to be performed by someone within the organisation. However, the judgment does not decide that if an employer re-allocates some duties attached to a position but retains the position (whether under the same or a different name), a redundancy will necessarily occur should the incumbent not be appointed to the position. The key findings in that case were that the job previously performed by the taxpayer no longer existed and was not to be performed by anyone.
121Mr Kimber referred also to Encyclopaedia Britannica v Campbell. In that case, the letter pursuant to which the claimant was employed provided for benefits "in the event of a redundancy". The employee was dismissed but his claim for a redundancy payment failed. My judgment (Giles and Macfarlan JJA agreeing) contains the following passages:
"[69] ... The background to the insertion of this expression ['in the event of redundancy'] in the letter was the concern stated by the [employee] to [the employer] arising out of the 35 redundancies that had taken place in May 2000. The [employee] conveyed his concerns about his own position, particularly if the [employer] intended to abolish further positions.
[70] In these circumstances, I would not be inclined to give the expression a narrow meaning. I would not be disposed, for example, to confine an event of redundancy to the case where the [employee's] employment was terminated because of a restructuring that affected a number of positions in the [employer's] organisation. On this approach, there might well be an event of redundancy if the [employee's] employment was terminated solely because the [employer] wished to redefine the role and responsibilities of the Managing Director and the [employee] was thought not to have the necessary qualifications or skills for the restructured position: cf Jones v Department of Energy, at 308.
...
[73] The redundancy provisions of the May 2000 Letter were intended to provide the [employee] with enhanced entitlements if the [employer] decided to terminate his services for a particular reason. The entitlements would arise if the decision was made, at least in part, not because of any perceived deficiency in the [employee's] ability to perform his duties, but because the position he held was to be abolished or because the responsibilities attached to it were materially changed. If, for example, [the employer] terminated the [employee's] employment because [it] wished to restructure the Australian operations and to redefine the role of the Managing Director, it is likely that there would have been an event of redundancy."
122These observations explain why, even on a broad construction of the redundancy provision in the letter of employment, the claimant's case in Encyclopaedia Britannica v Campbell had to be rejected. On the evidence, the claimant's employment was terminated because of dissatisfaction with his performance (at [72]). The judgment therefore had no need to consider the extent to which the role the claimant had performed prior to termination would have had to be redefined or the responsibilities "materially changed" before it could be said that the claimant had been made redundant. The judgment does not purport to address that question.
123Mr Kimber also cited the comment in the joint judgment in Amcor v CFMEU (at [52]) that:
"If ... there had been some change in the terms and conditions offered by the new employer from those offered by Amcor, or there had been some change in the tasks to be undertaken by the employee, there may have been some question about whether 'the position' continued."
This passage cannot be read as authority for the proposition that some changes in the duties attached to a position, regardless of the nature and significance of the changes, will justify a finding that the previous holder of the position has been made redundant.
124The facts of Foster's Group v Wing, referred to by Mr Jackman, are similar in some respects to those of the present case. The employee had been employed as the GM of the employer's Shanghai operations. His contract of employment provided for benefits if his position was "made redundant". The contract incorporated by reference a policy document, which stated that redundancy would arise:
"when an employee's role no longer exists or the duties of the role have changed that for all practical purposes the original role no longer exists."
The employee successfully claimed in the County Court of Victoria that he had been made redundant. The employer appealed.
125Habersberger AJA (Maxwell P and Nettle JA agreeing) examined the meaning of the term "redundancy" by considering the judgments in Adelaide Milk and Dibb v Commissioner of Taxation and the authorities referred to in those judgments. His Honour concluded (at [36]) that the approach in these cases had been reflected in the policy document which had been incorporated in the claimant's contract of employment. The critical question was therefore:
"whether through no fault of the employee his or her role no longer exists or the duties have so changed that for all practical purposes the original role no longer exists."
126Habersberger AJA went on to find (at [62]) that the employee had not been made redundant. The position of GM in Shanghai still existed after the termination and an acting GM (Mr Bett) performed the duties of the office. His Honour accepted (at [63]) that some of the responsibilities attached to the position had been transferred to another executive before the employee was dismissed, but considered that work remained for him to perform, whatever title was given to the role (at [65]).
127Habersberger AJA rejected (at [67]) as "unrealistic" the employee's contention that because Mr Bett devoted only 25 per cent of his time to the Shanghai GM's position, the position had been made redundant:
"it is unremarkable that Mr Bett was not able to devote his entire time to the general manager's role, given that he was at the same time carrying out the duties of his other, more senior, position. The [employer] further submitted, and I agree, that the fact that Mr Bett did not devote (according to the Judge) more than 20 to 25% of his time to the acting general manager role does not mean that if a person was employed in the role on a full time basis there would not be enough duties to occupy that person in a meaningful and substantial way. I also accept the [employer's] submission that, even putting the [employee's] case at its highest, if performing the "country manager" role in China would only involve 20 to 25% of a person's working time, it could not be said that the role did not exist. In the [employee's] terms, the degree to which the original role would have been changed was not sufficient to include that 'for all practical purposes it no longer existed'."
128The Court in Foster's Group v Wing could perhaps have dealt with the case by interpreting the language of the policy document without examining closely the authorities that have interpreted "redundancy" under the general law. But Habersberger AJA did undertake that examination and concluded that the policy document accurately reflected the meaning of the term "redundancy" under the general law. His Honour interpreted "redundancy" to mean that through no fault of the former employee his or her role no longer exists or the duties have so changed that for all practical purposes the original role no longer exists.
129Hodgson v Amcor Ltd, a decision referred to by the primary Judge and by both parties on the appeal, interpreted the judgment of Habersberger AJA in Foster's Group v Wing in this way. The issue in Hodgson v Amcor Ltd was whether one of six group general managers (GGMs) had been made redundant as a result of a restructure that reduced the number of GGMs to four. Vickery J found that the position occupied by the claimant (GGM Fibre Packaging) had been modified in the restructure, but not so as to alter the fundamental nature of the position (at [383]). The claimant had become "surplus to requirements", but that had not been brought about by any redistribution of the duties of his position, but because of other issues between the claimant and his employer.
130Vickery J quoted extensively from the authorities, including Foster's Group v Wing. He said (at [371]) that:
"subject to any qualification or re-statement found in the relevant contract of employment or any applicable statute, the common law concept of 'redundancy' comes down to the following propositions:
(a) A job becomes redundant when the job of the employee ceases to exist because the employer, for whatever reason, whether by reason of reorganisation, mechanization, change in demand or other reason, no longer desires to have it performed by anyone;
(b) This can occur either when the role no longer exists or the duties have so changed that for all practical purposes the original role no longer exists;
(c) However, redundancy is not limited to the circumstance where the employer, no longer desires to have the work previously performed by the terminated employee done by anyone;
(d) A redundancy may also arise upon the redistribution of job functions, where the duties performed by an employee are redistributed among other employees. In this case the employer still requires the duties to be performed, but the re-organisation may give rise to a redundancy. In this event, although the duties remain to be performed, 'for all practical purposes the original role no longer exists' because the duties are divided and assigned amongst others. In such a case the question is whether any function or duty remains to be performed by the employee. A redundancy will occur if, after the reorganisation, the employee in question is left with no duties to discharge; and
(e) Redundancy will not arise where the termination of employment is carried out solely because of any personal act or default of the employee terminated or for any consideration peculiar to that employee." (Citations omitted.)
131The opening words of this extract must be kept in mind: the starting point for analysis must be the language of the relevant statute, award or contract of employment. Subject to this qualification, Vickery J's analysis in my view accurately summarises the principles stated in the cases. The key concept is that the job performed by the claimant ceases to exist, or the duties have so changed that for all practical purposes the role no longer exists.
132This concept cannot be applied in the manner of a mathematical formula. A difficult judgment may have to be exercised, for example where the nominal position remains in place but the duties of that position are substantially altered: see Commonwealth Bank of Australia v Financial Services Union at [27]. Similarly, if the name of the position has been changed, but many of the duties and responsibilities attached to the previous position are retained, there may be no redundancy. But the fact that the duties attached to a position have changed or some responsibilities have been transferred to other positions does not establish that the position, or the occupant of the position, has been made redundant. Ordinarily, it is necessary for the employee claiming to have been made redundant to show that the changes in the duties and responsibilities of a position are so substantial that for practical purposes the position no longer exists. That may come about in a particular case where a position appears to continue (whether under the name or a different name), but the duties and responsibilities of the position are so substantially altered that it is largely stripped of its functions.