Fair Work Act 2009

s.394 - Unfair dismissal

Application for an unfair dismissal remedy - genuine redundancy - application dismissed

• [1] Zhiming Yang has made an application for an unfair dismissal remedy under s 394 of the Fair Work Act 2009 (Act). His former employer, Telstra Limited (Telstra), contends that the dismissal was a case of 'genuine redundancy' within the meaning of s 389. This is one of the matters that s 396 requires the Commission to decide before considering the merits of an unfair dismissal application. On 8 December 2023, I conducted a determinative conference to hear from the parties on Telstra's objection and the merits, with a view to deciding the jurisdictional objection first, and then the merits should that be necessary.

• [2] Mr Yang's evidence was that he was employed by Telstra as a 'technical expert' in the 'CCUC Technology Team' providing various forms of technical support to Telstra's customers. On 23 August 2023, he received a letter from Telstra stating that his position was redundant and that his employment would end on 19 September 2023. Mr Yang did not believe that his position was truly redundant. Mr Yang said that over the previous 12 months Telstra had hired four more staff to perform his role, that Telstra had invested a lot of money in the area in which he worked, and that the work of his team had continued to grow.

• [3] Mr Yang said that he believed Telstra had unfairly selected him for redundancy based partly on an incorrect and unfair assessment of his 2023 performance that was undertaken by his manager, Adnan Adnan, for the 2022/23 financial year. Mr Adnan had said in his evaluation of Mr Yang's performance that his troubleshooting and issue resolution skills were improving, when according to Mr Yang he had advanced skills in these areas, having closed almost one hundred percent of his cases. Mr Yang had also received commendations for his work and had built good relationships with major customers. Mr Yang said that Mr Adnan had failed to apply the assessment standards objectively across his team. He said that the number of cases he had closed was above the average number for his team, and that he doubted that Mr Adnan had really compared his achievements to those of others. Mr Yang also said that his ratings for 2022 and 2023 were inconsistent, because in 2022 he had closed 140 cases and received a rating of 3, but in 2023 he had closed many more cases but received a rating of only 2. Mr Yang said that he told Mr Adnan that he thought that his performance rating of 2 was unfair and that he would dispute it, and that he then raised the matter with Ms Riley and another manager. He said that Ms Riley sent him a link to a webpage through which he could raise a formal dispute however the link did not work.

• [4] Mr Yang said that Mr Adnan's purpose in giving him a poor performance rating was to force him to leave Telstra. He said that Mr Adnan would often ask him whether he planned to resign, and that Mr Adnan had unfairly refused to approve his request to take carer's leave earlier in the year to look after his son. Mr Yang said that he believed his selection for redundancy was racially motivated, as the four new people hired to do his role were all Indian like Mr Adnan. Mr Yang said that his selection for redundancy was not made in good faith and that his dismissal was unfair.

• [5] Laura Riley gave evidence that Mr Yang worked as a technical expert in the 'Enterprise Unified Communications and Contact Centre', which is part of Telstra Enterprise Service Management (TESM), a department that provides technology assurance to clients. Some thousand employees are employed in TESM, servicing customers on hundreds of products. TESM has eleven so-called pillars, or sections, one of which is Enterprise Voice Management (EVM), which Ms Riley leads. EVM provides assistance for voice-based platforms to clients when they experience faults or make service requests. It comprises four 'towers' (units), one of which is Internet Protocol (IP), which manages requests from customers regarding faults and services. Mr Yang worked in the 'back of house' Telstra IP Telephone (TIPT) team managed by Mr Adnan. His role included dealing with incidents and requests (tickets) from customers about their products and resolving these issues.

• [6] Ms Riley said that in the first half of 2023, Telstra conducted a review of TESM's operations, which resulted in a proposal to implement a number of changes, including automation of certain processes, a flatter team structure, and cross-skilling across teams. The impetus for the review was a need for TESM to reduce costs by $2.3 million. The changes would reduce the required number of employees in TESM as a whole; 83 roles would be removed, and 48 new roles would be created. In the IP unit, there would be a reduction of three staff, from 26 to 23. Ms Riley said that EVM had seen a steady reduction in tickets for the TIPT products that Mr Yang supported, and that this was attributable to several factors, including improved serviceability of product, the ability of customers to self-service through online portals and the upskilling of other employees to reduce the work of the TIPT team. She said that overall, 'fault' tickets had reduced by 25% since November 2022.

• [7] Ms Riley said that on 19 July 2023, TESM announced the proposed changes to employees and provided them with a consultation pack. There followed a two week consultation period with employees and unions as required by the Telstra Limited Enterprise Agreement 2022-2024 (Telstra Agreement), which involved discussions with staff about how the proposed changes would apply and obtaining staff feedback. Following the consultation process Telstra decided to proceed with the proposals.

• [8] Ms Riley's evidence was that on 20 July 2023, Telstra sought expressions of interest for the new 48 roles in TESM. Mr Yang initially expressed interest in one of the roles but did not submit a final application. Two technical experts from Mr Yang's team were appointed to two of the new positions. That left one more position to be removed from Mr Yang's team.

• [9] Ms Riley said that when Telstra needs to reduce the number of employees in a group it conducts a selection process involving a merit-based assessment of the impacted employees against selection criteria. There were five selection criteria: demonstration of Telstra values; approaching engagements with a view to providing customers with a brilliant experience; meeting team workload demands, by reference to work volume over the previous year; proactively working to resolve issues; and demonstration of usable skills in relevant technologies. Employees' managers provided feedback and scored employees against each criterion. Ms Riley was briefed on the assessments and rankings, and endorsed the outcomes. Ms Riley said that Mr Yang was the lowest ranked technical expert in his group and was therefore selected for redundancy. She said that Mr Yang had the lowest output for his level of experience, and below the average number of incident resolutions.

• [10] On 18 August 2023, Mr Yang was advised that he had been selected for redundancy. This was confirmed in writing on 23 August 2023. In accordance with the Telstra Agreement, Mr Yang had the opportunity to seek redeployment. Ms Riley said that during the redeployment period Mr Yang applied for four roles; three of these required a Department of Defence security clearance that Mr Yang did not possess, and which could take up to 18 months to obtain, and the fourth role was at band two and would have been a promotion. Mr Yang was unsuccessful in applying for that role because he did not have technical knowledge and experience in radio technology, mobile networks and satellites. Upskilling would have taken some two years. Ms Riley said that no suitable positions were identified by Telstra for Mr Yang in its business, including associated entities, and that Mr Yang's employment ended for reason of redundancy on 19 September 2023. He was paid a redundancy entitlement of 43.33 weeks pay, amounting to $111,348.54, as well as payment in lieu of notice.

• [11] Ms Riley said that Mr Yang was wrong to say that Telstra had hired four more people into his team. It had not done so. On the contrary, there was a reduced requirement for the technical expert role, and Mr Yang had been selected based on the application of the redundancy selection criteria. There were previously 26 employees in the role, this had been reduced to 23, and that remains the number. Ms Riley also denied Mr Yang's suggestion that he was selected for redundancy because he was not Indian.

• [12] Ms Riley said that Mr Yang had sent her an email stating that he did not agree with his performance rating and that she had sent him a link to the relevant procedure. She said that Mr Yang had never told her that the link did not work, and that he had been a Telstra employee for 11 years and she would expect him to be familiar with the process.

• [13] Ms Riley said that Mr Yang's position has been made redundant as part of a genuine redundancy process and that Telstra did not need Mr Yang's job to be performed by anyone due to the changed operational requirements of the business.

• [14] A person cannot have been unfairly dismissed if the Commission is satisfied that the dismissal was a case of 'genuine redundancy' (s 385). Section 389 states that a person's dismissal was a case of genuine redundancy if the person's employer 'no longer required the person's job to be performed by anyone because of changes in the operational requirements of the employer's enterprise' (s 389(1)(a)); and the employer complied with any obligation in a modern award or enterprise agreement to consult about the redundancy. Section 389(2) states that a person's dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer's enterprise or that of an associated entity.

• [15] I accept the evidence of Ms Riley that Telstra had a reduced requirement for technical experts in Mr Yang's area. The type of work that Mr Yang performed was still needed, but fewer people were needed to do it. I accept Ms Riley's evidence that Telstra has not hired four additional people as technical experts, and that the number of persons performing this role has reduced in the manner she described. Ms Riley was a credible witness. She has direct knowledge of the relevant parts of Telstra's business and the composition of the relevant workforce, as well as the operational requirements of the business. I prefer her evidence to that of Mr Yang about these matters. It was authoritative and convincing. I note Mr Yang said that his own tickets had increased in recent times, but even if that is correct, it says nothing about the overall number of tickets. I find that Telstra's operational requirements were such that it no longer needed as many technical experts and the pool of such workers needed to be reduced. Mr Yang is incorrect to say that because the type of work he was performing is still being done by others, his position could not really be redundant. Reducing the number of positions of a particular class is a very common circumstance of redundancy.

• [16] Mr Yang's job was selected for redundancy by applying Telstra's selection criteria. Strictly speaking, at the time when the Commission is considering whether a dismissal was a case of genuine redundancy, it is not necessary to inquire into the fairness of the selection criteria or their application, because s 389 is not concerned with fairness; if a dismissal is found not to have been a genuine redundancy, the Commission may then proceed to consider whether the dismissal was unfair by reference to the considerations in s 387. On the other hand, s 389 does require a particular causation: to be a genuine redundancy, the employer must have no longer wanted the applicant's job done by anyone because of changed operational requirements, and not because of some other reason, such as a desire to be rid of an employee. It is therefore relevant to inquire as to whether another motive for dismissal might have been at play. Mr Yang said that this was the case. I disagree.

• [17] I reject Mr Yang's suggestion that his dismissal was racially motivated. There is no evidence whatsoever to suggest that this was the case. Mr Yang said that Mr Adnan favoured people of Indian descent, but he failed entirely to substantiate this accusation. The most that Mr Yang could say about his claim of racism was that Mr Adnan was Indian and that so too were the new hires. Even if these things were true, it would not demonstrate racism.

• [18] I also reject Mr Yang's claim that Mr Adnan gave him a poor performance review as part of an effort to have him leave Telstra. I accept that Mr Yang strongly disagrees with the overall assessment he received, however he had the opportunity to seek a formal review of the assessment and failed to do so. Mr Yang said that the link to the company process sent to him by Ms Riley did not work, but if that was the case, he should have told her so. If he did not already know, he was on notice that there was a formal process for challenging his performance review. I find that there is no reason to think that the performance assessment is anything other than the result of a genuine effort on the part of Telstra to evaluate Mr Yang's performance. I appreciate that Mr Yang believes it was unfair for Telstra not to have granted him carer's leave to care for his son but unfairness during the employment is not relevant to the question of whether his dismissal was a genuine redundancy. I reject any suggestion that this matter is evidence of some desire of Telstra to have Mr Yang resign.

• [19] In cases where there has been a genuine but erroneous assessment by the employer of an employee's performance history, or an honest misapplication of selection criteria, can it still be said that the employer no longer wanted the applicant's job to be done by anyone because of changes in the operational requirements of the enterprise? Yes. In the context of the operational requirements of the enterprise, the individual positions in a pool that must be reduced are interchangeable. Section 389 requires, for a 'genuine redundancy', that the job be removed because of changed operational requirements, not the person doing the job. It does not matter if the employer makes the wrong selection, unless it is not a genuine selection, in which case the reason for the removal of the job would be called into question (see also the Explanatory Memorandum to the Fair Work Bill at [1553]).

• [20] Therefore, even if Mr Yang was correct in his assessment of his own performance, and the assessment of Mr Adnan was wrong, it would not alter the conclusion that the circumstance in s 389(1)(a) is met in the present case. Mr Yang was dismissed because Telstra no longer wanted his job done by anyone, and this was because of its changed operational requirements. Absent these changed requirements, he would not have been dismissed. Based on the evidence of Ms Riley, I find that Telstra did not make a 'mistake' when it selected Mr Yang for redundancy. Mr Yang gave evidence of his various achievements, and of positive feedback from customers. But that does not mean that he was better than other employees or that Telstra made an error in deciding to select him for redundancy. But in any event, I find that Telstra was genuine in its efforts to apply the selection criteria objectively to the relevant workforce.

• [21] I further find that Telstra complied with its obligations under the Telstra Agreement to consult about Mr Yang's redundancy. I accept Ms Riley's evidence about the steps taken by Telstra to consult with unions and employees about the positions being made redundant, including the preparation of material in writing for employees who might be affected by the proposed change, and in particular the information pack.

• [22] Based on the evidence before the Commission, I do not consider that it would have been reasonable in the circumstances for Telstra to redeploy Mr Yang to another position within its enterprise or an associated enterprise. The Telstra Agreement establishes a redeployment mechanism pursuant to which Mr Yang applied for other positions. He was unsuccessful for the reasons explained by Ms Riley in her evidence, which I accept and which in my view are good reasons. Mr Yang said in his evidence that he was in fact qualified for the fourth position, which remains vacant, but Ms Riley strongly disagreed and stated that in her opinion he was not qualified for it. I accept her evidence. Mr Yang said that earlier he did in fact submit a final application for one of the new roles, however again I prefer Ms Riley's evidence that Telstra did not receive a final application. Mr Yang has not pointed to any other position or type of work to which he might reasonably have been redeployed, nor can I identify any from the evidence before the Commission.

• [23] I find that Mr Yang's dismissal was a case of 'genuine redundancy' as defined in s 389. He was therefore not unfairly dismissed. But even if I had accepted Mr Yang's arguments that his performance was incorrectly evaluated, that he should not have been selected for redundancy, that this is relevant to the assessment of whether a dismissal was a genuine redundancy, and that the consequence of his unfair selection was that his dismissal was not a genuine redundancy, I would nevertheless have determined that Mr Yang's dismissal was not unfair, taking into account the considerations in s 387. Quite simply, I would have concluded that the redundancy payment of $111,348.54 remedied any unfairness.

• [24] Further, even if the dismissal had been unfair, the Commission would need to take this redundancy payment into account in calculating compensation under s 392(2). It would plainly be a relevant matter under s 392(2)(g). Inherent in the concept of 'compensation' in s 392 is the notion of making good economic loss. If the dismissal was unfair and ought not to have occurred, then the payment associated with the dismissal should also not have occurred. The fact that the payment was in fact made is centrally relevant to the consideration of compensation. I agree with Telstra's submission that if the dismissal had been adjudged to be unfair, no compensation could have been ordered, because the redundancy payment Mr Yang received exceeded the 6 month compensation limit in s 392(5) of the Act.

• [25] Mr Yang's dismissal was a case of genuine redundancy. It was therefore not unfair. The application is dismissed.

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