Alan Mitchell v QR Human Resources Pty Ltd

[2009] FWA 280

[2009] FWA 280

FAIR WORK AUSTRALIA

Workplace Relations Act 1996
s.643—Termination of employment

Alan Mitchell
v
QR Human Resources Pty Ltd
(U2009/10205)

COMMISSIONER FOGGO MELBOURNE, 11 SEPTEMBER 2009

Termination of employment; jurisdiction; genuine operational reasons.

[1] This is an application by Mr Alan Mitchell (the Applicant) pursuant to the Workplace Relations Act 1996 (the Act). Mr Mitchell was employed by QR Human Resources Pty Ltd (QRHR), part of the Stabil-Lime Group of companies. QRHR provided payroll and employment services for Quality Roads Constructions Pty Ltd (QRC) which is also part of the Stabil-Lime Group.

[2] The Applicant commenced his employment as a Grader Operator on 1 November 1996. A brief synopsis of this employment within the Stabil-Lime Group is contained in the written statement of Mr Heath Curnow the group Manager of the Stabil-Lime Group. He states:

“13. During the Applicant's employment between commencement and before 27 November 2007, the Applicant commenced working for SLD (Stabil-Lime Distributors Pty Ltd). The Applicant agreed to move between QRC and SLD to follow work opportunities between the two companies. In particular the Applicant had skills in the area of final trim, and this was a skill required by SLD. During the initial period of the Applicant's employment, the Applicant performed duties for Quality Roads Pty Ltd and SLD, and was employedby SLD Human Resources.

14. From around 27 November 2007 the Applicant was employed to perform work for QRC through QR Human Resources, where he worked as a Grader Operator. The Applicant agreed to this transfer to QR Human Resources, performing work for QRC, when he agreed to entered into an Australian Workplace Agreement with QR Human Resources, signed on 22 October 2007.” 1

[3] Mr Mitchell gave evidence relevant to the history his 13 years employment in the Stabil-Lime Group. He confirmed that there had been a transfer of employment between sites in October 2007 and he admitted that he had considered the AWA provided to him and had signed it. He made no allegations that there had been any coercion in the signing of the AWA and on his evidence, he knew that he would be required to sign it prior to being re-assigned to another client of the Group.

[4] Mr Curnow's evidence was contrary to Mr Mitchell’s and I have accepted Mr Curnow’s account of why there were several changes in Mr Mitchell's employer. The nature of the Stabil-Lime group businesses is that they carry out work for which they have won tenders. Each of the businesses has a confined area of expertise within the overarching work of the Stabil-Line Group which is predominantly civil construction.

[5] As contracts in one business came to an end, it was possible for some employees with relevant skills to carry out work for other companies in the group. Such was the case with Mr Mitchell who had skills as a fine grade grader operator. He had transferable skills and on his own account he moved from client to client according to the work available. The documentation available for the period of his employment shows a move between different companies within the Group.

[6] The AWA contained a clause which stated that the employer may require the employee:

“from time to time to perform work for other clients within the Stabil-Lime Group of companies. Where this occurs the Employer will prior to the commencement of work with the new client provide to the Employee details of the client's work, location and the employee's salary details.” 2

[7] Mr Mitchell's written statement said “At no stage was I aware that I had changed employers. I was aware that we got paid through a payroll division.” 3 In fact he was taken to the documentation relating to several claims he had for workers compensation which clearly stated who the employer was. He was also was provided with payslips which showed the employer. His group certificate stated the employer and Mr Mitchell was able to name his employer on his leave application certificates.

[8] Mr Mitchell continued in employment for a longer period than the other employees with whom he had been working at QRC. Mr Curnow's written evidence 4 provided the financial position of QRC showing that between June 2008 and June 2009 QRC made a net loss and that each of the employees of QRC had been made redundant in that period except for Mr Mitchell.

[9] It was stated that the employer genuinely tried to keep him in work and he was given work in various temporary grader operator roles with Stabil-Lime and QRC Gippsland, a separate entity to QRC, for a period of six months. The transfer of work was consistent with the AWA signed by the Applicant.

[10] Clause 18 of the AWA contains provisions regarding employee workload. It states:

“The Employee acknowledges that since the Employer’s workload is seasonal, the Employee’s workload will vary from time to time. QR Human Resources Pty Ltd will endeavour to provide continuous work where possible for the Employee, however there may be periods where the Employee may be required to either transfer to other work locations or sites or use accrued RDO’s, banked time or annual leave where the employer has no work. Should such a request be made by the Employer the Employee cannot reasonably refuse to comply.

…

The Employer will try and provide continuous work where possible, but it cannot be guaranteed.”

[11] Clause 18A contains provisions relating to Work For Other Clients. The clause states, in part:

“The Employer may require the Employee from time to time to perform work for other clients within the Stabil-Lime Group of Companies. Where this occurs the Employer will prior to the commencement of work with the new client provide to the Employee details of the client’s work, location and the Employee’s salary details.”

[12] This is precisely what occurred with the Applicant’s employment. QRC had no further work and QRHC as the company which provided the employees to QRC had to find other work for its employees. In lieu of finding other suitable work all QRHR employees were made redundant albeit that the Applicant was the last employee to be made redundant.

[13] Mr Barry Schmidt, Group Operations Manager for the Stabil-Lime Group of companies advised Mr Curnow on 17 June 2009 that Mr Mitchell was the sole employee remaining at QRC and because QRC had ceased trading and other areas of the Stabil-Lime Group were slowing for winter, there was no further work which could be provided to Mr Mitchell and he should be made redundant.

[14] The email from Mr Schmidt sent to Mr Curnow on 17 June 2009 states the company’s position regarding Mr Mitchell’s ongoing employment. He states:

“With Phil Grinter now finishing his work with QRC and ceasing employment last month we now only have one remaining employee in QRC Alan Mitchell. He has been seconded to Stabilime and QRCG over the past 6 months in various stop gap roles this included us trying to obtain Grader work on the North South water pipe line however this work was not ongoing. He is currently filling in for Jim Edlington on Maroondah Hwy but we intend to return Jim to Maroondah Hwy an I have not been able to obtain permanent ongoing work for Mitch and his grader within any of my operations or in Mark’s part of the business. As discussed QRC has been wound down and has no ongoing work. The other parts of the business are also slowing up as we come into winter. In my opinion Alan Mitchell is surplus to our current long term requirements.

Please advise how you wish to handle this matter.” 5

[15] There was no further work available for Mr Mitchell and he was made redundant.

[16] Mr Dircks argued that Mr Mitchell had commenced work for Mr Curnow’s father at Quality Roads Pty Ltd in 1996 the year in which that company started. He stated that none of the other corporate identities in the Stabil Lime Group could have been the Applicant’s employer because the ASIC records show they were not in existence at that time. 6

[17] He stated that the only question was whether the employment changed from Quality Roads and if so when. Mr Dircks stated that the submission that SLD Human Resources had paid Mr Mitchell’s wages from the time he commenced could not be correct because the ASIC records show that that company was not registered until 7 May 2002.

[18] It was further submitted that the requirements or pre-requisites for a valid contract had been satisfied and that in lieu of that there could not have been a contract created subsequent to the Applicant commencing work for Quality Roads Pty Ltd. 7

[19] The same argument could be applied in Mr Dirck’s view to the AWA because the Applicant was unaware that the employer sought to create contractual relations with a different entity to the Applicant’s current employer, that the offer was not pout as an offer of employment and there was no evidence that there was any improvement to the current wages and conditions of the Applicant. 8

[20] If the Commission determined that QRHR was the employer rather than Quality Roads, it must in the Applicant’s submissions then satisfy itself that there were genuine operational reasons for the termination of Mr Mitchell’s employment being reasons of an economic, technological, structural or similar nature.

[21] The decision of the Full Bench in Cruikshank and Priceline Pty Limited 9 was relied upon and it was submitted that the benchmarks established in that case had not been met in this case. It was alleged that, on its own submissions, the respondent did not need to reduce its head count,10 that Mr Curnow had little experience dealing with the Applicant’s employment and was therefore not a reliable witness and in fact there was no reliable evidence that the Applicant was seconded to any particular company.11

[22] It was submitted that the Applicant was not “filling in for Jim Edlington”, that the respondent had failed to provide relevant evidence regarding the employment status of this employee and others who may not have been permanent, that whether or not employment opportunities existed elsewhere in the group was not adequately tested because Mr Schmidt was not available for cross examination regarding his decision to state that Mr Mitchell was redundant, and that Mr Mitchell was treated differently to other employees.

[23] Mr Dircks further submitted that the Mr Curnow was not a credible witness in part because he was unable to accurately provide information about the Group which was publicly available and his evidence lacked precision in relation to details of the companies in the Group and financial information relevant to establishing that the termination of the Applicant’s employment was for genuine operational reasons.

[24] The Respondent’s final written submissions 12 considered in detail the indicia arising from Full Bench decisions commonly used in establishing the identity of an employer and an employment relationship.13 The Respondent re-iterated that the signed AWA and documentation in the form of pay slips and group certificates and workers’ compensation claims clearly showed the employer as QRHR.

[25] The Respondent submitted that there was a valid contract between Mr Mitchell and QRHR and that the AWA constituted such a contract. The AWA showed in their submission, an acceptance of the terms and conditions of employment, the increased pay increase contingent upon the signing of the AWA and a genuine consent in the making of the AWA.

[26] It was submitted that when QRC no longer had a requirement for QRHR to provide labour hire services there existed a genuine operational reason for the termination of the Applicant’s employment. The Respondent had provided evidence of the losses experienced by QRC over the past 12 months 14 and submitted that the genuine operational reasons were economic and structural in nature.

[27] There was no requirement according to the Respondent for them to provide alternate employment in other companies on the Stabil-Lime Group 15 but they nevertheless found employment on a non permanent basis for Mr Mitchell for a period of nearly six months. Additionally the Respondent submitted that the circumstances of this case showed through the evidence that the termination of Mr Mitchell’s employment was for genuine operational reasons and could not be found to be a sham or not authentic.

[28] The Respondent emphasized that it had provided work where it could across a number of sites in order to not make the Applicant redundant and that the Applicant’s own evidence that he was moved around sites to cover periods of leave for existing employees was consistent with this. They also submitted that arising from the Village Cinema case it was generally irrelevant whether the employer could have done any thing other than terminate the employment if there is a genuine operational reason. 16

[29] In summary, the Respondent submitted that as a result of the demand for labour from QRC which effectively ceased trading in November 2008 albeit that minor rectification works were undertaken until March 2009, and the lack of demand for labour across other entities in the Stabil-Lime Group, QRHR was required for genuine operational reasons, to make its employees including Mr Mitchell redundant.

[30] The Respondent stated that the allegations that another employee or employees had been employed to do work which could have been undertaken by Mr Mitchell were false and that the alleged examples raised for the Applicant were incorrect. Mr Mitchell temporarily replaced employees on leave and several rectification/completion jobs were undertaken after Mr Mitchell’s termination of employment by a casual employee but the jobs were minor in nature and there was no basis for ongoing or continuing employment for a permanent employee of QRHR.

Conclusion

[31] The evidence and the submissions for the respondent QRHR are compelling. I find that the reason for the termination of employment of Mr Mitchell was for genuine operational reasons.

[32] The submissions for the Applicant state that Mr Curnow who gave evidence for the Respondent was not a credible witness and that there is no other material before the Commission on which it could possibly be determined that the termination of Mr Mitchell’s employment was for genuine operational reasons.

[33] To the contrary I find that Mr Curnow was a credible witness in that he had first hand knowledge of many of the aspects of Mr Mitchell’s employment and sound knowledge and advice regarding the ongoing work opportunities available through the relevant subsidiary companies of the Stabil-Lime Group.

[34] Mr Mitchell also gave his evidence in a straight forward manner. He could not however remember documents which he had signed and on which his signature appeared and admitted that he did not pay close attention to documents he was required to read or sign such as the AWA, the group certificate and Workers compensation correspondence which clearly stated his employer to be QRHR.

[35] It is not satisfactory for employees to state that they have read documents, even if that is qualified by stating that reading is not one of their ‘stronger skills’, and then state that they did not take much notice of them. Mr Mitchell was employed by two different employers in the group during his 12 plus years with the company. On the evidence I find that he was aware, or failing that he should have been aware, that he changed employers when he took up employment with QRHR. He clearly remembered signing the AWA. In addition I accept Mr Curnow’s evidence that he spoke to Mr Mitchell specifically regarding the AWA.

[36] The Respondent has provided nine occasions on which the Applicant had available to him documentation or advice identifying his employer. 17 They submit that the Applicant was in no doubt who his employer was and on the basis of the documentation to which they refer I accept the submission. In addition to the issues mentioned directly above, I accept the arguments that Mr Mitchell correctly identified his employer in making a leave application on 26 March 2009, that the correspondence regarding his Workcover claim clarified that Mr Mitchell was employed by QRHR and that he was performing duties for QRC and not that they were his employer and that the pay slips including the final pay slip identified QRHR as the employer.

[37] Put simply, QRHR supplied labour to QRC. QRC no longer required QRHR to provide labour because it was no longer trading or tendering for work albeit that it had not been deregistered as an entity. For a period of six months, work of a temporary nature on various projects was found for Mr Mitchell but when these projects came to an end there were no other opportunities available for Mr Mitchell in any of the other businesses within the Stabil-Lime Group.

[38] Mr Mitchell’s skills and experience were able to be used in a short term capacity on other projects throughout the group for six months but then there was no work. He was the last employee of the QRHR company to be made redundant. In my view that company attempted to keep Mr Mitchell in work for as long as they could but given that there was no alternative work available, had no option other than to make their last employee, the Applicant, redundant.

[39] The overwhelming weight of the evidence is that Mr Mitchell’s employment was terminated for operational reasons, namely that his employer had no further work available for him to do. It was submitted that a casual employee had commenced work at the site Mr Mitchell had been working at following the termination of his employment. There is nothing to suggest that this was anything other than a temporary short term arrangement to complete a task.

[40] I do not underestimate the difficulty of employees with long employment records coming to terms with the end of their employment particularly employees over 50 years of age but the allegations that Mr Mitchell had his employment terminated for any reason other than lack of work do not exist. The respondent advised that QRC was still not operating due to the lack of work.

[41] I find that the reason for the termination of Mr Mitchell’s employment was for operational reasons that there was no work available for him and he was made redundant. An Order dismissing the application as it relies on s.643(1)(a) of the Act will be issued. 18 The matter will be listed for conciliation of the remaining grounds at a date and time to be advised.

COMMISSIONER

Appearances:

G. Dircks for the Applicant.

S. Ralph for QR Human Resources Pty Ltd.

Hearing details:

2009.

Melbourne:

August 19.

Final written submissions:

2 September 2009.

 1   Exhibit Ralph 1.

 2   Ibid Attachment HAC-1 clause 18A.

 3   Exhibit Dircks 1.

 4   Exhibit Ralph 1 paragraphs 16 -37.

 5   Exhibit Ralph 1 HAC 3.

 6   Final submissions 31 August 2009 paragraph 10 - 12.

 7   Ibid paragraphs 23 - 38.

 8   Ibid paragraphs 39 - 42.

 9   Cruikshank v Priceline Pty Limited [2007] AIRCFB 513.

 10   Final Submissions paragraphs 58 - 68.

 11   Ibid paragraphs 85-94.

 12   Final Submissions 2 September 2009.

 13   T Sammartino v Mayne Nickless t/a Wards Skyroad 98 IR 168 citing Stevens v Brobribb Sawmilling Company.

 14   Exhibit Ralph 1 HAC-2.

 15   Village Cinemas Australia Pty Ltd v Carter [2007] AIRCFB 35.

 16   Final written submissions paragraphs 52 - 61.

 17   Final written submissions paragraph 21.

 18  PR989215.

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