Australian Workersa** Union v Transpacific Industries Pty Ltd
[2008] FMCA 616
•16 May 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| AUSTRALIAN WORKERS’ UNION v TRANSPACIFIC INDUSTRIES PTY LIMITED | [2008] FMCA 616 |
| INDUSTRIAL LAW – Unlawful termination – Award breach – civil penalty – consideration of matters relevant to penalty – breaches terms of the New South Wales Chemical Workers (State) Award. |
| Chemical Workers (State) Award, cl 29 Workplace Relations Act 1996 (Cth), ss.179CQ (repealed), 298K (repealed), 659, 663, 664, 719, Schedule 8 |
| Amcor Ltd v Construction, Forestry, Mining and Energy Union; Minister for Employment and Workplace Relations v Construction, Forestry, Mining and Energy Union (2005) 138 IR 286 Australian Communication & Media Authority v Clarity1 Pty Ltd [2007] FCA 1399 Australian Meat Holdings Pty Ltd v McLaughlin (1998) 84 IR 1 Bean v Milstern Retirement Services [1995] IRCA 274 Chelvarajah v Global Protection Pty Ltd [2004] FCA 1661 Ellawala v Australian Postal Corporation [1999] AIRC 1260 Finance Sector Union of Australia v Commonwealth Bank of Australia [2005] FCA 1847 Fox v St Barbara Mines Ltd [1998] FCA 621 FM Hecker v Herald and Weekly Times Limited [2000] AIRC 628 Kenefick v Australian Submarine Corporation Pty Ltd (No 2) (1996) 65 IR 366 Liquor, Hospitality Miscellaneous Union, Liquor & Hospitality Division, NSW Branch on behalf of its member, Wayne Roberts v Woonoona Bulli RSL Memorial Club Ltd [2007] FCA 1460 Laz v Downer Group Ltd [2000] FCA 1390 Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186 |
| Applicant: | THE AUSTRALIAN WORKERS’ UNION (ON BEHALF OF ITS MEMBER CLEM PEREIRA) |
| Respondent: | TRANSPACIFIC INDUSTRIES PTY LTD |
| File number: | SYG 1809 of 2007 |
| Judgment of: | Lloyd Jones FM |
| Hearing dates: | 30 October & 31 October 2007 |
| Delivered at: | Sydney |
| Delivered on: | 16 May 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr R Tripodi |
| Industrial Officer for the Applicant: | Mr G Beard of the Australian Workers’ Union |
| Counsel for the Respondent: | Mr B Cross |
| Solicitors for the Respondent: | Mr M Osborne of Deacons Lawyers |
ORDERS
The application for relief for unlawful termination of Clem Pereira pursuant to s.659(2) of the Workplace Relations Act 1996 is dismissed.
I impose a penalty of $22,000 on Transpacific Industries Pty Ltd payable to Clem Pereira for the contravention of clauses 29(2)(ii) and 29(3) of the New South Wales Chemical Workers (State) Award, a notional agreement preserving State awards under the Workplace Relations Act 1996 (Cth).
Payment of the penalty be made within 28 days.
No order as to costs.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 1809 of 2007
| THE AUSTRALIAN WORKERS’ UNION (ON BEHALF OF ITS MEMBER CLEM PEREIRA) |
Applicant
And
| TRANSPACIFIC INDUSTRIES PTY LTD |
Respondent
REASONS FOR JUDGMENT
The proceedings
This is an application made on 8 June 2007 and pursuant to s.663 of the Workplace Relations Act 1996 (“the Act”) is in relation to two courses of action, being:
a)An application for relief from unlawful termination pursuant to s.659(2) of the Act. This concerns the reasons for the respondent employer terminating the employment of Clem Pereira (the employee).
b)An application for the imposition of a penalty for an alleged contravention of the New South Wales Chemical Workers (State) Award (“the Award”) pursuant to s.719 of the Act, which is to be treated as a notional agreement preserving State awards under the Act.
Mr Pereira has been assisted and represented in this matter by the greater New South Wales branch of the Australian Workers’ Union (“the Union”) and an industrial officer, Graeme Beard.
Background
Counsel for the applicant, Mr Tripodi, advised the Court that Mr Pereira has had a history of treatment to his knees arising from a work injury he sustained at the Homebush Bay Waste Management, where he had worked for 21 years. Mr Pereira has had various employers, the most recent being Transpacific Industries Pty Ltd (“Transpacific”) which took over the Homebush plant on 1 August 2005.
Despite undergoing arthroscopic surgery and a meniscectomy, the knee injury recurred in 2005 and Mr Pereira also suffered a further recurrence of the injury in his left knee in October 2006. Mr Pereira’s treating doctors advised him to undergo a partial knee replacement and an injury management plan was developed. Mr Pereira advised his manager at Transpacific, Paul Vujic, of this. Mr Vujic told Mr Pereira to give as much notice as possible which he did. Notice was required because adequate arrangements had to be made to cover Mr Pereira’s absence from work.
Mr Pereira underwent knee surgery on 31 January 2007. However his return to work was delayed because he contracted an infection during his stay in hospital. While absent from work, the respondent undertook a review of its manning arrangements and decided to reduce its four three-man shift operator crews by making one man in each crew redundant.
Prior to the review, the respondent employed two relief operators, one of whom was Mr Pereira. After the review it continued to employ two relief operators. Mr Pereira was reportedly made redundant on 28 March 2007 while at home recovering from his surgery and infection. The applicant claims that there was no lawful and valid redundancy situation requiring Mr Pereira’s to be made redundant. Initially, Mr Pereira’s position as shift operator was filled by a colleague and former shift operator, Ernie Gallagher. Mr Gallagher then incurred a non-work related injury and a casual employee was engaged in Mr Pereira’s position.
The applicant claims that the process of the purported redundancy selection was affected by bias against Mr Pereira in that the selection criteria was applied illogically and unfairly against him and in the favour of other shift operators.
Mr Tripodi submits that allegations were made by Transpacific staff members against Mr Pereira which included racism, aggression, industrial sabotage, incompetence and incapacity to get along with his colleagues. Mr Tripodi submits that these allegations are unfounded and that Mr Pereira was terminated because Transpacific was no longer willing to accommodate his longer than expected absence from work in spite of its obligation to do so.
Evidence
The following material formed the exhibits to the case:
a)Exhibit “A1”, Case note prepared by Trudy Simpson, Injury Management Consultant, on Mr Pereira (annexure 3);
b)Exhibit “A2”, Case note prepared by Trudy Simpson, Injury Management Consultant, on Mr Pereira (annexure 4);
c)Exhibit “A3”, Case note prepared by Trudy Simpson, Injury Management Consultant, on Mr Pereira (annexure 5);
d)Exhibit “A4”, an affidavit of Clem Pereira sworn 12 September 2007;
e)Exhibit “A5”, an affidavit of Clem Pereira sworn 26 October 2007;
f)Exhibit “A6”, an affidavit of Clem Pereira sworn 30 October 2007;
g)Exhibit “A7”, an affidavit of Graeme Beard, industrial officer of the Australian Workers’ Union, sworn 30 October 2007;
h)Exhibit “A8”, a record of shift work for the “C” shift for 28 March 2007, 28 April 2007 and 17 April 2007;
i)Exhibit “R1”, a Workcover New South Wales Medical Certificate of 11 July 2005;
j)Exhibit “R2”, a affidavit of Sam Girgenti, Shift Process Operator at the Waste Disposal Plan in Homebush Bay, affirmed 26 October 2007;
k)Exhibit “R3”, an affidavit of Paul Geordie Vujic, General Manager of Transpacific Waste Services, affirmed 24 October 2007;
l)Exhibit “R4”, an affidavit of Samantha McGee, Regional Human Resources Manager for Transpacific in New South Wales and Victoria, affirmed 25 October 2007;
m)Exhibit “R5”, an affidavit of Bruce Bailey, Plant Manager at Transpacific, affirmed 23 October 2007;
n)Exhibit “R6” an affidavit of Bruce Bailey, Plant Manager at Transpacific, affirmed 26 October 2007;
o)Confidential Exhibit 1 – list of names;
p)Confidential Exhibit 2 – list of names;
q)Confidential Exhibit 3 – list of names;
Orders sought
The orders sought by the applicant are:
1. An order imposing a penalty on the Respondent of $10,000, payable to the applicant;
2. An order requiring the respondent to reinstate Clem Pereira to his position of Process Operator with the respondent in which he was employed immediately before the termination of his employment.
3. An order compensating Clem Pereira in respect of all remuneration lost, or likely to have been lost, by him because of the termination of his employment by the respondent.
4. An order maintaining the continuity of Clem Pereira’s employment with the respondent for all employment-related purposes, including a service so that his employment is not taken to have been broken by the termination.
5. In the alternative to orders 2,3 and 4 above, an order requiring the respondent to pay Clem Pereira compensation in the amount of 6 months’ remuneration that was received or taken to have been received by Clem Pereira immediately before the termination of his employment with the respondent.
6. Further in addition to or in the alternative to orders 1-5 above, an order imposing a penalty of 300 penalty units on the respondent, payable to Clem Pereira, for contravening Clauses 29(2)(ii) and 29(3) of the Chemical Workers (State) Award, a Notional agreement preserving State awards under the Workplace Relations Act 1996.
Legislative framework
The definition of “Notional agreement preserving State awards” is in cl 1 of Sch 8 of the Act:
“Notional agreement preserving State awards” is an agreement that is taken to come into operation under clause 31.
Clauses 31 and 32 of Sch 8 of the Act state:
31 Notional agreements preserving State awards
If, immediately before the reform commencement, the terms and conditions of employment of one or more employees in a single business or a part of a single business:
(a) were not determined under a State employment agreement; and
(b) were determined, in whole or in part, under a State award (the original State award) or a State or Territory industrial law (the original State law);
a notional agreement preserving State awards is taken to come into operation on the reform commencement in respect of the business or that part of the business.
Subdivision B -- Who is bound by or subject to a notional agreement preserving State awards?
32 Who is bound by a notional agreement preserving State awards?
Current employees
(1) Any person who:
(a) immediately before the reform commencement, was bound by, or a party to, the original State award or original State law; and
(b) is one of the following:
(i) an employer in the business, or that part of the business;
(ii) an employee who is employed in the business, or that part of the business, who was so employed immediately before the reform commencement, who was not bound by, or a party to, a State employment agreement at that time and whose employment was not subject to such an agreement at that time;
(iii) an organisation that has at least one member who is such an employee, and that is entitled to represent the industrial interests of at least one such employee;
is bound by the notional agreement.
Future employees
(2) If:
(a) a person is employed in the business or that part of the business after the reform commencement; and
(b) under the terms of the original State award or the original State law, as in force immediately before the reform commencement, the person would have been bound by that award or law; and
(c) the person is not bound by a preserved State agreement;
the person is bound by the notional agreement.
It is not disputed between the parties that the Award applied to Mr Pereira’s employment. It is also not in dispute that Mr Pereira was employed as a Chemical Plant Operator and fulfilled the role of Relief Operator prior to being made redundant. The oral evidence of Mr Peter Sandanam, Process Supervisor, and the affidavit evidence of Bruce Bailey indicate that Mr Pereira was employed as a relief shift operator in December 2003 and then subsequently employed by Transpacific as a Relief Operator prior to being purportedly being made redundant.
Further, it is not disputed that prior to the 2007 redundancies taking place, there were two relief operators employed at the Homebush plant, one being Mr Pereira (paragraphs [7]-[8] of Exhibit “R5”). It is also not in dispute that apart from shift operators retiring, Mr Pereira was the only employee made redundant as two relief operators were still required at the Homebush plant (paragraph [47], annexure “BB-9” of Exhibit “R5”).
The following provisions of the Act are relevant to this matter:
Section 663(3):
(3) Subject to subsection (5), a trade union that has made an application under section 643 on behalf of an employee on the ground of an alleged contravention of one or more of sections 659 and 661 may apply to a court under this section for an order under section 665 in respect of that alleged contravention or each of those alleged contraventions.
Section 664:
Proof of issues in relation to alleged contravention of section 659
In any proceedings under section 663 relating to a termination of employment in contravention of section 659 for a reason (a proscribed reason ) set out in a paragraph of subsection (2) of that section:
(a) it is not necessary for the employee to prove that the termination was for a proscribed reason; but
(b) it is a defence in the proceedings if the employer proves that the termination was for a reason or reasons that do not include a proscribed reason (other than a proscribed reason to which subsection 659(3) or (4) applies).
Section 659(2)(a):
(2) Except as provided by subsection (3) or (4), an employer must not terminate an employee's employment for any one or more of the following reasons, or for reasons including any one or more of the following reasons:
(a) temporary absence from work because of illness or injury within the meaning of the regulations;
Award conditions
Clause 29 of the Award states:
(ii) Introduction of Change -
(a) Employer’s Duty to Notify -
(1) Where an employer has made a definite decision to introduce major changes in production, programme, organisation, structure, mechanisation or technology that are likely to have significant effects on employees, the employer shall notify the employees who may be affected by the proposed changes and the union to which they belong.
(2) “Significant effects” include termination of employment, major changes in the composition, operation or size of the employer’s workforce or in the skills required, the elimination or diminution of job opportunities, promotion opportunities or job tenure, the alteration of hours of work, the need for retraining or transfer of employees to other work or locations and the restructuring of jobs. Provided that where this award makes provision for alteration of any of the matters referred to herein, such alteration shall be deemed not to have significant effect.
(b) Employer’s Duty to Discuss Change -
(1) The employer shall discuss with the employees affected and the union to which they belong, inter alia, the introduction of the changes referred to in paragraph (a) of this subclause, the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees, and shall give prompt consideration to matters raised by the employees and/or the union in relation to the changes.
(2) The discussion shall commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in the said paragraph (a).
(3) For the purpose of such discussion, the employer shall provide to the employees concerned and the union to which they belong all relevant information about the changes, including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees, provided that any employer shall not be required to disclose confidential information the disclosure of which would adversely affect the employer.
(iii) Redundancy - Discussions Before Terminations -
(a) Where an employer has made a definite decision that the employer no longer wishes the job the employee has been doing to be done by anyone pursuant to subparagraph (1) of paragraph (a) of subclause (ii), Introduction of Change, and that decision may lead to the termination of employment, the employer shall hold discussions with the employees directly affected and with the union to which they belong.
(b) The discussions shall take place as soon as is practicable after the employer has made a definite decision which will invoke the provision of paragraph (a) of this subclause and shall cover, inter alia, any reasons for the proposed terminations, measures to avoid or minimise the terminations and measures to mitigate any adverse effects of any termination on the employees concerned.
(c) For the purpose of the discussions the employer shall, as soon as practicable, provide to the employees concerned and the union to which they belong, all relevant information about the proposed terminations, including the reasons for the proposed terminations, the number and categories of employees likely to be affected, and the number of employees normally employed and the period over which the terminations are likely to be carried out. Provided that any employer shall not be required to disclose confidential information the disclosure of which would adversely affect the employer.
Applicant’s claim
Mr Tripodi contends in his written submissions that the factual and legal issues are that Mr Pereira was terminated:
a)For the reason that Mr Pereira was temporarily absent from work because of illness or injury within the meaning of the legislation (s.659(2)(a) of the Act).
b)Not for the reason of a lawful and bona fide redundancy as the respondent alleges.
c)For the reason of a purported redundancy which was unlawful in that it was not a valid position redundancy because it was for the reason in sub-paragraph (a) above.
There is the additional legal issue of if there was a lawful and bona fide redundancy as the respondent alleges, whether there should a penalty be imposed on the respondent for the way in which it carried out Mr Pereira’s redundancy. He submits that the evidence indicates that Transpacific did not comply with clause 29(ii) and (iii) of the Award.
Mr Tripodi submits that the factual and legal issues must be viewed this way because there is an obligation under s.659(2) of the Act for the employer to prove that the alleged reason at [1(a)] above was not the reason or one of the reasons for Mr Pereira’s termination. Section 664 of the Act is similar but not identical to a reverse onus of proof. In support of this contention, Mr Tripodi referred to Laz v Downer Group Ltd [2000] FCA 1390 where Moore J discussed this provision prior to the Workchoices amendments which altered the then s.170CQ. His Honour stated at [26]:
In my opinion an applicant alleging termination in contravention of s.170CK(2) will succeed in the application unless the employer establishes a defence to prove that the alleged reason was not the reason or one of the reasons for the termination. Perhaps it can be put in terms that though the applicant must prove on the balance of probabilities each element of the contravention, s17CQ enables the allegation that a reason was a prescribed reason to stand as sufficient proof of the fact unless the employer proves otherwise: see Davids Distribution Pty Ltd v National Union of Workers (1999) 91 FCR where Wilcox and Cooper JJ refer to R v Hush: ex parte Devanny (1932) 48 CLR 487 at [507]. The success of the application does not depend on the Court being satisfied, other than by reference to the allegation of the applicant, that determination was for a prescribed reason (or one reason was prescribed reason) if the employer fails to make good its defence.
Mr Tripodi submits that the only reason Transpacific put forth for the termination was that it was a lawful and bona fide redundancy. This was set out in its letter to Mr Pereira:
In confirmation of your discussion with me this afternoon, Wednesday 28th March 2007, in regard to a business restructure to create internal efficiencies, addressing treatment, capacity, environmental and safety obligations and commercial imperatives. A review of the manning arrangement for the process operations at TWS has identified that one position of Process Operator is surplus to the operational needs of the business. The operational reasons include restructuring the shift operations from a three man crew to a two man crew. A fair and consistent selection criteria has been utilized and it is with regret that we advise your position of Process Operator has been made redundant effective Wednesday 28th March 2007.
In accordance with the Chemical Workers (State) Award, the company is required to give you two weeks notice or payment in lieu. We believe that it will be more beneficial to you to pay you, in lieu of asking you to work through the notice period, as there is currently no operational need for your position.
Mr Tripodi submits that Mr Pereira’s position was not made redundant because it was filled by a former shift operator, Ernie Gallagher. The Award was binding on the parties and Mr Pereira’s termination of employment cannot be said to have been a lawful and bona fide position redundancy.
Clause 29(3)(a) of the Award provides:
(a) where an employer has made a definite decision that the employer no longer wishes the job the employee has been doing to be done by anyone pursuant to sub-paragraph [a] of [i] of sub-clause 2, introduction of change, and that decision may lend to the termination of employment, the employer shall hold discussions with the employees directly affected and with the union to which they belong. [emphasis added]
Mr Tripodi submits that this could not have applied to Mr Pereira’s employment in the 2007 redundancy because it was never decided nor envisaged by Transpacific that Mr Pereira’s relief operator position would no longer be filled by anyone.
Mr Tripodi relied on Amcor Ltd v Construction, Forestry, Mining and Energy Union; Minister for Employment and Workplace Relations v Construction, Forestry, Mining and Energy Union (2005) 138 IR 286 at [296]-[297] where Gummow, Hayne and Heydon JJ said in noting the legislative background to awards and redundancy:
…the Commission said, in its supplementary decision, that it had “some difficulty in finding a suitable expression” to make its intention clear about what constitutes “redundancy”. In its earlier decision, it had referred to a number of definitions of redundancy. Chief amoung those was the decision by Bray CJ in R v Industrial Commission (SA); ex parte Adelaide Milk Supply Cooperative Ltd which was understood as emphasising that redundancy refers “to a job becoming redundant and not to a worker becoming redundant”…
For present purposes, what is important is that the Commission appears to have been seeking a form of words that would accommodate two features. The first, as was said in the Commission’s supplementary decision, it “did not intend the redundancy provisions to apply when an employee is dismissed for reasons relating to his / her performance, or where the termination is due to a “normal feature of a business”…
The focus of the provision was upon the work undertaken by the employee (“Job”), not upon the identity of either the employee or the employer. The relevant enquiry was whether employment in a particular kind of work then be undertaken was to come to an end. If that employment was to come to an end, it was necessary to consider why that was to happen. Was it because the employer wanted the job, then being done by the employee, done by anyone? Or, was it due to the ordinary and customary turnover of labour? [emphasis added]
Mr Tripodi submits that if the Court is satisfied that there has been no valid or lawful position redundancy, then the applicant’s case for unlawful termination is made out. The applicant has to satisfy the Court of each element of contravention of s.659(2)(a) on the balance of probabilities. Mr Tripodi submits that Mr Pereira was terminated while on an extended absence recovering from surgery on his knee. He submits that as no other reason apart from the redundancy was preferred by the respondent, its defence on this point fails.
Mr Tripodi then addressed the allegations of Mr Pereira’s racism, aggression, industrial sabotage, incompetence and inability to get along with his colleagues. He submits that there is no contemporaneous evidence of these allegations apart from a warning letter over an incident two years before the redundancy notification. Mr Tripodi submits that this cannot be alternative basis for a lawful termination or a refusal of reinstatement. This is especially because these allegations were not raised in the termination letter and have only arisen as justification for the termination on purported redundancy grounds. The purported redundancy ground is therefore irrelevant.
Mr Tripodi relies on Laz v Downer Group Ltd at [36] where Moore J considered making a reinstatement order and whether a satisfactory working relationship can be re-established:
[36] I accept that it is relevant to consider whether a satisfactory working relationship can be re-established. But as von Doussa J said in Ettridge v TransAdelaide (1998) 80 IR 422 at 430 (in relation to the exercise of the power conferred by s170CR):
In considering whether the discretion to order reinstatement should be exercised, a central consideration is whether a satisfactory working relationship can be re-established between the parties. As Moore J observed in Bean v Milstern Retirement Services Pty Ltd (unreported, Industrial Relations Court of Australia, 2 June 1995) in many instances personal tensions created by litigation can be expected to lessen if not dissipate entirely with the passage of time.
See also Perkins v Grace Worldwide (Australia) Pty Ltd (1997) 72 IR 186 at 191 and Sherman v Peabody Coal Ltd (1998) 88 IR 408 at 424-425.
In the present case I accept that the submissions made by counsel for the applicant did involve fairly forceful criticism of the conduct of Mr Gillies. Plainly enough, however, allowance needs to be made for the flourishes of an advocate in adversarial proceedings and the fact that counsel will develop and articulate as fully as possible (within the bounds of professional propriety) submissions made on behalf of a litigant. I have little doubt Mr Gillies, who is a senior executive in a large corporation, would understand and make allowances for this when considering the criticism made of him. I accept that, apart from any effect the criticisms may have, there will be tensions between Mr Gillies and the applicant if an order is made reinstating her. I also accept that if she is reinstated to her former position of personal assistant to Mr Gillies, those tensions would be exacerbated given the close working relationship that almost invariably attends the position of personal assistant. I should add, however, that no specific evidence was called on behalf of Downer directed to proving the inappropriateness of an order for reinstatement being made.
Mr Tripodi submits where the termination was unlawful and there was wrongful purported redundancy, this should not be in issue. The Court was also referred to Bean v Milstern Retirement Services [1995] IRCA 274:
In many instances personal tensions created by litigation can be expected to lessen if not dissipate entirely with the passage of time.
Mr Tripodi made the alternative submission that if I accept that there was a valid position redundancy, that the redundancy selection process was affected by bias in that the selection criteria was applied illogically and unfairly against Mr Pereira and in favour of other shift operators. He relies on the following evidence in support of this contention:
a)Mr Sandanam’s oral evidence on this process was inconclusive.
b)Mr Bailey’s evidence (Exhibit “R5”, paragraphs [25]-[35], [37]-[38]) should not be preferred over Mr Pereira’s evidence (Exhibit “A6”, paragraphs [10]-[23], [25]-[26]).
Mr Tripodi submits that the process adopted by Transpacific offends the principles established in Kenefick v Australian Submarine Corporation Pty Ltd (No 2) (1996) 65 IR 366 at [372]:
The adoption of a selection criteria to select employees for redundancy from a pool of eligible employees is a matter within the discretion of the employer subject to it being fair. [emphasis added]
Mr Tripodi submits that the allegations of racism, aggression, industrial sabotage, incompetence and inability to get along with colleagues were used to justify the second hand allegations from other shift operators who were not called to give evidence, or the evidence of Transpacific’s managers (Confidential Exhibits) who for most part relied on hearsay. He submits that apart from the warning letter, there was a failure to corroborate with contemporaneous independent accounts that Mr Pereira was disciplined or counselled at the relevant time for such alleged conduct.
Mr Tripodi submits that such evidence would also not meet the standard required to resist a reinstatement order, see Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186 per Wilcox CJ, Marshall and North JJ at [191]-[192]:
So we accept that the question whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is impracticable, provided that such loss of trust and confidence is soundly and rationally based.
At the same time, it must be recognised that, where an employer, or a senior officer of an employer, accuses an employee of wrongdoing justifying the summary termination of the employee's employment, the accuser will often be reluctant to shift from the view that such wrongdoing has occurred, irrespective of the Court's finding on that question in the resolution of an application underDivision 3 of Part VIA of the Act.
If the Court were to adopt a general attitude that such a reluctance destroyed the relationship of trust and confidence between employer and employee, and so made reinstatement impracticable, an employee who was terminated after an accusation of wrongdoing but later succeeded in an application under the Division would be denied access to the primary remedy provided by the legislation. Compensation, which is subject to a statutory limit, would be the only available remedy. Consequently, it is important that the Court carefully scrutinise any claim by an employer that reinstatement is impracticable because of a loss of confidence in the employee.
It may be difficult or embarrassing for an employer to be required to re-employ a person the employer believed to have been guilty of wrongdoing. The requirement may cause inconvenience to the employer. But if there is such a requirement, it will be because the employee's employment was earlier terminated without a valid reason or without extending procedural fairness to the employee. The problems will be of the employer's own making. If the employer is of even average fair-mindedness, they are likely to prove short-lived. Problems such as this do not necessarily indicate such a loss of confidence as to make the restoration of the employment relationship impracticable. [emphasis added]
Mr Tripodi states that given the poor state of evidence, if the Court were to find that Transpacific terminated the employment for the prescribed reason in s.659(2)(a) of the Act, both a reinstatement and penalty should be ordered.
Mr Tripodi submits that clause 29(ii) and (iii) of the Award is enlivened (consultation and discussion). There is therefore an obligation for an employer to consult and discuss with an employee in a redundancy situation, see Finance Sector Union of Australia v Commonwealth Bank of Australia [2005] FCA 1847 at [52] where Merkel J said:
[52] There are two problems with CBA’s new argument. The first is that the cases on which it relies are concerned with whether the employer was obliged to pay to employees severance payments as a result of their positions having actually become redundant. The present case concerns the anterior question of whether the employer was required to consult with FSU because it was ‘considering implementing change that impacts upon working arrangements and could give rise to potential redundancy’ (emphasis added). Thus, the obligation to consult can be attracted even if, in the events that may subsequently occur, there may not be an actual position redundancy. Further, as was pointed out at 67 [52] in the joint judgment in Amcor in relation to a position redundancy clause:
…"Position" was not used in the Agreement as a legal term of art. It was used in a colloquial sense. In the collocation of words found in cl 55.1.1 (when understood against the background of the various considerations earlier mentioned) "position" refers to a position in a business — a business to or of which another employer may be successor, transmittee or assignee (whether immediate or not). If, for example, 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. Issues of that kind do not arise in the present matter.
Mr Tripodi submits that the general principle on penalty for the breach of Industrial legislation and Industrial instruments is set out in Fox v St Barbara Mines Ltd [1998] FCA 621 where French J stated:
[penalties] are punitive in character and must be assessed with regard, inter alia, to the gravity of the conduct complained of, the existence of mitigating circumstances and the need to deter repetition of the conduct whether by the employer in question or generally.
However, more recently Merkel J stated in Finance Sector Union of Australia v Commonwealth Bank of Australia at 481:
The changing rules of industrial regulation can be set at nought if the Court does not act strongly to discourage and deter the party’s from flagrantly and deliberately breaching in terms of freely made industrial agreements, merely because their own self-interests dictates against compliance with those terms.
And at 483 his Honour held:
…any light handed approach that might have been taken in the past to serious, wilful and ongoing breaches of industrial law should no longer be applicable. As is apparent from the penalties I have imposed, I have not accepted that such an approach, which was urged by the CBA (which contended that either no penalty or only a nominal penalty was appropriate) is applicable in the present case.
Mr Tripodi submits that in this matter, the respondent adopted unlawful means to achieve an unlawful end. The unlawful means in Finance Sector Union involved the employer concealing its decision from the Union to prejudicially alter the employment of its employees. In this matter, there was a failure by the respondent to abide by its obligation for consultation and discussion with Mr Pereira and its obligation under the Award regarding its decision to purportedly make Mr Pereira redundant. Mr Tripodi submits that the argument that Samantha McGee, Regional Human Resources Manager, was unaware of such obligations must be rejected because:
a)Ignorance of the law is no excuse; and
b)As Regional Human Resources Manager she should have been aware of redundancy provisions under the Award.
Mr Tripodi submits that in Finance Sector Union the unlawfulness of the employer was the alteration of the position of its employees to their prejudice for a prohibited reason and in contravention of the then s.298K(1)(c) of the Act. Whereas in this matter, the unlawful end was the purported redundancy or unlawful termination of Mr Pereira when there was no valid position redundancy, or it was a redundancy process affected by bias in contravention of the prescribed reason in s.659(2)(a).
Mr Tripodi submits that the fact that the respondent sought to do by way of redundancy what it was prevented from doing under s.659(2)(a), shows that the termination was undertaken with deliberate disregard of the Act. The offence is therefore grave. However, Transpacific does not seem to have previously breached the Act. Mr Tripodi submits that the contraventions of the Award and the Act should properly be seen as two distinct acts, although to the extent there are two breaches of the Award, they arise out of the same course of conduct.
Mr Tripodi submits that the consequences for Mr Pereira have been significant. He has been left substantially out of pocket and, if he is not reinstated, would be unlikely to find equivalent alternative employment (Exhibit “A5”). Mr Tripodi relies on Finance Sector Union and the need for general deterrence, although the respondent has shown remorse regarding the Award breaches by admitting to its conduct. However, no remorse has been shown regarding contravention of the Act. The respondent had the opportunity to reinstate Mr Pereira to his position of Relief Operator when Mr Gallagher was injured but it failed to do so.
Respondent’s claims
Mr Cross, for the respondent, submits that Mr Pereira’s temporary absence from work because of illness or injury was not a reason for termination of his employment and that he was terminated because:
a)Transpacific made four positions redundant; and
b)Mr Pereira was chosen for redundancy based on his performance at work, in particular because of his poor relationship with other staff members.
Mr Cross submits that Mr Pereira’s absence from work on workers’ compensation was not a factor in its decision. Consequently, there is no basis for finding there was a breach of s.659(2)(a) of the Act.
Mr Cross referred to the applicant’s claim that the reason for the termination was Mr Pereira’s temporary absence from work because of illness or injury. In support of that claim, Mr Tripodi simply stated that Mr Pereira was absent on workers’ compensation at the time of his termination. However in Exhibit “A4”, Mr Pereira expanded the claim to include comments allegedly made by Joe Rivas (a former employee of Transpacific) in 2005. Mr Rivas is no longer an employee of Transpacific (Exhibit “R3” at [21]). Those claims were said to show bias against Mr Pereira.
In respect of the allegation of bias, Mr Cross submits that the Court should not be distracted by the irrelevant claims regarding Mr Rivas because:
a)They relate to a three to six week period over a year and a half before the termination of employment;
b)Mr Pereira’s affidavit contained incorrect claims regarding that period and Mr Cross referred to the apparent differences between paragraph [5] of Exhibit “A4” and annexure “BB-2” to Exhibit “R5”;
c)Mr Rivas was concerned about Mr Pereira’s total health and his ability to perform all his duties in a manner that did not compromise his safety or the safety of others (as Ms Simpson also clearly stated in her evidence). In so doing, Mr Rivas was complying with his obligations under Occupational Health and Safety legislation; and
d)Mr Rivas ceased employment on 8 December 2006, well before both the decision to restructure the operation at Homebush and the decision to terminate Mr Pereira’s employment.
Mr Cross submits that the reason for Mr Pereira’s termination was twofold:
a)That Transpacific wished to make a Shift Process Operator position redundant; and
b)That its management identified Mr Pereira as the most suitable employee to be made redundant. Its decision to reduce the number of shift process operators was genuine (paragraphs [3]-[10] of Exhibit “R3”; paragraphs [17]-[19] of Exhibit “R5”);
c)The implementation of additional safety measures in accordance with the Kellogg Brown and Root report allowing for a reduction in shift numbers (paragraph [9] of Exhibit “R3”; paragraph [19] of Exhibit “R5”); and
d)The fact that the number of shift operators has been reduced by four.
In choosing between employees, Transpacific created a matrix against which each employee was scored (paragraph [13] of Exhibit “R3”; paragraphs [3]-[5] of Exhibit “R4”; paragraphs [22]-[23] of Exhibit “R5”). Mr Cross submits that the matrix provides the Court with a clear and transparent explanation of the factors Transpacific considered. The matrix was applied to Mr Pereira (Exhibit “R5”, annexure “BB-3”) and other shift operators (Exhibit “R6”, annexure “BB-4”). Mr Pereira achieved the lowest score by a clear margin (Exhibit “R5”, annexure “BB-6”).
Transpacific has presented clear evidence regarding how the matrix was applied to Mr Pereira (paragraphs [25]-[38] of Exhibit “R5”). That evidence consistently shows that Mr Pereira’s conduct conflicted with other employees and significantly impacted on his scores.
Mr Cross submits that it is therefore beyond doubt that Mr Pereira experienced conflict with other employees. He submits that Mr Pereira claims that in 2004 he was not aware that other shift operators did not want to work with him (paragraph [2] of Exhibit “A6”). In cross-examination, however, Mr Pereira conceded that he was aware of other shift operators not wanting to work with him before and after 2004. That fact that Mr Pereira gave contradictory versions of conflict with other employees merely highlights that such conflict was apparent (paragraph [17] of Exhibit “A6”). Mr Cross drew the Court’s attention to the evidence Mr Girgenti, the “de-facto” union delegate, gave about the difficulty in working with Mr Pereira (Exhibit “R2”).
Mr Cross submits that it is irrelevant whether Mr Pereira disagrees with the respondent’s decision as the Act only requires that the decision not be made for reasons which include a prescribed reason. It is not relevant whether Mr Pereira was given a chance to refute the assessment, or even whether the process was fair or transparent, provided the decision was not for a prescribed reason. Transpacific has clearly proven that the termination was not for a prescribed reason.
Mr Cross further submits that although Mr Pereira seeks reinstatement, his evidence was that he was not fit to perform his former duties and received 80% of his former wage from workers’ compensation subject to increases for indexation. Mr Cross submits that it is apparent that he cannot be reinstated to his former position as he cannot perform those duties (paragraph [8 (1)] of Exhibit “R6”). Additionally, reinstatement would result in the termination of another employee as it has been clearly established that a reduction in the number of operators on each shift is required. Further, Mr Pereira’s reinstatement would cause significant concern amongst the staff because he would be required to work closely with them (paragraph [8(2)] of Exhibit “R6”) and the relationship has been substantially damaged (Confidential Exhibit 1; Confidential Exhibit 2; paragraph [8(2)] of Exhibit “R6”).
Mr Cross also drew the Court’s attention to Mr Pereira’s employment with Transpacific which was only from 1 August 2005 to 28 March 2007. Mr Pereira’s employment with the previous operator of the Homebush site was terminated immediately prior with a significant redundancy payment and termination entitlements. Mr Cross submits that any remedy, if awarded, should be limited to minimal compensation in light of the termination benefits provided to Mr Pereira by Transpacific and income earned since termination.
Mr Cross indicates that Transpacific admits it breached its obligations under clause 29(ii)(a) and (b) of the Award by failing to notify and discuss with the Union the changes which would have a “significant effect”. Mr Cross submits that when awarding a penalty this Court should consider the totality of the conduct rather than adding the two contraventions, see Australian Communication & Media Authority v Clarity1 Pty Ltd [2006] FCA 1399 at [46] where Nicholson J made the following comments on the totality principle:
[46] The totality principle requires consideration of the appropriateness of a pecuniary penalty having regard to the totality of the conduct rather than simply by the addition of each individual contravention: ACCC v Leahy at 285–286 per Merkel J and Australian Competition and Consumer Commission v McMahon Services Pty Ltd (ACN 008 274 020) (No 1) (2004) ATPR 42-022 at 49,081 per Lander J. There are two aspects of this matter which attract the operation of that principle. First, there is the high volume of contraventions rendering the conduct at the high end of the scale and arguably likely to attract close to the maximum penalty. The applicant concedes that the maximum penalty provided under the Spam Act would be extreme given all of the circumstances. Second, every time the respondents contravened s 16(1) or s 16(9) of the Spam Act they also contravened s 22(1) and s 22(3) meaning that there was a degree of overlap from the same conduct in relation to contraventions.
Mr Cross submits that the factors the Court should take into account are:
a)The nature and extent of the conduct which led to the breaches;
b)The circumstances in which the conduct took place;
c)Whether there has been similar previous conduct by the respondent;
d)Whether the breaches are distinct; and
e)Whether the respondent has shown contrition.
See Rajagopalan v VM Sydney Building Materials Pty Ltd [2007] FMCA 1412.
Mr Cross submits that in the current circumstances, the breaches:
a)Were inadvertent and not malicious;
b)Did not cause the applicant or any other employee material harm;
c)Arose out of a single course of conduct; and
d)Did not form part of a series of breaches or show a history of similar conduct on the part of Transpacific.
Furthermore, Transpacific has shown contrition for its action by:
a)Conceding the breach;
b)Informing its managers of notification obligations under the Award; and
c)Ensuring that its managers fulfilled their notification obligations under the Award.
Mr Cross submits that most penalties against an employer for breach of an Award or notional agreement preserving State award involve underpayment or non-payment of monies owed to an employee. Here, there is no suggestion that Transpacific did not abide by its key obligations under the Award and it has not been accused of underpaying Mr Pereira.
Consideration
The primary argument advanced on behalf of Mr Pereira was that he held a Relief Shift Operator position and it was never anticipated that the position would be made redundant in order to achieve the restructure objectives of Transpacific. It is claimed that Transpacific stated that the restructure envisaged a position redundancy of one shift operator amongst each of the four three-shift operator crews, without mention of the relief shift operator position. There were two relief shift operators before the restructure, one of whom was Mr Pereira. It is claimed that after the restructure, Mr Pereira’s position was terminated on a purported redundancy ground. In a position redundancy procedure, the position in which the employee was employed is no longer required.
The argument advanced is that there was no position redundancy in relation to Mr Pereira as Relief Shift Operator and the respondent’s reason that the termination was the result of a purported redundancy ground was invalid. There was an alternative submission, however, I believe that the position redundancy issue needs to be addressed first.
The Union claims that Mr Pereira’s temporary absence from work because of his injury was the reason, or part of the reason, for the termination of his employment. Mr Tripodi argues that the restructure did not apply to Mr Pereira’s position.
Subsequent to the restructure Mr Pereira was terminated, purportedly on redundancy grounds. Mr Tripodi relies on the Amcor Ltd case (see [21] above) as authority that in determining a position redundancy, what is required is that the position in which the employee was employed prior to the redundancy is no longer required. This process is not specific to the employee.
Mr Cross submits that the Union and Mr Tripodi disregarded the evidence and tried to position Mr Pereira as being a Relief Shift Operator and therefore distinct from the group considered for redundancy. Mr Cross contends that although Mr Tripodi elected to pursue this course, there is no challenge on this issue to:
a)Mr Bailey, Plant Manager;
b)Mr Sandaman, Process Supervisor, one of the twelve staff members who participated in the review and filled out the assessment matrix; and
c)Mr Vujic, General Manager and the person that made the final decision.
Mr Cross contends that the only way that the applicant could get around the failure to challenge the procedures was to create a fiction that Mr Pereira was not a shift operator, which Mr Cross contends is legally and factually incorrect.
A review of all the material read into evidence does not contain direct reference to the position of Relief Shift Operator being distinctly different from that of Shift Operator. I note Mr Cross’ argument that a legal fiction has been created that Mr Pereira was not a shift operator. I reject this argument because it is incorrect to suggest that there has not been a redundancy – an employee has clearly been terminated on the ground of redundancy. The evidence of Mr Bailey was that there were 14 shift operators but two had indicated that they were retiring (Exhibit “R5”). One other operator was to be transferred to the day shift roster (paragraph [21] of Exhibit “R5”). Mr Edwin Aquilina was moved to the day shift in March 2007 but remained on night shift temporarily relieving an absentee (paragraph [48] of Exhibit “R5”). In total, there were 11 employees subject to the redundancy process. Mr Bailey explained that there were four three-man teams of shift operators which was supplemented by two relief shift operators when a regular shift operator was absent. Consequently, it was normal for the relief shift operator to work the same number of hours per week as a regular shift operator. While I acknowledge that the two relief shift operators were not part of the regular roster pattern (Exhibit “R5”, annexure “BB-2”) they performed the same duties as a shift operator.
No evidence has been tendered nor has the evidence of any witness demonstrated to me that a relief shift operator held a position that was distinctly different to a shift operator’s normal tasks. The argument advanced that Mr Pereira should not have been subject to the “TWS Shift Process Operators’ Redundancy Selection” cannot be sustained. I am not satisfied that the material before the Court supports the proposition that the only way the Union could get around the failure to challenge the procedures was to create a position redundancy fiction. This argument should be rejected.
Turning to the issue of Mr Pereira’s employment termination, the dispute between the parties is whether the termination was in breach of s.659(2)(a) of the Act in that Mr Pereira was temporarily absent from work because of illness or injury. It was not in issue that at the relevant time, Mr Pereira was absent from work because of a partial knee replacement operation and subsequent infection.
Mr Cross acknowledges that Transpacific faces an unlawful termination allegation and has to prove that none of the reasons for the termination of employment involved Mr Pereira’s temporary absence due to illness as identified in s.659(2)(a) of the Act.
Mr Cross referred to Liquor, Hospitality Miscellaneous Union, Liquor & Hospitality Division, NSW Branch on behalf of its member, Wayne Roberts v Woonoona Bulli RSL Memorial Club Ltd [2007] FCA 1460 in which there was an allegation of termination because of a breach of s.659(2) of the Act (the employee refused to sign an Australian Workplace Agreement (AWA)). The response by the RSL Memorial Club was that there was a redundancy question. The case advanced by the Union was that Mr Roberts was dismissed because he did not sign an AWA. The Union put that there was a “but for” test in that but for not signing the AWA, Mr Roberts would not have been terminated.
However, Branson J stated that that approach did not apply and set out the reverse onus at [18]-[21]:
[18] The case advanced by the Union on Mr Roberts’ behalf was that he was dismissed from his employment by the Club because he would not accept the position of Chef on an AWA. It was submitted that it was immaterial that the AWA related to a position that he did not hold; had he agreed to sign the AWA he would not have been dismissed.
[19] I do not accept that s 659(2)(g) of the Act calls for the application of a simple ‘but for’ test of causation. Section 659(2) is concerned to proscribe the termination by an employer of an employee’s employment for any one or more of nine separate reasons, or for reasons that include those reasons. Subject to s 664, the subsection calls for the identification of the employer’s reason or reasons for terminating the employee’s employment.
[20] Section 664 of the Act is the analogue of the old s 298V. It provides:
In any proceedings under section 663 relating to a termination of employment in contravention of section 659 for a reason (a proscribed reason) set out in a paragraph of subsection (2) of that section:
(a) it is not necessary for the employee to prove that the termination was for a proscribed reason; but
(b) it is a defence in the proceedings if the employer proves that the termination was for a reason or reasons that do not include a proscribed reason (other than a proscribed reason to which subsection 659(3) or (4) applies).
[21] In this proceeding it is thus not necessary for the Union to prove that Mr Roberts’ employment was terminated for the reason, or for reasons including the reason, that he refused to negotiate in connection with, make or sign an AWA. However, the Club will have established a defence to the Union’s application if it has proved that Mr Roberts’ employment was terminated for a reason or reasons that do not include a proscribed reason.
Mr Cross argues that the facts show that Mr Pereira’s illness was not in any way a reason for the termination of his employment. The evidence of Mr Bailey was that there were 14 shift operators, two of which were relief operators, but that they were all under the broad description of “shift operators” (paragraphs [20]-[21] of Exhibit “R5”). Eleven were subject to the redundancy process.
Mr Cross submits that under cross-examination Mr Pereira indicated that all contact from Mr Bailey and Mr Sandanam were enquiries as to his recovery. Mr Pereira acknowledged that he was not pressured on when he would return to work and that they were not concerned about the length of time he was having off work. There was no dispute with Mr Vujic that Mr Pereira give as much notice as needed and proceed to have his knee recover.
Mr Cross submits that there was no challenge to the bona fides of the decision to reduce the shift operators from three per group to two.
There was a request by Mr Vujic for Mr Bailey to prepare a report on the possible reduction of shift process operators. In conjunction with this, additional safety measures were implemented. Mr Vujic and Mr Bailey held discussions with Transpacific’s human resources staff to determine who should be made redundant. It was decided that all employees’ performances would be mapped on a matrix (paragraph [22]-[39] of Exhibit “R5”). A copy of this table is in evidence (Exhibit R5, Annexure “BB-6” and “BB-7”).
I have had the benefit of Mr Bailey’s affidavit supplemented by oral evidence explaining why he gave the marks he did to various employees. In cross-examination he compared Mr Redmond and Mr Pereira and I noted the pattern which emerged from that process. Mr Redmond, a less experienced operator, received three out of five marks in relation to written, computer and process operations because of his lesser experience, but four out of five marks for his ability to interact with other employees. Mr Pereira received five marks for written, four marks for computer and four marks for process operation. However he scored less marks on his ability to interact with the laboratory, administration, transport and engineering sectors because of his prior conduct. I am satisfied that this is consistent with the other evidence I heard over the two days of this hearing.
I note that Barry Clark was awarded 4.5 out of five marks for “relationship with other employees” because he was involved in a heated argument with Mr Pereira. The process operator’s redundancy selection criteria relating to Mr Pereira is contained in Annexure “BB-3” of Exhibit “R5”. The contents are consistent with the evidence of Mr Girgenti, Mr Sandanam and Mr Bailey. I note that Mr Pereira conceded that he conflicted with other employees. His affidavit indicates that he did not have any conflict with other employees in 2004. However in cross-examination he agreed that he had been involved in disputes both before and after 2004.
I am satisfied and it is abundantly clear that other operators at the Homebush site had difficulties with Mr Pereira. However, the fairness or unfairness of a particular incident, or whether a written warning should or should not have issued, are not issues for this Court. This is not an enquiry into the fairness of the termination decision. If it was an unfair dismissal application it would have been heard in the Australian Industrial Relations Commission. The case that the respondent has to meet is whether the termination was unlawful.
The decision to terminate the employment was consequent on Mr Pereira receiving a lower score of nine marks less than any of the other shift operators (Exhibit “R5”, annexure “BB-6”). I am satisfied that there was no other reason for the decision and that it does not relate to one of the nine prescribed reasons in s.659(2) of the Act.
I now turn to the issue of bias. Mr Tripodi indicated in opening submissions that he wished to make the alternative submission that if there was a position redundancy, that process was infected by bias and that the selection criteria applied to Mr Pereira was illogical, unfair and in favour of other shift operators. Mr Tripodi claims that the respondent is attempting to establish a loss of trust and confidence in Mr Pereira to resist a reinstatement order (see [26]-[30] above). Mr Tripodi also claims that many of the allegations are vague and unsupported by direct evidence by witnesses.
Mr Tripodi also relies on a company officer stating that “shift operators have said that they can’t work with Mr Pereira”. Paragraph [9] of Exhibit “R5” states:
I was informed by Peter Sandanam, Process Supervisor, in 2004 that the applicant had been appointed as a Relief Shift Operator because Mr Sandanam had received numerous verbal complaints from the other Shift Operators about the Applicant, and that none of the other Shift Operators wanted to work with him.
Mr Tripodi referred to Mr Bailey’s concession that due to the nature of the company’s operations, disagreements and disputes do arise. However, the allegations against Mr Pereira did not result in disciplinary action other than a warning letter issued on 20 September 2005. This incident, together with other incidents which occurred two years before the issue of redundancy arose, did not result in Transpacific deciding to terminate his employment. Transpacific’s adoption of the TWS Shift Operators’ Redundancy Selection Criteria was used against Mr Pereira to justify his termination.
Mr Tripodi argues that if there had been a loss of trust and confidence, one would expect Transpacific to justify its dismissal of Mr Pereira not upon the ground of redundancy but upon allegations made against him. It was argued that Mr Bailey’s evidence indicated that there had been insufficient proof to discipline and council Mr Pereira in relation to these incidents. Mr Tripodi contends therefore that there was insufficient proof to justify Mr Pereira’s termination in the redundancy process.
Mr Cross argues that the allegation of bias relates to a three to six week period over one and a half years before the actual termination of employment occurred. The affidavit of Mr Pereira states:
I arrived at my normal workplace (Transpacific Waste) on 1st August 2005 at 6am. I was advised by my direct Supervisor, Mr Peter Sandanam, not to commence work until the OHS Department Official of Transpacific Waste have come to see me, as they have their own rules and regulations of managing workers returning to work after surgery or injury. Mr Sandanam and Mr Bruce Bailey, Manager, advised me to sit in the mess room near the maintenance workshop and wait for further instructions.
I remained in the mess room for the entire day on 1st August 2005, until 6pm that evening. On 2nd August 2005, I arrived at work ready to commence at 6am, having already changed into my work clothing and went to the mess room, as earlier advised by management. I remained (for the second day) in the mess room for the entire shift, and the[n] left the workplace at 6pm that evening.
On 3rd August 2005, I again arrived to work, ready to commence, changed into my work clothing and went to the mess room, at 6am. It was on Wednesday 3rd August 2005 that Mr Bailey, Plant Manager, and two OHS Managers, Mr Joe Rivas and his assistant, Mr Middlebrook, came to see me in the mess room. Mr Rivas was the Senior OHS Manager for Transpacific. I had no previous contact or knowledge of Mr Rivas or Mr Middlebrook prior to this meeting. The company managers then asked me a variety of questions including how far I lived from the workplace and how did I travel to work. I was not questioned about my injury or fitness to recommence work. (paragraph [5] of Exhibit “A4”)
In cross-examination, Mr Pereira conceded that this claim was not true. He could not explain why he had included such claims in his affidavit.
The affidavit of Mr Bailey states:
4. I make the following comment regarding the applicant’s affidavit dated 13 September 2007:
(1) At paragraph 5 of this affidavit the applicant claims that he was instructed to sit in the mess room and do nothing from 6am to 6pm on 1 August 2005 and 2 August 2005. This is incorrect. On 1 August 2005 the applicant was told to return home because he had forgotten his medical certificate. When he returned he was instructed not to do any duties as Transpacific Industries Pty Ltd (TPI) needed to determine what duties were safe for him to do. I began a case note from 1 August 2005 recording the actions that were occurring in relation to this enquiry. A copy of this case note form is attached and marked “BB-2”.
(2) The applicant claims that he spent 2 August 2005 in the mess room doing no duties, until a meeting was held where the TPI staff on 3 August 2005. This is incorrect. As shown by BB-2 the applicant had a meeting with TPI staff to discuss his capabilities on 2 August 2005.
This affidavit nor the evidence it contains was challenged in the proceedings and I believe it accurately portrays what occurred at that time. (paragraph [4] of Exhibit “R6”)
This issue was again canvassed with Ms Simpson, the Injury Management Consultant retained by Transpacific to manage Mr Pereira’s rehabilitation in respect of his workers’ compensation claim. Ms Simpson was called to give evidence and tendered copies of her case notes (Exhibits “A1”, “A2” and “A3”). Mr Pereira had commenced employment with Transpacific on 1 August 2005. He was injured at the time and it was Ms Simpson’s responsibility to make sure that his right knee was rehabilitated. Mr Rivas, who had not been employed by the previous employer, was responsible for ensuring that Mr Pereira was fit to take up his position with Transpacific. These facts were confirmed by Ms Simpson in her evidence.
Ms Simpson acknowledged her isolated focus (the rehabilitation of Mr Pereira’s right knee) and conceded the greater focus of Mr Rivas (to ensure Mr Pereira’s total fitness for his role). She gave evidence that Mr Rivas went to considerable lengths to ensure the health of Mr Pereira. I am satisfied from the evidence before me that this does not demonstrate bias against Mr Pereira but rather a compliance with Occupational Health and Safety legislation. I note that it is undisputed that Mr Rivas ceased employment with Transpacific on 8 December 2006, well before the decision to restructure the operation and to terminate Mr Pereira’s employment. I am satisfied that the claims of bias against Mr Pereira cannot be sustained.
The applicant seeks an order for the reinstatement of Mr Pereira. Reinstatement as a remedy is a powerful and flexible tool in returning an employee to a position with an employer when the employee has been dismissed contrary to the Act. I am satisfied that s.659(2)(a) of the Act has not been breached and that reinstatement is not a remedy available to Mr Pereira. Even if I were not satisfied that Transpacific had discharged its onus that the termination of Mr Pereira was not unlawful in respect of s.659(2)(a) of the Act, I would be obliged to determine the appropriateness of reinstatement as a remedy. Such a consideration involves an assessment of broader factors than impracticability, see Ellawala v Australian Postal Corporation [1999] AIRC 1260. The appropriateness of reinstatement is a question of fact: Australian Meat Holdings Pty Ltd v McLaughlin (1998) 84 IR 1. Mr Tripodi referred to Perkins v Grace Worldwide Aust Pty Ltd (see [29] above) which has been consistently applied and refers both to the “practicability” and “appropriateness” of reinstatement.
Mr Cross in his submissions above (see [45]) identified three issues to be considered in respect of reinstatement:
a)That Mr Pereira is not fit to perform his former duties;
b)The reinstatement would result in the termination of another employee;
c)There would be significant dislocation and concern within the workforce.
In Chelvarajah v Global Protection Pty Ltd [2004] FCA 1661, Gray J held that when reinstatement would be futile or liable to result in termination again, the remedy would be inappropriate. However, a further redundancy, or even a surplus employee, is not inappropriate when considering reinstatement: FM Hecker v Herald and Weekly Times Limited [2000] AIRC 628 per Gay C.
The more significant aspect to consider about appropriateness of reinstatement is the element of loss of trust and confidence. The Court in Perkins v Grace Worldwide (Aust) Pty Ltd found that trust and confidence is a necessary ingredient in any employment relationship. In light of the evidence given in this matter and taking into account the contents of the Confidential Exhibits, I have formed the view that trust and confidence in this case has been destroyed over a period of time and further exacerbated by this litigation. I am not satisfied that a viable and productive employment relationship can be restored. I believe it would not be appropriate to make such an order.
The case that Transpacific must meet is that the termination of Mr Pereira was not unlawful for any of the prescribed reasons in s.659(2) of the Act. The evidence before the Court is that the Homebush plant had run its shift operation with two operators for many years. However due to an industrial accident and operational problems, the standard shift structure was increased to three. The aim was to return the operation to a two man shift and steps were taken to improve the safety and enable this restructure. When these new procedures were put in place and the independent external organisation was retained to carry out a risk analysis, a report was prepared and provided to Transpacific. Subsequent to the report the human resources department of Transpacific was asked to prepare an assessment matrix to be applied to all relevant employees.
The preliminary argument put forward by Mr Tripodi was Mr Pereira did not fall within the class of employees subject to assessment in the redundancy procedure. I am not satisfied that there is sufficient evidence to suggest that Mr Pereira’s position as Relief Shift Operator was distinct from that of other shift operators. The only difference was that relief operators were not allocated to a specific shift on the roster. However, in all other respects, relief operators performed the same duties as other shift operators and worked approximately the same number of hours. Consequently their inclusion in the redundancy procedures was correct.
The evidence in respect of the procedure and evaluation of each employee indicates that the steps taken were correct. I am satisfied with the evidence given to explain variances which arose in the assessment and that the basis for the assessment was justified. I am satisfied that the claims of bias against Mr Pereira in the evaluation process cannot be sustained. The substantive claim in this matter is that s.659(2) of the Act has been breached. In particular, that the reason for termination of Mr Pereira was his absence due to his partial knee replacement which later became infected requiring further treatment and rehabilitation. I do not accept that the evidence supports this claim. In the circumstances the application for proposed orders one to five (inclusive) must be rejected.
I now move to the contravention of the Award. I acknowledge that the respondent has been open with the Court and made clear from the commencement of the hearing that it conceded to breach of the Award. The respondent submits that it was a technical breach but a breach nevertheless. When considering the award of penalty, I was invited to consider the totality of the conduct (rather than adding the two contraventions) and the circumstances within which it took place.
Transpacific claims that they were inadvertent breaches which were not malicious and did not cause Mr Pereira or any other employee significant material harm. It is submitted that they arose out of a single course of conduct and were not part of a series of breaches which could increase the penalty. Mr Cross drew my attention to the affidavit of Ms McGee and the steps she took to ensure ongoing compliance with Award obligations as a result of Transpacific becoming aware of their failure.
I note that Ms McGee is employed by Transpacific as its Regional Human Resources Manager for New South Wales and Victoria. I find it difficult to accept her evidence that although she advised management on the matrix structure used to score shift process operators in the redundancy process, she was unaware of the obligations under the Award which regulated the industry. Her job title suggests that Ms McGee is a specialist in human resources, either through tertiary education or considerable years of experience in the area.
Any person advising on redundancy procedures would be expected to be familiar with the relevant provisions of the Award, or at least to have carried out the appropriate research to familiarise themselves with the requirements of the relevant Act. Some accommodation can be expected in a small business where the principal may perform a wide range of functions in the management of that organisation. However, when a person is employed in this industry in a specialised role, it is difficult to accept ignorance of such a basic requirement.
This claim of ignorance is made in circumstances where a redundancy payment was prepared and where the calculation of termination payment is contained in the same section of the Award. There is nothing before the Court indicating an error in the calculation. It is difficult to believe that a final termination payment due to redundancy was prepared without reference to the Award. It should be noted that the table of redundancy payments appears in the section immediately below “Redundancy – Discussion Before Termination” in the Award. Ms McGee’s claimed oversight is difficult to accept.
Transpacific is a significant employer under the Award and the business is an important participant in its industry. There is no evidence to suggest that an imposition of even the maximum penalty would result in disproportionate injury to its business or financial position. I therefore do not believe that a discount of penalty based on the size of the business is appropriate. Transpacific’s business structure, position in the industry and the involvement of specialist human resources personnel require me to treat the breach as serious and inexcusable. There should be an imposition of a substantial penalty. I do not accept as excusable the failure of the responsible officer to discover and appreciate these breaches of the Award. The terms of the Award are clear and intelligible and the relevant manager’s failure to appreciate this reflects seriously upon their conduct in overlooking the provisions of the Award.
Other senior members of the organisation have attested to extensive experience in this industry and must have had exposure to the Award or ones of similar structure. If they were not familiar with the details of the provisions, some caution should have been demonstrated by either making themselves aware of its contents or raising the issue with the Human Resources Manager. The parties have been silent on this issue before this Court. Consequently, I set the penalty at $22,000 for breach of the Award.
I certify that the preceding ninety-three (93) paragraphs are a true copy of the reasons for judgment of Lloyd-Jones FM
Associate:
Date: 16 May 2008
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