Australian Workersa** Union v Transpacific Industries Pty Ltd - [2008] FMCA 616

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Workplace Relations Act 1996 (Cth), ss.179CQ (repealed), 298K (repealed), 659, 663, 664, 719, Schedule 8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…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2008] FMCA 616
Decision Date: 16 May 2008

CaseChat Overview and Summary

In the case of Australian Workers Union v Transpacific Industries Pty Ltd, the applicant, Clem Pereira, sought relief for unlawful termination of his employment, claiming that the termination was not for the prescribed reason of redundancy under the Workplace Relations Act 1996. The respondent, Transpacific Industries Pty Ltd, defended the termination on the basis of redundancy. The legal issues before the court were whether Transpacific had made a definite decision that Pereira's job would no longer be done by anyone, and whether this decision led to the termination of his employment. Additionally, the court had to determine if Transpacific had failed to consult with Pereira and the union as required by the New South Wales Chemical Workers (State) Award.

The court found that the termination of Pereira's employment was not for the prescribed reason of redundancy as defined by the relevant legislation and awards. The court noted that redundancy refers to the end of employment in a particular kind of work, not the identity of the employee or employer. It was established that Transpacific had not made a definite decision that Pereira's position would no longer be filled by anyone. Furthermore, the court found that Transpacific had failed to consult with Pereira and the union as required by the award, thus contravening clauses 29(2)(ii) and 29(3) of the award. Consequently, the application for relief for unlawful termination was dismissed, but a penalty of $22,000 was imposed on Transpacific for the contravention of the award provisions.

The court ordered that the penalty be paid to Clem Pereira within 28 days. No order was made as to costs.

Orders

Orders of the court

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.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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.

Ratio Decidendi

Legal Principle Established

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.