Begg v Clay and Mineral Sales
[1996] IRCA 389
•15 August 1996
DECISION NO: 389/96
C A T C H W O R D S
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - complaint of unlawful termination - REDUNDANCY - COMPENSATION.
INDUSTRIAL RELATIONS ACT 1988, ss.170DE, 170EE
Williams v. Compair Maxam LTD (1982) ICR 156
BEGG V CLAY & MINERAL SALES PTY LTD
No.SA96/1051
JUDICIAL REGISTRAR : LJ FARRELL
PLACE : ADELAIDE
DATE : 15 AUGUST 1996
IN THE INDUSTRIAL RELATIONS COURT )
OF AUSTRALIA )
SOUTH AUSTRALIA DISTRICT REGISTRY )
No.SA96/1051
B E T W E E N
WILLIAM JOHN BEGG
Applicant
AND
CLAY & MINERAL SALES PTY LTD
Respondent
MINUTES OF ORDER
BEFORE : JUDICIAL REGISTRAR LJ FARRELL
PLACE : ADELAIDE
DATE : 15 AUGUST 1996
THE COURT ORDERS THAT:
The Respondent pay to the Applicant the sum of $12,500 within 21 days of today’s date.
NOTE: Settlement and entry of Orders is dealt with by Order 36 of the Industrial Relations Court Rules
IN THE INDUSTRIAL RELATIONS COURT )
OF AUSTRALIA )
SOUTH AUSTRALIA DISTRICT REGISTRY )
No.SA96/1051
B E T W E E N
WILLIAM JOHN BEGG
Applicant
AND
CLAY & MINERAL SALES PTY LTD
Respondent
BEFORE : JUDICIAL REGISTRAR LJ FARRELL
PLACE : ADELAIDE
DATE : 15 AUGUST 1996
REASONS FOR JUDGMENT
This is an application pursuant to Section 170 EA of the Industrial Relations Act. The Applicant claims that his employment has been terminated unlawfully. He does not seek reinstatement. He seeks compensation. The Applicant conceded that the Respondent had a valid reason for the termination of his employment connected with the Respondent’s operational requirements.
The Applicant commenced employment with the Respondent in September 1980 as a manager. He was initially paid a salary of $15,000 per annum and an amount of $3,000, described as a bonus, was paid to him at the end of the financial year. His salary increased over the years until in 1995 he was being paid a salary of $29,640 in addition to a “bonus” of $14,000. On the evidence before me I am satisfied that the so called bonus was in fact a part of the Applicant’s remuneration.
Mr Fricker, Managing Director of the Respondent gave evidence of the Respondent’s difficult financial position. He said that the Respondent had been losing $3,000 per week for a considerable period of time. He gave evidence that he knew in May 1995 that he would terminate the Applicant’s employment. Mr Fricker gave evidence that he delayed terminating the Applicant’s employment because his son, who performed the same kind of duties as the Applicant for 3 days per week, would complete his studies at the end of 1995, then marry and go on a honeymoon. Mr Fricker also gave evidence that following giving notice to the Applicant that cordial relations were maintained between them.
In my view Mr Fricker ought to have advised the Applicant as early as possible that his employment would most likely be terminated. From the evidence before me it seems that Mr Fricker could have advised the Applicant as early as May 1995 that his employment would be terminated..
The decision of the English Employment Appeal Tribunal in Williams v. Compair Maxam LTD (1982) ICR 156 set out five, now well recognised, principles that reasonable employers ought to act in accordance with in these situations. The first of those principles is pertinent here. “The employer will seek to give as much warning as possible of impending redundancies so as to enable the union and employees who may be affected to take early steps to inform themselves of the relevant facts, consider possible alternative solutions and, if necessary, find alternative employment”.
The failure to consult with the Applicant at any stage prior to giving him notice in March 1996 renders the termination of the Applicant’s employment harsh, unjust and unreasonable.
In considering the amount of compensation I should award to the Applicant, I take into account the following factors:
the applicant received a lump sum payment on termination of his employment (for the purposes of this decision I regard the amount of $20,944 which is the amount set out as “Lump Sum D” on the applicant’s final group certificate, as being the amount that I should have regard to, although a number of different amounts were proffered by counsel for the Respondent during the course of the hearing.)
the Applicant has not yet found alternative employment
the Respondent could have forewarned the Applicant in May 1995 that his employment was likely to be terminated
the applicant is 57 years old
the continuing depressed nature of the industry in which he was employed in South Australia will make it difficult for him to find alternative employment.
I therefore award compensation to the Applicant in the sum of $12,500
I certify that this and the preceding two pages are a true copy of my reasons for judgment.
DATE OF HEARING : 30 JULY 1996
FOR THE APPLICANT : MR G COPPOLA
FOR THE RESPONDENT : MR M HOILE
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