Borlace v Pasminco Cockle Bay Pty Ltd (formerly Pasminco Metals Sulphide Pty Ltd)
[1998] IRCA 1
•14 January 1998
C A T C H W O R D S
INDUSTRIAL LAW - Termination of employment - unlawful termination - REDUNDANCY-whether applicants given an opportunity to respond - whether the respondent had a VALID REASON for the termination of each applicants employment - records destroyed by respondent - effect on onus of proof -REMEDY-Reinstatement
WORKPLACE RELATIONS ACT 1988, ss.170 DE, 170 DC, 170DB, 170DF
Kenefick & Ors v Australian Submarine Corporation,(No 2)(1996) 65 IR 366, Full Court,
D’Ortenzia v Telstra, Von Doussa J, 11 December 1997
Cosco Holdings Pty Ltd v Thu Thi Van Do & Ors, Full Court, 4 December 1997
PAUL THOMAS BORLACE v PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS SULPHIDE PTY LTD)
SI 1185 OF 1996
WAYNE MALCOLM CALDWELL PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS SULPHIDE PTY LTD)
SI 1181 OF 1996
PAUL DOUGLAS CARROLL PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS SULPHIDE PTY LTD)
SI 1186 OF 1996
RODNEY CHARLES CARROLL PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS SULPHIDE PTY LTD)
SI 1180 OF 1996
NEVILLE DAVID DENNIS v PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS SULPHIDE PTY LTD)
SI 1182 OF 1996
KOSGMAS DIAMANTES v PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS SULPHIDE PTY LTD)
SI 1190 OF 1996
GEORGE JOHNSON v PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS SULPHIDE PTY LTD)
SI 1183 OF 1996
PETER JON McDONALD v PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS SULPHIDE PTY LTD)
SI 1189 OF 1996
DENNIS RICHARD MANUEL v PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS SULPHIDE PTY LTD)
SI 1179 OF 1996
MARK GREGORY NAPIER v PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS SULPHIDE PTY LTD)
SI 1188 OF 1996
RONALD JAMES PARKER v PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS SULPHIDE PTY LTD)
SI 1187 OF 1996
RONALD SIMMONS v PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS SULPHIDE PTY LTD)
SI 1184 OF 1996
JUDICIAL REGISTRAR: LJ FARRELL
PLACE: ADELAIDE
DATE: 14 JANUARY 1998
IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA
SOUTH AUSTRALIAN DISTRICT REGISTRY
No. SA 96/1185
BETWEEN:
PAUL THOMAS BORLACE
Applicant
AND:
PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS
SULPHIDE PTY LTD)
Respondent
BEFORE: JUDICIAL REGISTRAR LJ FARRELL
PLACE: ADELAIDE
DATE : 14 JANUARY 1998
THE COURT ORDERS AND DECLARES THAT:
1. Mr Borlace is excluded from the operation of Sub-Divisions B, C, D and D of Division 3 of Part VIA of the Workplace Relations Act.
2. The application by Paul Thomas Borlace be dismissed
Note : Settlement and entry orders is dealt with in Order 36 of the Industrial Relations Court Rules
IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA
SOUTH AUSTRALIAN DISTRICT REGISTRY
No. SA 96/1185
BETWEEN:
WAYNE MALCOLM CALDWELL
Applicant
AND:
PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS
SULPHIDE PTY LTD)
Respondent
BEFORE: JUDICIAL REGISTRAR LJ FARRELL
PLACE: ADELAIDE
DATE : 14 JANUARY 1998
THE COURT ORDERS THAT:
1. The respondent reinstate the applicant to a position on terms and conditions no less favourable than those on which he was employed immediately before the termination of his employment.
2. The parties have liberty to apply in relation to consequential orders.
Note : Settlement and entry orders is dealt with in Order 36 of the Industrial Relations Court Rules
IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA
SOUTH AUSTRALIAN DISTRICT REGISTRY
No. SA 96/1180
BETWEEN:
RODNEY CARROLL
Applicant
AND:
PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS
SULPHIDE PTY LTD)
Respondent
BEFORE: JUDICIAL REGISTRAR LJ FARRELL
PLACE: ADELAIDE
DATE : 14 JANUARY 1998
THE COURT ORDERS THAT:
1. The respondent reinstate the applicant to a position on terms and conditions no less favourable than those on which he was employed immediately before the termination of his employment.
2. The parties have liberty to apply in relation to consequential orders.
Note : Settlement and entry orders is dealt with in Order 36 of the Industrial Relations Court Rules
IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA
SOUTH AUSTRALIAN DISTRICT REGISTRY
No. SA 96/1186
BETWEEN:
PAUL DOUGLAS CARROLL
Applicant
AND:
PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS
SULPHIDE PTY LTD)
Respondent
BEFORE: JUDICIAL REGISTRAR LJ FARRELL
PLACE: ADELAIDE
DATE: 14 JANUARY 1998
THE COURT ORDERS THAT:
1. The respondent reinstate the applicant to a position on terms and conditions no less favourable than those on which he was employed immediately before the termination of his employment.
2. The parties have liberty to apply in relation to consequential orders.
Note : Settlement and entry orders is dealt with in Order 36 of the Industrial Relations Court Rules
IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA
SOUTH AUSTRALIAN DISTRICT REGISTRYNo. SA 96/1182
BETWEEN:
KOSGMOS DIAMANTES
Applicant
AND:
PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS
SULPHIDE PTY LTD)Respondent
BEFORE: JUDICIAL REGISTRAR LJ FARRELL
PLACE : ADELAIDE
DATE : 14 JANUARY 1998
THE COURT ORDERS THAT:
1. The respondent pay compensation to the applicant the sum of $24,000 within 21 days.
2. The respondent pay damages to the applicant pursuant to Section 170 DB in the sum of $1130 within 21 days
Note : Settlement and entry orders is dealt with in Order 36 of the Industrial Relations Court Rules
IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA
SOUTH AUSTRALIAN DISTRICT REGISTRY
No. SA 96/1182
BETWEEN:
NEVILLE DAVID DENNIS
Applicant
AND:
PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS
SULPHIDE PTY LTD)
Respondent
BEFORE: JUDICIAL REGISTRAR LJ FARRELL
PLACE: ADELAIDE
DATE: 14 JANUARY 1998
THE COURT ORDERS THAT:
1. The respondent pay compensation to the applicant the sum of $23,166 within 21 days.
2. The respondent pay damages to the applicant pursuant to Section 170 DB in the sum of $791 within 21 days
Note : Settlement and entry orders is dealt with in Order 36 of the Industrial Relations Court Rules
IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA
SOUTH AUSTRALIAN DISTRICT REGISTRY
No. SA 96/1190
BETWEEN:
GEORGE JOHNSON
Applicant
AND:
PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS
SULPHIDE PTY LTD)
Respondent
BEFORE: JUDICIAL REGISTRAR LJ FARRELL
PLACE: ADELAIDE
DATE : 14 JANUARY 1998
THE COURT ORDERS THAT:
1. The respondent pay compensation to the applicant the sum of $32,000 within 21 days.
2. The respondent pay damages to the applicant pursuant to Section 170 DB in the sum of
$1315 within 21 days
Note : Settlement and entry orders is dealt with in Order 36 of the Industrial Relations Court Rules
IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA
SOUTH AUSTRALIAN DISTRICT REGISTRY
No. SA 96/1183
BETWEEN:
PETER JOHN McDONALD
Applicant
AND:
PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS
SULPHIDE PTY LTD)
Respondent
BEFORE: JUDICIAL REGISTRAR LJ FARRELL
PLACE: ADELAIDE
DATE : 14 JANUARY 1998
THE COURT ORDERS THAT:
1. The respondent pay compensation to the applicant the sum of $30,092 within 21 days.
2. The respondent pay damages to the applicant pursuant to Section 170 DB in the sum of
$1057 within 21 days
Note : Settlement and entry orders is dealt with in Order 36 of the Industrial Relations Court Rules
IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA
SOUTH AUSTRALIAN DISTRICT REGISTRY
No. SA 96/1179
BETWEEN:
DENNIS RICHARD MANUEL
Applicant
AND:
PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS
SULPHIDE PTY LTD)
Respondent
BEFORE: JUDICIAL REGISTRAR LJ FARRELL
PLACE :ADELAIDE
DATE : 14 JANUARY 1998
THE COURT ORDERS THAT:
1. The respondent reinstate the applicant to a position on terms no less favourable than
those on which he was employed immediately before the termination of his employment.
2. The parties have liberty to apply with respect to consequential orders.
Note : Settlement and entry orders is dealt with in Order 36 of the Industrial Relations Court Rules
IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA
SOUTH AUSTRALIAN DISTRICT REGISTRY
No. SA 96/1188
BETWEEN:
MARK GREGORY NAPIER
Applicant
AND:
PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS
SULPHIDE PTY LTD)
Respondent
BEFORE: JUDICIAL REGISTRAR LJ FARRELL
PLACE: ADELAIDE
DATE : 14 JANUARY 1998
THE COURT ORDERS THAT:
1. The respondent reinstate the applicant to a position on terms no less favourable than those on which he was employed immediately before the termination of his employment.
2. The parties have liberty to apply with respect to consequential orders.
Note : Settlement and entry orders is dealt with in Order 36 of the Industrial Relations Court Rules
IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA
SOUTH AUSTRALIAN DISTRICT REGISTRY
No. SA 96/1187
BETWEEN:
RONALD JAMES PARKER
Applicant
AND:
PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS
SULPHIDE PTY LTD)
Respondent
BEFORE: JUDICIAL REGISTRAR LJ FARRELL
PLACE: ADELAIDE
DATE : 14 JANUARY 1998
THE COURT ORDERS THAT:
1. The respondent pay compensation to the applicant the sum of $20,424 within 21 days.
2. The respondent pay damages to the applicant pursuant to Section 170 DB in the sum of $686 within 21 days.
Note : Settlement and entry orders is dealt with in Order 36 of the Industrial Relations Court Rules
.
IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA
SOUTH AUSTRALIAN DISTRICT REGISTRY
No. SA 96/1194
BETWEEN:
RONALD JOHN SIMMONS
Applicant
AND:
PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS
SULPHIDE PTY LTD)
Respondent
BEFORE: JUDICIAL REGISTRAR LJ FARRELL
PLACE: ADELAIDE
DATE : 14 JANUARY 1998
THE COURT ORDERS THAT:
1. The respondent pay compensation to the applicant the sum of $17,300 within 21 days.
2. The respondent pay damages to the applicant pursuant to Section 170 DB in the sum of $709 within 21 days.
Note : Settlement and entry orders is dealt with in Order 36 of the Industrial Relations Court Rules
IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA
SOUTH AUSTRALIAN DISTRICT REGISTRYNo’s. SI 96/1185, 1181, 1180, 1186
1182, 1190, 1183, 1189, 1179, 1188,
1187, & 1184BETWEEN:
PAUL THOMAS BORLACEWAYNE MALCOLM CALDWELL
PAUL DOUGLAS CARROLL
RODNEY CHARLES CARROLL
NEVILLE DAVID DENNIS
KOSGMAS DIAMANTES
GEORGE JOHNSON
PETER JON McDONALD
DENNIS RICHARD MANUEL
MARK GREGORY NAPIER
RONALD JAMES PARKER
RONALD JOHN SIMMONS
Applicants
AND:
PASMINCO COCKLE BAY PTY LTD
(formerly PASMINCO METALS
SULPHIDE PTY LTD)Respondent
BEFORE: JUDICIAL REGISTRAR LJ FARRELL
PLACE: ADELAIDE
DATE: 14 JANUARY 1998These are Applications for relief in respect of termination of employment. The Applications come before the Court pursuant to the provisions of the Workplace Relations Act 1996 formerly known as the Industrial Relations Act 1988. The applicants claim that their employment was terminated unlawfully.
1. THE CLAIMS
The applicants made the following claims;
(1) that the termination of each individual applicant’s employment relationship with his employer, namely, Pasminco Cockle Bay Pty Ltd, formerly known as Pasminco Metals Sulphide Pty Ltd, was in contravention of Division 3, Termination of Employment, of Part VIA, Minimum Entitlements of Employees, of the following sections of the Act:S 170DC, each individual employee was not afforded an opportunity to defend himself against allegations related to the employee’s conduct or performance;
S 170DE(1), the employer terminated each individual employee’s employment relationship where there did not exist a “valid” reason for the termination;
S 170DF(1), the employer terminated an individual employment relationship for reasons that included any one or more of the prohibited grounds in that subsection, namely, union membership, age, and physical disability;
S 170DB, notice payments assuming the only payment in lieu of notice made to the wages applicants was the 3 weeks, ie payment for the period of 19 July 1996 to 9 August 1996, the difference, if any, between the applicable minimum period of notice in s 170 DB and the 3 weeks.
(2) Pursuant to the associated jurisdiction in s 430 of the Act, the following common law claims:
(i) for all applicants, other than Mr Paul Thomas Borlace and Mr Dennis Richard Manuel, a claim that there was a wrongful termination at common law by the employer, in that his contract of employment was terminated by the respondent without the respondent giving to him a period of reasonable notice or payment in lieu thereof;
(ii) each applicant claims the employer breached an implied term of his contract of employment, namely, that the employer would in its dealings with the applicant act fairly and in good faith, in that the employer took into account matters not raised with the applicant in making the decision to dismiss each applicant from its employment;
(iii) each applicant claims the employer breached an implied term of the contract of employment, namely, that the respondent would not damage or destroy the relationship of trust and confidence between the parties, without reasonable cause, in that the employer took into account matters not raised with the applicant in making the decision to dismiss from its employment;
(iv) for Messrs Caldwell, Rodney Carroll, Dennis Manuel, Napier and Simmons a claim that the employer breached an implied term of the contract of employment, namely, the employer engaged in conduct likely to destroy or seriously damage the relationship of confidence and trust between the employer and employee, in that there was a failure of the employer to fulfil its rehabilitation obligations;
(v) for Mr Borlace, a claim, pursuant to clauses 41.4.3 and 41.4.4 of the clauses to be read in conjunction with the pension trust deed, for a redundancy payment calculated as a minimum notice of termination of employment on account of redundancy of three months pay (ex R10 tab 2 Appendix 2).
The respondent opposed the applicants’ claims in every respect.
2. BACKGROUND FACTS
The Pasminco group are the only mining operation in Broken Hill. They operate two mines. The companies in the Pasminco Ltd group and their involvement in the Broken Hill mines were shown in Exhibit R23. At the time of the termination of the employment of the applicants, Pasminco Cockle Bay Pty Limited was their employer.
Mining has been undertaken in Broken Hill since 1885 by various companies with leaseholds on the Broken Hill ore body. The mining operations in Broken Hill are now concentrated at the southern end of the ore body. The Potosi mine is on a separate ore body and involves a small open cut operation.
At its peak in 1952, mining at Broken Hill provided employment for 6,477 people. However, since that time the number of employees had declined so that today there is only the Pasminco Ltd group still involved in mining operations, which presently employs approximately 680 employees. The decline in employee numbers can be attributed partly to improvements in technology and a move away from more manually intensive forms of mining. However, the main cause of the decline has been the declining metal content of the ore body.
The decline in the number of employees employed in mining operations at Broken Hill was shown in the statistical data that is in the first part of exhibit R11 "Downsizing Strategies and the Socioeconomic Impact on Broken Hill". Also shown there are details of retrenchments that have occurred from 1986 to 1995. The latter data shows that between 1986 and 1995, in the southern operations, approximately 1,385 employees have been retrenched involuntarily and a further 156 voluntarily. These figures do not include retrenchments at the North Mine which, during 1993, numbered approximately 450.
The length of the life of the mine and the rate of decline in employee numbers are uncertain but depend on the combination of factors that affect the viability of those operations.
In April 1996 a review of the Broken Hill mining operations took place. The review was prompted by a decline in the world price for zinc and lead ore and the declining metal content of the remaining ore body. The graphs annexed to exhibit R14, Mr Edwards' statement, set out the decline in zinc and lead ore prices and grades from 1950. The review concluded that if the operations at Broken Hill were to remain viable beyond the year 2000 its cost structure would need to be reduced and a reorganisation undertaken of both underground and surface operations. (Exhibit R14 para 12).
The restructure and re-organisation effected in 1996 led to further substantial reductions in the workforce. Ninety four employees were retrenched. Of these forty eight accepted voluntary redundancy and forty six were involuntary. Further reductions came about by the cessation of employment of fixed term employees, apprentices not being retained when they completed their apprenticeship and by transfers.
3. INDUSTRIAL REGULATION AND ITS EFFECT ON THE CLAIMS
The industrial regulation is relevant here in relation to two aspects of the claims. Firstly, whether the applicants have been paid their proper entitlements and the respondent has met the obligations in the terms of the Agreements and secondly, the extent to which the applicants common law claims are limited because of the existence of those agreements.The industrial regulation of employment conditions in the Broken Hill mines is by way of industrial agreements between the mining companies and the Barrier Industrial Council (BIC), the peak trade union body in Broken Hill and its affiliated unions. The parties bound by the industrial agreements have by consent submitted to the jurisdiction of the Industrial Relations Commission of New South Wales (and its predecessor) for matters or disputes arising under the agreement.
Mr E Butcher, President of the BIC gave evidence that since about 1995 there have been 5 categories employed at the mining operations, namely, daily paid employees (or in other words mines agreement employees), single status contract employees, staff, Pasminco Exploration employees and contractors. It is apparent from the evidence of the respondent’s witnesses that the respondent had created a closed shop at Potosi for single status contract employees.
In the 1990’s, changes to the historical position in Broken Hill occurred as a result of the NSW Industrial Relations Act 1991 effectively prohibiting closed shops, Pasminco’s increasing use of contractors in its Broken Hill mining operations and also due to the introduction of single status contracts by Pasminco.
The manner of regulation of industrial affairs and employment conditions in Broken Hill is unusual in Australia, if not unique.
The Pasminco Mining - Broken Hill Agreement 1993 is, for present purposes, the relevant agreement (Exhibit R2). It had a nominal term of 8 May 1993 to 1 May 1996 but continued in operation after that date until varied or replaced. That agreement, "the 1993 Mine Agreement", is properly regarded as the latest in the long and consistent history of collective industrial agreements regulating industrial affairs and employment conditions in Broken Hill. Cahill VP of the NSW Industrial Relations Commission, in his judgment dated 22 April 1993, determined a number of issues that were submitted for determination in connection with the making of the 1993 Mine Agreement. His Honour says in that judgment:
"The present agreement is described as an "enterprise agreement", but it is not an enterprise agreement having regard to the provision of the Industrial Arbitration Act 1940 or the Industrial Relations Act 1991. Traditionally, agreements as to wages and working conditions between mining companies and unions at Broken Hill have been common law agreements and have not been filed or registered in accordance with those Acts. The present agreement has followed that course, as will any new agreement to be made between the parties arising out the present proceeding."
Mr E Butcher and each of the applicants accepted in their oral evidence that employment condition of employees in the Broken Hill mines have been and are governed by the Broken Hill mines agreements and that, to their knowledge and understanding has been the custom throughout the time they have been employed or involved in industrial affairs in Broken Hill.
The respondent argued that the application of the 1993 Mine Agreement to all of the applicants other than Mr Manuel is not diminished or qualified because Pasminco is not specifically named as one of the parties to the agreement. On its face it was intended to and does apply to employees of the "Pasminco Limited Group" in its operations in Broken Hill. It would not be open to the respondent, Pasminco as employer of the employees to deny that it is bound by that agreement because it is not specifically named as a party.
There are three essential instruments governing the redundancy arrangements and benefits for the respondent's employees, they are:
• The Agreement Concerning Clauses To Be Read In Conjunction With Pension Fund Trust Deed (Exhibit R10 - tab 2), (“The Additional Clauses”),
• Broken Hill Mine Employees Pension Fund Trust Deed - Part D (Exhibit R10 - tab 1 and 3), (“the Pension Fund”),
• The 1992 agreed retrenchment strategy. This is contained in a document the full title of which is "Minimising the Impact of Redundancy and Retrenchment the Proposed Strategy Between Pasminco Mining Broken Hill and the Barrier Industrial Council "the agreed retrenchment strategy".The respondent contended that the applicants are bound by the series of agreements (apart from Mr Manuel) and they were applicable to them at the time they were retrenched.
Pasminco relied on the following contentions to support its submission:
• Clause 1.3 of the 1993 Mines Agreement (Exhibit R2) binds Pasminco "to the conditions that have been agreed to by the parties, and recorded through correspondence or in the minutes of conferences".
• The minutes and correspondence attached to The Additional Clauses record a resolution by the BIC to accept the final offer from the Broken Hill Mining Managers Association. That final offer is set out in the correspondence.
• It appears to be common ground that the applicants, apart from Mr Manuel, were at the time of their retrenchment members of the Pension Fund and Part D of the Pension Fund sets out retrenchment benefits afforded as a distinct benefit for retrenched members.
• The agreed retrenchment strategy was agreed to by the parties and recorded in correspondence. (Exhibit R12 and A60)It is evident that the BIC and the unions and Pasminco have regarded themselves as bound by, and employees entitled to the provisions of, Part D of the Pension Fund and The Additional Clauses. This is clear from the fact that the unions have made claims concerning the benefits provided under these instruments and have had those claims determined by the NSW Industrial Relations Commission. The Judgments of Cahill VP dated 10 April 1992 (Exhibit R9 tab 5) and 29 March 1996 (Exhibit R9 tab 9)illustrate this. The latter judgment was given approximately 4 months before the applicants were retrenched.
It became evident that there are in existence two variations of the agreed retrenchment strategy; namely one marked November 1992 and the other December 1992. The November 1992 variation was forwarded to Cahill VP under cover of a letter dated 17 March 1992 and, on Mr Edwards’ evidence, acknowledged. The letter to Cahill VP indicating that the agreed retrenchment strategy had been agreed to was signed by Mr Leonard as Secretary for the BIC. It is evident that the Pasminco has been acting on the December 1992 version.
Whatever the explanation, the November 1992, version was incorrectly sent to Cahill VP and the December 1992 version contains the final agreed terms. Mr Butcher could cast no other light on the confusion. He stated that he could not remember negotiation of the agreed retrenchment strategy or the document itself.
For the purposes of the present case, it is not necessary to resolve finally which version contains the actual agreement. I accept the argument of the respondent that for material purposes, the substance of the two documents is the same. The Company reasonably fulfilled its obligations insofar as monetary provisions were concerned regardless of which version is the correct one.
The 1993-96 Mines Agreement does not contain any relevant clause concerning redundancy or retrenchment, other than Section 29 ‘Seniority 29.1 Seniority in the sense of an absolute rule of “first on last off” does not apply under this agreement, although any Union has the right to present the case of any employee who is considered to have been unjustly treated. 29.2 When retrenchments occur, the Company has the right to discharge according to ability for the particular job, but in cases where there is equality with regard to ability, then seniority will be observed.’ In my view Section 29.2 does not override the respondent’s obligation pursuant to Section 170 DC of the Act.
Cahill VP, on the application of the unions, reviewed the redundancy benefits in Part D of the Pension Fund with a clear appreciation and reliance on the other benefits afforded to retrenched employees. His Judgment of 29 March 1996 at page 10 (Exhibit R9 - Tab 9) states:
"Comparisons of benefits under the scales are difficult to make, but, as a generalisation, it may be said that the benefits provided by Part D seem to be superior particularly in regard to employees with relatively lengthy periods of service, and also taking into account the 3 months pay in lieu of notice benefit as contrasted with a maximum of 5 weeks notice or pay in lieu of notice provided by what appears to be the relevant provisions of the redundancy award".
The respondent submitted that the Court should give very substantial weight to the fact that the redundancy benefits and associated arrangements applicable to the applicants had been thoroughly considered and ruled upon by Cahill VP who, it is evident, has had a long and close familiarity with industrial affairs and employment conditions in Broken Hill.
In my view the applicants could not give away their statutory rights under this Act and while the pension fund payments may have some relevance to the assessment of compensation they cannot exclude the applicants from pursuing these claims.
I am satisfied that agreement existed which bound the applicants and prevented them from pursuing common law claims. That is certainly the case in relation to Mr Manuel and Mr Borlace, in so far as the other applicants are concerned, although there was haphazard communication and the redundancy strategy was sloppily managed they are sufficient to be regarded as agreement which prevents the applicants from pursuing common law claims.
On the evidence before me the Respondent has not made any real attempt to comply with the agreement by notifying the unions and employees as soon as possible or providing them with the required information referred to in the 1992 redundancy strategy. Indeed it seems the conduct of the respondent was by design intended to take the unions and employees by surprise.
In my view the pension benefits are a matter that ought not be taken into account here, because they are benefits that each applicant would be likely to receive in the future because of the likelihood of retrenchments in the future of the mine.
4. THE APPLICANTS’ EVIDENCE
WAYNE MALCOLM CALDWELL
Mr Caldwell is aged 39 years. He seeks reinstatement in some suitable light duties position. Originally he worked as a miner. He had broken service. He had about 8 years service both times. At the time of termination of his employment he was working in the laundry as a result of the injuries he sustained in a mine accident. He gave evidence that when he was offered the position in the laundry he was told by the Human Resources manager, Mr Paul Edwards that he would have ‘a job for life’ if he took the position. He gave evidence that he has suffered psychological problems since the termination of his employment. He experienced suicidal feelings after the termination of his employment for about 8 to ten days. He was not told that his skills or performance were taken into account in deciding whether he would be made redundant.He claimed that the respondent had failed to rehabilitate him. He was told that the laundry function was to be contracted out to Tempo, a company that performed contract cleaning. Later the cleaning work was put out to tender and he unsuccessfully tendered for the work. He had understood that the laundry would be there until the mine closed. At the time of the termination of his employment he had been absent from work from 1 May 1996 because of a dermatitis condition caused by detergents in the laundry. He has been in receipt of weekly payments of workers compensation since the termination of his employment.
He was placed on a list of excess employees that was given to Mr Mitchell. Mr Mitchell admitted in cross examination that he had not considered Mr Caldwell for any position. It was apparent from the evidence of Mr Edwards that Mr Caldwell was dismissed because of his physical restrictions as a result of injuries. He was never told that this was the reason at the time his employment was terminated and never given an opportunity to respond.
Mr Caldwell was a credible witness. The offer of the work in the laundry was a matter of a great deal more importance to him than to Mr Edwards. I have preferred his evidence to that of Mr Edwards because it seems to me to be more likely that his recollection would be more accurate than Mr Edwards because of the importance of that information to him.
PAUL DOUGLAS CARROLL
Mr Paul Carroll is aged 40 years. He was employed by the respondent for 16 years. He seeks reinstatement. He wanted to work until he was 55. At the time of the termination of his employment Mr Carroll’s position was that of crusher operator. In 1984 he suffered an injury at work when he twisted his spine. He gave evidence that he went to the meetings, he was able to recall Mr Smith giving a talk in Marble Arch. He could not recall any mention of forced redundancies at that talk.He believed that he could not be in the union and at the same time have a single status contract. He had never spoken to Mr Fletcher who had made the decision to terminate his employment. He gave evidence that he was disappointed and angry about the termination of his employment.
He had attended union meetings about the Mines Agreement. He could recall that there were 200-300 people at the meeting. He did not vote for the agreement. He had never seen the 1992 redundancy and retrenchment strategy and he did not regard as dealing with his employment He had never signed anything agreeing to be bound by the Mines Agreement.
He had sent a letter asking why he was dismissed. He received a response that said he was not eligible for the restructure. He did not go and talk to his supervisors because he did not know anyone who had a review and got their jobs back since 1986.
Mr Fletcher’s affidavit stated that he did not have sufficient skills. He was never told him what the insufficient skills were before or after the termination of his employment. He believed that he was selected because he fell out with his immediate foreman, Noel Hannigan. He gave evidence that Mr Fletcher could not have known who he was to say that he had no experience as a platman because he had performed plat duties until 1995.
There was some evidence concerning his unwillingness to perform a wide range of duties but this was vague. He gave evidence that Mr Hannigan had complained about his attitude but not about his work. He believed he was more experienced than most of the mine workers. He had made numerous attempts to find work, but had been unsuccessful.
RODNEY CHARLES CARROLL
Mr Rodney Carroll is aged 38. He was employed by the respondent as a miner for 15 years. He suffered an injury to his back. when he was thrown from a drill rig. Mr Carroll seeks reinstatement. At the time of the termination of his employment he was working in the Laundry. He was told there was a restructuring and the laundry was to be put out to tender.He took out a large mortgage shortly before the termination of his employment. His house was not finished and he expected to lose $30,000. He had undertaken a MOTS course so that he could teach others. He believed that there was nothing he could not do.
He was aware of the Mining Agreement . He went to most meetings. Mr Smith conducted the talks. He was never told that there were to be forced redundancies.
He had experience doing cable dowelling, mining, shotcreting, bricklaying and was in sand fill for about 2 years. He did operate an 8 yard loader for a few months. He drove dump truck occasionally. He had worked as a development miner which was regarded as the most skilled mining work, but he was not considered for any other mining work. His employment was terminated by Mr Boyce, he was never told he was not equal to the others in development mining and he was given no opportunity to respond.
At the time of the hearing Mr Carroll continued to be in receipt of weekly payments of workers compensation
Mr McMurdo, psychiatrist, held the opinion that he was unfit for work at the time of the hearing because of depression and anxiety caused by his sudden dismissal from work.
NEVILLE DAVID DENNIS
Mr Dennis is aged 39. He was a fitter specialising in the repair of skips and cages in the workshop. He was a member of the AMWU. He refused to sign a single status contract. He was therefore excluded from doing overtime as a dump truck operator driving at Potosi, where only employees who were single status contracts were permitted to work. He gave evidence that other employees who had signed single status contracts and who worked in his area were given dump truck duties at Potosi.Mr Dennis raised two matters in relation to the validity of the reason s for his termination of employment Firstly his supervisor, Mr Gilby, who was identified by Mr Mitchell as being involved in the selection process for Mr Dennis, disliked Mr Dennis. Only during the cross examination of Mr Mitchell was it revealed that Mr Gilby had ranked Mr Dennis last. Mr Mitchell gave evidence that he was unaware of any ill-feeling between Mr Gilby and Mr Dennis.
Secondly Mr Dennis had never been given the opportunity to obtain dump truck skills because he was not allowed to do overtime at Potosi because he was not on a single status contract.
Neither Mr Gilby nor any other supervisor was called to give evidence. Mr Dennis was able to point to another employee Mr Reid, who did not have his qualifications or experience. Mr Mitchell’s evidence in cross examination regarding the comparable skill levels of the two men was unconvincing.
The respondent’s evidence was that he was selected for retrenchment because he had fewer skills than other fitters. One of the factors that was taken into account was that he was unable to drive a dump truck. There was never any discussion with him about his skills or his ability to do the duties underground. There was no consultation with him.
It is my view that Mr Dennis was dismissed indirectly because of his participation in union activities and that the termination of his employment was in breach of Section 170DF of the Act. Mr Dennis’ union activities resulted in him being denied the opportunity to do work at Potosi and therefore reduced his value to the respondent. When the respondent proceeded to apply the selection criteria that it had chosen to select employees for redundancy Mr Dennis was placed in a disadvantaged position compared to the pool of employees from which he was selected.
Mr Dennis’ evidence about seeking reinstatement was ambivalent. He has found some alternative employment and his trade is one which is in high demand according to the evidence of Ms Barclay.
KOSGMAS DIAMANTES
Mr Diamantes seeks compensation. He does not seek reinstatement. He was employed for 31 years at the mine. He is aged 56 years. At the time of the termination of his employment he was employed doing water filling and sand filling.He gave evidence that in May 1993 he attended a union meeting and voted against the agreement. He believed that the majority voted for it. He had never seen the 1992 redundancy Strategy and never attended any meeting about it.
He did not recall attending a meeting where Mr I K Smith spoke. He said that after 31 years he felt like the respondent had vomited on him. No one had discussed anything with him about his skills or attitude.
He believed his employment had been terminated because he was too old and a member of the union. He did not seek a review because employees who had sought reviews in 1992 had been unsuccessful. He was the only one made redundant out of his panel. He was not told there was a comparison of him and another employee called Lehman.
Mr Fletcher gave evidence that Mr Diamantes was rated behind the 16 sandfillers who were to be retained and that he did not have other skills. Mr Diamantes was given no opportunity to respond.
GEORGE JOHNSON
Mr Johnson is aged 56 years. He did not attend high school. He had 6 years service with the Respondent. Earlier in his life he had 10 years additional service. Previously he had worked as a shearer. At the time of the termination of his employment he was a loader driver. He made many complaints about safety about draw points. He was known as ‘Magic Johnson’. He asked for but was not given a single status contract.He had experienced flashbacks following the death of a friend whom he had to dig out after a mining accident. The flashbacks worsened after the termination of his employment. He had worked six shifts each week as a way of coping with the death.
He could recall attending a meeting with Mr Smith and he did not mention forced redundancies. He wrote requesting reasons after he was advised of the termination of his employment. He believed his tonnage was high. He had no time off in 8 years.
Mr Fletcher gave evidence that he did not regard Mr Johnson as a versatile worker nor as one of the top 36 miners competing for the positions as a loader driver. He had apparently been placed on a list of loader drivers to be retained by his supervisor but had been removed from the list at some later stage. Whilst Mr Johnson believed that he had been dismissed as a result of his activism about safety for loader drivers and his age, the evidence is insufficient for such a finding. It is quite clear however that no justifiable reason existed for the termination of Mr Johnson’s employment.
He could not recall voting on the Mines agreement in 1992. He had not seen the 1992 Redundancy strategy before or agreed to be bound by it. He has been unable to find alternative employment. He cannot afford to relocate because of the cost compared to what he would get for his home. His defacto relationship broke down in early 1997 after nine and a half years. He believed the relationship broke down because of the termination of his employment. He has suffered depression since the termination of his employment.
Mr. McMurdo whose report was tendered by consent has diagnosed the applicant as suffering from a major depressive disorder almost certainly as a result of his dismissal, and made worse by his excessive consumption of alcohol. Mr McMurdo expressed the view that it may be extremely hard for him to re-enter the workforce in any capacity and he presents as an individual who is quite conscientious and needs to be working or doing something of value. Mr McMurdo stated that "it is doubtful whether [Mr Johnson] could stop his present drinking pattern without medical intervention. It would have been preferable if he had been prepared for his dismissal and given an opportunity to make alternative plans rather than to be suddenly made redundant and useless.”
PETER JON McDONALD
Mr McDonald is aged 44 years. He seeks compensation. He does not want to be reinstated. He had a total of 16 years of service but that was broken service. He had no knowledge of any meetings with the union. He could recall being down the back at a meeting at which Mr I K Smith attended but he had not heard anything about forced redundancies He had not signed any agreements. He did not know about single status contracts.
On Friday 19 July 21 he was working on the rock breaker when he was told to report to Brett Fletcher in the front of the office Mr Fletcher told him that a decision had been made and that due to the restructure of the mine the position of rock breaker was no longer required. No one discussed his qualifications with him. He has suffers from arthritis for the last eight years. He required daily medication and needed to get up earlier in the morning so that he was able to move around sufficiently to do his work. Mr Boyce gave evidence that since Mr McDonald’s redundancy a worker is usually rostered on to perform the job of rockbreaker.
He believed that he was sacked because of his arthritis. He has had no success obtaining alternative employment. He was never offered an opportunity to retrain. He was not consulted about his performance at work. He was limited in the functions he could perform because of his arthritis. He is now receiving an invalid pension.
DENNIS RICHARD MANUEL
Mr Manuel was a tradesman and boilermaker. He is aged 44 years. He had 27 years experience in the Broken Hill mines including both underground and surface work. He was an impressive and straight forward witness. He seeks reinstatement. He has been in receipt of weekly payments of workers compensation since the termination of his employment. He was the only applicant who at the time of the termination of his employment was engaged on a single status contract.The respondent decided to eliminate one of the supervisory positions. Mr Manual did not have any opportunity to discuss the decision to terminate his employment before he was notified by Mr Burgess of the termination of his employment on 19 July 1996. His duties included organising the subcontracting.
He was not considered for one of the operator positions, even though he would be expected to slowly improve as his disc injury healed.
MARK GREGORY NAPIER
Mr Napier is aged 30 years. He seeks reinstatement. He was employed by the respondent as a developmental miner. He had been a leading hand for 2-3 years. He had 7 years service. He had suffered a knee injury at work. He had not accepted a single status contract because he thought he would have more job security if he had stayed in the union.
He had no approach from the company regarding his rehabilitation. The reason given to him for the termination of his employment was that he did not fit into the plan and his skills were not up to scratch. He believed that he had been dismissed because of a ‘run in’ he had with Mr Butcher, his supervisor, who was not called to give evidence and because of his injury. It was apparent from the evidence that his name was removed from the list of employees to be retained at sometime between 6 July and 19 July. The respondent witnesses were unable to give a reasonable explanation of why this was so.
In a meeting with Mr I K Smith he was told ‘if I don’t hear any more I’ll tell you another reason’. Mr Smith did not tell him another reason. He kept pestering Mr Smith and Mr Smith would say ‘economic reasons.’
His experience included training others for their tickets. He attended some union meetings but could not remember a redundancy strategy. He had never signed anything to say he would be bound by an agreement.
During the hearing the applicant was seen by an orthopaedic surgeon, Dr Roger Patterson. The applicant gave evidence that Dr Patterson had cleared him to return to light duties driving trucks and loaders on the surface
RONALD JAMES PARKER
Mr Parker is aged 59 years. He had 40 years service with the respondent. At the time of the termination of his employment he was a dump truck driver. Since the hearing in this matter concluded the Court has been advised by the solicitors for the applicant that he does not seek reinstatement.Mr Parker had lived in Broken Hill since he was a toddler. He has continued to receive weekly payments of workers compensation since the termination of his employment. He was told ‘there has been a restructure and there is not a job for you’. He had no idea that a comparison of skills had taken place. He regarded the retirement age as usually 62.
He attended a meeting at which Mr Smith spoke on about 17 May 1996. He could recall him mentioning voluntary redundancies. To the applicant’s knowledge nothing was said about non voluntary redundancies. In May 1993 he attended a mass meeting at Jubilee oval. He believed that the mining agreement before that had been terminated. He recalled no vote and had not signed anything. He was to have an operation next month. He had received no contact about rehabilitation. Liability had been accepted for his workers compensation claim.
Mr Fletcher affidavit evidence stated that Mr Parker was selected for retrenchment because he did not possess any skills other than dump truck driving and that those selected did possess other skills. However he modified that evidence in his evidence in chief.
He had other experience in the mine including sand filling with the current equipment, shotcreting as a offsider. He gave evidence that he knew a lot about working underground through being underground.
There had been no consultation with him and no discussion about other skills he may have possessed.
RONALD JOHN SIMMONS
Mr Simmons is aged 52 years. He worked in the lamp room since being injured at work. He would return to work if reinstated but, believed he would be treated unfairly were he to return to work. His duties are now performed by the Ambulance officers. He was not consulted with as he was absent in Adelaide at the relevant time. He expected to work until he was 55 years.Mr Mitchell was the manager responsible for the area that Mr Simmons worked in. Mr Mitchell decided that the department did not require an employee dedicated to performing the duties of lamproom attendant. The position was made redundant and the duties were split up between other positions. Mr Mitchell also gave evidence that when Mr Simmons was compared to other employees he did not have the same skills and qualifications and he was not as versatile. None of this was ever put to Mr Simmons.
Mr Simmons felt shocked and humiliated when his employment was terminated. He experienced some physical symptoms, he believed as a result of the termination of his employment. His evidence concerning his desire to be reinstated was ambivalent.
PAUL THOMAS BORLACE
Mr Borlace is aged 33 years. His situation is different from the other applicants. His employment was terminated on 12 July 1996. He was employed under a series of eight rolling fixed term three month contracts from 13 July 1993 as a mine worker grade 3. There were three gaps in his contracts during which he continued to work at the Pasminco group mining operations without a contract.He said in cross examination there was no negotiation with the employer over the terms of the contracts and if you wanted to work you had to sign contracts.
Mr Borlace's engagement as a fixed term contract employee was pursuant to clause 2.3 of the Mine Agreement which provides:
"Employees may be employed on daily hire at the applicable graded wage rate plus lead bonus for specific tasks or projects or fixed term work assignments not exceeding 3 years duration. However, employees engaged pursuant to this provision will be entitled to retrenchment benefit provided by Part "D" of the Broken Hill Mine Employees Pension Fund Trust Deed upon completion of the contract of employment after 12 months continuous service."On 28 May 1996 Mr Borlace was offered and he accepted a further fixed term contract of employment which was expressed to operate until Friday, 12 July 1996. Mr Borlace was subsequently advised by letter dated 5 July 1996 (annexure "J" to Exhibit R18) that following a review of the Company's operations his contract of employment would not be renewed and that his contract completion date would be 12 July 1996, the expiration of the term of his current contract of employment.
Mr Borlace understood the terms on which he was offered and accepted the fixed term contracts of employment. The issue of whether the contracts were for a fixed term and not for continuing permanent employment were raised during discussions between Mr Borlace and Mr Edwards when he was offered a permanent contract with the Company in or about August 1995 as a single status employee, he refused to sign a single status contract because he believed it would mean he could not remain in the union.
The fact that in August 1995 Mr Edwards had told the applicant that he would become permanent if he agreed to sign a single status agreement cannot alter the fact that at the time Mr Borlace’s employment ended it did so because the fixed term contract concluded.
Each of the contracts, following the initial contract is described as an extension of the contract and sets out the reason or justification for the contracts. In the decision of Von Doussa J in D’Ortenzia v Telstra dated 11 December 1997, his honour regarded the applicant in that case as accepting the offer of an extension of her fixed term employment by continuing to work after the expiry of the earlier nominated period. At page 16 of the unreported judgment he says “Although the contract was on three occasions extended, on each occasion the effect of the extension was to extend the term of the employment to a new fixed date. As extended, on each occasion the contract continued to be a fixed term contract.”
Mr Borlace argued that the nature of the employment was appropriate for indeterminate duration and that he had no say in the terms of the agreement. In my view there is no evidence on which I could make a finding that the nature of the employment was appropriate for indeterminate duration and it seems to have been an accepted practice having regard to the Mines Agreement. It is not clear to me how the say that an employee has in an agreement can have any relevance to the matter.
The respondent submitted that Mr Borlace is excluded from the operation of the provisions of the Workplace Relations Act dealing with termination of employment pursuant to section 170CC and regulation 30B(1)(a) or, alternatively, Regulation 30B(1)(aa) in that he was engaged under a contract of employment for a specified period of time.
Mr Borlace argued that the respondent discriminated against him because other fixed term employees continued to be employed. It seems to me that the respondent had no choice in the matter. It could not offer permanent employment to a fixed term employee at a time that it was retrenching permanent employees and at the same time the mines agreement did not permit a fixed term employee from being employed beyond three years.
In my view Mr Borlace is excluded from the operation of sub-divisions B, C, D and D of Division 3 of Part VIA of the Act. His claim for unlawful termination of employment must therefore fail.
Mr Borlace also claimed that he was entitled to increased redundancy pay in the Court’s associated jurisdiction. However it seems to me that Mr Borlace’s entitlements are limited at paragraph 2.3 of the Mines Agreement.
5. RESPONDENT’S EVIDENCE
MR EDWARDS
Mr Edwards gave the most detailed evidence for the respondent. He is the group manager of Employee Relations for the respondent. He reported to the general manager of the respondent who was at the time Mr I K Smith. H e gave evidence of his involvement prior to 1996. He was involved with earlier redundancies as manager and industrial relations officer from the end of 1986. He was aware of the socio economic impact on Broken Hill following the 1993 closure of the North Mine. He was involved in the 1994 & 1995 voluntary redundancies.He gave evidence about the declining ore content in the mines and the restructure of the respondent’s operations. He gave evidence about the number of employees covered by the Mines Agreement, single status contracts and staff contracts.
He attended a meeting in Mr I K Smith’s office prior to the retrenchments taking place. Mr Smith had concerns about the economic indicators. A fairly major restructure was discussed. He asked the unions if they were prepared to postpone the agreement. The unions all commented that they had concerns. He said that it was best to put it to the unions that the negotiations be postponed in the event that any employees were to lose their jobs. The meeting was in the nature of a private chat. He could not recall the exact words he thought that the word ‘downsize’ had been used near the end of the meeting. The unions asked how it might take place. Mr Smith undertook to update them and on that basis the unions agreed to postpone the negotiations for the new agreement.
He gave evidence about the previous retrenchments and people stopping him in the street, being asked who would be involved and how no body was spending money at that time. The respondent identified as essential contracting out the gardening and laundry service which had been done in house. A decision was made about contracting out of ancillary and non core functions. As well there was a decision to not renew fixed term contracts.
From 16 May 1996 forty-eight workers accepted voluntary redundancy. After that 46 positions remained right across the entire operations. He spoke to the managers and went through the requirements that they must not to consider such as race and physical disability ability. He did not mention counselling them against subjectivity in their decisions.
At a meeting in the general manager’s office of all the managers he then discussed the matters they were to consider he talked about individual skills, as they were applied on a day to day basis. He gave evidence that there was a lengthy debate about the long repertoire of skills some workers had but those skills were now redundant and they had to look at the skills that would be relevant. He did not keep any notes and was not aware of anyone else keeping notes.
A list of names was presented to Mr Smith completed on 2 June 1996. A list including all voluntary redundancies and fixed term as well as all of the details and names and numbers was conveyed on 19 July. It was spelled out that 9 August was the implementation date.
There were minutes of the meeting on 19 July. He spoke with the Commonwealth employment Service and Fay Joyce from Life Line. The list was finalised once Melbourne had approved it.
Single Status
He gave evidence that single status contracts had commenced with the surface earth works department who were dissatisfied with their arrangements. They put forward the concept.
It was in early 1994. They had approaches from Potosi mine where all sought and accepted single status contracts. This was followed by stores. They decided it was fair to offer it to the entire workforce on a voluntary basis 98 employees accepted single status. He addressed many meetings and spoke predominantly to the mines agreement /union membership not a pre requisite He told the employees it was a better system of employmentThe laundry was discussed in 1993 negotiations for the industrial agreement. The company opposed that claim and that was agreed to by Commissioner Cahill. There were some concerns with lead contamination. The laundry was a lighter type of job. He was involved in the final selection of workers for the laundry. He asked Mr Caldwell if he would be interested. He told him it was permanent and he would be full time in that role. He was unable to recall saying that it was a ‘job for life’.He regarded “permanent” as different from ‘a job for life’.
He said there was no request from Mr Butcher to be involved in any restructure.
At the end of a negotiation in 1994 the then general manager Mr Dini had said any rationalising would take place through natural attrition and voluntary redundancies. On 28 June 1996 the tax exemption ended for bona fide redundancies. The management team was selected on 10 May, although it may have been selected before that. On 4 June 1996 toolbox meetings took place. The unions were not formally notified prior to 19 July 1996 when the applicants were told that their employment was being terminated. There was no consultation with the employees and there was no consultation with the relevant unions.
In the standard letter that the applicants received there was no reference to an appeal process.
The applicants were given no opportunity to discuss the termination of their employment prior to or at the time of their dismissal on 19 July 1996.Mr Caldwell was not considered for jobs he could not do. Mr R Carroll was trying to return to his normal job. Caldwell was originally displaced from the laundry
Sabotage was not an issue and not a consideration in deciding not to give the applicants the opportunity to respond.
Mr Edwards had access to the Lansbury Report, a substantial document that had examined the processes in previous redundancies and made recommendations on how the company should proceed in the future. As well the direction of Cahill VP set out below was well known. While Mr Edwards took steps to ensure that appropriate services were available for the employees in the community, the steps that the respondent ought to have taken were largely ignored.
Re Broken Hill Barrier Industrial Council and Ors; Re Dispute with Pasminco Mining, Cahill VP, 10 April 1992
‘in future situations of this nature I am very much of the opinion that the company should seriously attempt to advise at the outset the projected total number of employees to be involved and that the retrenchment programme should proceed over a more extensive time span, with more time given to employees to consider and make up their minds as to whether they should volunteer to accept voluntary retrenchment.’‘the employer must be scrupulously fair in ensuring that inappropriate considerations do not influence the processes of selection’
6. WAS THERE A VALID REASON FOR THE TERMINATION OF THE EMPLOYMENT OF THE APPLICANTS? :S170DE(1) - THE LAW
The recent Full Federal Court decision in Cosco Holdings Pty Ltd V Thu Thi Van Do, 4 December 1997 has overruled Nettlefold v Kym Smoker Pty Ltd (1996) 69 IR 370, Kerr v Jaroma Pty Ltd (1996)70 IR 469 and Westen v Union des Assurances de Paris, 17 December 1996 Madgwick J, to the extent that those decisions give a wider meaning to the word “valid”. The majority in Cosco regarded their decision as consistent with the Full Court in Kenefick v Australian Submarine Corporation Pty Ltd. (No 2 ) (1996) 65 IR 366. They refer to the Full Court in Kenefick holding that there were two operative reasons for the termination of the appellants’ employment. However the minority judgment of Northrop J goes further and at page 22 says “The valid reason must be based on the operational requirements of the employer, but this requirement does not impose an obligation on the employer to investigate the personal circumstances of all employees likely to be affected by the operational requirements. The Act does not prescribe any criterion to be considered by the employer.” He goes on to say at page 31 of his judgment “It is difficult to conclude that in a redundancy situation like the present, the employer is required to search out and consider the effect on all the members of its production workforce before determining which employees are to be terminated.”The argument put on behalf of the applicants here is different from the situation in Cosco. Indeed it seems to me that the facts as they were before the Full Court in Cosco were very unusual. It is a rare case that involves no proof about why individual employees are dismissed. The fact that a decision is made to reduce the size of a workforce does not logically mean that any particular employee will be dismissed. What it almost invariably means is that an employer will have to make a decision as to which employees will be dismissed. It seems to me for an employer to demonstrate that it has a valid reason based on its operational requirements, it must be able to show that it has not selected the employees because they were disliked by a supervisor or for some other unsound reason.
I am not satisfied on the evidence before me that the respondent used objective selection criteria and that the selection criteria were then objectively applied to its workforce.
THE FINANCIAL POSITION OF THE RESPONDENT
During the course of the hearing I understood the applicants to be arguing that because the broad based mining operation that the respondent belonged to was financially successful there was no need for the termination of the employment of any applicant. The argument was not pursued in the final submissions of the applicants.It is clear from decisions such as Quality Bakers of Australia v Goulding (1995) 60 IR 371 that employers are not required to demonstrate a “need” in order to satisfy a Court that they have a valid reason for the termination of an employee’s employment based on the operational requirements of the undertaking. Employers seeking to maximise their profits by reducing the number of employees is widely regarded in our society now as acceptable business practice. “Practices and attitudes in industry change with time and new norms of acceptable industrial relations behaviour will emerge.” - Williams v Compair Maxam{1982}ICR 156
7. THE SELECTION PROCESS
The first step of the selection process involved a restructure of management to form a new management team. Each manager would be responsible for each discrete part of the mine's operations. The operations at the mine were separately identified as Mine Design, Production, Metallurgy, Engineering, Finance and services and Human Resources.The management team apparently decided that, in order for the mine to remain viable and make profits until the next century, it would be necessary to determine an organisational structure and cost base that could achieve a production output of 2.7 million tonnes of lead and zinc ore per annum.
Planned changes that were identified as essential to the future operation of the mine were, the introduction of 7 day operations, a review of the use of contractors, moving to a more functionalised system of work, implementation of annual salaries for all employees, the relocation of the north mine workshops to the main area of the mine and contracting out of non core activities such as gardening, oval maintenance and laundry services and the introduction of 12 hour shifts for all employees working underground.
(See Exhibit R14 para 15-23)The respondent asserted that the criteria used in selecting employees varied depending on the particular positions available. Generally, the standard criteria adopted by each of the managers included individual skills possessed, skills applied on a day to day basis, overall performance of duties; and ability to work flexibly in line with the changes required under the new structure.
The selection process was undertaken over an extended period from about the beginning of June until just before 19 July 1996. There were extensive discussions between the managers primarily involved in the selection and their subordinate staff and the General Manager.There was continuing revision and adjustment of the selection of employees throughout the extended selection period. It resulted in a number of employees who had not initially been selected in one of the available positions being selected and displacing other employees who initially had been selected.
There was evidence from each of the managers primarily concerned with the selections made. The evidence of each of the managers who was responsible for the selection of each of the applicants lacked the kind of detailed knowledge I would expect from a manager who had engaged in a sound comparison of employees.
For example it is hard to imagine what consideration was really given to employees who were not currently under the supervision of the manager. The evidence of some of the applicants that their immediate supervisors ‘had it in for them’ was not dispelled by the evidence of the managers who had relied in some instances on the opinions of those immediate supervisors without any real knowledge of their own of the applicants.
THE TERMINATION OF THE APPLICANTS EMPLOYMENT
On 19 July 1996 most of the employees before the Court received their notices of termination of their employment in the following terms signed by Mr Smith as “General Manager”, “...a reorganisation of both the underground and surface operations has been completed. Consequently in addition to the voluntary redundancy programme, a number of positions have become redundant, and I regret the Company is unable to place you within the revised operational structure. As a result you are included in the Selective Redundancy Programme as at 9th August 1996.” The applicants argued that the letter made it clear the decision to terminate the employment relationship had already been made as each applicant was told in writing that there was no place for him in the new operational structure. I accept that the submission of the applicants is correct at law.“Unless otherwise notified by your Department Manger, you will not be required to report to work for the remainder of your employment with the company.”
The applicants argued that it should be inferred that the employer intended the termination to take effect immediately upon an employee receiving the notice of termination as the employer did not require the employee to work out the period of notice. On balance I think this is a correct inference to be drawn from the evidence. It was most apparent in relation to Mr Parker who was told to collect his things and get off the lease.
The respondent's managers were instructed as follows “The retrenchments are not part of the voluntary scheme. The retrenchment letter and entitlements is not an offer and is therefore not negotiable”(exhibit a72).
Each applicant was a member of a trade union, other than for Mr Manuel who ceased being a union member from the time he went on to a single status contract on 14 July 1995 (ex A42). The relevant union of the applicants was known by the employer as shown by it being listed as the last column in Addendum 4 of ex A85. In cross-examination, Mr Edwards conceded that it was understood that the relevant union of each applicant, whether it be the CFMEU (through FEDFA) or the AMWU, was registered in both the State and federal industrial jurisdictions.
8. THE DESTRUCTION OF RECORDS
The applicants argued that a number of issues adversely affect the employer’s evidence actually adduced before the Court in the present proceedings. Those issues are as follows:(a) the employer destroyed “irreplaceable” documents, usually by shredding, and such documents were unquestionably relevant to the selection process its senior officers purported to follow and would have provided information about the objectiveness of any selection process;
(b) when documents of the Pasminco group, including Mr Smith’s 16 July 1996 memorandum and other computer records, were belatedly produced from Messrs Boyce and/or Mitchell during the employer’s case, there was a failure by the employer to explain: the differences in the contents of the documents produced; the differences between the contents of the documents and the evidence of its senior officers; the respective dates various versions of a particular document came into existence; and what computer records, if any, were still on the Pasminco group’s system. The belated production was notwithstanding the request for such records by the applicants’ legal representatives pursuant to the procedure agreed between the parties as a result of a preliminary direction’s hearing of this Court.
(c) there are a number of gaps in the employer case as a result of its failure to call material witnesses who were available to be called, namely, Messrs Smith, Toms, Halliday, Plush, P Butcher, Gilby, and Hannigan, and also Ms Hales.
Sections 170 DE and 170 EDA(1), make provision for the employer to carry the onus on matters peculiarly within the knowledge of the employer, the Full Court (per Ryan, Beazley and North JJ) in Kenefick v ASC (No 2) (1996) 65 IR 366 at 375 said:
“Thus, in the present case, the respondent made the decisions concerning the selection of each particular appellant, and determined the basis on which the selection was to be made. The respondent should justify those decisions. To cast on the employee the onus of showing that the basis for the selection has been harsh, unjust or unreasonable would be inconsistent with the apparent intention that this legislation should accord an accessible and inexpensive means by which a dismissed employee can seek a remedy. The consideration derives particular force when it is remembered that often an individual employee will not know why he or she has been selected for retrenchment.”
There can be no dispute that the employer destroyed “irreplaceable” documents, usually by shredding, and such documents were relevant to the selection process its senior officers purported to follow. The documents were all destroyed before the expiration of the employer’s so-called review process on 9 August 1996.
Counsel for the applicant referred to the reasoning of McHugh J in EPA v Caltex Refining Co Pty Ltd (1993) 178 CLR 477 at 554
“Corporate conduct is often complex. Assessment of a corporation’s conduct may only be possible through an examination of its documents (99), this is particularly so when the alleged wrong is committed as a result of the failure of a system set up by a corporation (1). A true understanding of the corporation’s procedures is likely to be gained only through evidence from the corporation itself, particularly from its records. The difficulty in obtaining independent evidence against corporations is sometimes exacerbated by the inability to identify a victim of corporate behaviour who can testify. Often, the victim is an ‘amorphous entity such as a market’ (2). Furthermore, corporations are often well equipped to cover up their activities and to fund their defences. (3)”
On the evidence before me I am satisfied that the best evidence of the employer’s selection process was destroyed. Most of the managers admitted they had no contemporaneous notes to assist their recollections, they only retained a general, rather than specific, recollection of an applicant’s individual selection for redundancy. Whilst the motive of any individual manager of the employer in destroying documents may well have been innocent or naive, the result was that the selection process must be viewed with doubt. When considered with those incomplete records, which came to light part way through the hearing, I am not satisfied that the respondent has satisfied the onus of proof in relation to the validity of the selection process.
It seems to me that a party who destroys evidence or fails to produce the necessary evidence that will prove step, by step, the efficacy of the decision to terminate employment will almost always fail to meet the onus of proof where it is cast upon them, unless they can come to the Court with a reasonable explanation as to why such destruction occurred. In this matter I am not satisfied with the explanation regarding the widespread destruction of notes, records and minutes that must have accompanied the decision making process in this matter.
9. SECTION 170DC CLAIMS
I am satisfied in relation to each of the applicants before me that their employment was terminated for reasons related to their conduct or performance and they were not given an opportunity to respond to the allegation against them.The respondent argued that it could not reasonably be expected to give each employee the opportunity to respond prior to notifying them of their dismissal. Mr Edwards gave evidence of his concern about the impact on the remaining employees and the Broken Hill community if employees were given the opportunity to respond.
The legislation here is not concerned with the effect on the remaining employees or the community. Though I do believe the respondent underestimated the value of a fair and open process in easing the minds of the remaining employees who may think that their job could be next.
10. SECTION 170DF CLAIMS
On the evidence before I am satisfied that there was a breach of Section 170DF in relation to the termination of the employment of Mr Dennis. I am not satisfied on the evidence before me that there was any breach of Section 170DF in relation to any other applicant.11. THE COMMON LAW CLAIMS
The applicants claims for reasonable notice and the other common law claims must fail in view of what I have decided about the existence of the agreements between the parties. If I am wrong in relation to that, it seems to me to be unlikely that such claims would have produced a level of damages above what the applicants will receive in any event.12. FAILURE TO REHABILITATE MESSRS CALDWELL, R CARROLL, MANUEL, NAPIER AND SIMMONS
Some of the applicants claimed damages for alleged failure by Pasminco to fulfil its rehabilitation obligations. I accept the respondent’s submissions in relation to this aspect of the applicants’ claims that I set out here.No authority or precedent supports this claim for damages. Carrigan v Darwin City Council, Von Doussa J is authority for the proposition that failure to fulfil obligations of rehabilitation may lead to a finding that a constructive termination of employment has occurred at the initiative of the employer.
In the present cases there is no substance in the contention that Pasminco has failed in its obligations to its employees to rehabilitate them, in a way that has destroyed trust and confidence between Pasminco as employer and the employees so as to raise a potential liability for damages. Furthermore, there is no evidence of damage on which the Court could rule.
The breach or otherwise of rehabilitation obligations turns on analysis of the relevant post employment legal entitlements. Entitlements after termination of employment arise not from the employment contract but from the relevant statute. Allegations of breach of the relevant statutes are properly matters for the relevant statutory authority. There is no evidence of any claim having been initiated. The lack of any claim being initiated is significant for two reasons. First, it diminishes any genuine apprehension that there is a serious claim that Pasminco has breached it obligations. Secondly, it indicates that the applicants have not sought to mitigate any loss allegedly occasioned by alleged non compliance with the statutory obligations.
13. REMEDY
No circumstances here preclude the applicants who seek reinstatement from being reinstated. A few of the applicants were ambivalent as to whether they sought reinstatement. The ambivalence of their evidence has played an important part in my decision whether or not to reinstate each of the applicants, especially as these applications were heard together and the applicants were mostly present for the evidence of each other.The respondent argued that the applicants ought not be reinstated in the circumstances because of the allegations or imputations of dishonesty, impropriety or incompetence against the managers associated with their retrenchment and the distrust of the employees and resultant ill feeling of the employees against the respondent.
The kind of criticisms of supervisors that occurred in this hearing are no worse than those uttered in tea rooms across the country when employees believe they have been mistreated by their supervisors. It does not breach the employment relationship in my view. In my view once a working relationship is reestablished then ill feeing and distrust will dissipate.
Having regard to the relevant authorities as referred to in the submissions for the applicants, I will order reinstatement of the following employees, Mr Caldwell, Mr R Carroll, Mr P Carroll Mr Napier and Mr Manuel.
For those employees that are reinstated in my view there is no power to award compensation for hurt and distress pursuant to Section 170 EE. Where reinstatement is ordered then the only other orders can relate to continuity of employment and remuneration lost. As well, the decision of the Full Court in Burazin prevents any common law claim for distress.
In relation to each of the applicants for whom I found reinstatement impracticable, I will consider an award of compensation for hurt and distress in relation to the manner of the termination of each of those applicants. In doing so I have had regard to the summary of their evidence in the applicants’ submissions.
In assessing compensation I will not take into account the pension benefits received because it is likely that each of the applicants would be retrenched eventually. However I do take into account that the bleak future of the mines and the relevant contingencies means that on average none of the applicants was likely to be still working in the mine for more than another four years.
I have decided not to order reinstatement in relation to the following applicants either because they did not seek reinstatement or their own evidence concerning the desirability of reinstatement seemed to me to be ambivalent. I have also had regard to the matters raised in Mr McMurdo’s medical report in relation to Mr Johnson.
Section 170 DB requires the respondent to give each of the applicants a requisite period of notice or payment lieu. Each applicant received three weeks payment in lieu of notice. Mr Dennis, Mr Diamantes, Mr Johnson, Mr McDonald, Mr Parker and Mr Simmons are entitled to a payment in lieu of notice of one additional week’s pay pursuant to the provision of Section 170 DB.
The respondent’s supplementary submissions set out, in relation to each of the applicants, the cap in Section 170 EE and the gross weekly remuneration. I have relied on those figures in awarding compensation as follows;
Mr Dennis (cap - $23,166, gross weekly remuneration - $791) had found other temporary employment and has the best chance of finding alternative employment in Ms Barclay’s view. By the time of the trial he had lost over $34,000. It seems to me that if he would have continued to lose income at about the same rate over a further four years his loss would have been in the vicinity of $136,000. In my view Mr Dennis had a 60% chance of being selected for retrenchment in any event. As the amount of his loss would still exceed the cap, I will award the maximum amount of $23,166.
Mr Diamantes (cap - $31,969, gross weekly remuneration - $1,130). had not found any alternative employment by the time of the hearing, his chances of finding alternative employment are low having regard to his level of skill and his age. His loss of income to the date of hearing was approximately $60,000. Over a four year period his loss would be about $240,000 Mr Diamantes had a fairly high chance of being selected for retrenchment s because of his limited skills. In my view Mr Diamantes had a 90% chance of being retrenched. On my calculation the amount he should receive is $24,000. The evidence of his distress at being terminated did not warrant any additional award of compensation.
Mr Johnson (cap $32,000, gross weekly remuneration - $1,315) had been unable to find alternative employment and by the time of the hearing his loss was approximately $64,000. Within the next four years his loss is likely to be in the vicinity of $256,000. In my view he had a 70% chance of being selected for the retrenchment. As the amount of his loss would still exceed the cap, I will award the maximum amount of $32,000.
Mr McDonald (cap - $30,092, gross weekly remuneration - $1,057) has been unable to find alternative employment. By the time of the hearing his loss was approximately $60,000. Within the next four years his loss is likely to be in the vicinity of $240,000. In my view he had a 70% chance of being selected for the retrenchment. As the amount of his loss would still exceed the cap, I will award the maximum amount of $30,092.
Mr Parker (cap - $20,424, gross weekly remuneration - $686) had been unable to find alternative employment and by the time of the hearing his loss was approximately $41,000. Within the next four years his loss is likely to be in the vicinity of $160,000 In my view he had a 70% chance of being selected for retrenchment. As the amount of his loss would still exceed the cap, I will award the maximum amount of $20,424.
Mr Simmons (cap - $21,040, gross weekly remuneration - $709) had been unable to find alternative employment and by the time of the hearing his loss was approximately $42,000. Within the next four years his loss is likely to be in the vicinity of $168,000 In my view he had a 90% chance of being selected for the retrenchment because of his limited skills. I will award compensation to him in the sum of $16,800. In addition I will award compensation in the sum of $500 in relation to distress as result of his dismissal.
I will dismiss the application of Mr Borlace for the reasons set out in the judgment.
14. CONSEQUENTIAL ORDERS
It will be necessary for each applicant who is reinstated to repay to the respondent any termination payments received and to repay the pension fund. Any weekly payments of workers compensation will have to be repaid if they were paid as a consequence of the termination of employment (as opposed to partial weekly payments that the applicants may have been entitled to in any event).The written submissions for the applicants refer to the decision in Kozelj v Kellogg (Aust) Pty Ltd of Chief Justice Wilcox on 26 July 1996 where he ordered that the monies already paid to the applicant should be set off against the monies the applicant was entitled to receive as a consequence of his judgment. In this matter however because repayments in part will have to be made to a Pension Fund I do not believe that it is possible for me to make such an order.
I will hear the parties as to the orders that I should make in respect of continuity of service for the applicants who are to be reinstated.
I will hear further submissions as to the calculation of remuneration lost having regard to the length of time between the date of dismissal and the date the matters came before the Court. There is some mention of this matter in the respondent’s submissions but there is no evidence before me in relation to this matter and it was not addressed by the applicants’ submissions.
I would like to acknowledge the assistance given to me in the hearing of this matter at Broken Hill by Ms Margie Veale from Auscript, who for a large part of the hearing acted as my associate whilst performing her duties as an Auscript reporter. I would also like to acknowledge the forbearance of the representatives of the parties many of who were away from home, sitting long and sometimes inconvenient hours. Finally I would like to acknowledge my use in this judgment of the written submissions made by the parties, made easier for me by the provision of their submissions in disc form.
I certify that this and the preceding 34 pages are a true copy of my Reasons for Judgment.
DATES OF HEARING - 20, 21, 22, 23, 26, 27, 28, 29, 30, & 31 MAY,
1, 2, 4, 5, & 6 JUNE, 14 & 15 AUGUST 1997
FOR THE APPLICANT - MR B DOCKING
FOR THE RESPONDENT - MR A MORRIS
DATE OF JUDGMENT - 14 JANUARY 1998
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