Bynion v Email Electronics
[1996] IRCA 221
•24 May 1996
DECISION NO: 221/96
C A T C H W O R D S
INDUSTRIAL LAW - Termination of employment - operational requirements - redundancy in one position leading to termination of occupant of another position - termination at initiative of employer
Industrial Relations Act 1988 S170DE
CASES:
Gibson v Bosmac Pty Ltd (1995) 60 IR 1.
Maria Teresa Bechara v Gregory Harrison Healey & Co, IRCA 19 April 1996, Matter No NI-1129 of 1994, Decision 142 of 1996
Kenefick v Australian Submarine Corporation Pty Ltd (1996) 62 IR 107
Selvachandran v Peteron Plastics Pty Ltd, (1995) 62 IR 371
Jones v Department of Energy and Minerals (1995) 60 IR 304.
KAREN ANNE BYNION -v- EMAIL ELECTRONICS
No. VI-4912 of 1995
Before: Judicial Registrar Ryan
Place: Melbourne
Date: 24 May 1996
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI-4912 of 1995
B E T W E E N :
KAREN ANNE BYNION
Applicant
AND
EMAIL ELECTRONICS
Respondent
MINUTES OF ORDERS
Judicial Registrar Ryan 24 May 1996
THE COURT ORDERS:
That the application be dismissed
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI-3522 of 1995
B E T W E E N :
KAREN ANNE BYNION
Applicant
AND
EMAIL ELECTRONICS
Respondent
Before: Judicial Registrar Ryan
Place: Melbourne
Date: 24 May 1996
REASONS FOR JUDGMENT
THE CLAIM AND THE RESPONSE
The Applicant claims unlawful termination of employment and seeks compensation. The Respondent asserts that the Applicant’s employment was not terminated at the initiative of the employer. However, the Respondent clearly concedes that the Applicant was told on Friday 1 September 1995 that she was to be replaced in the secretarial position she then held. The solicitor for the Respondent, to use his own words, stated:
“The Applicant was advised that she would be earmarked for retrenchment on 8 September”
THE FACTS
This is not a case in which it is necessary to go into much detail on the facts. The Respondent had a senior manager with a secretary and specific responsibilities in Huntingdale. Ms Berger was the secretary. Mr Casey was the manager. Another managerial position became vacant in Dandenong. The Applicant occupied the position of secretary to that particular manager, a Mr Hutchins.
Mr Casey was appointed to succeed Mr Hutchins but he also retained his managerial responsibilities for his department in Huntingdale.
Mr Casey was appointed to the position in Dandenong on the 26 July 1995 and relocated there soon afterwards. Ms Berger remained at Huntingdale where 80% of her duties disappeared. The Respondent has been subject to a number of competitive pressures in recent years and has lost a major contract. The Court accepts that the Respondent needed to reduce costs where possible. A plan to reduce costs by voluntary redundancies, to be followed by involuntary redundancies, was abandoned or at least deferred after two voluntary redundancies had been achieved. Although the Respondent placed some emphasis on the deferred or abandoned redundancy proposal as evidence of the need to reduce costs, this proposal is of no significance or relevance in these proceedings.
Mr Casey decided that Ms Berger could better fulfill his needs for a secretary and personnel assistant than the Applicant, then the incumbent of the secretary’s position Mr Casey had inherited from Mr Hutchins.
The Court accepts that from 26 July 1995 Mr Casey performed the duties of his new position, National Sales and Service Manager (Petroleum Equipment - Dandenong) and continued to be responsible, by and large, for the duties of the position of National Sales and Marketing (Wholesale Electronics - Huntingdale). Although the arrangement may have been a little lacking in formalised documentation, the two positions were in effect amalgamated and the responsibilities of both positions have been performed by Mr Casey since 26 July 1995.
The Court also accepts that the operational requirements of the Respondent’s business led to this arrangement and led to the Huntingdale position of Ms Carol Berger becoming, in effect, redundant.
OPERATIONAL REQUIREMENTS
A key question is, if the Applicant was terminated at the initiative of the Respondent, which the Respondent denies, was the termination for a valid reason associated with the operational requirement of the Respondent?
The Court shall return to the separate issue of whether the Applicant left the employment of her own accord or was terminated at the initiative of the employer.
Counsel for the Applicant submits that the Respondent cannot rely on an alleged valid reason of operational requirement if the Applicant’s position never at any stage became redundant. While the solicitor for the Respondent never addressed that issue directly, the Court must and has done so. The Court has concluded that the restructure which led to Mr Casey becoming both National Sales and Service Manager (Petroleum Equipment) and National Sales and Marketing (Wholesale Electronics) also led to the position occupied by Ms Berger becoming, in effect, redundant. Indeed, Mr Casey acknowledged that in the notes he prepared for an interview with the Applicant on 4 September 1995 (Exhibit R4) in which he wrote:
“There is an executive secretary there (i.e. Huntingdale) whose position is effectively redundant”
The Court has also concluded that the restructure and the effective redundancy of Ms Berger’s position constituted a valid reason, in terms of operational requirements, for the Respondent to make a decision to choose Ms Berger rather than the Applicant for the ongoing position of secretary to Mr Casey in his new, combined managerial task at Dandenong.
Operational requirements led the Respondent to a position described by its solicitor as “between a rock and a hard place”. Counsel for the Applicant does not disagree with that description but has asserted that the redundancy of Ms Berger’s position could not constitute a valid reason for the termination of the Applicant on the grounds of the operational requirements of the Respondent. The Court disagrees.
There clearly was inadequate work for both Ms Berger and the Applicant. Mr Casey did not need two secretaries. He needed one who could perform as an executive secretary and personal assistant. He knew Ms Berger very well. She had worked very satisfactorily for him for four years. He was absolutely confident she could perform the duties of secretary and personal assistant to the combined managerial position he now holds.
Mr Casey openly and fairly conceded that he cannot and does not conclude that the Applicant is incapable of performing the duties of the position, duties which are similar but more demanding than those performed by the Applicant for Mr Hutchins. What Mr Casey says is that he is convinced that Ms Berger can perform those duties better for him and the Court finds that he is entitled to make that assessment and can reasonably make it on the basis of his long experience of working with Ms Berger and his short experience of working with the Applicant.
FAIRNESS
Having concluded accordingly that the Respondent had a valid reason for termination pursuant to S170DE(1), it is necessary to consider whether the termination, if at the initiative of the employer, was harsh, unjust and unreasonable. Because of the sequence of the evidence and the events which led to the ending of the employment relationship, the Court will deal next with the fairness of the termination and then with the question of whether the Applicant was terminated at the initiative of the employer.
The Court has concluded that there was no element of the employer’s actions in relation to the ending of the employment which could be categorised as harsh, unjust or unreasonable.
The Respondent was experiencing difficulty and continuing competitive pressures. The two secretarial positions could not be justified or sustained. The Respondent was not obliged to go through a specific, formal assessment of the Applicant in comparison to Ms Berger. The Respondent was obliged to fairly consider the relative merits of the Applicant and Ms Berger. (See Gibson v Bosmac Pty Ltd (1995) 60 IR 1 at 7).
Having heard evidence from the Applicant, from Tassos Dasios, a former business development manager with the Respondent who worked with the Applicant at Kilsyth and Dandenong, Geoffrey Leonard Heslop, the Respondent’s Group Personnel Manager, Gary Lyons, the Respondent’s Divisional Marketing Manager, David Cooper, the applicant’s present employer, and from Mr Thomas John Casey and Ms Carmel Berger, the Court has concluded that:
the Applicant was told on 1 September that she was to be retrenched from her position in favour of another secretary (this was Ms Berger although her name may not have been mentioned at that time)
the Applicant was offered another position at the same level at Kilsyth but declined the position because of the distance from her residence in Patterson Lakes
on 7 September the Applicant was offered the possibility of serious consideration for another secretarial position with a subsidiary company, DORF, and informed that no final consideration of such an appointment could be made by the relevant manager until he returned from overseas on 11 September 1995
the Applicant was offered the opportunity to remain in her position at Dandenong until at least Monday 11 September or longer should that be necessary to await the decision on the secretarial position with DORF. On this issue, the evidence of Mr Casey is accepted and any evidence of the Applicant that she was not offered the opportunity to remain till, and if necessary after, 11 September is rejected
the Applicant declined to wait and demanded a definite answer by close of business on 8 September and when such a definite answer was not and indeed could not be given she chose to leave on that day on the date originally foreshadowed
the steps taken above (i to v) were fair, just and reasonable
TERMINATION AT INITIATIVE OF EMPLOYER
Given the conclusion that the termination was for valid reason and not harsh, unjust and unreasonable, it is, strictly speaking, unnecessary to determine whether the Applicant was terminated at the initiative of the Respondent or left of her own accord and at her own initiative. However, the Court records that it is of the view that the termination can be correctly categorised as at the initiative of the employer. The Applicant was given an opportunity to continue and await the outcome of the DORF position and the Applicant chose not to accept that offer. Nevertheless, the termination resulted from the Respondent’s choice of Ms Berger for the position of executive secretary to Mr Casey. It was the action of the employer which led to the Applicant being in a position in which she decided to reject the Kilsyth job and declined to await for the possibility of an appointment with DORF. The termination was at the initiative of the employer but for the reasons already given the termination was not unlawful and the application is dismissed.
I also add that even if I had found the termination unlawful because in some way harsh, unjust and unreasonable I would not have awarded compensation. The Applicant obtained full-time employment within 17 days of the termination and, on her own evidence, she did some temporary work after termination and before full-time employment. The evidence of Mr Cooper suggests that he interviewed the Applicant and offered her the position she presently occupies 3 to 10 days after the termination of her employment with the Respondent.
Her present salary is comparable to that provided by the Respondent when account is taken of the favourable taxation treatment of her present car allowance. Furthermore, the Applicant refused one position and declined to wait for possible appointment to another. The comments of Madgwick J in Maria Teresa Bechara v Gregory Harrison Healey & Co, IRCA 19 April 1996, Matter No NI-1129 of 1994, Decision 142 of 1996 at 13 and 14 are applicable. Had I found any element of the termination unlawful, I would have in this case, as Madgwick J did in that case, have found that it is not appropriate to award any compensation.
For completeness, I record that I have considered carefully the decisions of the Chief Justice in Kenefick v Australian Submarine Corporation Pty Ltd (1996) 62 IR 107, Northrop J in Selvachandran v Peteron Plastics Pty Ltd, (1995) 62 IR 371, Moore J in APESMA (on behalf of Cross v Deniliquin Council (1996) 134 ALR 267 and Ryan J in Jones v Department of Energy and Minerals (1995) 60 IR 304. Nothing in those decisions leads me to conclude that the termination in this instance was in any way unlawful. In fact there are comments in all four cases to the effect that consultation with an employee in such circumstances need not be formal provided it is adequate. In my view, the consultation was adequate and the criteria for choice of Ms Berger reasonable and alternative options were considered and offered to the Applicant.
Of the cases cited above, all but Kenefick dealt with an employee terminated from a position which was alleged to have become redundant. However, Kenefick involved the selection for redundancy of 36 production personnel. Five of these former employees claimed unlawful termination of employment. The primary issue in respect of validity of dismissal centred on the criteria adopted in selecting employees for termination. I have found nothing in the decision of the Chief Justice on review (or the Full Court on appeal) to lead me to the conclusion that the selection process was unfair in this case.
The application is dismissed.
MINUTES OF ORDERS
THE COURT ORDERS:
That the application is dismissed.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
I certify that this and the preceding 6 pages are a true copy of the reasons for judgment of Judicial Registrar Ryan.
Associate:
Dated: 24 May 1996
Solicitors for the Applicant: Wollerman Shacklock
Counsel for the Applicant: Ms J Campton
Solicitors for the Respondent: Messrs Gary Katz & Associates
Counsel for the Respondent: Mr G Katz
Date of hearing: 4 March and 23 May 1996
Date of judgment: 24 May 1996
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