Dianne McMinn v Gordon Technologies Pty Ltd
[1996] IRCA 21
•07 February 1996
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI-2043 of 1995
B E T W E E N :
DIANNE MCMINN
Applicant
AND
GORDON TECHNOLOGIES PTY LTD
Respondent
Before: Judicial Registrar Ryan
Place: Melbourne
Date: 7 February 1996
REASONS FOR JUDGMENT
CLAIM OF UNLAWFUL TERMINATION OF EMPLOYMENT
BACKGROUND - MONDAY 20 FEBRUARY AND TUESDAY 21 FEBRUARY
The applicant was employed as a process worker by the respondent from 28 February 1994 to 1 March 1995.
Clause 5 of an Individual Employment Agreement (Exhibit R3) signed by the parties on 28 February 1994 reads as follows:
Sick Leave
Sick leave is allowed in accordance with the Employee Relations Act (Victoria) 1992 which provides for 1 week’s paid Sick Leave based on the number of ordinary hours required to be worked in any one week.”
The applicant concedes that by 20 February 1995 she had taken all the authorised paid sick leave to which she was entitled at that stage.
The applicant claims that she was adversely affected by certain activity undertaken in the work place on Monday 20 February 1995. Her evidence (transcript 80) included the following:
“I have had a bit of trouble with silver soldering, we’re in an enclosed room and I have a bit of, well, I do have an allergy to chemicals and a lot of other things and unfortunately when the silver soldering was on in the room it affected me, I used to get sort of very dizzy, blood noses and migraines from it. It sort of used to affect you in a lot of different ways, breathing, feeling nauseous with it. So, at the end of work that day I went home. I’d sort of been sitting there watching TV...I actually switched that off because my eyes were killing me with the migraine...I took some Enos trying to calm the nausea and the usual thing and by about 11 o’clock that night I couldn’t stand this migraine, it had got really bad and I’d taken some Mercandol but that hadn’t helped, I was always taking headache tablets there and that hadn’t helped, so my shoulder, everything was killing me so I ended up going over to the hospital just to see if I could get some relief over there.”
The patient was referring to Maroondah Hospital and she gave further evidence (transcript 81) that she was at the hospital until 6 or 7:00 am on Tuesday 21 February and that a doctor prescribed further medication for migraine and nausea and asked her to see her own local doctor in respect of her complaints about a sore shoulder and neck.
THURSDAY 23 FEBRUARY
On 23 February the applicant attended the surgery of Dr K C Lum. Dr Lum did not give evidence and that creates certain difficulties to which I shall refer later. However, he provided a written report to the solicitors for the applicant on 16 August 1995. The first two paragraphs of the report deal with the medical examination of the applicant on 23 February and are as follows:
“Dianne McMinn first attended me on 23-02-95, complaining of a very sore right shoulder and sore right elbow as well as a sore right neck. She stated she had worked as a factory hand for at least one year at Gordon Technology in Bayswater. Dianne stated her work is of a repetitive nature, includes pressing, sealing, assembling and looping of metal parts. She stated she attended the Accident and Emergency Department at Maroondah Hospital the previous day on 22-2-95, for sore right shoulder and chest, and advised by the doctors there, that her symptoms could be related to her employment, and was told to go and see her local doctor. On this occasion, she attended here for a intercurrent chest infections and symptoms of gastritis with reflux. She was also tender over her epigastrium area. On examination, there were tenderness over the occipital insertion of the Trapezius muscle. There was tenderness over the right shoulder. Full flexion and extension of the right shoulder were limited by pain.
As a rule, we always checked with the claimant’s boss, and informed the general manager that their worker had attended our practice for a work-related incident. I rang Mr Bruce Gosling, explaining that Mrs McMinn had consulted me for a work-related condition. I asked for verbal acknowledgement of Mrs McMinn worker compensation case. Mr Gosling replied he could not accept liability as the decision had to come from his boss/owner, Mr Moishe Gordon, who was temporarily out of his office. I reminded Mr Gosling to notify Mr Gordon to call me as soon as possible. Sometime later, in the afternoon, Mr Gordon rang. I reiterated that Mrs McMinn appeared to have sustained a work-related injury to her right neck and right shoulder, moreover, she was in a lot of pains. In short, the impression I got from Mr Gordon was that he felt that it was unlikely that Mrs McMinn’s right shoulder and right neck pains could be related to her current employment. Because of his reply, I advised Mrs McMinn to see a specialist, orthopaedic-surgeon, Mr Amiroff Razif, for a second opinion and further treatment and managements. I issued a medical certificate for a week from 27-02-95 to 07-03-95 to cover her medical illness of chest infection and right shoulder pain.”
The Court notes that the certificate certifying unfitness to 7 March was issued on 24 February following a second visit to Dr Lum (Exhibit R12). The Court also notes that on 24 February Dr Lum issued a Certificate of Work Capacity (Exhibit R10) certifying that the applicant would be unfit for work until 13 March.
The following is an edited extract of what the applicant said in evidence about her consultation with Dr Lum on 23 February (transcript 82).
“When I spoke to Dr Lum he asked me about what was going on with, why the pains in the shoulder and head and everything else and I told him....that I’d been on a repetitive machine all day and there were gases and I was just feeling terribly ill and everything else and that’s why I’d had to go to the hospital. The hospital was supposed to send a report to him so I didn’t sort of go into it much further, and I said the doctor at Maroondah asked me to come and see you and find out what’s going on, like get some more allergy tests taken to see whether I was having severe reactions to chemicals and things like that.
Dr Lum said, “what about work?” and I said, “Look, just give me a couple of days off and get the tests done, I just want to get back to work....I just want to be well enough to get back to work.” He said, “What about your employer? What about light duties?” I said, “There’s not much in the way of light duties, it’s an assembly factory.” He said, “Is there anything light duties?” I said, “Yes, there’s different light things you can do.” He said, “Well, I’ll ring Mr Gordon up.” I said, “No, don’t do that. Just sort of get me right.” He said, “But this could be a Work Care thing.” I said, “No, no, it’s not Work Care...that means my job. I don’t want Work Care brought into it.” He said, “Look, your employer will be reasonable, surely he’s a reasonable man...I’ll ring him up and discuss light duties with him and we’ll see how it goes from there.”
The Managing Director of the respondent company, Mr Moishe Gordon, gave evidence that he first became aware that the applicant was absent from work and sick on the “third day of her absence (i.e. 23 February) when her daughter called advising that she (the applicant) had attended Maroondah Base Hospital for headache and migraine”. (Transcript 16).
FRIDAY 24 FEBRUARY
An edited extract of Mr Gordon’s evidence (transcript 16 and 17) appears below:
Mrs McMinn arrived unexpectedly at my office on Friday afternoon, 24 February. ...She wanted to clarify her entitlement to Work Care. ...I had some information that there was possibly a Work Cover claim coming up as a result of a phone call I had received from Dr Lum (on Thursday 23 February). The doctor inquired of me whether the patient he was seeing was suffering a work related illness or injury. I suggested that from all the information I was able to gather it appeared not to be a work related injury. I made some efforts before speaking to him to make investigations into this area and I was entirely satisfied that in fact it was not a work related matter and I conveyed that very strongly to him. (In cross-examination Mr Gordon conceded he may have used the word “fraud” or “fraudulent” in describing to Dr Lum his view of any claim of work related illness or injury.)
Mrs McMinn indicated that she had come from the doctor and obviously the doctor had indicated to her the salient points of the conversation I had with him the previous day. She was clearly there concerned about her Work Care. ....she seemed reasonably hostile. I think the two most clear points that she made or left me with was first and foremost her only concern that she had was to regain her health and was making that the only thing in her life and I expressed my understanding for that. She also made it abundantly clear again that she had no desire to continue work at the company. It appeared to be related to her health. It was an impression I gained and it also tallied with the comments she had made to her supervisor and her fellow workmates that she had no desire to continue employment at the company. (These were comments that had been conveyed to me from time to time).”
Counsel for the respondent asked Mr Gordon whether he had spoken to the applicant at that time about her position becoming redundant. Mr Gordon replied (transcript 18):
“It was a point that was made insomuch as I had made it clear that there was a downturn in the assembly. I could foresee that her position would be no longer required. She was concerned that she would be disadvantaged if she resigned and I explained to her that the position would be made clear to her in a letter and in that way her full entitlements would be able to be preserved. She was concerned about her annual leave. She was concerned to make sure that she gained the benefit of the 12 month period and therefore picked up that extra week of holiday pay. I think at the end of the meeting it was basically an agreed meeting of minds, if you like, and I expected to see or hear from her no further.”
Counsel for the respondent then asked Mr Gordon whether, if he had not had a meeting with the applicant on Friday 24 February, the company would “still have had a redundancy situation”. Mr Gordon replied as follows: (Transcript 18, 19 and 20)
“Definitely, the situation was in fact that we were trying to make contact with Dianne quite apart from this unforeseen illness that she had incurred, and she doesn’t have a telephone. We had left a couple of messages with her daughter, and of course we heard nothing from her except for this Friday meeting.....She was paid in full for the work she had attended. It should be made clear that part of her financial difficulties which was also raised at the Friday meeting was because she had obviously no more entitlements under her sick pay. She had exhausted all her sick pay and had no other means of income.
I did not expect to see Mrs McMinn at work after that meeting. After that meeting we sent off a letter dated 1 March.”
WEDNESDAY 1 MARCH
The letter of 1 March is Exhibit R6 and reads as follows:
“1 March 1995
Ms D McMinn
19 Tania Court
Ringwood Vic 3134
Dear Dianne,
We have made a decision to make your position redundant due to the down turn of our assembly work. It has been unclear when you would be able to receive this news in person but today has presented an opportunity to pay you a benefit namely holiday pay that only accrued to you today hence this letter.
Wishing you well in the future.
Moishe Gordon”
THE CLAIM AND ISSUES OF REDUNDANCY AND REINSTATEMENT
On 15 March the applicant lodged and served her application for remedy and claim of unlawful termination of employment. On 15 March the applicant also signed a worker’s claim for compensation under the Accident Compensation Act 1985 and a copy of that claim appears to have been served on the respondent on or about 15 March 1995.
The applicant gave evidence that at no stage was she advised that the company might be down sizing assembly staff because of a supply agreement with PBR Automotive Pty Ltd. The applicant denies that she ever discussed with Mr Gordon the possibility of leaving the company although she gave a somewhat equivocal answer to her own Counsel when asked whether she had ever given notice of resignation to anyone. She responded as follows (transcript 79):
“No, no. There was once or twice when I was unhappy...I had pressure put on me and I said that, you know, I was leaving, but the basic thing is that I can’t afford to leave a job. They are things said in anger.”
The following is an extract from the applicant’s evidence of her discussion with Mr Gordon on 24 February (transcript 83-85):
“I went over to see Moishe and take the certificates because I was upset
at the time anyway. When I walked in and saw Moishe I said, ‘excuse me, Moishe, I’ve got my sickness certificates...what’s going on...what’s happening, I’ve just left Dr Lum, he’s upset, he’s telling me that you’re saying that he’s fraudulent, I’m fraudulent. He’s sitting there saying what an arrogant unreasonable man you are and all he wanted was me to go on light duties. What’s happening? What’s going on?’
I said, ‘I didn’t want to make a Work Care claim. Dr Lum wanted to ring and see if there were light duties that I could come back to until we resolve this problem that I’ve got and got treatment for it or whatever. I want my job, you know I’m single and I’m by myself, I need a job. I don’t have any other income. I have to work. It’s as simple as that.’
He said, ‘look, obviously we’ve had a bit of misunderstanding...we want you to get better...you just get better then. How long do you think?’
I said, ‘well it’s Dr Lum. I should be back within a few days. I’ve just got to try and work out what’s going on and get it treated and then get back.’
He said, ‘okay, fine, well, we want you get better and we want you to come back to the job and be able to do the job. Do what you have to do and we’ll see you when you come back.’
He never mentioned to me about leaving the job or being made redundant at all, not before - not on that day.
The first I knew that I did not have a job was on 1 March when I received the letter saying that I had been made redundant. The other thing was, I was going to see the girls when I went to see Moishe and he said that he’d spoken to the girls and that they had said that I had been working towards this for months and being fraudulent and sort of lying and all the rest of it, so I didn’t feel - I classed them as my friends until then and I didn’t feel like I could go down and say hello then, not knowing what was going on.”
Counsel for the applicant asked her how the termination had affected her and she replied as follows (transcript 85):
“Well, it was shock for the start. I couldn’t afford to lose a job. I’m by myself. I have obligations. I was just starting to get on my feet, so I couldn’t afford to lose the job at the time. I had no intentions of leaving the job until if and when I found another job which did suit me. My holidays that were owing would have been used to look for another job if - at my age there is not that much around. I was adjusting myself to being there for a long time.”
The comment “my holidays.....could have been used to look for another job” is curious. This comment suggests that the applicant on 24 February 1995 may have been taking the position that she was sick, absent from work (in effect on unpaid sick leave) and wanted to use her holiday leave to look for another job. However, she has never suggested that on 24 February or at any other time she applied for the holiday leave due on March.
The re-employment of a former employee, Mrs Yvonne Parmenter on a casual basis and her appointment to a position in which she works sometimes as a process worker and sometimes as a machinist does not, in my view, weaken the respondent’s position that the process worker assembly division resources had to be reduced because of operational requirements.
Mrs Parmenter likes working for the respondent. Mrs Parmenter only left in the first place because temporary ill health made her unfit for the work. Mrs Parmenter was a direct and impressive witness. She is a very flexible employee. She works as required in the assembly division and as required in the machining division. When she returned to work she was only offered casual employment. Her permanent appointment again in July 1995, 3 months after the applicant declined the offer of reinstatement, is quite consistent with reduced assembly division resources. The fact of the matter is that from March 1995 to August 1995 the assembly division operated usually with 3 or 4 process workers whereas prior to the PBR contract the assembly division regularly consisted of 5 and sometimes 6 process workers.
On 15 March 1995, when the applicant lodged her application for remedy and her claim of unlawful termination of employment, she sought “reinstatement, compensation, two weeks payment in lieu of notice and redundancy pay”.
Clearly, at that stage, the applicant was treating herself as dismissed for redundancy and she was asking for her job back and, if that was not to occur, she wanted some compensation by way of a redundancy payment.
The applicant no longer seeks reinstatement. Her Counsel considers reinstatement impracticable. Counsel for the respondent considers reinstatement impracticable. Furthermore, there may even be a question as to whether the applicant is fit to work as a process worker with the respondent. In any event, reinstatement was offered to the applicant on 1 April 1995 by way of a letter to her from Mr Gordon. The letter is Exhibit R8. It reads as follows:
“Saturday, April 1 1995
Ms D McMinn
19 Tania Court
Ringwood Vic 3134
Delivered By Hand
Strictly Confidential & Without Prejudice
Dear Dianne,
It has been noted in your application to the Industrial Relation Court of Australia that you seek to be reinstated.
Please be advised that you are now reinstated and you will be expected to begin work this Monday the 3rd of April at the normal time.
Yours sincerely
Mr M Gordon
Managing Director”
The applicant never responded to the offer of reinstatement and she stated in evidence that she did not respond because of legal advice.
SECTIONS 170DF, 170DE AND 170DB
When the applicant lodged her claim of unlawful termination of employment on 15 March 1994 she did not allege that her employment had been terminated for reasons including reasons prohibited under S170DF(1)(a) or S170DF(1)(e) of the Industrial Relations Act 1988 namely:
(a) temporary absence from work because of illness or injury
(e)the filing of a complaint or participation in proceedings, against an employer involving alleged violation of laws or regulations or recourse to competent administrative authorities.
However, at the hearing, Counsel primarily based the case on a breach of S170DF(1)(a) with an alternative submission that, if the termination was a genuine redundancy, in the sense of a termination brought about by the operational requirements of the respondent’s business, it was nevertheless a harsh, unjust and unreasonable termination because the applicant was never consulted or given an opportunity to suggest other possible options and the respondent did not itself consider or suggest any other options other than termination.
Counsel for the applicant asserted that the termination provided no form of compensation for redundancy and indeed until after the Conciliation Conference in the Industrial Relations Commission there was no payment in lieu of notice of termination. In other words, Counsel for the applicant alleges that the respondent breached S170DB and seeks compensation for that breach by way of additional damages even though the payment in lieu of notice has now been made.
No real or satisfactory evidence to substantiate the claim of a breach of S170DF(1)(e) was led and certainly Counsel did not pursue that claim in his final address.
However, the applicant persisted with the primary claim of a breach of S170DF(1)(a). Her Counsel put her claim as follows:-
The applicant was examined at Maroondah Hospital early on the morning of Tuesday 21 February 1995 and by her own medical practitioner, Dr Lum on 23 and 24 February. She was certified as unfit to work and took one or more medical certificates to her employer, Mr Gordon, on Friday 24 February. She told Mr Gordon that she wanted to return to work as soon as possible and was led to believe that this was acceptable to her employer but without warning or consultation she was told in writing on Wednesday 1 March that her position was redundant. She states that on 23 February Mr Gordon, in effect, suggested to Dr Lum in a telephone conversation that her illness and/or injuries were a sham and that any contemplated Work Cover claim would be fraudulent. Dr Lum was not called to give evidence in support or against the applicant’s allegations as to the nature of the conversation between Mr Gordon and Dr Lum.
The applicant denies that redundancy was discussed with her on or before 24 February and she denies that she agreed to what Counsel for the respondent called “a voluntary redundancy”.
THE RESPONDENT’S POSITION
The respondent’s position as put by Counsel is as follows.
The respondent conducts a repetition engineering manufacturing business which produces two main product types. One product type contains components which are individually machined and then assembled. The other product does not contain components. It is manufactured by machine and does not require assembly.
The respondent’s operations are conducted in two divisions, a machining division and an assembly division. In late 1994 the respondent secured a contract to supply machine made components to PBR Automotive Pty Ltd. These parts were machined as a single component. They did not require assembly. As a result of the PBR contract the respondent was required to allocate more machine capability to these parts and less machine capability to the parts which required assembly. A consequent result was a decline in work in the assembly division. Earlier that division had operated with as many as six process workers. As a result of the PBR contract the division was to be reduced by way of operational requirements to four process workers but with one of these process workers to work whenever required in the machining division. The result was that the assembly division often operated between February and August 1995 with only three process workers full-time in the division.
The respondent claims that Mr Gordon explained this situation, at least in general terms, to the applicant when she saw him on Friday 24 February, having been absent sick or injured on 21 February, 22 February, 23 February and 24 February and being unfit for duty and certified as unfit for duty until at least 13 March 1995. The Court notes that it is not at all clear that the Certificate of Work Incapacity (R10) indicating unfitness to 13 March was given to Mr Gordon on 24 February. However the Medical Certificate (R12) certifying unfitness to 27 February was given to Mr Gordon on 24 February.
The respondent further claims, through Counsel, that Mrs McMinn made it clear to Mr Gordon on 24 February that because of her health she had no desire and no real capability of continuing in employment and on that basis there was “a meeting of minds” that her employment would come to an end and that she would be terminated on the basis of redundancy and that she would receive written confirmation in due course. The respondent claims that the applicant expressed some concern as to the possibility of losing annual leave entitlements and that Mr Gordon assured her that she would not lose those entitlements and would be terminated with the entitlements intact. The respondent states that the leave entitlements became due on 1 March 1995 and presumably this is the respondent’s explanation as to why the letter confirming a termination on the grounds of redundancy outlined on 24 February was issued and delivered to the applicant on 1 March.
The Court notes that the letter does not specify a date of termination but implies that employment has ended. The letter also implies that a payment of an unspecified amount accompanied the letter or was to be made by some other means and the payment was described as “a benefit namely holiday pay that only accrued today hence this letter”.
The respondent asserts that the employment of the applicant was terminated for a valid reason being the operational requirements of the business and that given the applicant’s stated preparedness to leave in those circumstances there was no need to undergo more elaborate procedures as would normally be the case in a redundancy and that the applicant effectively selected herself as the appropriate candidate for redundancy.
ASSESSMENT OF THE EVIDENCE
When adjourning this matter at the conclusion of the hearing (transcript 166), I made the following comment:
“It is no doubt obvious from some of the comments that I have already made that, at this early stage of my consideration of this matter, I have some difficulty in reconciling the letter of 1 March with either version of the discussions on 24 February, and again, at this early stage of my considerations, I have some difficulty in concluding that either version of the discussions on 24 February is entirely plausible. For those reasons and for others I reserve my decision and adjourn sine die.”
A careful examination of the transcript and of all the exhibits has led me to the conclusion that neither version of the discussions between Mrs McMinn and Mr Gordon on 24 February is completely convincing.
The respondent called three other process workers namely Colleen Anne Goldsmith, Patricia Anne Goldsmith and Yvonne Parmenter. They gave evidence as to the nature of the work, the likely decline in assembly work as a result of the PBR contract, some very general advice to them of the likely reduction in assembly work and constant expressions of dissatisfaction from the applicant in relation to the nature of her work and her regular expression of her intention to leave the work once she had qualified for annual holidays. The Court has no difficulty in accepting the evidence of all three of these witnesses.
By and large, the Court also accepts Mr Gordon as a witness of truth but, having assessed all of the evidence, the Court is not satisfied that there was “a meeting of minds” between the applicant and Mr Gordon on 24 February. The Court is not satisfied that the applicant agreed to accept termination of her employment provided that she received her annual leave entitlements.
It is the evidence in its entirety which leads the Court to this conclusion.
It must be said that the Court found the applicant an unimpressive, inconsistent and unreliable witness. The applicant’s daughter and Dr Lum were not called as witnesses and both of them, and particularly Dr Lum, could have given evidence which would have been of assistance to the applicant if, of course, his evidence was consistent with the applicant’s evidence. Dr Lum could also have given evidence crucial to the applicant’s claim that the respondent, through Mr Gordon, terminated the employment of the applicant for reasons which included temporary absence from work because of illness or injury.
Be that as it may, the terms of the letter of 1 March do not really confirm or even refer to an agreement or “meeting of minds” between the applicant and Mr Gordon. If there had been an agreement whereby the applicant had clearly agreed to accept a redundancy termination for the meagre benefit of annual leave entitlements one would have expected a specific reference to the agreement in the letter of 1 March. Indeed, if there was such an agreement and an agreement which justified a termination of the applicant without any form of consultation or consideration of other options, a prudent employer would not only have referred to the agreement in writing but would have obtained a signature or some obvious indication of assent from an employee allegedly accepting termination and, in effect, resigning her employment.
Furthermore, it is inherently unlikely that this applicant would have readily agreed to the termination of her employment with no benefit other than her annual leave entitlements. The respondent has argued that the applicant did not want to work any more for the respondent, was unfit to work for the respondent, was on unpaid sick leave and that it was, in effect, in her interest and to her benefit to receive the holiday entitlements.
This argument leaves implied but unsaid that the alleged voluntary acceptance of the termination was in the applicant’s interest because she did not want to continue working for the respondent, her physical ability and fitness to work was questionable and the ending of the employment gave her the opportunity to seek more congenial employment or, if unfit, to obtain appropriate social service benefits. At the time of the hearing the applicant indicated that she was in receipt of sickness benefits and was contesting the rejection of her Work Care claim.
The Court does not exclude the possibility that the applicant did indeed agree to leave on the basis of the meagre recompense of annual holidays, and because it suited her plans to obtain other employment if and when she was fit for other employment. However, on the balance of probabilities, the Court repeats that it is inherently unlikely that this applicant so agreed. There is no satisfactory evidence of such an agreement and the terms of the letter of 1 March do not suggest such an agreement.
FINDINGS
The Court accepts that:
the operational requirements of the respondent’s business required and justified a reduction in assembly division resources
Mr Gordon genuinely believed that the applicant was the appropriate employee to select for redundancy
Mr Gordon was not satisfied then or now that the applicant on and from 21 February 1995 had or has a sustainable Work Care claim for compensation for work related illness or injury
the respondent through Mr Gordon did not terminate the employment of the applicant for reasons including temporary absence from work because of illness or injury
However the Court has also concluded that the termination of the applicant on 1 March, or on 24 February 1995 with effect from 1 March, was unjust and unreasonable because there is no satisfactory evidence that the applicant was consulted or even informed of the possibility of termination prior to 24 February. Indeed, the terms of the letter of 1 March leave open the possibility that the applicant received no notice of the termination until 1 March and, even then, the letter imples but does not state that employment has ended as of 1 March.
LACK OF CONSULTATION
This is not a situation such as presented in Australian Submarine Corporation v Kenefick (1995) 131 ALR 197 where the operational requirements were such that consultation would have been required with a significant number of employees. Indeed in Kenefick the Chief Justice considered consultation a likely minimum requirement in a situation of the diminution of a relatively small number of specific jobs where the occupants are readily identifiable and able to be consulted meaningfully. (See also “Managerial Prerogative in ‘Operational Requirements’ Dismissals” (Kollmorgen) (1995) 8.Aust. Journal of Labour/Law 247 at 250).
In this case it was one position. The occupant was the applicant. She could have been consulted. She should have been consulted. In addition to Kenefick I rely on three other recent decisions of this Court namely Quality Bakers of Australia Ltd v Goulding (1995) 60 IR 327; Jones v Department of Energy and Minerals (1995) 60 IR 304 and Pam Coker-Godson v National Dairies Limited (Marshall J) VI0262R of 1994 (unreported) 359/95.
TEMPORARY ABSENCE DUE TO ILLNESS OR INJURY
Counsel for the applicant argues that in respect of S170DF(1)(a), termination for reasons including temporary absence due to illness or injury, the respondent has failed to discharge the onus placed on it under S170EDA.
S170EDA(2)(a), (b) and (c) read as follows:
“If an application under S170EA alleges that a termination of employment of en employee contravened subsection 170DF(1) on the ground that the termination:
(a) was for a particular reason or reasons referred to in that subsection that were stated in the application; or
(b) was for reasons stated in the application that included a particular reason or reasons referred to in that subsection;
the termination is taken to have contravened subsection 170DF(1) unless the employer proves that:
(c) the employment was not terminated for the particular reason or reasons or for reasons that included the particular reason or reasons;”
Northrop J referred to onus of proof including the onus in respect of S170EDA(2) in Johns v Gunns Ltd (1995) 60 IR 258 at 261 as follows:
“Normally in proceedings of the type similar to those described in S170EA(1), the applicant has the general onus of proving the claim the subject of the application. It is true that in the conduct of the hearing of the application the shifting or evidentiary onus may fall upon the respondent to the application but the overall onus of proof remains on the applicant. In many respects, the provisions contained in S170EDA(1) and (2) are similar to an averment provision in a statute with the result that if the averment is made, or in cases where S170EDA(1) and (2) apply, the termination of employment is not in dispute and the appropriate allegation is made in the ‘application under section 170EA’, the applicant has proved an entitlement to a remedy unless the respondent produces evidence to satisfy the Court to the contrary. The proper construction and application of these two provisions could affect the procedures at the hearing of an application under S170EA(1) with the result that the respondent should present a defence before the applicant is required to give evidence in support of the claim contained in the application.”
In this case the respondent readily agreed to present a defence before the applicant gave her evidence in support of the claims in the application. The respondent has satisfied the Court that the termination was valid in the sense that it has been found to be a termination for a valid reason based on the operational requirements of the respondent’s undertaking, establishment or service, i.e. section 170DE(1).
However, the Court has also found that the applicant has discharged the onus placed on her under S170DE(2) to establish that the termination based on operational requirements was nevertheless invalid because it was harsh, unjust and unreasonable.
Has the respondent discharged the onus to prove that the applicant was not terminated for reasons including temporary absence because of illness or injury? The ball is in the respondent’s court. There is evidence of temporary absence of the applicant because of illness and possibly, but less clearly, because of injury. However, even if the evidence of absence because of illness or injury was crystal clear and irrefutable that is not the issue. The issue is whether the respondent has demonstrated on the balance of probabilities that the termination was not based in whole or in any part on such a temporary absence from work.
The respondent cannot discharge the onus just by denying that temporary absence because of illness or injury formed any part of the reasons for termination. The respondent cannot discharge the onus by asserting that the termination was based wholly and solely on operational requirements and on an agreement with the applicant. Northrop J described this situation thus in Heidt v Chrysler Ltd (1976) 26 FLR 257 at 268.
“The mere proof of a reason for dismissal, other than the reason alleged in the charge, does not necessarily negate the reason alleged in the charge. A mere denial of the reason alleged in the charge may not be sufficient to satisfy the onus cast upon the defendant. All the facts and circumstances leading up to the dismissal must be considered, including any reason expressed at the time of the dismissal, as well as any denial of the reason alleged in the charge.”
The applicant did not allege any breach of S170DF by way of reasons stated in the application. However, the Court notes and accepts the dicta in Johns at 268 and 269 that, as the Court Rules no longer require an allegation of reason for termination, any obvious allegation during the presentation of a case that one of the reasons for termination by a respondent was temporary absence from work because of illness or injury is sufficient to satisfy the requirements of S170ED(2).
The applicant places considerable reliance on Mr Gordon’s admission that he had formed the view, after inquiries, that there was no justification for a Work Care claim by the applicant based on work related illness or injury. The applicant also places weight on Mr Gordon’s concession that he might have described such a claim in his discussion with Dr Lum as a “fraud” or “fraudulent”.
The fact that Mr Gordon rightly or wrongly assesses any Work Care claim as unfounded, and the fact that he may have expressed the view and hold the view that a Work Care claim is fraudulent, is not evidence of itself of a termination by the employer for reasons including temporary absence from work because of illness or injury.
Even if Dr Lum had been called and even if he confirmed that Mr Gordon did describe the proposed Work Care claim as “fraudulent” that would not in itself constitute evidence that a reason for the termination, in effect a termination by Mr Gordon for the employer, was temporary absence from work because of illness or injury. Had Dr Lum been called and had he confirmed that Mr Gordon expressed strong views that a Work Care claim was unjustified (which Mr Gordon concedes) it may have provided further evidence that the termination was motivated in whole or in part because of the applicant’s temporary absence because of sickness or injury. However, the onus is on the respondent not the applicant. This can be very difficult when there is evidence of actual or possible absence because of illness or injury. The respondent has to prove a negative. The respondent has to prove on a balance of probability that the temporary absence for illness or injury played no part in the reasons for termination.
I have concluded that, on a balance of probability the temporary absence of the applicant from 21 February to 1 March 1995 and the likely continued absence (presumably temporary) did not play a part and was not a reason for the termination.
REDUNDANCY SOLE REASON FOR TERMINATION
This is not a case like Mifsud, Filippi and Sandhu v Pacific Dunlop Tyres and Goodyear Tyres (trading as South Pacific Tyres, three cases before Parkinson JR (unreported)) VI-2041 of 1994, VI-2044 of 1994 and VI-1891 of 1995, Decision No 501 of 1995, 19 September 1995 in which the sole reason for the termination was held to be operational requirements but where the selection criteria for redundancy included consideration of the level of absence from work of particular employees. Nevertheless I have gained assistance from the Pacific Dunlop judgment (and from Kenefick cited therein and earlier in this judgment) in concluding that the sole reason for termination of Mrs McMinn was the operational requirements of the business specifically the downturn in assembly work because of the PBR contract. Of course, in this case, Mr Gordon applied no expressed or identifiable criteria to Mrs McMinn and does not seem to have discussed criteria with her or even the redundancy issue until 24 February 1995. His failure to do so is a primary reason for concluding that a termination for valid reason was unjust and unreasonable. However, in concluding that the sole consideration for the termination of Mrs McMinn was redundancy or operational requirements. I note the following in Kenefick at 206:
“An employer may have more than one reason for terminating an employee’s employment. If so, a provision of Subdiv B of Div 3 of Pt VIA that relates to a reason will apply, notwithstanding that a different provision applies to another reason. The termination will be lawful only if every reason complies with the pertinent statutory provisions. However, this principle is not relevant to the present cases. There were not two reasons for termination of the present applicants’ employment. There was only one reason: the redundancy situation. That is so, notwithstanding that particular retrenchees were selected because of conduct/performance characteristics throught to make them less valuable ASC employees than others.”
In this case, as in Kenefick, the conclusion I have reached, albeit with some difficulty, is that the redundancy was the sole reason for the termination.
REMEDY
Having found the termination was because of the operational requirements and did not breach S170DF(1)(a) or S170DF(1)(e) but did breach S170DE(2) and having found reinstatement impracticable and indeed rejected by the applicant, the question arises as to whether it is appropriate in all the circumstances of the case to make an order requiring the employer to pay to the employee compensation. I gave some consideration to awarding no compensation despite a finding of procedural irregularity.
I am satisfied having heard and accepted the evidence of the applicant’s three colleague process workers that the applicant was dissatisfied with work with the respondent and often expressed an intention to leave as soon as she had earned her holiday pay entitlements. On the other hand I am not satisfied she agreed to leave on and from 1 March 1995.
I have found that the termination was unjust and unreasonable because the applicant was never consulted and never informed in advance of the decision to make her position redundant.
While I was not impressed with the applicant as a witness, and while I have found that she was dissatisfied with her work and, in my view, was very likely to leave her employment with the respondent, I consider some small compensation is due to her for the fact that she was terminated without warning, counselling or consultation, albeit because of the genuine operational requirements of the business.
In Nicolson v Heaven and Earth Gallery Pty Ltd (1994) 1 IRCR 199 at 213 the Chief Justice of this Court indicated that had he reached the question of compensation he would have assessed it on the basis that procedural irregularity deprived Mr Nicolson of a chance of retaining his employment.
The Chief Justice however went on to say that he would not have awarded a large sum in compensation because, in his view, the company, acting regularly, would have been entitled to dispense with the applicant’s services and would have done so.
That is my conclusion too in this case. There is also the real possibility that Mrs McMinn would have shortly ended the employment at her own initiative because of her oft expressed dissatisfaction and possibly because of an increasing inability to satisfactorily perform the duties.
In all the circumstances I consider appropriate compensation to equate to 4 weeks wages at $353 a week, i.e. $1,412 and I order that the respondent pay compensation in the sum of $1,412 within 21 days of this order today.
Counsel for the applicant mounted what I would call a minor argument that, despite the fact that the respondent well after the termination, paid the sum due under S170DB in lieu of notice, damages are still payable in the sum due under S170DB. He seemed to rely on the following statement of Lee J in Aitken v The Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia - Western Australian Branch (unreported) WI328 of 1994, Decision 352 of 1995, 7 August 1995 at page 7:
“Pursuant to sub-s.170EE(5) of the Act contravention of s.170DB permits the Court to make an order requiring the employer to pay the employee an amount of damages equal to the amount of the compensation which should have been paid under s.170DB at the time the employment was terminated.”
Counsel went on to argue, again relying on Aitken, that as an object of the Act is to promote compliance with notice provisions in S170DB, a subsequent compliance does not render lawful the original breach of S170DB and that in the circumstances of this case the Court should order damages for the breach in the sum due under S170DB.
I accept that, as the object of Division 3 of Part VIA of the Act is, pursuant to S170CA, to give effect to the Termination of Employment Convention and the Termination of Employment Recommendation, 1982, compliance with Division 3 and S170DB is part of that object. However I do not accept that any dicta in Aitken is authority for the proposition that damages for breach of S170DB should flow in any case in which the section is contravened and where the payment is made at a later date. I certainly do not find that a payment in lieu of notice should be ordered in this case where the payment has been made.
The Court also rejects the proposition that any order for compensation should include an amount for psychological, psychiatric or emotional injury or distress arising out of the termination. Counsel for the applicant cited Clunne v Nambucca Shire Council (unreported) NI 1071 of 1995, Decision 355 of 1995. This was a vastly different case where the applicant led psychiatric evidence. In this case Mrs McMinn, at the date of hearing, had declined a number of recommendations from Dr Lum that she attend a psychiatrist. Furthermore, the judgment in Clunne for injury and associated distress was separate from compensation ordered under S170EE and was as a result of a breach of contract claim in the Court’s accrued jurisdiction.
MINUTES OF ORDERS
THE COURT ORDERS:
The respondent to pay the applicant compensation in the sum of $1,412.
The payment is to be made within 14 days of this order.
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 18 pages are a true copy of the reasons for judgment of Judicial Registrar Ryan.
Associate:
Dated: 7 February 1996
Solicitors for the Applicant: Maurice Blackburn and Co.
Counsel for the Applicant: N Kenyon
Solicitors for the Respondent: Maddock Lonie and Chisholm
Counsel for the Respondent: I G Waller
Date of hearing: 21 and 30 August 1995
Date of judgment: 7 February 1996
DECISION NO: 21/96
C A T C H W O R D S
INDUSTRIAL LAW - Termination of Employment - Valid Reason - Operational Requirements - Temporary absence from work because of illness or injury - Reinstatement offered but rejected - Reinstatement impracticable - Compensation.
Industrial Relations Act 1988, ss.170CA, 170DB, 170DE, 170DF, 170E, 170EDA, 170EE
CASES:
Australian Submarine Corporation v Kenefick (1995) 131 ALR 197
Quality Bakers of Australia Ltd v Goulding (1995) 60 IR 327;
Jones v Department of Energy and Minerals (1995) 60 IR 304
Pam Coker-Godson v National Dairies Limited (Marshall J) VI0262R of 1994 (unreported) Decision 359 of 1995, 4 August 1995
Johns v Gunns Ltd (1995) 60 IR 258 at 261
Heidt v Chrysler Ltd (1976) 26 FLR 257 at 268
Mifsud, Filippi and Sandhu v Pacific Dunlop Tyres and Goodyear Tyres
(trading as South Pacific Tyres), JR (unreported), VI1891, 2041 and2044 of
1994 Decision No 501 of 1995, 19 September 1995
Nicolson v Heaven and Earth Gallery Pty Ltd (1994) 1 IRCR 199 at 213
Aitken v The Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia - Western Australian Branch (unreported), WI328 of 1994 Decision 352 of 1995, 7 August 1995
Clunne v Nambucca Shire Council (unreported) NI 1071 of 1995, Decision
355 of 1995, 8 August 1995.
DIANNE MCMINN -v- GORDON TECHNOLOGIES PTY LTD
No. VI -2043 of 1995
Before: Judicial Registrar Ryan
Place: Melbourne
Date: 7 February 1996
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI -2043 of 1995
B E T W E E N :
DIANNE MCMINN
Applicant
AND
GORDON TECHNOLOGIES PTY LTD
Respondent
MINUTES OF ORDERS
Judicial Registrar Ryan 7 February 1996
THE COURT ORDERS:
The respondent to pay the applicant compensation in the sum of $1,412.
The payment is to be made within 14 days of this order.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
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