Dobbie v Transfin Pty Ltd (Receivers and Managers Appointed)

[1996] IRCA 523

DECISION NO:523/96

C A T C H W O R D S

INDUSTRIAL LAW - Termination of Employment - Redundancy

INDUSTRIAL RELATIONS ACT 1988, s.170ED, 170DE

DOBBIE V TRANSFIN PTY LTD

SA96/1137

JUDICIAL REGISTRAR:                   L FARRELL
PLACE:  ADELAIDE
DATE:  7 NOVEMBER 1996

IN THE INDUSTRIAL RELATIONS COURT          )
OF AUSTRALIA  )
SOUTH AUSTRALIA DISTRICT REGISTRY          )

No. SA96/1137

B E T W E E N:

JOHN WILLIAM DOBBIE

Applicant

AND

TRANSFIN PTY LTD
  (RECEIVERS AND  MANAGERS APPOINTED)

Respondent

MINUTES OF ORDER

BEFORE:                 JUDICIAL REGISTRAR L FARRELL

PLACE:  ADELAIDE

DATE:  7 NOVEMBER 1996

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

IN THE INDUSTRIAL RELATIONS COURT          )
OF AUSTRALIA  )
SOUTH AUSTRALIA DISTRICT REGISTRY          )

No.SA96/1137

B E T W E E N:

JOHN WILLIAM DOBBIE

Applicant

AND

TRANSFIN PTY LTD
  (RECEIVERS AND
  MANAGERS APPOINTED)

Respondent

BEFORE:                  JUDICIAL REGISTRAR L FARRELL
PLACE:  ADELAIDE
DATE:  7 NOVEMBER 1996

REASONS FOR JUDGMENT

This application comes before the Court pursuant to the provisions of Section 170ED of the Industrial Relations Act. The Applicant claims that his employment was terminated unlawfully. He seeks compensation. He does not seek reinstatement.

The Applicant was employed as a new car sales manager by the Respondent at it's Christies Beach car dealership from July 1992 until his employment was terminated on 5 August 1996.

On 26 June 1996 the Respondent was placed in receivership.   On 27 June 1996 the Receiver, Mr Carter and Mr Lewis, who had the day to day management of the receivership held meetings with the employees of the Respondent advising them of the financial position of the Respondent and suggesting that they seek other work.   The Receiver subsequently appointed a consultant manager, Mr Davey.   He was to try and turn the business around.
The company held franchises for Toyota and Mitsubishi.   Following the receivership, Mitsubishi withdrew its franchise, worsening the already difficult financial position of the Respondent.

Mr Lewis gave evidence that in mid July Mr Davey had raised with him the possibility that the new car sales manager position and the used car sales manager position could be combined and the duties performed by one person.

On 29 July 1996 a meeting was held between Mr Davey, Mr Carter, Mr Lewis and Mr Hutson.   Records of that meeting mention under the heading “Advertising/Marketing” as follows  “The object is to employ good managers prior to advertising. Managers are currently not accepting accountability and responsibility.”   I also heard evidence that $6000 was spent on advertising cars on 3 August 1996.

On 2 August 1996 Mr Davey spoke to Mr Lewis and the decision was made to make the Applicant’s position redundant.   Mr Davey requested to meet with the Applicant at the end of the working day, however the Applicant left that evening without meeting with the Mr Davey.   Mr Davey was aware that the Applicant had received other job offers. 

The following day, 3 August 1996 an advertisement appeared in the Advertiser for the position of “General Sales Manager”.   The Applicant gave evidence that he had a ‘Rostered Day Off’ on that day.   Mr Ellis gave evidence that he attended earlier that morning in shorts and a T shirt canvassing for building work at the Respondent’s premises, that he met Mr Davey, whom he had not seen for years, and Mr Davey asked him if he would work that day.

Ms Dunnett, who was at that time the Respondent’s business manager gave evidence for the Applicant that she arrived about 8.30am, that Mr Ellis was there and told her he was now working in sales.   She gave evidence that Mr Ellis was at work the following week, which is inconsistent with the account of the Applicant that Mr Ellis was not there on the Monday.   Mr Ellis signed documents on 3 August 1996 that required a manager’s authority, although Ms Dunnett’s evidence was that both she and the salesperson involved were concerned about this. She gave evidence that she did not see Mr Davey until later in the day. Ms Dunnett seemed to me to be a frank and truthful witness, however some of her recollection of events may be faulty.
The evidence of the Respondent’s witnesses Mr Davey and Mr Ellis as to what occurred on 3 August 1996 seems to me to be unlikely to be true. More likely there was some prior arrangement between Mr Davey and Mr Ellis.   Whether or not that prior arrangement went beyond him being engaged for that day can only be guessed at.   At some time on Monday 5 August 1996 Mr Davey told the Applicant that his position was redundant.   He was invited to apply for the position of manager of new and used cars, or for some other position.   He was given a letter regarding the redundancy.   Mr Dobbie spoke to Mr Lewis who confirmed the position.

It is unnecessary for me to make findings of fact in relation to the discrepancies between the Applicant’s evidence and the Respondent’s evidence of what occurred on Monday 5 August 1996.

The Applicant gave evidence that he obtained a job interview on 12 August 1996 with Australian Motors and that he commenced employment immediately following that interview.   The Applicant has been employed by Australian Motors since 12 August 1996 at the same weekly rate of pay but with a different bonus structure than what  he had been paid by the Respondent.   I gained the impression that the Applicant was not entirely frank in giving his account of how and when he obtained his employment with Australian Motors.

Whilst the evidence of Mr Davey and Mr Ellis about the events of 3 August 1996 does not attract me as honest evidence, I cannot see that the evidence taints the validity of the reason for the decision to make the Applicant’s position redundant.

I am satisfied on the evidence before me that the Respondent did not take into account the Applicant’s conduct or performance in deciding to make the Applicant’s position redundant. The combining of the positions of new car sales manager and used car sales manager seems to be based on simple logic rather than any views held by Mr Davey about the Applicant. This is especially so bearing in mind the loss of the Mitsubishi franchise.   The Applicant did not dispute that he had been offered other positions by the Respondent on 5 or 6 August 1996, however he declined to take any position that was offered to him.

I am satisfied that the Applicant’s employment was not terminated before consultation took place, that he was given the opportunity to take up other positions with the Respondent, but that he declined to do so, and that the Respondent did not breach the Award in terminating the Applicant’s employment.

The Applicant argued that the Respondent ought to have consulted with him on 2 August 1996 after the decision to make his position redundant.   I do not think that the Respondent can be held responsible for the Applicant’s failure to meet with Mr Davey that evening.    I do not regard the delay of any discussion with the Applicant until Monday 5 August as of any consequence. This is especially so bearing in mind that the Respondent was in Receivership and it was necessary for it to act quickly.

The Respondent’s counsel advised the Court that the receivership of the company under the Corporations Law prevents the payment of any sums that the Applicant is entitled to by virtue of Section 170DB or the Award until it has met the priorities set out in Section 556 of the Corporations Law.

The Respondent did acknowledge that the Applicant is entitled to receive $3462 representing 3 weeks notice based on a package of $60,000 and $6,400 being 8 weeks severance payment based on the Applicant’s weekly rate of pay of $800 as well as 85% of the Applicant’s accrued annual leave which remains unpaid in the sum of $2873. The Applicant will receive those amounts he is entitled to if sufficient funds become available in accordance with Section 556 of the Corporations Law.

The Applicant also claimed that he was entitled to bonus payments for the month of July in the sum of $1,650.   I am satisfied on the evidence of Mr Lewis that there was no profit in the month of July and that the Applicant was not therefor entitled to any bonus payment.   The application is dismissed.

I certify that this and the preceding 3 pages are a true copy of the reasons for my judgment.

DATES OF HEARING          :          30 & 31 OCTOBER 1996
FOR THE APPLICANT         :          HIMSELF
FOR THE RESPONDENT     :          MR P YOUNG