Gibb & Australian Manufacturing Workers' Union v T.E.D Engineering Australia
[1997] IRCA 6
•28 Jan 1997
DECISION NO:6/97
C A T C H W O R D S
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - statement of claim - whether just and convenient to proceed with this at same time as unlawful termination claim - VALID REASON - whether position REDUNDANCY - whether failure to consider or offer alternative employment relevant to existence of a VALID REASON for termination
Workplace Relations Act 1996 ss 170DC, 170DE(1), 170DF(1)(b), 170DF(1)(d), 430
Phillip Morris Incorporated v Adams P. Brown Male Fashions Pty Limited (1981) 148 CLR 457
Fencott & Muller (1982-1983)152 CLR 570)
Jones v Department of Energy & Minerals (1995) 60 IR 304
Quality Bakers of Australia v Goulding (1995) 60 IR 327
Kenefick v Australian Submarine Corporation Pty Ltd (1996) 65 IR 366
Johns v Gunn Ltd (1995) 60 IR 258
Nettlefold v Kym Smoker Pty Ltd (unreported, IRCA, Lee J, 4 October 1996)
Thomas v Lynch (unreported, IRCA, Wilcox CJ, 20 December 1996)
EDWIN ROSS GIBB & AUSTRALIAN MANUFACTURING WORKERS’ UNION - v - T.E.D. ENGINEERING AUSTRALIA LIMITED
No. VI 1751 of 1996
Before: Judicial Registrar Millane
Place: Melbourne
Date: 28 January 1997
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 1751 of 1996
B E T W E E N :
EDWIN ROSS GIBB &
AUSTRALIAN MANUFACTURING WORKERS’ UNION
Applicants
A N D
T.E.D. ENGINEERING AUSTRALIA LIMITED
Respondent
MINUTES OF ORDERS
Judicial Registrar Millane 28 January 1997
THE COURT ORDERS THAT:
The applications of the applicants are 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 1751 of 1996
B E T W E E N :
EDWIN ROSS GIBB &
AUSTRALIAN MANUFACTURING WORKERS’ UNION
Applicants
A N D
T.E.D. ENGINEERING AUSTRALIA LIMITED
Respondent
Before: Judicial Registrar Millane
Place: Melbourne
Date: 28 January 1997
REASONS FOR JUDGMENT
In this proceeding the first applicant, Edwin Ross Gibb, seeks reinstatement and compensation alleging that he was terminated from his position as a maintenance fitter on 13 May 1996 in contravention of the provisions of the Workplace Relations Act 1996 (the Act). In the week preceding the hearing of the unlawful termination application, the applicants filed a notice of motion seeking the following relief:
“1. That the Applicant be granted leave to proceed with a claim for damages as outlined in the attached statement of claim in the courts accured (sic) jurisdiction.”
The notice of motion was returnable on the hearing date and argument was heard from both sides as to whether the claims expressed in the statement of claim should proceed to be heard along with the unlawful termination claim which, of itself, was fixed some months earlier for only one day’s hearing.
On the return date I determined that it was not just or convenient for the Court to deal with the additional claims stating then that I would provide my reasons for doing so in my reasons for judgment.
Insofar as the convenience of the Court is concerned, I was not satisfied that the applicants had acted with due diligence in notifying both the respondent and the Court of the prospective additional claims and, in doing so, ignored the limited time set aside for hearing the principal proceeding and the need to avoid any prejudice to the respondent in its preparation of any defence. In other words, any additional late claim would necessitate an adjournment of the proceeding relating to an alleged unlawful termination on 13 May 1996 to a date in 1997. Apart from the need to prepare its case, it was apparent from the proposed statement of claim that there was no proper particularisation of the damages claimed for breach of an alleged agreement and this further step would need to be finalised before any proceeding could advance to hearing.
What the applicants sought to do was to rely on section 430(1) of the Act which provides as follows:
“430(1) So far as the Constitution permits, jurisdiction is conferred on the Court in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Court is invoked.”
The proposed statement of claim related to two areas of claim. One was, broadly speaking, an allegation that there was a breach of an agreement made on 19 November 1993 (partly oral and partly to be implied) that the respondent would provide “at least the same amount of overtime” hours to the first applicant as that provided to its press shop workers. The first applicant sought unspecified damages in relation to the alleged breach.
It was the respondent’s submission, a submission with which I ultimately agreed, that the alleged breach of agreement and the alleged cause of action referred to was not a federal claim, nor did it depend on common transactions and facts from which the Court might conclude that it arose out of a common substratum of facts (see Phillip Morris Incorporated v Adams P. Brown Male Fashions Pty Limited (1981) 148 CLR 457 in Fencott & Muller (1982-1983)152 CLR 570).
There was a second claim contained in the proposed statement of claim alleging a breach of an implied term in “the agreement” that the respondent would not discriminate against the first applicant on the basis of his union activities or membership. Damages were also sought in respect to this rather unusual contract claim. This claim was arguably connected to the alleged unlawful termination. Whilst the respondent accepted that in the principal proceeding it was on notice of a claim that there was an alleged breach of section 170DF(1)(b) and (d) of the Act, it rejected any suggestion that a term of contract such as that alleged in the proposed statement of claim could be implied, much less give rise to a claim sounding in common law damages.
Because of my preliminary views on the appropriateness of proceeding with late claims at short notice, it was not necessary for me to determine whether the second limb of the statement of claim and the second claim made constituted a properly pleaded and actionable cause of action.
The statement of claim was not proceeded with at hearing, however, the unlawful termination claim did canvass issues relating to any discrimination arising pursuant to section 170DF(1)(b) and (d) of the Act, with the respondent carrying the burden of proving that it did not terminate the first applicant for reasons which included those prohibited by that section as follows:
“170DF(1) An employer must not terminate an employee’s employment for any one or more of the following reasons, or for reasons including any one or more of the following reasons:
(a)...
(b) union membership or participation in union activities outside working hours or, with the employer’s consent, during working hours;
(c)...
(d)seeking office as, or acting or having acted in the capacity of, a representative of employees; ...”
THE TERMINATION
The respondent conceded termination at its initiative alleging that the termination of the maintenance fitter applicant, who worked in its press shop, was as a result of a bona fide redundancy. At hearing it relied on the decisions of this Court in Jones v Department of Energy & Minerals (1995) 60 IR 304 and Quality Bakers of Australia v Goulding (1995) 60 IR 327, which decisions discuss the accepted meaning of redundancy, to say that the termination involving the abolition of the first applicant’s position in the press shop and the contracting out of his maintenance work to a private contractor on an as and when needed basis was, in fact, a redundancy. Because there was only one maintenance person and one position being abolished as a result of its operational requirements, it was said by the respondent that there were no conduct or performance issues relevant to selecting the first applicant for termination; there being no selection process involved where there was only one person working in the position abolished.
Accordingly, it was argued that the respondent was not required to establish a valid reason for selection of the first applicant, nor was it open to the first applicant to allege that he had not been given any or any proper opportunity to respond to any conduct or performance issues (see the Full Court decision in Kenefick v Australian Submarine Corporation Pty Ltd (1996) 65 IR 366). On the evidence presented to the Court I have accepted the general thrust of the respondent’s submission on the abovementioned matters and further have accepted that at hearing the respondent discharged the evidentiary onus it carried to substantiate the abovementioned submissions.
The respondent further argued that the decision to abolish the first applicant’s position was a logical and defensible response to a lack of work in the press shop. As will be seen from the matters set out below, I have also accepted the merit of this argument.
WITNESSES
The following witnesses were called by the respondent:
-Benni Aroni (Aroni), a solicitor and director of the respondent
company;
- Tab Fried (Fried), the respondent’s chief executive officer and
managing director ;
- Claude Tabone (Tabone), the respondent’s manufacturing
manager; and
- Robyn Frances Hurley (Hurley), a personnel clerk employed by
the respondent.
The applicant gave evidence and called the following witnesses:
- Colin Richard Ormsby (Ormsby), state organiser for the
Australian Manufacturing Workers’ Union ; and
- Julien Marsh Sutcliffe (Sutcliffe), industrial organiser for the
Australian Manufacturing Workers’ Union.
SECTION 170DF(1)(b) & (d)
As I have already indicated the respondent bore the onus of showing that the decision to terminate was not tainted by any of the matters of discrimination prohibited by section 170DF(1)(b) and (d) of the Act (see the decision of Justice Northrop in Johns v Gunn Ltd (1995) 60 IR 258). It met this onus by having its witnesses, particularly Aroni, who was a party to the decision to terminate, and Fried, who made that decision, positively affirm that the prohibited reasons did not play any part in the decision to terminate as well as establishing to the satisfaction of the Court that there existed bona fide reasons for termination relating to the respondent’s operational requirements.
It was conceded by Aroni and Fried that Fried was against the respondent’s workshop being turned into what is understood to be a closed union workshop. Whilst he accepted that some employees were members of the union, and one of the these included his son, with many employees being union members over a long period of time, Fried wanted to be able to negotiate with individual employees and not just the union. He did in the relevant period express antagonism towards the union because he believed that it was trying to interfere with the running of the company.
It was apparent from the evidence of the two witnesses that when it came to deciding on retrenchments, which included the press shop manager, Gary Forbes, they were concerned that the respondent’s action in abolishing the first applicant’s position, where as from 2 April 1996 he had been elected as a union shop steward, might be misconstrued. Nevertheless, their evidence was that they determined to press on with the decision to abolish the position and contract out the maintenance work as a cost saving measure, in the press shop area, where the work was diminishing and the need for maintenance was an intermittent one.
Apart from Fried’s overt hostility to an increased union presence on site, the first applicant sought to rely on one other matter as being evidence of a discriminatory attitude towards him after he took up his shop steward position on 2 April 1996. His case was that he was not offered any overtime after 28 March 1996 because, he believed, this was withheld from him as a direct response to his shop steward activities after 2 April 1996. He also alleged that he had been told by Forbes between March and April 1996 that the boss had said “there is to be no more overtime”. Forbes himself was retrenched at about the same time as the first applicant was and he was not called by either party to give evidence. It was the respondent’s case that overtime had been reduced because of the downturn in the use of the press shop facility and, indeed, that facility now operates with staff working for only four days per week.
The applicant’s pay slips (Exhibit A2) show that from 28 March 1996 he received no further overtime work at all. The respondent prepared a summary sheet (Exhibit R6) produced to the Court by its witness, Hurley, summarising a selection of overtime offered to all press shop employees between 17 January 1996 and 7 May 1996. That summary confirms that after 27 March 1996 there was no maintenance overtime performed in the press shop. It also shows that for the other workers in the press shop, such as the operators, little if no overtime was performed by them in the same period. This is consistent with the respondent’s claim that there was a reduction in work generally and as a consequence the overtime available was very limited. A further consequence was that the maintenance needs in that area were reduced.
If the abovementioned matters are considered along with the first applicant’s evidence that he was elected as a shop steward on 2 April 1996, it is apparent that the dramatic drop in overtime worked occurred the week preceding his election as a shop steward and could not have been connected to this event occurring. There was evidence that in the months preceding April the first applicant was active in recruiting new union members at the site, however, the work records show that he was then performing regular overtime.
It was put to Fried in cross-examination that after the meeting of employees, at which meeting the first applicant was elected one of two shop stewards, he communicated with Ormsby indicating that he did not want the “union coming in” and trying to run the company. Whilst Fried demonstrated no proper recollection of the contents of this conversation and appeared to prevaricate when asked questions concerning this conversation, I am satisfied that as a result of the general admissions made by him concerning his views on increased union activity at the work place, and further as a result of Aroni’s evidence confirming Fried’s views, that it is probable that he made these comments at the time to Ormsby. The first applicant in his evidence suggests that the comments were made directly to him, however, this was not put to Fried in cross-examination and it seems from Ormsby’s evidence that the discussion was one that was really held with him.
The other shop steward remains in employment with the respondent. The general allegation that Fried, who appears to be the person in charge of the running of the company, did not then “like” unions and was opposed to any union control of the worksite, must be balanced against evidence of a history in the company of longstanding union membership, including the first applicant’s union membership, and the fact that the other shop steward is still engaged at the worksite.
On the evidence I am satisfied that the respondent has established that it was not motivated by any of the prohibited reasons contained in section 170DF(1)(b) and (d) when it abolished the first applicant’s position and made him redundant. To my mind, the fact that the employer showed some antagonism towards increased union activity at the worksite is not a sound basis from which it might be inferred the company was motivated by particular discriminatory reasons when it decided to terminate the first applicant in May 1996.
THE REDUNDANCY
The evidence supports a conclusion that prior to the termination the applicant did not have enough work to fully occupy him in the workshop. He was then given various jobs in other areas such as welding and fitting to fill in his time. If anything, in my view the applicant’s claim comes down to one where it was said by him that there was no or no proper consideration of alternative employment within the factory, even though the operational requirements may have necessitated abolition of his position. Even the applicant accepted that it was open to the respondent to contract out the maintenance work performed in the press shop.
It was said by the respondent that any decision of this Court which might suggest that a failure to offer alternative employment means that there was no valid reason for termination as a result of the respondent’s operational requirements, is in direct conflict with the decisions of the Court in Jones’ case and the Quality Bakers’ case because in the present case this was a position redundancy. I do not accede to this submission as a general proposition because in this Court the phrase “valid reason” has a meaning which encompasses a notion of fairness and refers to a reason that can be justified. Two recent decisions illustrate this point. The first is that of Justice Lee in Nettlefold v Kym Smoker Pty Ltd (unreported, IRCA, Lee J, 4 October 1996) where he says at page:
“Neither counsel made any submissions on the question whether the phrase "valid reason" used in sub-s170DE(1) of the Act imposed a requirement that in all the circumstances a termination of employment at the initiative of an employer not be unjust or unfair. The terms of the Act suggest that such a construction is arguable. Section 170CA of the Act states that the object of Div 3 of Pt VIA is to give further effect to the Termination of Employment Convention ("the Convention") the text of which is set out in Schedule 10 of the Act. Art 8 of the Convention requires a contracting party to the Convention to ensure that a worker who has been dismissed is entitled to challenge that dismissal in an appropriate tribunal if the worker considers that his or her "employment has been unjustifiably terminated" and pursuant to Art 9 of the Convention that tribunal is to be empowered "to examine the reasons given for the termination and the other circumstances relating to the case and to render a decision on whether the termination was justified".”
The second decision is that of the Chief Justice of this Court in Thomas v Lynch (unreported, IRCA, Wilcox CJ, 20 December 1996). In Thomas’ case the Chief Justice offers the following interpretation of Justice Lee’s words:
“As I understand Lee J’s view, it is that the validity of the employer’s reason cannot be divorced from its effect on the employee. It is not enough that there is a reason for the termination that is defensible from the employer’s point of view. The reason must be one that makes the termination “justified”, after taking into account the effect of the termination on the employee.”
In my view the valid reason or the justification required by section 170DE(1) of the Act relates to the termination. If termination through the respondent’s operational requirements is avoidable in the sense that appropriate alternative employment is available, then a termination based on the operational requirements of the company is not necessarily defensible or justifiable.
In the present case before the decision to terminate the first applicant was taken, Aroni pointed to discussions with Fried about alternatives to termination and Fried responded in the negative. The first applicant does have skills that may allow him to perform some work in other areas of the factory from time to time, however, on the evidence of the respondent’s witnesses I am satisfied that there was no position appropriate to his skills and qualifications available at the date of termination and it is not a case where an appropriate alternative position was identified as being available.
I am satisfied that the termination was for a valid reason and, accordingly, I propose to order that the applications of the applicants be dismissed.
MINUTES OF ORDERS
THE COURT ORDERS THAT:
The applications of the applicants are 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 ten (10) pages are a true copy of the reasons for judgment of Judicial Registrar Millane.
Associate:
Dated: 28 January 1997
Representatives for the Applicants: Australian Manufacturing Workers’
Union
Appearing for the Applicants: Ms P. Flint
Solicitors for the Respondent: Aroni Colman
Counsel for the Respondent: Mr M. Fleming
Date of hearing: 19 & 25 November 1996
Date of judgment: 28 January 1997
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