Gregory Vertigan v Allstaff Airconditioning (Vic) Pty Ltd

[1996] IRCA 58

DECISION NO:  58/96

C A T C H W O R D S

INDUSTRIAL LAW - UNLAWFUL TERMINATION - VALID REASON - OPERATIONAL REQUIREMENTS - REDUNDANCY - HARSH, UNJUST OR UNREASONABLE TERMINATION - REMEDY - COMPENSATION - long serving employee dismissed while on workers compensation - whether position available or redundant - whether reinstatement impracticable - whether alternative position was available.

Industrial Relations Act 1988 ss. 170DB, 170DE, 170EDA, 170EE.

CASES:         

Selvachandran v Peteron Plastics Pty Ltd  (Industrial Relations Court of Australia, Northrop J, 7 July 1995)

APESMA and Cross v Deniliquin Council (Industrial Relations Court of Australia, Moore J, 14 December 1995)

Kenefick v Australian Submarine Corporation Pty Ltd (1995) 131 ALR 197

Mitchell-Collins v The Latrobe Council (1995) 60 IR 480

Sinclair v Anthony Smith and Associates Pty Ltd (Industrial Relations Court of Australia, von Doussa J, 1 December 1995)

Paff v Speed (1961) 105 CLR 549

Aitken v The Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia - Western Australian Branch (Industrial Relations Court of Australia, Lee J, 7 August 1995)

Nicolson v Heaven & Earth Gallery Pty Ltd (1994) 1 IRCR 199

Patterson and Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Newcrest Mining Ltd (Industrial Relations Court of Australia, Marshall J, 21 December 1995)

Redding v Lee (1983) 151 CLR 117

Coker-Godson v National Dairies Ltd (Industrial Relations Court of

Australia, Marshall J, 4 August 1995)

Quality Bakers of Australia Ltd v Goulding (1995) 60 IR 327

GREGORY VERTIGAN -v-
ALLSTAFF AIRCONDITIONING (VIC) PTY LTD

No. VI 3374 of 1995

Before:  Judicial Registrar Murphy
Place:  Melbourne

Date:  27 February 1996

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI 3374 of 1995

B E T W E E N :

GREGORY VERTIGAN
Applicant

AND

ALLSTAFF AIRCONDITIONING (VIC) PTY LTD
Respondent

MINUTES OF ORDERS

Judicial Registrar Murphy     27 February 1996

THE COURT ORDERS:

1.That the respondent pay to the applicant compensation of $7,795 pursuant to s170EE(2) of the Act, within 21 days.

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 3374 of 1995

B E T W E E N :

GREGORY VERTIGAN
Applicant

AND

ALLSTAFF AIRCONDITIONING (VIC) PTY LTD
Respondent

Before:           Judicial Registrar Murphy
Place:              Melbourne
Date:              27 February 1996

REASONS FOR JUDGMENT

In this proceeding under Part VIA of the Industrial Relations Act 1988 (“the Act”) the applicant seeks reinstatement to his former position with the respondent. The legal issues in the proceeding were whether the applicant’s position was redundant and the respondent had a valid reason to terminate his employment, whether the termination was otherwise unlawful, and whether reinstatement was practicable.

Background

The applicant is a qualified plumber and aged 44.  He commenced employment with the respondent in 1976.  He remained employed continuously, except for a short break, until his services were terminated on 7 June 1995.  For the last 15-18 years of his employment the applicant, although employed as a plumber, had discharged the duties of a site foreman.  Perhaps exceptionally, the applicant was also a shareholder of the respondent.  His shareholding arose when the respondent was established.  He was one of  the employees of a business operated by another company who banded together to purchase the business and incorporated the respondent to operate it.

The respondent is an airconditioning contractor and employs approximately 70 field staff and 30 head office employees.  At any one time the respondent is working on a number of different projects within the building industry. As building contracts are completed employees of the respondent are redeployed to the next contract won by the respondent. In addition the respondent operates a mobile division that deals with repairs and maintenance to existing airconditioning units.

In 1991 the applicant sustained a serious back injury at work.  He was off work for some months and received Workcover payments.  He returned to full-time work on a graduated basis over some months in 1991 and 1992.  In 1993 the applicant underwent surgery to his back.  After his recovery he again returned to full-time work on a graduated basis.  His hours increased and his duties altered as his condition allowed. 

In 1995 the applicant was employed on a major project of the respondent, the Eastland  shopping centre.  The applicant’s condition prevented him from undertaking heavy duties and a position was created that recognised this limitation.  The applicant’s position was in charge of quality assurance on the project, and also site foreman duties.  The applicant was involved in administrative and clerical duties, ordering materials and equipment, and dealing with consultants and leading hands of other contractors.  The applicant described his position as being in control of the job except in relation to labour on site and site meetings.   The quality assurance function involved about 35% of the applicant’s time. There was a nominated site foreman on the project, Mr Jacobi, whose duties were to control labour on the site and attend at site meetings

Mr Henwood commences employment.
Mr Jim Henwood commenced employment as construction manager of the respondent in March 1995.  He has wide experience in the industry.  As part of his duties he decided to visit each project to meet staff.  He was also seeking to rationalise pay rates within the respondent as there were a number of different rates and allowances being paid throughout the respondent.

During March 1995 the respondent needed a foreman at one of its projects, the Casino carpark.  On 20 March Mr Henwood asked the applicant, through another employee, would he transfer across to this project.  As a result of this message the applicant met Mr Henwood and a director of the respondent at Mr Henwood’s office.  At that meeting the applicant advised Mr Henwood that he had personal problems and would be unable to accept the position of foreman at the Casino project.  Mr Henwood’s response was that he appreciated the frank advice given by the applicant.  It was agreed that the applicant would return to the Eastland project which at that stage was nearing completion.  At no time in the conversation was the applicant told that his refusal to accept the transfer to the Casino carpark site would result in the termination of his employment.  Mr Henwood confirmed the conversation in a facsimile to the applicant (Exhibit R1).  It read in part : 

“I will confirm your advice that you no longer feel that you can carry the duties of project foreman and wish to continue as a hands-on plumber.”

The applicant denied receiving this facsimile.  I accept his denial on this point because the last phrase of the document is unlikely to have represented the applicant’s position. From the evidence, since his back injury, he has been unable to work as a “hands-on plumber”.

In early April Mr Henwood visited the Eastland project and advised the applicant, among others, that his salary would be reduced because the applicant wasn’t going to work in the capacity of a foreman any more.   In cross-examination the applicant said that he told Mr Henwood that he was not ruling out performing foreman duties but that the Casino carpark project was “bad timing”.  Mr Henwood admitted in evidence that he was a bit upset when the applicant refused at the March meeting to work at the Casino project.  He denied that he took it as a personal rebuff.

The applicant ceases work
During March and early April the applicant felt that his back condition was deteriorating.  He attributed this to part of his duties that involved checking incoming equipment to the Eastland project.  On 5th April 1995 the applicant saw his doctor and obtained a medical certificate indicating that he was incapacitated for work.  He completed a Workcover claim form and forwarded the claim and certificate to the respondent.  He ceased work on 5 April. 

After the applicant ceased work he was paid sick pay for a period until the respondent’s Workcover insurer accepted liability to make payments.  In late May his sick leave payments were re-credited by the respondent when the Workcover payments came through to the respondent from the insurer.  From the time that the applicant ceased work he forwarded to the respondent the relevant Workcover certificates of capacity. 

In April Mr Henwood unsuccessfully tried to contact the applicant requesting a meeting.  In June the applicant, still off on Workcover, attended the respondent for a hearing test and Mr Henwood arranged a meeting.

The meeting of 2 June
The purpose of the meeting was for Mr Henwood to discuss the applicant’s future with the respondent.  At the time the applicant was still certificated that he was unfit for work.  Mr Henwood said that the applicant told him in the meeting that his doctor had said he would not be able to work “on the tools” again. This evidence was not challenged and is consistent with the applicant’s own evidence as to his work capacity.    According to Mr Henwood the applicant said that he would be able to work as a foreman and in a quality assurance position.  Mr Henwood told the applicant that he had no foreman positions available but that he would investigate the respondent’s projects to see if there were any quality assurance positions available. 

The applicant said that at the meeting of 2 June he had advised Mr Henwood that his incapacity certificate was due to run out.  He said that he spoke about returning to work and sought to ask Mr Henwood what sort of work was available “so he could get me re-instated”.  He told Mr Henwood that he would be speaking to his doctor about the type of work before returning to work.  The applicant gave unchallenged evidence that in the course of the discussion there was no discussion about his employment being terminated, that his job was in jeopardy, or that he faced a prospect of being made redundant.  There was also no discussion about the applicant’s sick leave entitlements.  In cross-examination the applicant suggested, in evidence not put to Mr Henwood, that Mr Henwood “took it personally” that he was not working but also said that the conversation was “quite amicable”.

The applicant is dismissed.
Mr Henwood’s evidence was that after the meeting he made enquires of the various sites of the respondent and found that there were no positions available for the applicant.  On 7 June he rang the applicant and advised him that he had no position available for him, that he was going to make him redundant and his employment was terminated.  The applicant was advised that he would be paid his termination entitlements and that was the end of the conversation.  The applicant was later paid his outstanding entitlements, including one days pay in lieu of notice, and seven days Workcover and make-up pay.  He was not paid any accrued sick leave.

The respondent’s work position at 7 June
In late May and early June the respondent was negotiating with the builders of the Casino for a further contract on the podium level.  At the time the respondent had nominated its proposed site foreman for that particular job and was involved in a joint venture with two other organisations seeking to win the contract in a very competitive environment.  Subsequently in July the respondent was awarded the contract.  In relation to the other handful of jobs being undertaken by the respondent in early June, the quality assurance function was generally being discharged by the relevant site foreman.

The applicant’s employment status in June
By June 1995 the applicant was receiving Workcover payments from his employer.  His sick leave had been re-credited by the respondent.  There was no dispute that the applicant was entitled to 10 days sick leave per year and at June 1995 had 100 days accumulated sick leave.  The applicant’s Workcover payments ceased on 14 June 1995.  The basis for this cessation was that under the relevant legislation he had exhausted the 104 weeks entitlement to weekly payments in respect of his back injury.  The applicant has proceedings extant against his employer in relation to some unspecified Workcover entitlements.

Did the employer have a valid reason to terminate the employment ?
The respondent carries the onus of proof that it had a valid reason, in the sense of a “sound, defensible or well-founded” reason, based on its operational requirements, to terminate the applicant’s employment (see ss170EDA(1)(a) and 170DE(1) of the Act and Selvachandran v Peteron Plastics Pty Ltd  (Industrial Relations Court of Australia, Northrop J, 7 July 1995)).

There was no suggestion that the termination was connected with the applicant’s conduct or capacity.  I accept Mr Henwood’s evidence that the respondent rested its decision on its operational requirements.  It submitted that the applicant was surplus to those requirements and thus it had a valid reason to terminate his employment.

In Kenefick v Australian Submarine Corporation Pty Ltd (1995) 131 ALR 197, 208 Wilcox CJ adopted the comments in Selvachandran (above) and said :

“I respectfully agree, and I think it follows that the reason must be genuine, that there must be a causal relationship between the reason and the termination and that the termination must be a logical response to the employee’s capacity or conduct or the employers operational requirements.  Of course, there is often more than one logical way of dealing with a problem.   While the subsection requires the employer to establish that the termination was a logical way of dealing with the problem of employee capacity or conduct, or operational requirements, that gave rise to it, it does not require proof that this was the only logical course.  The subsection was designed to inhibit capricious terminations, not to put the court in the employer’s managerial chair.”

On one view of the evidence the respondent had no position for the applicant as he was surplus to requirements.  In June the project he had previously been working on had run right down.  The respondent had covered its requirements for foremen and quality assurance services elsewhere in its operations and did not need the applicant after the Eastland project wound down.  The Casino podium project was only a possibility.

Counsel for the applicant could not dispute this picture but argued that the applicant had some security in his employment by reason of his unused sick leave entitlements. He further argued that the respondent acted prematurely in terminating the applicant’s employment while the position regarding the Casino podium project remained unclear.

On this view of the evidence there was no particular necessity at that time to terminate the applicant’s employment.  The applicant was a longstanding employee who had accorded valuable service to the respondent.  In March 1995 he was seen as having the skills necessary to be offered the position of foreman on the Casino carpark project.  He declined that position for personal reasons.  This was accepted by the respondent at the time.

The applicant from April was off work due to incapacity.  There was no dispute that he had advised Mr Henwood on 2 June that his incapacity was likely to end in the near future.  The applicant said the purpose of the meeting of 2 June was to see what was in store for him when he was in a position to resume duties.

A particular argument put by Counsel for the applicant was that the applicant’s 100 days accrued sick leave prevented the respondent terminating his services while that sick leave remained unused and the applicant incapacitated.  He relied on the following comments by Windeyer J in Paff v Speed (1961) 105 CLR 549, 566 :

“A servant is entitled, in the absence of an express or implied term to the contrary, to be paid his wages during periods of temporary illness or incapacity.”

I reject this argument.  As in all contracts, the contract of employment contained an implied term that it could be terminated upon notice.  I am not satisfied that there was any express term of the employment contract preventing the contract being terminated lawfully while sick leave entitlements remained unused.

In determining whether the respondent has discharged its onus of proof the fact that in the past employees had not been retrenched when contracts were completed is relevant, but not decisive in the case of the applicant.   Despite the vicissitudes of the building industry, the respondent had not had to resort to retrenchments.  The applicant’s limited physical capacity, however, put him in a different situation when the matter was looked at from Mr Henwood’s chair.  Looking at the respondent’s operational requirements at that time Mr Henwood was entitled, on the evidence, as a defensible or logical managerial decision, to terminate the applicant’s employment.  When the applicant was likely to be able to present himself for work, the respondent, on the evidence, had no duties for him.  The Casino podium project had still not been won and there were no other positions in sight.  There was thus a causal link between the lack of positions and the termination of his employment.

In Selvachandran (above) Northrop J said that s170DE(1) “should not impose a severe barrier to the right of an employer to dismiss an employee.”  I am satisfied that the respondent has discharged its onus of proof.

Breach of s170DE(2)
The applicant carries the onus of proof that the termination was not for a valid reason because it was harsh, unjust or unreasonable (ss170EDA(1)(b) and 170DE(2) of the Act).

In APESMA and Cross v Deniliquin Council (Industrial Relations Court of Australia, Moore J, 14 December 1995) the Court said :

“In construing s170DE(1) and applying its provisions to a particular set of facts, it is necessary to bear in mind the object of Division 3 of Part VIA. As earlier mentioned s170CA states that the object of Division 3 is to give effect to the Convention and Recommendation which are Schedules 10 and 11 to the Act respectively. The Recommendation contains provisions concerning termination for economic, technological, structural or similar reasons.

Article 19 provides:

“(1)     All parties concerned should seek to avert or minimise as far as possible termination of employment for reasons of an economic, technological, structural or similar nature, without prejudice to the efficient operation of the undertaking, establishment or service, and to mitigate the adverse effects of any termination of employment for these reasons on the worker or workers concerned.

(2)       Where appropriate, the competent authority should assist the parties in seeking solutions to the problems raised by the terminations contemplated.”

and article 21 provides :

“The measures which should be considered with a view to averting or minimising terminations of employment for reasons of an economic, technological, structural or similar nature might include, inter alia, restriction of hiring, spreading the workforce reduction of a certain period of time to permit natural reduction of the workforce, internal transfers, training and retraining, voluntary early retirement with appropriate income protection, restriction of overtime and reduction of normal hours of work.”

Thus a feature of the Recommendation is that an employer should avoid terminating an employee’s employment as a result of a restructuring if it is possible to place the employee in another position within the employer’s organisation.”

In Aitken v The Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia - Western Australian Branch (Industrial Relations Court of Australia, Lee J, 7 August 1995) the Court also referred to the Convention  and Recommendation and said :

“The object of these provisions (Division 3 of Part VIA of the Act) is to institute a level of practice in the management of labour which will tend to preserve the worth of the asset that labour represents.
.......
The question in this case is whether the employer gave due regard to all reasonable and fair considerations the employee was entitled to expect as part of the employer/employee relationship that existed between them prior to termination of the employee’s services.  That is to say, acting fairly and having due regard to the interests of the employee did the employer do that which could be reasonably expected of it in the circumstances to avoid the termination operating harshly, unjustly or unreasonably?”

Applying these comments the respondent had a wider duty than that undertaken by Mr Henwood in and after the conversation of 2 June 1995. The applicant’s background with the respondent is important and puts him in a special category. Although the applicant was limited in the range of duties that he was able to discharge the fact was that he had discharged duties of that type for the respondent for the last 15-18 years. He said he had been complimented for his work in quality assurance. He was a shareholder in the company. He had not been retrenched or laid off by the respondent in the past. In response to the cycles in the building industry the respondent had, prior to this, kept its workforce intact. The respondent had also, in relation to the applicant personally, twice rehabilitated him to its workforce. All these factors are important to assessing, through the prism of s170DE(2), the validity of the response of the respondent that its operational requirements did not require the services previously provided by the applicant .

It was admitted that Mr Henwood did not consult the applicant after the conversation of 2 June and before he advised that he was terminated.    He also did not say to the applicant that retrenchment was likely if a position could not be found.  The applicant was thus deprived of the opportunity to use his own extensive knowledge of the respondent’s operations to put to Mr Henwood alternative proposals regarding the continuation of his employment.

The importance of proper consultation in circumstances of redundancy has been recognised in a number of cases:  see eg. Aitken (above), Sinclair v Anthony Smith and Associates Pty Ltd (Industrial Relations Court of Australia, von Doussa J, 1 December 1995) and Quality Bakers of Australia Ltd v Goulding (1995) 60 IR 327, 334-7.

Mr Henwood did not consider the question of the applicant’s outstanding leave entitlements.  For instance the applicant could have been invited to take annual leave until the Casino  podium contract was resolved.  He could have been offered part-time work of some description when his medical condition allowed.  By failing to consider these entitlements Mr Henwood failed to properly consider the “possibility” that the respondent would win the Casino podium contract and thus have a position for the applicant.  The respondent failed to exhaust the options open to it short of the termination of the applicant’s employment.

The Court had the clear impression that Mr Henwood took advantage of the absence of the applicant from work and the lack of an immediate position to place him in to dispense with his services.  The manner in which this was done, and the substantive unfairness of the outcome to a person with his background with the respondent make the decision “harsh, unjust and unreasonable” and contrary to s170DE(2) of the Act.

Remedy
Reinstatement is the primary remedy under s170EE of the Act and is to be ordered unless it is impracticable. The comments of Wilcox CJ in Nicolson v Heaven & Earth Gallery Pty Ltd (1994) 1 IRCR 199, 210 command general acceptance in the Court:

“The word “impracticable” requires and permits the Court to take into account all the circumstances of the case, relating to both the employer and employee, and to evaluate the practicability of a reinstatement order in a commonsense way.  If a reinstatement order is likely to impose unacceptable problems or embarrassments, or seriously affect productivity, or harmony within the employer’s business, it may be “impracticable” to order reinstatement, notwithstanding that the job remains available.”

In Sinclair (above) the Court held that the decision on reinstatement “must be made in the light of the evidence and circumstances that prevail at the time that the order is to be made”. It was further held that “the evidentiary burden of proof of impracticability rests upon the employer.”

Here the applicant’s physical capacity for work is a matter of contention.  The only medical evidence before the Court was a medical certificate dated 7 July 1995 stating that the applicant was fit for  “4 hours light duties clerical” from 7 July to 4 August 1995.

In his evidence the applicant stated that he believed he was capable of discharging a full-time position performing site foreman and/or quality assurance duties.  He has, of course, not performed those duties since ceasing his position at the Eastland project in April 1995.

Mr Henwood said that the respondent has no site foreman or quality assurance positions available and none coming up.  The main project that the respondent is involved in is the Casino podium level.  There it is in a joint venture and the labour requirements are negotiated and shared equally by the partners.  The quality assurance function has been undertaken since August by an employee being rehabilitated after suffering an industrial accident.  It is a rehabilitation position.

S170EE(1)(a)(i) requires the Court to consider first whether the applicant can be reinstated to his former position. I am satisfied that this cannot be done because the Eastland project has now been wound down by the respondent. The applicant’s position was, I am satisfied, fashioned within that project to utilise his skills, but was not one that could be described as necessarily referable to the respondent’s next project. This was the first time it occurred. Further it must be remembered that the applicant’s substantive position within the respondent is in fact that of a plumber. It is common ground that he is not able to discharge the duties required of that job.

Counsel for the applicant next argued that the applicant should be appointed to another position on terms and conditions no less favourable than his previous one.  This first requires the identification of a position.  I am satisfied that there is no identifiable position within the respondent that the applicant could, given his physical limitations, be appointed to.  All the handful of foreman positions are filled.  The only possible position is that of quality assurance at the Casino podium project.  I am satisfied, applying the Nicolson test (above) that this is impracticable.  There is an existing incumbent in that position and in any event it is not clear that the applicant would be able to immediately resume a full-time position. 

In Patterson and Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union -v- Newcrest Mining Ltd (Industrial Relations Court of Australia, Marshall J, 21 December 1995) the Court dealt, in the context of an argument about “impracticability”, with evidence that a “fabricated” position could be created from various aspects of work from other existing jobs. It was held that it would not be a sustainable full-time job. Marshall J said that this was not the sort of position intended to be covered by s170EE(1)(a)(ii) of the Act.

Here, the position is similar. I am satisfied that given the applicant’s physical limitations, and the fact that the functions that the applicant is able to discharge are all being discharged by incumbents, it is impracticable to order his reinstatement pursuant to s170EE(1)(a)(ii) of the Act.

Compensation

Under s170EE(2) the Court is given a discretion, in the case where reinstatement is impracticable, to order payment of compensation to an applicant of the amount of remuneration that he would have earned, up to a limit, had the termination not occurred. Pursuant to s170EE(3) of the Act the limit on any compensation is the amount of remuneration that an employee would have been likely to have received in the six month period after he was dismissed on 7 June 1995. The application of s170EE(3) requires a twin task. The first step is to ascertain the applicant’s losses. The second step is to ascertain the limit for any order for the payment of an amount of compensation for the losses found.

In Nicolson (above at 212) Wilcox CJ said that the Court, in assessing any compensation under the Act, must take into account what would have happened had the termination not occurred.

The applicant, at the time of his termination, was receiving Workcover benefits and make-up pay.  Those benefits, due to a legislative limit, ceased on 14 June 1995.  At the date of his termination the applicant had accrued 100 days, or 20 weeks sick leave.  In evidence was a medical certificate that indicated that from 7 July - 4 August 1995 the applicant was fit for 4 hours per day “light duties clerical”.  It was not clear from the evidence what the applicant’s position was after 4 August.  Presumably had he returned to work on 7 July his hours would have increased until he was able to resume full time duties in a suitable position in August.

Here I am satisfied that had the dismissal not occurred the applicant would have remained in receipt of either Workcover benefits or sick leave until 7 July 1995.  I am satisfied that at that stage he would have been given partial duties or remained on sick leave - his Workcover payments having ceased - until early August.  At that point I am satisfied that there was a prospect of him securing a position on the Casino podium project, probably in the quality assurance function.  Given the restrictions on the range of duties able to be discharged by the applicant, I would assess his prospects of having secured a position on the Casino podium project, or elsewhere within the respondent, at 50%.  In the event that he did not secure a position I am satisfied that he would have been lawfully dismissed.  I do not accept that at that time he could have forced the respondent to keep him as an employee until the expiration of his accrued sick leave, or that at that point he could have cashed out the accumulated sick leave.

The applicant’s losses to 4 August 1995 can be calculated as approximately eight weeks wages (he was paid until 13 June).  Based on the rate at which he was being paid at the date of his termination  ($13.784 per hour, with no allowances being payable) his weekly wage was $551.36.  His loss until 4 August is therefore $4,411.

His losses since 4 August 1995 are, in the light of the contingencies discussed above, very difficult to quantify.  He may have been employed with the respondent, he may have been dismissed.  He has, to date, been unable to obtain other work.  His employability is somewhat limited due to his physical restrictions. 

Had the applicant been employed at the Casino podium project his weekly wages would have been approximately $658.00.  This is based on the above hourly rate for 40 hours, plus a $90 per week site and $16.72 insulation allowance. (He may have earned more than this on the project as his earnings at Eastland averaged nearly $1,000 per week in the period July 1994 to 26 March 1995.)  The Casino podium project is still being undertaken by the respondent and had the applicant secured a position there is no reason why he would not have remained there throughout this calendar year.

Doing the best I can in these circumstances, and with competing contingencies, favourable and unfavourable,  I find that $17,108 or six months wages at $658 per week is a reasonable approximation of the applicant’s losses since 4 August 1995.  His total loss then, past and future, having regard to what would have happened had the termination of his employment not occurred, amounts to $21,519.

Reverting to s170EE(3) the maximum amount of compensation is the amount of remuneration that the applicant would have received over the period 7 June 1995 to 7 December 1995. Had he not been terminated on 7 June 1995 he would have been paid at a weekly sick leave rate of $551.36 for 9 weeks until 4 August 1995, a total of $4,962. He would have received remuneration for the balance of the 18 weeks to 7 December at the rate of $658 per week, a total of $11,844. The maximum compensation that can be ordered then is $4,962 plus $11,844, a total of $16,806. This amount is less than the $21,519 I have found is the total loss that has flowed to the applicant as a result of the termination.

Effect of redundancy payment
While employed by the respondent the applicant had credited to him payments made by the respondent to a fund operated under the Victorian Building Industry Agreement known as the Redundancy Payment Central Fund Ltd.  The rules of the Fund, which were incorporated into the relevant industrial award, provide that where a member retires or leaves the industry then they are entitled to the amounts standing in their name.  The applicant has been paid his entitlement totalling $13,724.10.

The respondent argued that this amount should be taken into account in assessing any compensation payable.  The applicant disputed this and relied on Redding v Lee (1983) 151 CLR 117 which held that an invalid pension should be disregarded in assessing damages for personal injuries caused by negligence. I reject the applicant’s argument. In the provisions of the award relating to the Fund it is explicitly stated that the Fund “shall not result in any “double dipping” insofar as the benefits payable to any employee are concerned and no additional claims will be made for redundancy payments.”(Cl29.1)

In Coker-Godson v National Dairies Ltd (Industrial Relations Court of Australia, Marshall J, 4 August 1995) the Court held that in assessing the amount of compensation under the Act redundancy payments already made must be taken into account. I propose to follow this decision. There is no analogy here between this payment, which was provided for by contributions of the respondent to compensate for the same reason as the applicant was terminated, and the government pension considered in Redding v Lee (above). The respondent is entitled to rely on the amount of this payment to reduce the amount of any compensation payable to the applicant consequent upon a breach of the Act.

Conclusion
From the applicant’s losses of $21,519, the amount of $13,724 must therefore be deducted, leaving a loss of $7,795. I am satisfied that this is an appropriate amount of compensation for the breach of s170DE(2) of the Act and I propose to order that the respondent pay that amount to the applicant.

Breach of s170DB(2) of the Act
Counsel for the applicant argued that the respondent had failed to pay the applicant the proper amount in lieu of notice when it terminated his employment. He was paid one days wages in lieu of notice at the time. He was also paid until 13 June being the end of the week of his termination. Under s170DB(2) of the Act, given his length of service, he should have been paid at least four weeks pay in lieu of notice. The amount of his loss as a result of the failure to meet the requirements of s170DB(2) is three weeks wages at $551.36 per week, a total of $1,654.00. As this amount is included in the losses for which compensation has been provided I decline to order that the respondent pay any amount of damages to the applicant pursuant to s170EE(5) of the Act.

MINUTES OF ORDERS

THE COURT ORDERS:

1.That the respondent pay to the applicant compensation of $7,795 pursuant to s170EE(2) of the Act, within 21 days.

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 sixteen (16) pages are a true copy of the reasons for judgment of Judicial Registrar Murphy.

Associate:                   
Dated:  27 February 1996

Solicitors for the Applicant:               Ryan Carlisle Thomas
Counsel for the Applicant:                 Mr R M Niall

Representative for the Respondent:   Mr Ross Fearne

Date of hearing:  2 February 1996
Date of judgment:  27 February 1996