Jobson v Allwest Print Pty Ltd
[1997] IRCA 144
•03 April 1997
DECISION NO:144/97
CATCHWORDS
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - REDUNDANCY - VALID REASON - claim of UNLAWFUL TERMINATION - OPERATIONAL REQUIREMENTS - PROCEDURAL FAIRNESS - REINSTATEMENT - COMPENSATION
Workplace Relations Act 1996 (C'th) (formerly Industrial Relations Act 1988 (C'th)) Ss 170 DC, 170 DE, 170DE(1), 170DE(2), 170EA
Industrial Training Act S 37
Grundy (Teddington) Ltd v Plummer [1983] ICR 367
Kenefick v Australian Submarine Corporation Pty Ltd (2) (1996) 65 IR 366
Kerr v Jaroma Pty Ltd, unreported, IRCA 470/96, Marshall J, 7 October 1996
Nettlefold v Kym Smoker Pty Ltd, unreported, IRCA 469/96, Lee J,
4 October 1996
Quality Bakers of Australia v Goulding (1995) 60 IR 327
Senathirajah Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371
State of Victoria and Ors v Commonwealth of Australia, High Court of Australia, M46 of 1994, 4 September 1996 (unreported)
Gerard Westen v Union Des Assurances de Paris unreported, IRCA 419/96, Madgwick J, 28 August 1996
GREGORY RAYMOND JOBSON WI96/1286
GLENN JOHN OOSTERHUIS WI96/1291
ANTONIO TOMASELLI WI96/1292
COLIN GEORGE RANGER WI96/1293
BRADLEY MARK GIBSON WI96/1294
DERMOT O'REILLY WI96/ 1295
ALESSIO GIUSEPPE CONTARICI WI96/1296
PETER JOHN AINGE WI96/1298
RODNEY EDGE WI96/1451
and AUTOMOTIVE FOODS METALS ENGINEERING PRINTING AND KINDRED INDUSTRIES UNION
- v - ALLWEST PRINT PTY LTD
Before: BOON JR
Place: PERTH
Date: 3 APRIL 1997
IN THE INDUSTRIAL RELATIONS COURT )
OF AUSTRALIA )
WESTERN AUSTRALIA DISTRICT REGISTRY )
WI 1286 of 1996
B E T W E E N:
GREGORY RAYMOND JOBSON
and AUTOMOTIVE FOODS METALS
ENGINEERING PRINTING AND KINDRED
INDUSTRIES UNION
Applicants
A N D:
ALLWEST PRINT PTY LTD
Respondent
WI 1291 of 1996
B E T W E E N:
GLENN JOHN OOSTERHUIS
and AUTOMOTIVE FOODS METALS
ENGINEERING PRINTING AND KINDRED
INDUSTRIES UNION
Applicants
A N D:
ALLWEST PRINT PTY LTD
Respondent
WI 1292 of 1996
B E T W E E N:
ANTONIO TOMASELLI
and AUTOMOTIVE FOODS METALS
ENGINEERING PRINTING AND KINDRED
INDUSTRIES UNION
Applicants
A N D:
ALLWEST PRINT PTY LTD
Respondent
WI 1293 of 1996
B E T W E E N:
COLIN GEORGE RANGER
and AUTOMOTIVE FOODS METALS
ENGINEERING PRINTING AND KINDRED
INDUSTRIES UNION
Applicants
A N D:
ALLWEST PRINT PTY LTD
Respondent
WI 1294 of 1996
B E T W E E N:
BRADLEY MARK GIBSON
and AUTOMOTIVE FOODS METALS
ENGINEERING PRINTING AND KINDRED
INDUSTRIES UNION
Applicants
A N D:
ALLWEST PRINT PTY LTD
Respondent
WI 1295 of 1996
B E T W E E N:
DERMOT O'REILLY
and AUTOMOTIVE FOODS METALS
ENGINEERING PRINTING AND KINDRED
INDUSTRIES UNION
Applicants
A N D:
ALLWEST PRINT PTY LTD
Respondent
WI 1296 of 1996
B E T W E E N:
ALESSIO GIUSEPPE CONTARICI
and AUTOMOTIVE FOODS METALS
ENGINEERING PRINTING AND KINDRED
INDUSTRIES UNION
Applicants
A N D:
ALLWEST PRINT PTY LTD
Respondent
WI 1298 of 1996
B E T W E E N:
PETER JOHN AINGE
and AUTOMOTIVE FOODS METALS
ENGINEERING PRINTING AND KINDRED
INDUSTRIES UNION
Applicants
A N D:
ALLWEST PRINT PTY LTD
Respondent
WI 1451 of 1996
B E T W E E N:
RODNEY EDGE
and AUTOMOTIVE FOODS METALS
ENGINEERING PRINTING AND KINDRED
INDUSTRIES UNION
Applicants
A N D:
ALLWEST PRINT PTY LTD
Respondent
MINUTE OF ORDERS
3 APRIL 1997 PERTH BOON JR
THE COURT ORDERS THAT :
The Court orders and declares as follows:
The respondent has breached the provisions of section 170DE(1) and section 170DC of the Workplace Relations Act 1996 in the termination of the employment of the applicants.
The matter will be set down for a further half-day hearing in relation to the appropriate remedy for Mr Oosterhuis at 10 am on Thursday 1 May 1997.
The respondent pay to Mr Jobson compensation in the amount of $16,853.20.
The respondent pay to Mr Gibson compensation in the amount of $16,853.20.
The respondent pay to Mr Tomaselli compensation in the amount of $2,701.
The respondent pay to Mr Ainge compensation in the amount of $1,296.48.
The respondent pay to Mr O'Reilly compensation in the amount of $4,662.08.
The respondent pay to Mr Ranger compensation in the amount of $3,123.38.
The respondent pay to Mr Edge compensation in the amount of $15,000.18.
The respondent pay to Mr Contarici compensation in the amount of $1,664.
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 )
WESTERN AUSTRALIA DISTRICT REGISTRY )
WI 1286 of 1996
B E T W E E N:
GREGORY RAYMOND JOBSON
and AUTOMOTIVE FOODS METALS
ENGINEERING PRINTING AND KINDRED
INDUSTRIES UNION
Applicants
A N D:
ALLWEST PRINT PTY LTD
Respondent
WI 1291 of 1996
B E T W E E N:
GLENN JOHN OOSTERHUIS
and AUTOMOTIVE FOODS METALS
ENGINEERING PRINTING AND KINDRED
INDUSTRIES UNION
Applicants
A N D:
ALLWEST PRINT PTY LTD
Respondent
WI 1292 of 1996
B E T W E E N:
ANTONIO TOMASELLI
and AUTOMOTIVE FOODS METALS
ENGINEERING PRINTING AND KINDRED
INDUSTRIES UNION
Applicants
A N D:
ALLWEST PRINT PTY LTD
Respondent
WI 1293 of 1996
B E T W E E N:
COLIN GEORGE RANGER
and AUTOMOTIVE FOODS METALS
ENGINEERING PRINTING AND KINDRED
INDUSTRIES UNION
Applicants
A N D:
ALLWEST PRINT PTY LTD
Respondent
WI 1294 of 1996
B E T W E E N:
BRADLEY MARK GIBSON
and AUTOMOTIVE FOODS METALS
ENGINEERING PRINTING AND KINDRED
INDUSTRIES UNION
Applicants
A N D:
ALLWEST PRINT PTY LTD
Respondent
WI 1295 of 1996
B E T W E E N:
DERMOT O'REILLY
and AUTOMOTIVE FOODS METALS
ENGINEERING PRINTING AND KINDRED
INDUSTRIES UNION
Applicants
A N D:
ALLWEST PRINT PTY LTD
Respondent
WI 1296 of 1996
B E T W E E N:
ALESSIO GIUSEPPE CONTARICI
and AUTOMOTIVE FOODS METALS
ENGINEERING PRINTING AND KINDRED
INDUSTRIES UNION
Applicants
A N D:
ALLWEST PRINT PTY LTD
Respondent
WI 1298 of 1996
B E T W E E N:
PETER JOHN AINGE
and AUTOMOTIVE FOODS METALS
ENGINEERING PRINTING AND KINDRED
INDUSTRIES UNION
Applicants
A N D:
ALLWEST PRINT PTY LTD
Respondent
WI 1451 of 1996
B E T W E E N:
RODNEY EDGE
and AUTOMOTIVE FOODS METALS
ENGINEERING PRINTING AND KINDRED
INDUSTRIES UNION
Applicants
A N D:
ALLWEST PRINT PTY LTD
Respondent
REASONS FOR DECISION
3 APRIL 1997 BOON JR
INTRODUCTION
This is an application under section 170EA of the Workplace Relations Act 1996 (formerly the Industrial Relations Act 1988) (the Act). The applicants seek relief arising out of the alleged unlawful termination of their employment by the respondent, Allwest Print Pty Ltd. Four of the applicants, Mr Oosterhuis, Mr Gibson, Mr Tomaselli and Mr Jobson, are seeking reinstatement as well as compensation. Mr Ranger, Mr O'Reilly, Mr Contarici, Mr Ainge and Mr Edge are seeking payment of compensation only.
On behalf of the applicants it was said that the provisions of the Act have been breached in a number of ways. In the first place, they say that there was no valid reason for the termination of the applicants' employment as required by section 170DE(1) of the Act. In the second place, it is alleged that the applicants were not provided with an opportunity to be heard in relation to allegations against their conduct or performance before their employment was terminated as required by the provisions of section 170DC.
The respondent, on the other hand, says that this was a case of a genuine redundancy and that this provided a valid reason connected with the employer's undertaking, establishment or service within the meaning of those words in Section 170DE(1) of the Act. In relation to the alleged breaches of section 170DC of the Act, the respondent says that even if allegations against the applicants' performance or conduct were not put to each applicant prior to the termination of his employment, the outcome would have been the same in any event. The respondent further argues that if there has been a breach of the Act, reinstatement would be impracticable because of financial difficulties experienced by the company.
BACKGROUND
The respondent, Allwest Print Pty Ltd, came into being several years ago. The Coventry Group bought into a company called Mercury Press. The Group then purchased what was formerly known as the State Government Printing Office. The companies then merged and became Allwest Print Pty Ltd. Some former employees of both the government printers and Mercury Press were employed by Allwest Print Pty Ltd.
The primary witness called on behalf of the respondent was Mr James Brayshaw who is now the general manager of the respondent. He is an accountant with many years experience. He was initially employed by Allwest Print Pty Ltd in February 1996. He was taken on as administration manager and after a few months was promoted to assistant general manager, which was the post he held at the time of the termination of the applicants' employment on 29 May 1996. He has been general manager since June 1996. Mr Brayshaw told the Court that when he was initially employed by Allwest Print, a director of the company, Mr Barry Watson, told him that their company was losing a lot of money and needed a cost accountant or management accountant to "go in there to have a good look" at the company's operations. Mr Brayshaw said that initially he looked at the administrative operations at Allwest Print and found that it was not managed in an orderly manner: it was crisis driven and there was always a large backlog. In March 1996 there were some redundancies when the administration section of Allwest Print was restructured. After that round of redundancies there were approximately 96 employees left at Allwest Print.
Mr Brayshaw said that after the first restructure he became assistant general manager and found that the company was operating in a most inefficient manner. As part of his role he applied his accounting expertise to the company's financial management. He formed an opinion about the financial position of the respondent from accounts that had been put out by the company's accountant who was based in the Coventry Group. Mr Brayshaw said that when he took up the position as assistant general manager, he found the state of accounts and the accounting processes to be unprofessional. Mr Brayshaw said that first he invented an accounting system for Allwest Print. He then decided to make a plan or model of the company that would at least give it a viable operation. Mr Brayshaw said that it was not until some time after he was appointed that there were accounts available for the company. Even those accounts, however, showed a very large loss to the extent that the company was not viable.
The evidence of Mr Brayshaw was that in formulating his model or plan for the company, he spent a lot of time acquiring knowledge of the company's operations. He looked at the available resources in terms of the productive capacity of each machine owned by the company. He spent time with the managers and supervisors of each department and came up with an average figure for the time or amount of work that each of those machines could do. Mr Brayshaw said that he made a lot of notes and then tried to put together a realistic position by listing all of the machines that were useful and how many hours per week or per day the machines could be expected to operate. He then listed the number of hours each machine could operate if the company tried to improve its output. Mr Brayshaw said that he then found out how many operators it took to operate these machines, and by adding all of this up he was able to approximate a number of hours per day of effort that the company required. After this process Mr Brayshaw costed the production targets. He then worked out what percentage of the machine hour rate related to the selling price of the finished product. By this process, Mr Brayshaw said that he built up what he thought would be a practical sales budget for the company. With that budget figure he worked out what the costs were of the paper, inks and labour. Mr Brayshaw described it as putting the whole thing together like a jigsaw puzzle with many iterations along the way. He said that the model was a model for survival for the company, as to do anything else would be unrealistic. He said that the first thing he had to do was "stop the bleeding" as the major shareholder was unlikely to keep pumping money into the company.
Mr Brayshaw referred to the financial statements of Allwest Print Pty Ltd for the year ended 30 June 1996. He had very little role in putting those accounts together. Mr Brayshaw said that the accounts showed that there was an operating loss of $2.6 million. The financial statements showed that for that financial year, there were proceeds from borrowing of $1.7 million. It appeared to him that it was necessary for the investors to pump in $1.7 million to the organisation for that financial period. Mr Brayshaw said there was a consistent pattern to the way the company was accumulating losses. There appears from the financial statements to have been a large purchase of plant and equipment in that financial year but that expenditure was not able to be explained by Mr Brayshaw. He himself had no knowledge of what had gone on before he arrived at the company.
Mr Brayshaw's evidence was that he calculated the company's break-even sales point and noted that in the past the company's sales had been well below the level at which the amount of its sales would pay its expenses. Mr Brayshaw said that he did not consider that the sales results could be improved significantly as each time the company tried to increase its sales it ran into difficulty because of the disorganisation within the company and the lack of capacity of the machines to consistently produce above a certain level. Because of this, no effort was made to improve the sales significantly. Mr Brayshaw said that each time it was busy at Allwest Print Pty Ltd, the company ran into difficulty and jobs were late.
Mr Brayshaw's evidence was that he spent a great deal of time researching the company's operations before he constructed his business plan. After the many iterations of the plan, he said that it indicated to him that there was a surplus of people on the production floor. He estimated that there were probably about 15 people too many with the company. Mr Brayshaw said that he tried to keep on as many people as he could and he did not want to destroy the careers of any more people than he possibly had to. However, the impact of implementing the decision to remove 15 positions meant that it would cost a lot less money to run the company. He said that redeployment was not considered for any of the people who would be retrenched because by the time the applicants were dismissed, they had worked out how many people they required and who they would be. There was no place to deploy them to.
Although the respondent's case was put before this Court on the basis that Mr Brayshaw systematically produced a plan to save the company and this plan indicated to him that there were 15 people too many employed by the company, the cross examination of Mr Brayshaw by Mr Blewett for the applicants left me with considerable doubts about whether this was so. In his examination-in-chief, Mr Brayshaw said:-
"It wasn't a matter of finding the employees that would not be retained, it was first of all building up a profile of a production area fully equipped with machines and people for the amount of time that the machines operated and filling those gaps with the people with the necessary skills to do it. At the end of that operation or that process, there were obviously names left over, and those names were simply - I guess we probably just wrote it down, made a quick list of the names that were left over, and obviously examined that as well. But the process was definitely - it was one of how can we best do this - and I will use the word "objective" - and I gave instructions to my people that this was to be an objective exercise. I wasn't going to have any business of favourites and that sort of thing, that wasn't on."
Mr Brayshaw described how he produced some documents for the three departments within Allwest Print Pty Ltd. Those documents were headed "Pre-Press", "Printing" and "Binding". Those documents contained a list of the names of all the people who worked in each department, together with their wages and the skills they had. There were discussions based on these lists. Mr Brayshaw said that the outcome of the discussions was that they were able to carry out the tasks in each department with less people than were currently there. During cross examination, Mr Brayshaw stated that he worked out the costs of all production. Mr Brayshaw said that he did many iterations and made many adjustments to his figures before he came up with a final sales figure which he thought was achievable. However, it appeared from the cross examination that in producing the company's plan, Mr Brayshaw calculated the labour costs of exactly the 15 people who were eventually made redundant in arriving at that sales figure. This was evident from the documents produced by the respondent and which were said to have been used in providing the plan. There is nothing necessarily sinister about this. However, I found it difficult to accept that the plan itself dictated who should be made redundant out of the company's workforce when it appears that the wages of those who were made redundant were calculated into the plan. In other words, the plan itself does not appear to me to dictate why the applicants in this case were those people who were necessarily the ones who had to go.
Mr Brayshaw said that once he had formulated a plan, he spoke to the managers of each department and told them how many jobs would have to go in their sections. He gave each manager a number of jobs to fill and left them to work out who should fill each position. Although he said that he told his managers to be objective, he did not give them any criteria to use for selecting people other than a list of duties and a list of machines to be operated and the hours in which they were to be operated. Mr Brayshaw said that as he had not been in the position for very long, he did not know some of the people who worked at Allwest Print Pty Ltd very well. Mr Brayshaw said that some of the department managers whom he consulted did not agree on the names of the people who should go. He said that there was ultimately agreement among them. They went through the capacities and skills of all of the people and put them against jobs, and took into account the recommendations of the managers when deciding who to dismiss.
A curious feature of this process was that the general manager of the company at that time, Mr Benbow, was not involved in this decision-making process at all, according to Mr Brayshaw's evidence.
In relation to discussions regarding the names of people who worked in the pre-press area, Mr Brayshaw consulted Mr Paul Meek who headed the pre-press area. Mr Brayshaw also consulted Mr Alan Bennett, the production manager. Mr Brayshaw said that during the discussions he was not in a position to argue with anyone because he had not been there very long. There was, however, what Mr Brayshaw described as a "fairly robust conversation between Paul and Alan". There were some differences of opinion between the two men about who should fill the positions. Those differences were resolved. In the process of resolving those differences, Mr Meek offered to resign to make way for one of the other men. That offer was not accepted by Mr Brayshaw. Mr Brayshaw said he felt that Mr Bennett would have been in the best position to make judgments about the capacities and skills of the people within the organisation.
In relation to the people in the binding department, Mr Brayshaw met Mr Bennett and Mr Gannoway, who was head of the binding department. Once again there were some disagreements between Mr Bennett and Mr Gannoway which were ultimately resolved. In particular, Mr Brayshaw remembered that there was some disagreement between the two men in relation to whether or not Mr Contarici or another person should be the one who should be made redundant. In the end Mr Brayshaw accepted the advice of Mr Gannoway because he thought Mr Bennett's judgment might be clouded by a distant family relationship with Mr Contarici. Mr Brayshaw said that it never entered his mind that as Mr Bennett had come from Mercury Press he would have been closer to the former employees of Mercury Press and be biased in their favour. Mr Brayshaw said that he did not ask where the people whose names were on the lists originally came from.
Mr Bennett gave evidence that he was formerly the owner of Mercury Press and when the Coventry Group took over, he became production manager with Allwest Print Pty Ltd. He said that he first became aware that retrenchments were going to occur at Allwest Print when Mr Brayshaw called him in and went through the plan. This occurred in the week prior to the dismissals being put into place. He said that Mr Brayshaw gave him details from the plan in relation to the positions they had with the available machinery and how many people could fill those positions. Mr Bennett then consulted with other supervisors of the various areas to check on the abilities, experience or expertise of the people on the various machines so that he could compile a list of the experienced people. At no time did he meet with Mr Benbow in connection with the redundancies. He said it took approximately thirty minutes to discuss what needed to be done before his supervisors came back with their ideas of the people and positions. When asked what criteria were applied to the decision to select or "deselect" an employee for a particular position, Mr Bennett said "looking at the ability to run various presses, ability to produce the job to company requirements, spoilage and things would have been taken into account. Just the whole range of printing ability and also the consideration of what presses they were able to run." Mr Bennett said that after he had gone through that process, he had a meeting with Paul Meek and Mr Brayshaw. Mr Bennett and Mr Meek had compared their lists and there were some difference between them. The final decision was made by Mr Brayshaw. The final list of the people who were dismissed was different from Mr Bennett's initial list.
Mr Meek gave evidence that prior to his appointment to Allwest Print he was pre-press manager for the State Government Printers. Mr Meek said that the first time he became aware that there would be redundancies at Allwest Print was on the Monday prior to the week in which the dismissals occurred. Mr Meek said that it was left to him to go through and look at his staff members in the areas where they could possibly lose people. He was not given any selection criteria. Mr Meek confirmed that he offered to resign as he felt there was a possibility that he could work in his wife's business and that that might save somebody else's job. Mr Bennett however told him that if Mr Meek resigned they would simply have to employ somebody else in a supervisory capacity. Mr Meek said that he was told that he had to select five people and he based the selections on their work history, their flexibility within the area itself, whether they could actually go to other areas of work and also what was needed in terms of production requirements. When Mr Meek looked at his production area he decided he could afford to lose one person from the plate-making area, at least three positions in the desk-top publishing and leg-arranging area and he could do away with the reading area. Mr Meek said that in deciding which people to chose, he looked at their work history and their capabilities. Mr Meek said that he did not consult anybody else in reaching those decisions. He had a further meeting with Mr Bennett and Mr Brayshaw on the following Monday. Mr Meek again offered his resignation in the hope that it would save a job but was told that this would not resolve the situation.
Mr Meek confirmed that there were differences between his list of people and the list produced by Mr Bennett. Mr Meek had not selected Mr Gibson but had selected another person by the name of Mr Balough. Mr Balough has since left Allwest Print.
Mr Gannoway gave evidence that he was with State Print prior to joining Allwest Print. Mr Gannoway said that he was first advised of retrenchments in the week prior to the dismissals taking place. He was called into a meeting with Mr Brayshaw and Mr Bennett and was asked to go away and put together a list of staff to "get rid of". He was not given any guidelines by Mr Brayshaw or Mr Bennett as to how this task was to be performed. Mr Gannoway said that he undertook the task by looking at the skills of the employees and how the department could run if the people were not there. He was told to get together a list of six people from the binding department. He produced a list of people. The list he produced was not the list of people which was eventually used in deciding who would be retrenched. Mr Gannoway said that he looked at his skills register which was a document he compiled as an on-going process during the time he worked for Allwest Print. The register set out a list of skills and Mr Gannoway would put a tick next to each person's name to say whether that person could perform those functions. He used that document in determining which people would stay. He also used his own observation of the workers. In the first instance there was some disagreement amongst Mr Gannoway, Mr Brayshaw and Mr Bennett. During cross examination on the skills register Mr Gannoway admitted that Mr Contarici did not appear at all on his skills register and other employees did not necessarily have ticks next to their names for each of the skills that they could perform.
Mr Gannoway also confirmed that at least one person volunteered for redundancy but was not chosen.
GARY BUCKNALL
Mr Bucknall gave evidence that he is the Assistant State Secretary of the AFMEPKIU (the Union). He is also West Australian Regional Secretary of the printing division of that union. He is responsible as organiser for Allwest Print.
Mr Bucknall gave evidence that there was a round of redundancies at Allwest Print in March 1996. Those redundancies were based on a "last-on first-off" system. That was a negotiated settlement as a result of consultation with the Union at the time.
Mr Bucknall said that he was continually involved with Allwest Print after March 1996 in relation to enterprise bargaining negotiations. The issue of further redundancies was never raised with Mr Bucknall until 27 May 1996. Mr Brayshaw asked Mr Bucknall to meet with him privately on the morning of the next day, 28 May, at approximately 9:30 am. Mr Bucknall said that he was not in a position to meet with Mr Brayshaw privately. He said that he would bring along a delegate to be in attendance at that meeting. Mr Bucknall said that Mr Brayshaw told him that the nature of the conversation had to remain confidential. Mr Bucknall said that he did not have any inkling that there were going to be any redundancies. Mr Bucknall said that he attended the meeting on 28 May with Mr Brayshaw and Mr Heathcote who was the industry representative. Mr Brayshaw asked at the outset of the meeting that Mr Bucknall keep the information confidential amongst the three of them. Mr Bucknall said that as he did not know what was going to be discussed, he could not give such an undertaking. Mr Brayshaw indicated that he was about to show him some financial statements of the company and requested that they remain confidential. At that time Mr Bucknall indicated to Mr Brayshaw that those financial statements would remain confidential. The financial information was shown and Mr Bucknall said that as he was not an accountant he did not fully understand the document that was being presented to him.
Mr Brayshaw indicated to Mr Bucknall that it was his intention to declare redundancies across the board in all areas including supervisory staff, amounting to 15 or 16 people in total. Mr Bucknall said that he was quite shocked because there was a process of a consultative committee that was meeting on a regular basis and none of this had been raised during the meetings of that committee. It had never been raised with Mr Bucknall previously. Mr Bucknall said that he indicated that he would seek to have the principle of "last-on first-off" apply. Mr Brayshaw's response to him was that it did not work last time and it would not work this time. He said that Mr Brayshaw informed him that the decision was basically made and that he was in the process of selecting the people who would be made redundant. Mr Bucknall said that he asked how those people were to be selected and asked if it could be done on a voluntary basis. That was rejected. Mr Bucknall's evidence in relation to this conversation was supported by the evidence of Mr Brayshaw.
When Mr Bucknall asked how the redundancies were to be selected Mr Brayshaw said that they were going through the selection processes with the supervisors of the departments. Mr Bucknall asked what criteria were going to apply but he was never given an answer. Mr Bucknall said that he sought a list of names of those to be made redundant but Mr Brayshaw advised him that he did not have a complete list at that time and was not prepared to release the list then. Mr Brayshaw indicated that he would be releasing that list to people on Friday of that week. Mr Bucknall said that he asked Mr Brayshaw when he was going to consult properly in accordance with the Award and when he was going to inform his workforce as to when these redundancies were to occur. Mr Brayshaw's response was that he had advised Mr Bucknall and that was all he intended to do. He was not going to advise the workforce until such time as those people would be advised that they would be made redundant. This was confirmed by Mr Brayshaw in his evidence. Mr Bucknall said that he advised Mr Brayshaw that that was a totally unacceptable position and that if he was not going to advise the workforce then it was Mr Bucknall's intention to do so. Mr Brayshaw tried to persuade him not to tell the workforce but Mr Bucknall made it clear that he would not comply with that request. Mr Bucknall indicated that he intended to speak to the staff at a meeting. Mr Brayshaw's response was that if Mr Bucknall intended to have that meeting then Mr Brayshaw would terminate the people the following day.
Mr Bucknall held a meeting later that day in the canteen of Allwest Print. The meeting was very well attended. Mr Bucknall told the workers that he had been advised that 15 or 16 people would be made redundant but that he was unaware of the names and would not be given the names until such as the people would be terminated. Mr Bucknall asked for volunteers. There was at least one person at the meeting who indicated that he was prepared to take voluntary redundancy. There was a further person later that day or the following day who volunteered for redundancy. However, this was rejected by Mr Brayshaw.
Mr Bucknall said that he went back to Mr Brayshaw and advised him that a number of people were prepared to volunteer for redundancy but Mr Brayshaw did not want to know and did not ask the names of those people.
On the following day, 29 May 1996, the dismissals took effect.
The respondent's witnesses to a large extent gave general evidence in relation to how the dismissals took place. There was limited evidence in relation to each of the applicants specifically. I do propose however to deal briefly with each applicant in turn.
ANTONIO TOMASELLI
Mr Tomaselli is a 50 year-old man who worked at State Print for 25 years. In the beginning of 1995 he took up a position at Allwest Print because State Print closed down. He worked in the press area with IBM computers, Apple Macintosh computers, Paste-up, working with negatives, four colour negatives, reading, Fuji colour proofing and maintenance work. Mr Meek was his supervisor. Mr Tomaselli said that he was never called in for counselling or discipline.
Mr Tomaselli said that before the redundancies occurred, there had not been any indication from management that they were to happen. He attended a meeting on a Tuesday at which Mr Bucknall from the union spoke to the workers. Mr Bucknall said that Allwest Print was about to make 15 or 16 people redundant and asked if there were any volunteers. On the next day Mr Tomaselli was asked to go to the boardroom where he met Mr Brayshaw and Mr Meek. Mr Brayshaw said that because of lack of work he had to make Mr Tomaselli redundant. Mr Tomaselli said that he was not told why he was chosen for redundancy.
Mr Meek said that Mr Tomaselli was quite a good operator on the computers but he needed supervision. Mr Meek referred to the fact that Mr Tomaselli had a history of sick leave and a history of not performing very well under stressful situations. Mr Tomaselli had a letter from his doctor that he could not go on to an afternoon shift because of his medical condition. Mr Meek rated Mr Tomaselli's flexibility as fairly low.
Following the termination of his employment, Mr Tomaselli was successful in obtaining alternative employment at Euro Print. Mr Tomaselli said that at the end of the second day, he felt so depressed on his way home that he could not drive. People from passing cars assisted him. He was taken to his doctor and has been on sickness benefits since then. Mr Tomaselli said that he suffered from panic attacks which started in about 1985 but had gradually improved. After his employment was terminated, however, his condition worsened. He gets dizziness, he suffers from loss of concentration and he cannot drive. He just has to stay at home, take his medicine and sometimes stay in bed. He is under treatment by a psychiatrist.
Mr Tomaselli indicated that he was seeking reinstatement to his former position. It appears to me, however, on the basis of his health that to order reinstatement would be impracticable. This is in addition to other reasons for impracticability which will be dealt with below.
When he was cross examined in relation to his efforts to find work, Mr Tomaselli said that for the first few days after he finished at Allwest Print he stayed at home and did nothing. Then he telephoned a friend of his at Euro Print who indicated that Mr Tomaselli could start work on 1 July. In the intervening period of about one month between the date of his termination and the date he started at Euro Print, Mr Tomaselli went to the Commonwealth Employment Service to apply for job start allowance. In the intervening period he was looking in the newspaper but was unable to find any work because he was only a printer. He telephoned some people but was unsuccessful in obtaining work other than at Euro Print.
At Allwest Print Mr Tomaselli was earning a weekly wage of $540.20 gross. At the time of his termination, he was paid two weeks in lieu of notice amounting to $1,080.40 plus four weeks' redundancy payment amounting to $2,160.80. The total termination pay received by Mr Tomaselli was $3,241.20. His only income since that date has been Jobstart allowance and sickness benefit payments.
GREGORY JOBSON
Mr Jobson is 49 years old and started work at Allwest Print in about September 1994. He mainly worked in the plate-making section on the afternoon shift. Mr Jobson said that he was never counselled or disciplined in any fashion. Mr Jobson said that he was not informed by management about pending redundancies at Allwest Print at all. He was not at the meeting at which Mr Bucknall addressed the staff. Mr Jobson found out indirectly through another employee about the redundancies. On the Wednesday afternoon he started his normal shift at about 3:30pm. About an hour into his shift, Mr Meek approached him and asked him to accompany him to the office. He was spoken to by Mr Brayshaw who told him that his services were not required any longer. Nobody explained to him why he was selected for redundancy.
Mr Jobson's weekly wage at Allwest Print was $504.20 plus 20% shift loading making a total of $648.24. Mr Jobson was paid one week in lieu of notice in the amount of $540 plus one week's redundancy pay in the amount of $540 by Allwest Print. That amounted to a total termination payment of $1,080.
In the period from June to September 1996 Mr Jobson made many job applications. He was successful in obtaining alternative employment on 11 November 1996. He has been employed as a store man by West Graphic Supplies at a gross weekly wage of $500. Mr Jobson is seeking reinstatement as his position with West Graphic Supplies was not a permanent position.
BRADLEY GIBSON
Mr Gibson is a 30 year-old man who previously worked at State Print. He went to Allwest Print at the time State Print's business was transferred. Mr Gibson worked in the pre-press department at Allwest Print and the duties he was involved in included typesetting, bench negative arranging, software, Quark express, Pagemaker, Freehand, Illustrator, backup procedures of the computers, dark room procedures, plate making and client liaison. He has used Apple Macintosh and some IBM machines. He worked on the afternoon shift.
Mr Gibson said that the first he heard of pending redundancies was from Mr Bucknall on 28 May 1996 at a meeting of staff. On the next day, when he had been working an hour or so, he was asked to meet with Mr Brayshaw and Mr Meek. Mr Brayshaw said that he would be redundant because of the economic situation of the firm. Mr Gibson said that he was not told why he had been selected for redundancy.
Since the termination of his employment from Allwest Print, Mr Gibson has made a number of attempts to find alternative employment. He called the local printers in the area but was unsuccessful in his job applications. He received social security benefits and did some work in a business which he operated. The business manufactures rubber stamps but Mr Gibson said that he had not made any money from it.
Mr Meek's evidence was that Mr Gibson was average at his work and required some supervision. There were no employees with the same skills currently employed by Allwest Print who he would rate below Mr Gibson.
Mr Gibson's weekly wage at Allwest Print was $540.20 gross plus a 20% shift loading, making a total weekly wage of $648.24 gross. At the time of the termination of his employment, Mr Gibson received two weeks' wages in lieu of notice amounting to a total of $1,080.40 plus four weeks' redundancy payments amounting to $2,160.80.
PETER AINGE
Mr Ainge is a 60 year-old man. He worked at the State Government printing office for 13 years. He started work at Allwest Print on 30 January 1995. At all times he has worked as a proof reader. Mr Ainge worked on a part-time basis three days per week. There were no other proof readers employed at Allwest Print although some of the other workers occasionally did some proof reading on Mondays and Fridays when Mr Ainge was not there. Mr Ainge said that he was never disciplined or counselled by his supervisor. His evidence was that management did not discuss with him any impending redundancies. Mr Ainge said that he first heard of the redundancies when he picked up the newspaper on Friday morning and it announced that 15 people had been sacked at Allwest Print. He telephoned someone at Allwest Print and asked if he was one of the 15. That person said that "you've put me in a very awkward position" and advised Mr Ainge that Paul Meek was going to ring him later. When Mr Meek rang him he said that he was sorry but that Mr Ainge was one of the people who had been made redundant. Mr Ainge was not given any reason for his redundancy.
Mr Meek gave evidence that the selection of Mr Ainge for redundancy was fairly cut and dried because they had decided to do away with his position as proof reader.
Mr Ainge received a weekly wage of $324.12 gross at Allwest Print. On termination he received two weeks' wages in lieu of notice amounting to a total of $648.24 plus four weeks' wages by way of redundancy payment amounting to a total of $1,296.48. Since termination, Mr Ainge has worked on a casual basis at the Department of Justice as a proof reader reading reprinted acts and regulations. He works on average about two days per week for which he receives a weekly wage of $207.64 gross. Mr Ainge indicated that he had not sought any other employment outside the Ministry of Justice. He had received two offers of employment for a firm, Print Force, to do a casual job and from Parliament House to read Votes and Proceedings which was another casual job. Mr Ainge said that he did not take on those jobs because the Department of Justice job is on call and they will ring him and ask him to come in the next day. If he was doing another job it would become very complicated and Mr Ainge indicated that in any event the Ministry of Justice job suited him well. Both the Print Force job and the Parliament House job were part-time positions. Mr Ainge indicated that he was happier working two days per week and did not want to take on any extra work.
GLEN OOSTERHUIS
Mr Oosterhuis is a 22 year-old man who was employed by Mercury Press under an indenture of apprenticeship. He remained at Mercury Press for approximately two years until he was transferred across to State Print and then at Allwest Print. He has continued his apprenticeship at State Print and Allwest Print. He worked in the pre-press area. He was about three years and four or five months into his apprenticeship when his employment was terminated. The indenture of apprenticeship indicated that the apprenticeship was for a period of four years. The employer agreed to take on Mr Oosterhuis for a term of four years and teach him and instruct him in the art of graphic reproduction.
Mr Oosterhuis admitted that Mr Meek had approached him on several occasions and spoken to him about being late and also about some absenteeism. Mr Bennett said that it was taken into account when deciding on who to terminate that Mr Oosterhuis had had "all of his tech school training and would have had the ability to hold a job somewhere else". Mr Bennett said that he had no idea whether or not it was lawful to terminate the employment of an apprentice. Mr Meek said that Mr Oosterhuis was selected for termination because of his work performance, his attitude to his work and the fact that he had been counselled on many occasions. Mr Meek felt that Mr Oosterhuis was below the standard of the people he was employing.
Mr Oosterhuis said that he first found about pending redundancies when Mr Bucknall addressed a meeting of workers. At a meeting on the following day Mr Oosterhuis was taken by Mr Meek into an office with Mr Brayshaw. Mr Brayshaw informed Mr Oosterhuis that he had been made redundant. Mr Oosterhuis said that he said to Mr Brayshaw "Do you realise that I am an apprentice?" and Mr Brayshaw said "Yes, but there is really nothing I can do about that". Mr Oosterhuis said that he was in shock because he had not expected it to happen to him as he was an apprentice and in an indenture.
Since the termination of his employment, Mr Oosterhuis started work at a place called Statewide Publishing on the following week. He worked there for seven or eight weeks until the place was closed down. After that he looked for further work and was employed at a dry cleaning place called Chem Dry Advanced. He started there in mid September 1996. The work is part time and Mr Oosterhuis receives an average weekly wage of $260.75 in that work. Mr Oosterhuis is seeking reinstatement because he wants to finish his apprenticeship.
At the time of the termination of his employment, Mr Oosterhuis was receiving a weekly wage at Allwest Print in the amount of $379.10. When his employment was terminated, he was paid three weeks' wages in lieu of notice amounting to $1,137.30. He also received seven weeks' wages by way of redundancy payment in the amount of $2,653.70. At Statewide Publishing he earned a total of $3,075. Since 17 September 1996 he has been receiving an average weekly wage at his current employment of $260.75.
DERMOT O'REILLY
Mr O'Reilly is a 47 year-old man who was employed by State Print as a printing machinist from 1987. At some stage during his time at State Print he was seconded to TAFE as a lecturer. In October 1995 after State Print had closed down Mr O'Reilly had gone on a visit to Allwest Print on one or two occasions. Mr Robinson was the manager at the time he asked when Mr O'Reilly was coming back to Allwest Print. Mr Robinson told Mr O'Reilly that he was welcome back at any time and Mr O'Reilly made a decision to leave TAFE and go back to Allwest Print. Mr O'Reilly operated the six-colour Roland, the two-colour Roland, the single colour Roland, the two-colour Heidelberg GTO, single colour GTO, single-colour Practica press, and the two colour Sprint machines.
Mr Bennett indicated that Mr O'Reilly was not recommended for a position because he had evaluated the work that Mr O'Reilly had produced in the period of time that Mr Bennett was production manager and assessed that the expertise of Mr O'Reilly's work was not up to the standard of the people who held the position ahead of him. Mr Bennett indicated that the only time he made Mr O'Reilly aware of his concerns was in relation to individual jobs when Mr Bennett would made a comment about something he had done.
Mr O'Reilly said that he was never counselled or disciplined during his time at Allwest Print. He said that the first that he knew of the impending redundancies was when Mr Bucknall addressed the workers at a meeting. On the next day, 29 May 1996, Mr O'Reilly was escorted to the office and spoken to by Mr Brayshaw. Mr Brayshaw said that Mr O'Reilly was to be made redundant. Mr O'Reilly was not given any indication as to why he was selected for redundancy.
At the time of the termination of his employment, Mr O'Reilly was receiving a weekly wage of $588.20 plus a 20% shift loading which amounted to a total of $705.84. He was paid one week's wages in lieu of notice amounting to $588.20 plus one week's redundancy payment in the amount of $588.20.
Mr O'Reilly worked on the afternoon shift at Allwest Print and said that Mr Bennett did not see him very often.
Mr O'Reilly said that after his employment was terminated he was unable to find work immediately. Mr O'Reilly said that he applied for numerous jobs and what little savings he had went out the door because he had four children. He had a month of difficulty. He eventually started full-time employment in July at Cypress Print. He was paid $570 for a 40-hour week. He received two or three hours per week overtime payments which fluctuated. He remained at Cypress Print until 29 October 1996. During his time at Cypress Print he received a total of $9,690. He then started at Professional Printers for which he received a weekly wage of $701.94.
COLIN RANGER
Mr Ranger is 41 years old; he was previously employed by the State Printing division. He was there for 23 years and worked as a printing machinist. He was transferred to Allwest Print to run the rapid copy centre. After some time the rapid copy centre was closed down in March 1996. Mr Ranger was made the supervisor of the printing department mainly looking after the small printing side but he also helped out on larger machines.
Mr Ranger said that the first he heard about retrenchments was when Mr Bucknall addressed the meeting of staff. On the next day Mr Ranger was called into a meeting with Mr Brayshaw who said to him that he would be made redundant. Mr Ranger was angry because he felt that he put so much work into the business. Mr Ranger said that he was devastated by the termination of his employment.
Mr Bennett's evidence was that according to the plan, after the restructure took place there would only be one supervisory position and Mr Luff was the only one who could fill that role. Mr Bennett's view was that Mr Ranger did not have the experience or the ability in the larger presses to hold down that job.
Mr Ranger's evidence was that he did not feel like working for a while after his termination and he had a little bit of money. He went on a holiday for a week or two and then started looking for work. He found a job at Snap Printing in which he earned a total of $4,129. He worked at Snap Printing between 5 August 1996 and 17 September 1996. He then found a job at George Percival Prints at which he receives a total weekly wage of $718.04. He started at George Percival Prints in September 1996 and his first pay packet was on 2 October 1996.
At Allwest Print Mr Ranger received a weekly wage of $725.29. Upon the termination of his employment he was paid two weeks' wages in lieu of notice amounting to $1,450.58. He was also paid four weeks by way of redundancy making a total of $2,901.68.
RODNEY EDGE
Mr Edge is a 50 year-old man; he was employed as a printer at State Print for almost 20 years. He did not move to Allwest Print immediately but moved there in February 1995. He took up a position as a schedular and then sometime later was offered a position as second in charge to a Mr Laurie Smith in the print room towards the end of 1995. Subsequently he changed to the night shift. In that position Mr Edge was supervising the night shift printers. He was second in charge to Mr Ranger. After that there was another change in that he was moved from a supervising position back to a printer position on the night shift.
Mr Edge said that he first became aware that there would be redundancies at a meeting with Mr Bucknall. Mr Edge was not at work on the next day, the Wednesday, but went to work on the Thursday morning. By that time Mr Edge had heard about the redundancies. He was approached by an office worker who accompanied him to reception. Mr Edge signed a redundancy form, was given a wage slip and left the premises. He was not told why he was selected for redundancy.
Mr Bennett said that Mr Edge was not selected to remain as after going through and evaluating each person he felt that the expertise and experience that the other employees had were of greater value. Mr Bennett agreed that Mr Edge could have been redeployed onto another machine but he would have been no better than any of the people who were already on the presses.
At Allwest Print Mr Edge earned a weekly wage of $576.93 gross. At the time of his termination he was paid two weeks' wages in lieu of notice, amounting to a total of $1,153.86 plus four weeks' wages by way of redundancy payment amounting to a total of $2,307.72.
Mr Edge gave evidence that after leaving Allwest Print he applied for several positions. He was given some casual work at City Print, at Hollywood Hospital and at Lamb Printers for which he received a total of $600 gross. On 18 November 1996 he was finally employed by Lamb Print. In that position he receives a weekly wage of $495.
ALESSIO CONTARICI
Mr Contarici is a 59 year-old man who started work with Mercury Press in 1979. He remained employed until Mercury Press became Allwest Print. At Allwest Print his duties were as a driver, forklift driver, dispatcher, a cleaner and tablehand and binder. His main functions were binding and delivering. Mr Contarici's evidence was that he was never counselled or disciplined in any way.
Mr Contarici said that he found about the redundancies when Mr John Gannoway took him to see Mr Brayshaw. Mr Contarici had not heard any rumours about redundancy before then. When he saw Mr Brayshaw he was told "things were not going the best at the moment" and he was to be laid off. Mr Contarici said he was not told why he was being chosen for termination.
The evidence was that there was some disagreement between Mr Gannoway and Mr Bennett about the inclusion of Mr Contarici's name on the list of those who would be dismissed. Mr Gannoway was of the view that Mr Contarici should go and Mr Blott should stay. Mr Gannoway's evidence was that Mr Contarici was able to perform the tasks but always seemed to take a lot longer than anyone else to perform his work.
At the time of the termination of his employment Mr Contarici received a weekly wage of $416. He was paid four weeks' wages in lieu of notice amounting to a total of $1,664. He was also paid eight weeks' wages by way of redundancy amounting to a total of $3,328.
Mr Contarici said that since leaving Allwest Print he had managed to find alternative employment with Arrix Cleaning Company. He had been working at night with Arrix Cleaning Company part time while he was at Allwest Print. He continued to do the night work part time since the termination of his employment. He has picked up a couple of extra hours here and there with Arrix since his employment at Allwest Print was terminated. His group certificate from Arrix for the year ending 30 June 1996 showed that Mr Contarici earned a total of $17,011 at that job. Between June 1996 and mid November 1996 Mr Contarici earned a total of $14,302.56 at Arrix Cleaning Company.
WAS THERE A VALID REASON FOR THE TERMINATIONS?
The Submissions for the Applicants
Operational Requirements
On behalf of the applicants, Mr Blewett pointed to a number of difficulties with the evidence called on behalf of the respondent in relation to the question of whether or not there was a valid reason for the terminations as required by section 170DE of the Act. In the first place, in relation to the allegation that there was a need for the terminations based on the operational requirements of the respondent's business, the evidence came mainly from Mr Brayshaw. It was submitted that the evidence did not satisfy the onus cast upon the respondent to demonstrate a need to reduce the workforce and in particular to reduce the workforce in the way in which it was eventually done. Mr Brayshaw's evidence was that he relied upon a business plan and the calculations leading up to that plan. Mr Blewett pointed out that the calculations set out in the documents forming part of the plan appeared to show that certain reductions were necessary in each area yet when the redundancies were actually implemented based upon that plan in the binding area the numbers of those made redundant do not accord with the numbers set out by the plan. There was no explanation offered for that difference and Mr Blewett invited this Court to conclude that the evidence in relation to these redundancies was not satisfactory.
Secondly, Mr Blewett said that the evidence of the respondent's witnesses did not show who was determining whether there was a need to make people redundant. Both Mr Brayshaw and Mr Bennett were adamant that the General Manager of the company, Mr Benbow, had had no involvement in this matter at all. A memorandum by Mr Benbow which was tendered in evidence showed that Mr Benbow did appear to have some involvement, at least from his own point of view. Mr Meek and Mr Gannoway were not clear whether Mr Benbow had had any involvement. Mr Benbow was not called to give evidence. It was submitted on behalf of the applicants that it is not conceivable that Mr Benbow was not in some way responsible for the decisions about reducing the work force and it is therefore not known who the actual determining mind in the respondent was to reduce these numbers.
Thirdly, Mr Blewett submitted that Mr Brayshaw's evidence was that this complex working-out of the plan without regard to individuals meant that 16 people had to be made redundant. It was submitted that this was patently false. Mr Bennett gave evidence that he had no involvement in the plan prior to being told about the need for redundancies and that he had no involvement in the placing of people on the list of names to be made redundant. It was clear, however, from Mr Brayshaw's evidence coming out of cross examination that what he did was look at particular individuals, cost them, and then feed them into his plan. It was submitted that Mr Brayshaw's whole plan was based on getting rid of certain individuals in the pre-press area and that one must presume that this was also the case in the binding and printing areas.
Mr Brayshaw, of his own admission, said that he had no real knowledge of the workers' capacities or abilities and stated that it was all quite random and that he had just gone down the list of workers and costed people. This did not appear to be so in view of Mr Meek's evidence that the five people who were made redundant were those on what he described as Mr Brayshaw's and Mr Bennett's list. It was submitted by Mr Blewett that it was not possible that that was a list formed subsequent to Mr Brayshaw's plan. The actual costing of those people was quite clearly part of the plan. Mr Blewett submitted that what flows from that was that Mr Brayshaw came to this Court saying that he had a plan which unfortunately required the loss of 15 people, but what came out of his evidence was that his plan did not result in the redundancies but was instead a plan based upon redundancies of particulars individuals and the plan came out afterwards.
Fourthly, it was submitted that Mr Brayshaw's evidence was that the plan consisted of complex detailed workings-out involving looking at each machine and seeing how many operators would be required on those machines and what hours the machines would be operating. Yet, once Mr Brayshaw had worked out this plan requiring particular machines and particular numbers of people operating those machines, the managers were then told to go and structure their departments as they saw fit. This had nothing to do with looking at a particular machine in accordance with a plan and seeing how many people were required on the machine.
Because of these four reasons, Mr Blewett said that the evidence of the operational requirements of the business leading to reductions of the labour force simply does not add up. It cannot satisfy the respondent's onus that it needed to reduce its labour force. It was submitted that the financial state of the company is something that was existing for some time and there was never a satisfactory explanation of what the large purchase of plant and equipment was. It was submitted that presumably the shareholders in this company were quite aware of these large purchases and so the allegation that they were going to pull out in the immediate future does not wash. It was further submitted that Mr Brayshaw did not base his case on saying there was a loss of profit and the company needed to cut labour, but instead said that there was a dramatic loss of profit and therefore he set out about fixing the company by embarking on this plan. The plan itself was his evidence about why he needed to reduce these numbers and the plan simply does not satisfy the onus on the respondent in respect of the need to reduce the labour force at all, and certainly not in relation to the numbers that were actually reduced.
Lack of Consultation
Mr Blewett pointed to the fact that the respondent conceded that there had been a lack of consultation with the Union or the employees themselves. Mr Blewett conceded that traditionally this has been regarded as an aspect of what is "harsh, unjust or unreasonable" within the meaning of subsection 170DE(2) of the Act, which has been declared invalid by the High Court of Australia. It was argued, however, that lack of consultation is now better placed within the question of "valid reason" within the meaning of these words in section 170DE(1). The first reason for this is that before the enactment of the unlawful termination provisions of the Workplace Relations Act, consultation had always been regarded as an aspect of "harsh, unjust and unreasonable" because that was all there was. There was no question of "valid reasons" until 1994. Because of that, the categorisation of lack of consultation flowed through. Secondly, there was no need to change that because of the existence of section 170DE(2). Mr Blewett pointed to two recent decisions of this Court. The first is the decision of His Honour Justice Lee in Nettlefold v Kym Smoker Pty Ltd, (unreported, IRCA 469/96, 4 October 1996). The second decision was that of His Honour Marshall J in Kerr v Jaroma Pty Ltd, (unreported, IRCA 470/96, 7 October 1996). It was submitted by Mr Blewett that in the light of these two cases the question of "valid reason" is now being given greater attention.
It was submitted that the failure to consult does mean that the apparent reasons for the dismissal of these applicants must by virtue of that failure to consult, be invalid. It was submitted that this argument starts from the decision in Kenefick v Australian Submarine Corporation Pty Ltd (2) 1996 65 IR 366 in which the Court found that a respondent in a redundancy case must show that there is a valid reason for the selection of each employee. It was said that in the Kenefick case the Full Court of this Court found that in such a case the respondent must justify the dismissal of each employee. Mr Blewett submitted that the lack of consultation gives rise to that same principle, because the purposes of consultation include considerations of alternatives to forced reduction of staff, for example by the use of volunteers or attrition. It was submitted that in the absence of consultation about matters such as whether there were any alternatives to forced reduction or the selection of appropriate criteria, an employer cannot justify the dismissal of each employee because one cannot know what would have happened had that consultation occurred. It was further pointed out in support of the submission that the provisions of the relevant Award required the employer to notify the employees who may be affected by major changes in organisational structure of the employer. Under the terms of the Award, the employer must notify the employees and their union. Further, the Award requires the employer to discuss with employees affected and their union the introduction of such changes, measures to avert or mitigate the adverse affects of such changes on employees and give prompt attention to matters raised by the employees and/or their union in relation to the changes. It is quite clear from the evidence in this case that this did not happen here.
It was submitted that the employer in this case could not show that consultation would have made no difference. In the first place, the evidence showed that there must be at the very least real uncertainties about the number of people that had to go because of the way the plan was formulated. Therefore, there was clearly uncertainty about whether some people should have gone at all regardless of the selection. Secondly, there was evidence of volunteers being present and not accepted. It was submitted that consultation with a reasonable employer in these circumstances where volunteers were available would have led to those volunteers being accepted. There was evidence that one employee went directly to his manager and asked to be selected and was in fact selected. Further, there was evidence that a number of the employees who volunteered for selection have left the employment of the respondent in the last few months. Mr Blewett's submissions was that the most significant aspect of the lack of consultation was that no reasonable employer having consulted with the union and employees would have insisted on the criteria adopted in this case. It was submitted that far from showing that consultation would have made no difference in this case, the Court should find that proper consultation would have been likely to have led to a different result thereby rendering invalid the terminations of these employees. In relation to this submission, Mr Blewett referred the Court to the case of Grundy (Teddington) Ltd v Plummer [1983] ICR 367. That was a decision of an English appeal tribunal considering the provisions of the Employment Protection (Consolidation) Act 1978 and concerned the question of whether the employer acted reasonably in dismissing its employees. In that case, a number of people were made redundant by reference to amongst other things those who would in the manager's opinion best meet the future needs of the employers. The employer submitted that the decision of the lower Industrial Tribunal was perverse on the basis that because the Industrial Tribunal did not find either that the criteria for selection were unfair or that the manager had not applied them fairly, other so-called "procedural" failures were irrelevant. It was submitted that the only possible conclusion was that the dismissal was reasonable and therefore fair. The Tribunal stated at page 378:
"We reject this submission totally. It rests on a fundamental misunderstanding of the law and illustrates the danger of seeking to make a clear cut division between substantive and procedural matters in industrial relations cases. . . . Section 57(3) requires the Industrial Tribunal to consider whether the employer acted reasonably in selecting for dismissal, and dismissing, the employee rather than some other employee. If, as a result of proper consultation different criteria had been adopted or had been applied differently, a different employee might have been selected. Therefore although in one sense proper consultation is a "procedural" matter, it has a direct bearing on the substantive decision to select that particular employee. It is not necessarily enough for an employer to say "I adopted reasonable criteria" if, after consulting as a reasonable employer would have done, different criteria leading to a different result might have been adopted. Similarly, the failure to look for alternative employment has a direct bearing on the reasonableness of the decision to dismiss: if alternative employment had been found for the complainant, he would not have been dismissed."
Mr Blewett submitted that although the Court there was talking in terms of "reasonableness" the principle here is very much the same in that one cannot separate procedural from substantive matters. It was submitted that to divorce consultation from the substantive validity of the reasons to dismiss might be a misunderstanding of the law.
The Selection Criteria
It was submitted on behalf of the applicants that for a dismissal consequent upon a reduction in the labour force to be valid in circumstances where some are being selected from a larger pool of employees, there need to be some objectively-applicable selection criteria. It was submitted that that was the effect of the Kenefick decision. At page 368 of their decision, the Full Court (Ryan, Beazley and North JJ) recited some facts as follows:
"The general manager of operations, Mr Bews, met with his managers and senior foremen and told them to make assessments for redundancy on the basis of criteria such as skills, flexibility, commitment, time keeping, attitude, performance and supervisory requirement. Mr Dawson then reviewed all employees in the whole shop, and further reviewed the list with Mr Hickey and another foreman later that day. . . .After Mr Hartley's contribution, Mr Dawson met with Mr Bews and finalised the list by discussing each employee on the list and the reasons for selection."
Further on in that decision, the Full Court said at page 372 - 373:
" . . . the terminations in this case were for two reasons. Both were based on the operational requirements of the respondent. One reason was the need to reduce the workforce, the other was to retain some rather than other employees of the existing workforce. Without both steps, no individual would have been terminated. The decision to reduce the overall numbers of welders in the hull shop did not of itself lead to the termination of individual appellants, and the process of selection was only commenced after the decision to reduce overall numbers had been taken. Consequently, the respondent carried the onus of showing that there was a valid reason for the selection of each appellant."
It was submitted on behalf of the applicants that the Kenefick decision stands for the proposition that there must be some clear or objective criteria applied in order for there to be a valid reason. It was said that the selection criteria apparently adopted by the respondent in this case are very much on a par with the facts of the Kenefick case and the failure to provide objective, fair selection criteria must render these dismissals invalid. It was submitted that the one difference between this case and the Kenefick case was that here it was impossible to identify the selection criteria.
It appears to me from the evidence that in this case there were no readily identifiable criteria for selection of employees who were to be made redundant. Each supervisor or manager was simply told to go and choose a certain number of people for redundancy, and they used different methods for making their selections. Further, the selections were made on a subjective rather than an objective basis. To the extent that several different people were asked to provide a list in relation to the same section, there were clearly differences at first between the lists each person compiled. Finally, the evidence shows that part performance was taken into account in making the selections.
Mr Oosterhuis
In relation to Mr Oosterhuis it was submitted that an apprenticeship is a particular form of relationship between those providing labour and those requiring labour and that in the case of an apprenticeship there is an exchange of skills and information from the employer to the apprentice in return for faithful service by the apprentice. It was said that traditionally an apprenticeship has been regarded as something quite different from an ordinary employment contract and that is reflected in the indenture itself. The indenture in this case was for a definite period of four years. Paragraph 12 of the indenture provides for a specific method of cancelling an indenture, with the consent of the union or unions or the board of reference. Those processes have not been complied with in this case. Further, the Industrial Training Act by section 37 provides that no apprentice or industrial trainee shall be discharged from employment unless an order is made by the director on the application of the employer. It was submitted that given that the termination of the employment of Mr Oosterhuis was unlawful, the Court could not be satisfied that there was a valid reason for his termination of employment.
The Submissions of the Respondent
Mr Heathcote on behalf of Allwest Print referred to cases which he submitted stand for the proposition that an employer is permitted to make a decision to reduce its workforce as a response not only to some extreme financial position but also for no better reason than because it wants to improve its profits. Mr Heathcote referred to the decision of Quality Bakers of Australia v Goulding (1995) 60 IR 327 at which Her Honour Justice Beazley states at page 333:
"Part IVA provides, relevantly, that there must be a valid reason for any termination of employment based upon the operational requirements of the business. An employer might decide to make certain positions redundant with the sole intention of increasing the profitability of an already profitable business. Such a decision would relate as much to the operational requirements of the business as would a decision as to redundancies taken in the case of a business which was in a parlous financial condition or when a certain type of work was no longer undertaken by the business. If the submission was correct, it would be necessary in every case of termination because of a redundancy for an employer to call expert economic or financial evidence to support an operational decision to make jobs redundant and the Court would become the arbiter of whether the employer's operational decision was justified. There is nothing in the Act to justify such an approach."
Mr Heathcote submitted that the effect of that decision was that there is no requirement that the employer be in a situation where financially it has no choice but to make redundancies or reduce its work force. It is not something that it must be compelled to do by economic stringency and it has the option if for no other reason than in the interests of achieving better profit.
The second case relied on by Mr Heathcote was that of Gerard Westen v Union Des Assurances de Paris (unreported, IRCA 419/96, Madgwick J, 28 August 1996) where His Honour said at page 5:
"There was, apart from section 170DE(2), a valid reason for the termination, namely bona fide reorganisation of the respondent's business in pursuit of increased profits."
It was submitted that these two cases illustrate that the discretion that the employer has in respect of restructuring is not a discretion which needs to be exercised on the back of compulsion but is a discretion which could be exercised as a matter of prerogative. It was submitted that in this case, notwithstanding the evidence that has been brought before the Court indicating that there was considerable financial pressure and that the company's very viability was being threatened, the company still ought to have the discretion to make the decisions that it did in respect of reducing its work force.
Mr Heathcote referred to what he saw as the difficulty that the company encountered as being the two-stage test that arises out of the decision of the Kenefick case. He said that the case is authority for the proposition that there needs to be not only a valid reason for reducing the work force but also a valid reason for selecting each employee. It was submitted that the definition of "valid reason" was considered and has been cited with some regularity in this Court. The case of Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 was referred to in which Northrup J said at page 373:
"In its context in section 170DE(1), the adjective "valid" should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of section 170DE(1). At the same time the reason must be valid in the context of the employee's capacity or conduct or based upon the operational requirements of the employee's business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must "be applied in a practical, commonsense way to ensure that" the employer and employee are each treated fairly, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd (1995) 60 IR 1, when considering the construction and application of section 170DC.
The requirements of section 170DE(1) should not impose a severe barrier to the right of an employer to dismiss an employee. Nevertheless, in cases similar to the one before the Court, the application of section 170DE(1) should always be considered and decided before consideration is given to the additional limitations on the right of an employer to terminate the employment of an employee imposed by section 170DE(2) and 170DC."
Mr Heathcote submitted that the validity of the reason for termination needs to be looked at in its proper industrial context having regard to the workplace and the dynamics of each individual workplace. It was submitted that Allwest Print was a company which had unsophisticated management and in the context of that situation Mr Brayshaw was introduced to go into the organisation and assess its viability. It was submitted that Mr Brayshaw was in a situation where there had to be a decision to make people redundant because of the losses the company was suffering. Mr Brayshaw needed to take rapid steps. Because Mr Brayshaw knew very little about printing and very little about the jobs and equipment he had to rely heavily on the expertise of others in arriving at his decisions. Mr Heathcote submitted that there was a difficulty for Mr Brayshaw in that because of the lack of sophistication at Allwest Print there was no objective or well-developed mechanism for monitoring the relative value of employee contributions. There was no other well-defined method of measuring any other acceptable performance criteria that might have been used. It was submitted that he was put in the situation where the only criteria on which he could give any guidance was to leave it to the supervisors to decide themselves. Mr Heathcote submitted that the supervisors were left to arrive at their own subjective judgment and by eventually arriving at some consensus about who were the best people to stay at Allwest Print there was a broader range of views by which bias and prejudice could be eliminated.
In relation to lack of consultation, Mr Heathcote suggested that it would have made no difference because consultation may well not have had any effect anyway. Mr Brayshaw's evidence was that he made the decisions; he wanted sole responsibility for the decisions and showed little intent to entertain any form of compromise. It is submitted that in these circumstances any consultation would have made very little difference to the outcome.
Mr Heathcote said that at the end of the day the decision to terminate involved a two-stage test, firstly, the decision to reduce the company's manpower, and secondly that it needed to select particular individuals. Mr Heathcote said that whilst the criteria in this case were not ideal, they were in the context the best that the employer could hope to do in the circumstances. On that basis it was submitted that the decision ought to be regarded as defensible. It was submitted that in this manner the criteria met the test set out in Selvachandran.
There are several difficulties that I can see arising out of the respondent's submissions. In the first place, Mr Brayshaw did not come to this Court to say that the company had been losing business and therefore they needed to reduce the size of the workforce. He also did not say that the decisions were made simply because the company wanted to increase its profit. Instead, Mr Brayshaw said that he devised a plan which indicated that the company should terminate the employment of 15 or 16 people. I agree with the submissions Mr Blewett made in relation to that plan. I do not propose to go through the unsatisfactory aspects of that evidence again. Suffice it to say that I accept the submissions of Mr Blewett in this regard. In the second place, it is in my view not good enough for a respondent to come to this Court and say that because of its unsophisticated management in the past, the Court should accept the use of subjective selection criteria in the case of redundancies as amounting to a valid reason for the termination of employees on that basis. Further, a decision not to consult with employees and their union does not become defensible simply because consultation would perhaps not have made any difference if the decision maker was behaving in an unreasonable manner. In this case, the submission on behalf of the respondent is that as Mr Brayshaw showed little intention to entertain a compromise, any consultation is unlikely to have made any difference to the outcome. As His Honour Lee J said in the case of Kerr v Jaroma at page 20-21:
"As is clear from Kenefick, a reason which is based on the operational requirements of an undertaking does not thereby become "valid" because of it being so characterised from the subjective view of the employer. The question remains as to whether the employer has satisfied its onus of proof in showing a reason it alleges to be based on its operational requirements, in fact, was justified or objectively defensible in the circumstances. The Court will in each case determine, in the particular circumstances prevailing, whether any termination alleged to have been taken due to operational requirements was nonetheless effected for a valid reason, ie, one which is defensible or justifiable on an objective analysis of the relevant facts."
As to the suggestion that an employer has managerial prerogative to reduce its work force, Lee J said in Kerr v Jaroma at page 14 - 15:
"In any event, I do not see the decision in Selvachandran as providing a defence to the respondent on the question of compliance with section 170DE(1) of the Act. It cannot be assumed that a mere desire that an employer to change the way it conducts its business which, in turn, leads to the termination of the employment of some of its employees, will necessarily found a valid reason for the terminations based upon the operational requirements of the undertaking."
It appears clear from the decisions in Kerr v Jaroma and also Nettlefold v Kym Smoker Pty Ltd that since the decision in State of Victoria and Ors v Commonwealth of Australia, High Court of Australia, M46 of 1994, 4 September 1996 (unreported) and the Full Court decision in Kenefick that this Court is more likely to scrutinise more carefully the decision of an employer to make certain employees redundant.
In this case I consider that the employer has not discharged its onus of proving that there was a valid reason for the termination of each employee as required by the decision in Kenefick. I have already referred to my concerns about the use of Mr Brayshaw's plan as a justification for the termination of these particular employees. Secondly, I consider that the absence of readily identifiable selection criteria in this case means that the respondent is unable to discharge its onus of proof. Thirdly, the Award clearly requires consultation and because of the evidence of the presence of some volunteers for redundancy, I am not satisfied that consultation would have made no difference. In saying this I am not finding that consultation will always be necessary in proving that there was a valid reason for the termination of an employee's employment. Rather, the lack of consultation in the circumstances of this case is one of the many unsatisfactory elements in the process of the termination of the applicants' employment. Finally, I consider that the termination of Mr Oosterhuis' employment was clearly unlawful as it was in breach of his indenture of apprenticeship.
WAS THERE A BREACH OF SECTION 170DC?
Mr Blewett submitted that with the exception of Mr Ainge, every other applicant in this matter was selected for termination with reference to performance or conduct matters. Because of that, it was submitted that section 170DC applies. It was submitted that the applicants should have been given an opportunity to defend themselves according to the provisions of that section and as they were not, their dismissals were unlawful. It was said that this flows directly from the Kenefick decision.
The evidence from the respondent's own witnesses was that they took into account past performance or conduct when selecting the names of the people who were to be put on the list for termination. The evidence of the respondent's witnesses is also to the effect that these matters were not put to or discussed with the applicants before their employment was terminated. Because of this, I am satisfied there was a breach of section 170DC in relation to each of the applicants except Mr Ainge.
THE APPROPRIATE REMEDY
On behalf of the respondent it was argued that to order reinstatement would be impracticable because of the restructure of the respondent's organisation since the termination of the applicants' employment. It was said that the jobs are not there to be reinstated to. Further, it was submitted that to order reinstatement would affect harmony in the employer's business or create other unacceptable problems or embarrassments. In my view there is no evidence to support such a submission. There did not appear to me to be any disharmony in the work force before these terminations occurred. Further, there are authorities in this Court to the effect that reinstatement is intended to be the primary remedy for a breach of these provisions of the Act, and a respondent cannot defeat the intention of the legislation by claiming that a job is simply not there any longer. I am satisfied that it would be impracticable to order the reinstatement of Mr Tomaselli because of the evidence relating to his medical condition.
The Court has recently been informed, albeit informally, by both parties that all of the printing assets of Allwest Print have recently been sold. In these circumstances, I am satisfied that it would be impracticable to order the reinstatement of some of the applicants who are seeking such an order. In my view, in the case of most of the applicants, payment of compensation is now the most appropriate remedy. I do however have considerable doubts about the most appropriate remedy for Mr Oosterhuis and I intend to seek further submissions and possibly hear further evidence in relation to that question. It is my preliminary view that every effort should be made to enable Mr Oosterhuis to finish his apprenticeship.
Mr Tomaselli
Mr Tomaselli was fit for work until about 2 July 1996. I have doubts about whether he would in any event have been fit to work for Allwest Print after he became ill. In the circumstances, I consider it appropriate Mr Tomaselli payment of compensation in the sum of a further five weeks' wages amounting to a total of $2,701.
Mr Jobson
Mr Jobson was unemployed from the date of termination until 11 November 1996, a period of almost 24 weeks. His current wage is lower than that which he earned at Allwest Print. He is suffering a continuing loss. I am satisfied that it is appropriate to award to Mr Jobson payment of a full six months' compensation at his former rate of pay of $648.20 per week, making a total of $16,853.20.
Mr Gibson
As at the date of the hearing of this matter, Mr Gibson was still unemployed. Although he operated a business during that time, he was doing so even during the time of his employment with Allwest Print and the income derived from that business was negligible. In these circumstances, I am satisfied that it is appropriate to award to Mr Gibson payment of a full six months' compensation at his former rate of pay of $648.20 per week making a total of $16,853.20.
Mr Ainge
Mr Ainge is not seeking reinstatement. The evidence was that the company had decided to do away with a position of proof reader. In my view, it is likely that had these terminations been carried out lawfully, Mr Ainge would have been terminated in any event. Further, Mr Ainge has refused more lucrative work although I understand his reason for doing so. In the circumstances I consider it appropriate to award to Mr Ainge a further four weeks' wages by way of compensation amounting to a total of $1,296.48.
Mr Oosterhuis
As I have already indicated, I wish to hear further submissions and possibly further evidence relating to the appropriate remedy for Mr Oosterhuis.
Mr O'Reilly
Since 29 October 1996 Mr O'Reilly has been employed in another position in which he earns a similar wage to what he was earning prior to his termination by Allwest Print. If Mr O'Reilly had been employed by Allwest Print between 29 May and 29 October 1996, a period of 22 weeks, he would have earned a total of $15,528.48. Instead, he received termination payment in the amount of $1,176.40 plus an amount of $9,690 from his employment at Cypress Print. Those two amounts total $10,866.40. Mr O'Reilly's total remuneration lost is $4,662.08 and I consider that that is the appropriate amount to order by way of compensation.
Mr Ranger
Since about 18 September 1996 Mr Ranger has been working at George Percival at which he receives a similar weekly wage to what he earned at Allwest Print. The period between 29 May 1996 when his employment was terminated and when he started at George Percival amounts to 16 weeks. If Mr Ranger had been employed by Allwest Print during that time at his pre-termination wage of $725.29 per week he would have earned a total of $11,604.64 over that period. Instead, he received total termination pay of $4,352.26 plus $4,129 by way of earnings at Snap Print, amounting to a total of $8,481.26. His remuneration lost up to the time of starting at Snap Print is therefore $3,123.38 and I consider that that is the appropriate amount to order by way of payment of compensation.
Mr Edge
At the time of termination, Mr Edge was paid a total amount of $3,461.58 by Allwest Print. On 18 November 1996 he was employed by Lamb Print at a weekly wage of $495. His pre-termination wage was $576.93 gross per week at Allwest Print and Mr Edge appears to be suffering a continuing loss. His only earnings between the date of termination and 18 November 1996 have been a total of $600 gross. The total income Mr Edge received the date of termination and the date of starting at his present position was $4,061.58. 26 weeks of wages at the rate of $576.93 amount to a total of $15,000.18 and I consider it appropriate in Mr Edge's case to award that amount.
Mr Contarici
The schedule provided to me in relation to Mr Contarici shows that he is now better off than he was prior to the termination of his employment by Allwest. Taking into account that Mr Contarici is almost 60 years old, I consider it appropriate to award him compensation in the amount of a further one month's pay making a total of $1,664.
The Court orders and declares as follows:
The respondent has breached the provisions of section 170DE(1) and section 170DC of the Workplace Relations Act 1996 in the termination of the employment of the applicants.
The matter will be set down for a further half-day hearing in relation to the appropriate remedy for Mr Oosterhuis at 10 am on Thursday 1 May 1997.
The respondent pay to Mr Jobson compensation in the amount of $16,853.20.
The respondent pay to Mr Gibson compensation in the amount of $16,853.20.
The respondent pay to Mr Tomaselli compensation in the amount of $2,701.
The respondent pay to Mr Ainge compensation in the amount of $1,296.48.
The respondent pay to Mr O'Reilly compensation in the amount of $4,662.08.
The respondent pay to Mr Ranger compensation in the amount of $3,123.38.
The respondent pay to Mr Edge compensation in the amount of $15,000.18.
The respondent pay to Mr Contarici compensation in the amount of $1,664.
I certify that this and the preceding fifty (50) pages
are a true copy of the reasons for decision of
Judicial Registrar Boon.
Associate:
Date: 3 April 1997
APPEARANCES
Representative for the Applicants: Mr S. Blewett of Automotive Foods Metals Engineering Printing and Kindred Industries Union
Representative for the Respondent: Mr S. Heathcote of the
Printing Industries Association
Date of hearing: 27, 28, 29 November 1996
Date of judgment: 3 April 1997
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