John Georgievski and Kraft Foods Limited
[1995] IRCA 191
•10 May 1995
CATCHWORDS
INDUSTRIAL LAW - Termination of employment - Unlawful termination - Work related injuried - Rehabilitation - Restructure of workplace - Redundancy - Operational requirements - Harsh, unjust and unreasonable termination - Reinstatement.
Industrial Relations Act 1988, S170DE, S170EA, S170EE.
JOHN GEORGIEVSKI AND KRAFT FOODS LIMITED
No. VI-2093/94
Before: Ryan JR
Place: Melbourne
Date: 10 May 1995
Liddell v Lembke [1995] 127 ALR 342;
Papadopoulos and The Colonial Mutual Life Assurance Society Limited, IRCA, 16 August 1994 (VI-437/94 - unreported);
Fenton and Casey College of Technical and Further Education, IRCA, 8 December 1994 (VI-1107/94 - unreported);
McLean v David Jones (Australia) Pty Ltd [1993] AILR 98;
Delaney and Others and Meadow Lea Foods Limited, cases 94/436-439; decision E94/0261; Employee Relations Commission of Victoria 20 October 1994, Hastings C (unreported),
IN THE INDUSTRIAL RELATIONS
COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY Matter No VI-2093/94
B E T W E E N: JOHN GEORGIEVSKI
Applicant
AND:KRAFT FOODS LIMITED
Respondent
RYAN JR
MINUTES OF ORDER
10 MAY 1995
THE COURT ORDERS THAT:
the applicant be reinstated to
(a) his former position as Production Superintendent or
(b)another position on terms and conditions no less favourable to those previously enjoyed by him
the respondent pay to the applicant an amount of compensation the equivalent of that which he would have earned had his employment not been terminated
the amount of severance payment paid to the applicant be set off against the amount ordered to be paid by way of compensation in order 2
the period between the date of termination and the date of reinstatement be treated as continuous employment for all purposes
leave be reserved to the parties to apply to the Court in respect of any difficulties which may be encountered in the implementation of these orders.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.
IN THE INDUSTRIAL RELATIONS
COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY Matter No VI-2093/94
B E T W E E N: JOHN GEORGIEVSKI
Applicant
AND: KRAFT FOODS LIMITED
Respondent
COURT: RYAN JR
PLACE: MELBOURNE
DATE: 10 MAY 1995
REASONS FOR JUDGMENT
APPLICATION FOR REMEDY FOR UNLAWFUL TERMINATION
OF EMPLOYMENT
EMPLOYMENT, HOSPITALISATION AND RETURN TO WORK
The applicant worked with the respondent as a production superintendent for twenty years from 1974 to termination on 16 December 1994. He worked at the respondent’s major food processing plant in Port Melbourne.
The applicant was not subject to an award and was not a member of the union.
From 1991 to 1993 the applicant was responsible for a production area involving vegemite and peanut butter filling, and two other areas, one involving waxing and the other cleaning.
In early 1993 a new department or line was established involving peanut butter only. The applicant sought appointment as production superintendent of the peanut butter line and was trained for this position from May to August and began as the production superintendent of the new line on 30 August 1993.
By October 1993 the applicant was limping and experienced progressive discomfort and restriction in mobility. In January 1994 stress fractures in both feet were diagnosed and the applicant suggested that a leading hand be trained to assist him with the work in his area.
In February 1994 the applicant collapsed at work.
He returned after two weeks sick leave but was restricted in mobility and wore splints on both feet and his lower legs. In May he was hospitalised for 43 days. It is uncontested that he was anxious to return to work and did so on a part-time basis on the 2 October 1994 after a 5 month absence including the substantial period in hospital.
His mobility was still very restricted. He was on crutches and attending hospital twice a week for rehabilitation. He was clearly unfit to work as a production superintendent and began work part-time in a filing job in the personnel department. He continued his work and rehabilitation writing operational manuals for machines in areas with which he was familiar. There is some suggestion that this task could have occupied one person for up to two years.
In November he went to hospital for two weeks for rehabilitation. When he returned to work later in November it was on a full-time basis and he appears to have soon aggravated a pre-existing thumb injury which was somewhat relieved when he was given access to a computer or word processor to reduce the amount of writing by hand associated with the preparation of the manuals.
It is undisputed that the applicant was unhappy with the task of manual writing and that he was uneasy and even embarrassed about his ability to prepare the manuals in an adequate standard of English.
In early December he indicated to Mr Michael Bohan, Manager, Grocery Products, that he wanted to go back to work as a production superintendent but was told to continue with the manuals.
The Court notes that the applicant’s Orthopaedic Surgeon, Mr Cunningham had issued a Certificate of Work Capacity dated 24 October 1994 which contained the following endorsement:
“Work restrictions - modified duties until 1/11/94 and return to normal duties 8 hours per day from 2/11/94.”
RESTRUCTURE
Port Melbourne is the respondent’s prime site in Australia. At one stage, there were 780 employees there. In 1991 the company decided on a restructure which included the relocation of a major function (process cheese to Strathmerton). An announcement was made in 1991 which the Court assumes referred to significant staff reductions and redundancies but the detail of the announcement was not tendered.
The General Manager at Port Melbourne, Mr Peter Ray gave evidence that:
the restructure, when completed in early 1996, will have resulted in 350 production workers becoming redundant
five production superintendents and two other positions of a similar status will be redundant
these seven positions are first line management
the first line management redundancies result in part from the relocation to Strathmerton and in part from the adoption of a flatter, management structure with some management functions delegated to the factory floor
production superintendents under the new structure need to be more “facilitative” and less “directory” and less emphasis will be placed on technical skills and more emphasis on leadership, communication and motivation skills
the seven redundancies in the first line management area began on 30 June 1993 and by December 1994 six of the seven redundancies had been settled with all to have occurred by the end of 1995
the one first line management or production superintendent redundancy unresolved in early December 1994 was targeted to come from one of four production superintendents (the applicant, Kumar, Rasiak or Whitfield)
Whitfield has been acting in the production superintendent position which had been held by the applicant until he was hospitalised in May 1993
that position had had some additional responsibilities added to the peanut butter line, namely portion controls and the salt room. The Court notes that nevertheless it was essentially the same position as vacated by the applicant in May 1993 and at the time of the hearing Whitfield was still occupying this position
10.at a meeting described as a “return to a work” meeting, involving the applicant, Ray and Bohan in August 1994, the applicant had asked Ray what was going to happen to his position and Ray advised the applicant that it was premature to discuss that matter and that the company was concerned with achieving his rehabilitation.
The Court notes that:
the applicant claims that he was reassured at this meeting on 30 August 1994 that his job was secure but that this was denied by both Ray and Bohan
Ray admitted in cross-examination that he knew on 30 August 1994 that in respect of three production superintendent positions to remain at Port Melbourne he would have to make a decision out of Menzies, Rasiak, Whitfield and the applicant
this is a little different from his evidence in chief that by December 1994 the one remaining production superintendent redundancy had to be achieved from Kumar, Rasiak, Whitfield and the applicant but this does not necessarily amount to an inconsistency in evidence
Ray, while acknowledging that the applicant was expressing concern about his future in the company at the return to work meeting on 30 August 1994, nevertheless did not consider that it was appropriate to advise the applicant that he might be made redundant even though Ray knew this was so at the time and conceded this in cross-examination. When Mr Lawrence, for the applicant, put it to him that this was tantamount to misleading the applicant, Ray replied:
“No - I just did not do it.”
The Court considers this a significant omission on Ray’s part. To be fair, he and Bohan may have been concerned primarily at this stage in assisting in the applicant’s rehabilitation and finding suitable, temporary, and less physically demanding, duties than those of a production superintendent. However, it is rarely fair in these circumstances to suppress information which would give notice of a possible redundancy.
In this case, Ray and Bohan seem to have adopted the view that the applicant must have known of the possibility of a redundancy. The Court accepts that this very likely and that is why the applicant asked about his future. The suppression of any information about a possible redundancy in the face of a direct question from the applicant was unfair in that it may have given the applicant real hope his position was safe and the applicant may then have continued in that hope and expectation until he was told on 16 December 1994 that he would be terminated effective 30 December and could leave immediately.
THE TERMINATION
On 16 December 1994 without any warning or consultation the applicant was summoned to a meeting with Ray and the Human Resources Manager (Forster). The meeting lasted about 30 minutes. Ray indicated in his evidence that he told the applicant that:
unfortunately he was redundant to the company’s requirements
only three people were required as production superintendents and the decision had to be made out of four employees
he (Ray) was sorry but after going through a selection process he (the applicant) had been selected for redundancy
Ray stated that he could not recall whether he gave any detail of the selection process. The applicant says no detail was given and I find that no real detail of the process was given to the applicant then or at any other time.
Ray states that the applicant said that he expected it (i.e. the redundancy), that he understood and that he was disappointed.
No notes were kept of the termination meeting and the other participant (Forster) did not give evidence.
The applicant, in his evidence, demonstrated considerable respect for the General Manager, Peter Ray. He described him as “a gentleman” but that he was suddenly told that he would have no job from 30 December 1994 and that he could go immediately or work till 30 December. His evidence is that he was told that his termination was because of the restructure and that Ray said words to the following effect:
“Look John - this is not a termination because of your ability or performance but because of the new structure - unfortunately we have to terminate people like you”.
Forster apparently explained the redundancy package and gave the applicant two pages of figures (Exhibit A1) which indicated severance pay of four weeks ($3,725); a redundancy payment of 80 weeks ($74,502); sick leave 177 hours ($4,554); long service leave 17.77 weeks ($16,549); estimated annual leave ($11,490). This amounts to a redundancy payment of $82,781.38 (gross) and leave entitlements of $28,039.
The applicant states that he said to Ray that:
“I am in your hands...you know what you are doing.”
In cross-examination he said that he had not been concerned that he might be made redundant; he believed he had no choice but to accept the decision and that he was half laughing and half crying and referred to the decision sarcastically as “a very good Christmas present”.
FINDINGS
I am not satisfied there was a genuine redundancy at least in respect of the Production Superintendent of the peanut butter line.
Within the wider terms of a restructure I am not satisfied that the position the applicant occupied changed so fundamentally that the position had been replaced by a different position. The position, with some additional responsibilities, remained and, in terms of the overall restructure, the respondent decided Whitfield was more suitable than the applicant.
While the applicant was on sick leave and while the applicant was working on other duties during a period of rehabilitation, the position he had previously occupied continued and some additional responsibilities were added to it. I accept that operational requirements drove the changes and additions but could it be said that what has resulted is a fair and lawful termination of the applicant because of operational requirements? I think not.
First, I do not accept operational requirements led to a position which was so changed as to become in effect a new position for which the applicant was assessed as less suitable than other employees. I believe that the applicant was assessed, and perhaps in objective terms accurately assessed, as less suitable than others for continuation in the production superintendent position with the expanded requirements and less suitable than others for any remaining Port Melbourne position.
However, I am not satisfied that the position was so changed as to render it a position substantively other than that which he held when he went to hospital. He was replaced temporarily while unfit to do the duties. Some six weeks after the applicant was cleared as fit to return to normal duties, the applicant was terminated allegedly because of the operational requirements of the respondent. I do not accept that the facts support a lawful or fair termination on these grounds. I am not satisfied that the termination in these circumstances was a termination based on operational requirements although, I accept that the respondent treated the position as a termination based on operational requirements and that the respondent was in the middle of substantial staff reductions based on genuine redundancy. I also accept that it might well have been possible to terminate the applicant on redundancy grounds and do so fairly and justly.
I believe the respondent, after genuinely seeking to meet obligations to rehabilitate the applicant, was faced with a medical certificate which certified the applicant was fit to return to his production superintendent duties. There is a good deal of practical but non-medical evidence to suggest that the applicant was not really fit to resume those duties on 16 December 1994 and may not be fit to do so now but there is no medical evidence other than Exhibit R1. The Court will not go behind that medical clearance nor should the respondent. The respondent assessed the applicant against others and rather than return him to the production superintendent position took advantage of the opportunity presented by the medical clearance to bring the company one step closer to the overall restructure and production superintendent reductions which were then and may still be the operational target.
However, in the course of seeking to achieve what may be fair and reasonable operational targets, and in an overall sense, justified by genuine operational requirements, I believe the respondent has unfairly terminated the applicant’s employment for reasons which cannot be justified as based on operational requirements in this instance and in these circumstances,.
Even if I am wrong and the termination of the applicant was justified and effected on the basis of operational requirements, I do not believe the respondent has been fair and reasonable in its dealings with the applicant.
He was indisputably committed to returning to work. He tried to return before he was fit to do so. He was prepared to accept work he did not like and about which he had doubts as to his suitability. He was given this work during a period of rehabilitation. He says he is prepared to return to that work or any other suitable work with the respondent. He was not consulted during a process which assessed him as unsuitable to return to his production superintendent position albeit a position with some changes made.
It is not relevant that at some stage he may have expressed an interest in a redundancy package in discussions with his workmate, Salvatore Sposato. On legal advice he has only accepted part of the severance payments. He did not willingly accept redundancy. He contests it.
He seeks reinstatement. Reinstatement is the primary remedy. In my view, reinstatement is practicable and if it is open he should be reinstated to the production superintendent position he held before he went to hospital. If this position is not open he should be appointed to another position on terms and conditions no less favourable than those on which he was employed as a production supervisor. In concluding that reinstatement is practicable and should be ordered I have noted the findings of the majority in Liddell v Lembke [1995] 127 ALR 342 at 360 and indeed the stronger position taken by Gray J at 367. Adopting either test I find reinstatement practicable.
CASES CITED
In terms of redundancy and what constitutes it both parties seemed content to rely on the cases cited in Papadopoulos and The Colonial Mutual Life Assurance Society Limited, IRCA, 16 August 1994 (VI-437/94 - unreported) Ryan JR at 7 and on Fenton and Casey College of Technical and Further Education, IRCA, 8 December 1994 (VI-1107/94 - unreported) Parkinson JR at 13 and 14 which in turn at 19 cites Hunt and STA Tech Engineering Pty Ltd (t/a Boyd Steel), IRCA 23 September 1994 (unreported) Ryan JR and Beshara and Budget Couriers Equity Management, Employee Relations Commission of Victoria, 22 July 1993 (unreported).
I have taken account of the cases above and the cases cited therein:
R v The Industrial Commission of South Australia; Ex parte Adelaide Milk Supply Co-operative Ltd [1977] 44 SAIR 1202 at 1205;
Corkrey v General Motors Holden Ltd [1986] SAIR 351; 1986 AILR 439;
Hemmings and others v CPS Credit Union [1991] 58 SAIR 421; 1991 AILR 323;
Cheesman v Kinhill Engineers Pty Ltd [1992] 59 SAIR 168;
White v Douglas Diagnostic [1993] 60 SAIR 142;
McLean v David Jones (Australia) Pty Ltd [1993] AILR 98;
Needham v Shepparton Preserving Company Limited [1991] AILR 395;
Shearer v Action Mercantile [1993] AILR 281.
I have grave doubt that in this case it could be said that the applicant’s position as Production Superintendent of the peanut butter line has become redundant for reasons already given. In any event, if it could be held that the overall restructure created a spill of production superintendent positions and in such circumstances the applicant was subjectively assessed as less suitable than others, I consider the process was inadequate and unfair to the applicant. He was not consulted. He was not given an opportunity to consider other options or to suggest them. He was not given an opportunity to comment on the process. This is not a case like McLean and David Jones where dismissals were not found to be unfair although the employer had breached a clear requirement to consult with the employees prior to termination. In that case the facts indicated that the dismissals were due to genuine redundancies, that selection for redundancy was made on fair and just criteria, and that even is discussions had occurred, the dismissals would still have taken place as and when they did. Each case must be determined on its own facts. Quite apart from my doubts on redundancy as a genuine ground in a case in which in the specific position remains, a redundancy which if it can be justified must be justified on the basis of a spill of positions which was in no way explained to the applicant, requires consultation with the applicant otherwise it is unfair.
While there are some definite similarities with the shift co-ordinators who were dismissed without consultation in the case of Delaney and Others and Meadow Lea Foods Limited, cases 94/436-439; decision E94/0261; Employee Relations Commission of Victoria 20 October 1994 Hastings C (unreported), there is also an important difference namely that Meadow Lea was a case of exclusion of non-union members from enterprise bargaining meetings. The case, like many others cited, is of some assistance as a guide only as to what may or may not be found to be harsh, unjust and unreasonable in the circumstances of redundancy. At the end of the day, the cases are sign posts only and the decision must be made on the facts as found.
The same considerations and restrictions apply to Fuller and Law Institute of Victoria IRCA 17 February 1995, Parkinson JR (VI-1324/94 - unreported); Sargeant and Regent Press Pty Ltd IRCA Staindl JR, 15 February 1995 (VI-196/94 - unreported); and Blackley and Eleanor Pty Ltd and Another IRCA Chancellor JR, 11 January 1995 (VI-1422/94 - unreported).
ORDERS
The Court orders that:
the applicant be reinstated to
(a) his former position as Production Superintendent or
(b)another position on terms and conditions no less favourable to those previously enjoyed by him
the respondent pay to the applicant an amount of compensation the equivalent of that which he would have earned had his employment not been terminated
the amount of severance payment paid to the applicant be set off against the amount ordered to be paid by way of compensation in order 2
the period between the date of termination and the date of reinstatement be treated as continuous employment for all purposes
leave be reserved to the parties to apply to the Court in respect of any difficulties which may be encountered in the implementation of these orders.
I certify that this and the preceding pages are a true copy of the Reasons for Judgment of Judicial Registrar Ryan.
Associate :
Date : 10 May 1995
Appearances:
Counsel for the Applicant : Mr B D Lawrence
Solicitor for the Applicant : Mr T Adam
Counsel for the Respondent : Mr T Ginnane
Solicitor for the Respondent : Mr A Woods
Date of Hearing : 27 and 31 March 1995
Judgment : 10 May 1995
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