Joseph Attard and Nilsen Electric (SA) Pty Ltd trading as Nilsen Electric
[1995] IRCA 3
•11 January 1995
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA SI No. 217 of 1994
SOUTH AUSTRALIAN REGISTRY
BETWEEN
Joseph ATTARD
Applicant
AND
NILSEN ELECTRIC (SA) PTY LTD
ACN 007 873 387 trading as NILSEN SERVICERespondent
MINUTES OF ORDER
11 January 1995 Judicial Registrar Tomlinson
THE COURT DECLARES
That the termination of the employment by the respondent of the applicant contravened Division 3 of Part VIA of the Industrial Relations Act 1988.
AND THE COURT ORDERS THAT
The respondent to pay to the applicant the sum of $13,000.00 within one month of the date of this judgement.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA SI No.217 of 1994
SOUTH AUSTRALIAN REGISTRY
BETWEEN
Joseph ATTARD
Applicant
AND
NILSEN ELECTRIC (SA) PTY LTD
ACN 007 873 387 trading as NILSEN SERVICERespondent
Reasons for Judgement
11 January 1995 TOMLINSON JR
Joseph Attard has applied to the Court under Section 170 EA of the Industrial Relations Act (“the Act”) claiming that an order declaring the termination of his employment to have contravened Division 3 of Part VIA of the Industrial Relations Act 1988. The applicant claims compensation from the respondent together with other such orders as would put him in the same position as if his employment had not been terminated.
In support of his application to the Court the applicant put three arguments to the Court stating:
That the respondent did not choose the appropriate course of action in dismissing the applicant as at the time there were other options available to the respondent.
That there was a breach of procedural fairness in that there was a breach of Section 170 DC of the Act as the applicant was not given the opportunity to defend himself against allegations made.
With regard to payments made to the applicant by the respondent upon termination in accordance with Article 12 of Schedule 10 of the Act the conduct of the respondent did not accord with current practice in the field of industrial law.
The applicant Joseph Attard began employment with the respondent on 9 September 1968 and stayed employed there for some 26 years. At the time of the dismissal the applicant was employed as a Refrigeration Mechanic under the Metal Industry Award of 1984. In the applicant’s affidavit it is stated that the reason given by the respondent was redundancy and further that the date upon which he received written notice of his termination was 26 September 1994.
The Court heard evidence from:
the applicant Mr Joseph Attard
a manager of the respondent Mr Paul Rohal
a manager of the respondent Mr Graham Rashleigh.
The applicant told the Court that at the beginning of his employment with the respondent in 1968 he served a five year apprenticeship and then became a qualified refrigeration mechanic servicing commercial refrigeration units. Changes occurred in the business of the respondent and in 1984 the respondent company began to service domestic refrigeration units and apparently experienced a downturn in the servicing of commercial refrigeration units. The applicant advised the Court that he alone was responsible for the servicing of commercial refrigeration appliances and that at the end of his employment in 1994 with the respondent a Mr Hammond solely looked after the service of domestic refrigeration customers.
The applicant stated during the course of his employment with the respondent the work was seasonal and in order to assist his employer he took his holiday leave in the middle of the year in winter during the quiet time rather than during the summer months when the demand for his services as a refrigeration mechanic was at a peak.
The applicant stated Mr Paul Rohal began employment with the respondent as Service Manager on 1 September 1994. As such Mr Paul Rohal was in charge of the service personnel. Shortly after that time a discussion took place apparently between the applicant and Mr Rohal as a result of which it was agreed the applicant would approach former customers of the respondent in order re-build the commercial refrigeration work of Nilson Electric.
The respondent company comprised three departments, namely the applicant’s department (the service department), a contracting department and an engineering department. The Court heard that on occasion the applicant would work for other departments than his service department when work was short.
In his evidence the applicant told the Court that on the 12 September 1994 some two weeks after Mr Rohal commenced employment a notice was posted on the main notice board by Mr Rohal showing the non-productive hours worked by each of the employees in the service department. This notice identified the applicant clearly as having one of the highest rates of non-productive hours. The applicant wrote in red ink across the top:
“I do not agree with this.”
The applicant told the Court that at no time was preparation of the document discussed with him nor was he given the opportunity to deal with the allegations. The applicant stated that he did not discuss the posting of the document with it’s author Mr Paul Rohal.
On Monday 26 September 1994, some ten days after the discussion with the manager concerning ways of improving the business of the respondent employer, the applicant was contacted via his mobile phone whilst he was out on job and requested to come back to a meeting at the office. The applicant told the Court he had no idea as to what the meeting was to be about. He accordingly returned to the office and at 4.30 in the afternoon on that day he was summarily dismissed on the basis that his position was redundant and his services no longer required.
The applicant was paid four weeks salary in lieu of notice and also received a payment of eight weeks redundancy pay. The applicant stated that he would like to work out his notice instead of leaving the premises immediately. Mr Paul Rohal apparently refused this request. The managers for the respondent requested he return Company property and then gave the applicant $20.00 towards a taxi fare home. The applicant told the Court that he would have preferred to discuss the matter with the respondent but that he was clear that the decision to terminate him had already been made and was final. The applicant gave every indication of being shocked by the actions of the respondent and whether or not there had been a downturn in business obviously felt the treatment meted out to him to be unjust and unfair. I agree with the contention of the applicant that the conduct of the respondent through its managers falls into the category whether the termination was harsh and unjust.
Section 170DE(2) of the Act provides that if a termination is harsh, unjust or unreasonable the reason for termination is not valid taking into account the operational requirements of the undertaking, establishment or service. To my mind it is established on the evidence before the Court that the termination breached Section 170 DE (2)
In mitigation of his position the applicant stated that he had applied for two other positions as a refrigeration mechanic and at the time of leaving his employment had obtained consent from the respondent that he be allowed to contact former clients of the respondent in the field of commercial refrigeration in an effort to begin a business on his own account. This he had attempted to do and his evidence indicated that in this regard his expenditure had exceeded his income so that he had been forced to live on savings.
Reference was made to a dispute which seemingly took place between the applicant and the respondent in January of 1994 but this matter was not pursued and it cannot be said in any way formed part of the decision to terminate the applicant.
Mr Paul Rohal gave evidence on behalf of the respondent and advised the Court that he began with the respondent on 1 September 1994 as manager of the service division and that he held an “A” class certificate as an electrician. His brief was to improve the performance of the service department. To achieve this Mr Rohal analysed the production figures made available to him by the respondent and it was noted that non-productive time was fairly high.
Mr Rohal gave evidence that :
“My first task was to try to get a handle on what the business was and what it was doing and who the people were (sic) involved in it, and try to get a feel for the people involved and perhaps where to start looking at the business directions and what we could do with them.”
From the evidence placed before the Court it is clear that Mr Rohal made a point of acquainting himself with his employees but that at no stage during this period was the applicant warned that his job was at risk. It should be borne in mind that the applicant was terminated some three weeks after the arrival of Mr Rohal and so it cannot be argued that the applicant had ample opportunity to acquaint himself with what Mr Rohal perceived to be “business directions”.
As a result of analysing production figures it seems that Mr Rohal alone determined to post the notice on a notice board indicating the non-productive hours spent by each employee. He stated to the Court that he did not wish the employee to feel threatened but that his strategy in posting the document on the notice board was part of a plan of general employer - employee communications so that each person would know how he or she was performing. I am of the view that the posting of such information in that public place in the manner in which it was done would have had the effect of placing each of the employees under a great deal of stress and personal competition. It appeared to be common ground between the parties that the relatively large amount of non-productive time expended by the applicant was not the fault of the applicant. Accordingly it was published for the world to see that the applicant was one of the employees who, in the opinion of management, was one of the least productive and one of the least efficient. Seemingly there was no explanation provided by management that this fact was not the personal fault of the applicant. The Court heard no evidence that this fact was the personal fault of the applicant.
Accordingly I am of the view that the conduct of the respondent was harsh and unjust and that the respondent breached Section 170 DE (2).
After this notice was posted on the board, Mr Rohal had a conversation with Mr Rashleigh, a manager of another department as to performance of various members of his department and he sought advice from Mr Rashleigh as to which employee it would be better to keep and who in his opinion it would be better to let go. It seems that Mr Rashleigh advised that it would be better in the interests of the service department to dismiss the applicant. Accordingly I agree with the first argument of the applicant that the respondent failed to consider all options which may have been available to the parties at the time of the termination and I am of the view that this failure resulted in the termination being harsh and unjust.
The Court heard that some time between the 19 and 23 September 1994 Mr Rohal made the decision to terminate the applicant. He agreed with the evidence the Court heard earlier that the applicant was recalled to the office while he was out on a job and in the presence of other managers Mr Rohal terminated the applicant and handed to him the documentation being a letter of dismissal and a cheque representing some twelve weeks pay.. It is common ground that at this point the applicant posed the question;
“Is this all I get for my length of service?”
To my mind this question supports the view that the applicant felt aggrieved at the treatment accorded him by the respondent at that time.
The Court heard evidence that the letter of termination was incorrectly dated 13 September 1994 as Mr Rohal had typed the letter himself and the incorrect date was due to a computer error. It was stated that Mr Rohal was of the view that his employees would perform better if they were aware of the amount of non-productive time each employee expended. It was noted that in addition to this targeted area of information other work practices were communicated via random memoranda on the notice board such as the wearing of uniforms and “The Employee of the Month”. Mr Rohal stated that he was of the view that the applicant was not responsible for his non-productive time as the work simply was not there with regard to his speciality, that of commercial refrigeration mechanic.
Mr Graham Rashleigh had been a supervisor employed by the respondent for some ten years and he stated the applicant had a background mainly in the servicing of commercial refrigeration.
Mr Rashleigh gave evidence that Mr Rohal joined the firm on 1 September 1994 and that shortly afterwards Mr Rohal asked for an opinion as to the structure of Mr Rashleigh’s area. It is clear that Mr Rashleigh gave his opinion as to the abilities of various staff members and indicated to Mr Rohal that there were other employees he would prefer to retain over the applicant Mr Attard.
On behalf of the respondents it was argued that as the applicant (unknowingly) had allowed his “B” electrician’s licence lapse he was unable legally to fulfil his contract of employment. It was conceded that this was unknown to the employer. The fact that this licence had not been valid since 1988 is not an issue in these proceedings. I agree with the contention of Counsel for the applicant that the issue of the currency of the licence of the applicant is a red herring. I can not agree with the assertions on behalf of the respondent that there can not be an order for compensation for the period of termination until the date these proceedings or until the point in time when the applicant should or will receive a current licence.
On behalf of the respondent it was stated that a concession was made by the applicant that the case of Mr Attard was a bona fide redundancy. I am of the view that a dismissal can arise out of a redundancy situation and accordingly the provisions of the Act apply..
Section 170DE(1) provides that a termination must be for a valid reason. It will not be necessary to deal in detail with the operations of that section. Section 170 DB of the Act provides a minimum standard for the provision of notice in such circumstances and payment in lieu of such notice is specifically authorised and that a minimum standard is set out.. Further, it was submitted on behalf of the applicant that the respondent had not satisfied its onus of establishing that the applicant had to be preferred in terms of being the choice for redundancy over Mr Hammond.
In Nicholson v Heaven & Earth Gallery Pty Ltd (NI127 of 1994) Wilcox CJ stated:
“Section 170 DC carried in to Australian labour law a fundamental component know to lawyers as ‘Natural Justice’ or more recently ‘Procedural Fairness’. The relevant principle is that a person should not exercise legal power over another, to that person’s disadvantage and for a reason personal to him or her, without first affording the effective person an opportunity to present a case. The principal is well established in public administrative law. It was accepted into international labour law when article 7 was inserted in the termination of Employment Convention. Section 170 DC is directly modelled on Article 7. The principle is, I believe well understood in the community. It represents part of what Australians call ‘A fair go’. In the context of 170 DC, it is not to be treated lightly.”
In this case I find there has been breach of Section 170 DC (a) and that at no time was any consideration given to affording the applicant the opportunity to deal with the allegations as to his expenditure of non-productive time. Nor was opportunity provided to the applicant to discuss re-deployment which after the length of employment of the applicant with the respondent would seem to be the better way to go. The applicant received no warning or indication ever at any time from the manager Mr Rohal that his position was at risk. To the contrary, the applicant was led to believe his area of expertise in fact could well have been under consideration for a revival. On behalf of the applicant it was argued that it may well have been an option to terminate the applicant in the following year after the peak ‘season’ had passed. This most certainly was a viable option but in no way was considered.
On behalf of the respondent it was argued that Mr Rohal did not ignore other options as to alternatives available however it was admitted that he did not raise them with the applicant. The applicant may well have been the most suitable candidate to be made redundant but that issue was unclear as some of the evidence appeared to b equivocal.
This is a case of redundancy. The applicant does not seek reinstatement. It is clear from the information before the Court that the commercial refrigeration work of the respondent had disappeared. The employer no longer wished the job the employee had been doing to be done by anyone. The TCR case (1984) 8IR34 states employers have a responsibility to provide various forms of assistance to those dismissed as a result of this redundancy.
On behalf of the applicant it was argued that the payments made to the applicant by the respondent in accordance with Article 12 of Schedule 10 of the Act did not accord with current practice in the field of industrial law. On behalf of the respondent it was argued that Section 170 DB of the Act sets a minimum standard for the provision of notice and the attention of the Court was drawn to the fact that that section accords with the minimum standard contained in the TCR case (1984) 294 178. However having found that the conduct of the employer contravened Division 3 of Part VIA of the Act I am of the view that compensation payable is governed by Section 170 EE(3) of the Act.
Having considered the circumstances surrounding the termination of the applicant I am of the view that the maximum amount of compensation is payable and accordingly award to the applicant Joseph Attard the sum of $13,000.00 payable within one month of the date of these proceedings.
I certify that the preceding nine (9) pages are a true copy of the Reasons for Judgment of Judicial Registrar Tomlinson.
Associate :
Date of Judgement : 11 January 1995
Appearances:
Dates of Hearing : 5 & 6 December 1994
Counsel for the Applicant : Mr T Bourne
Solicitor for the Applicant : Stanley & Partners
Counsel for the Respondent : Mr R Manuel
Solicitor for the Respondent : Minter Ellison Baker O’Loughlin
0
0
0