Kerry Ann Keating and Teico Investments Pty Ltd

[1994] IRCA 49

INDUSTRIAL RELATIONS COURT

OF AUSTRALIA

MELBOURNE DISTRICT REGISTRY             VI No. 527 of 1994

BETWEEN:   Francis Owen JONES   Applicant

AND:   Department of Energy   and Minerals

Respondent

COURT:  E J Tomlinson, Judicial Registrar

PLACE:  Melbourne

DATE:            20 September 1994

REASONS FOR JUDGMENT

THE APPLICATION

This an application under Section 170 EA of the Industrial Relations Act. The applicant, Francis Owen Jones acting on his own behalf claimed:

1. an order declaring the termination by the respondent of the employment contravened Division 3 of Part 6A of the Industrial Relations Act 1988 (“The Act”) (Order 1 (a) in the application).

2.  in order that the respondent pay compensation to the employee.  (Order 1 (c) in the application).

3.  an order extending the time in which proceedings be commenced. 

By a Notice of Motion dated 6th August 1994 the respondent sought an order that the application be dismissed.  In support of that application Mr. Turner of Counsel argued that the application had been filed out of time and secondly that the applicant had received $33,003.05, a sum that exceeded the statutory amount of $30,000 referred to in Section 170 EE of the Act.  The court declined to make orders sought by the respondent in relation to the time of the filing of the application, and granted that the time in which the proceedings be commenced be extended on the basis of compassionate reasons supplied by the applicant.  In relation to the respondent’s motion that the applicant had already received in excess of $30,000 the court was of the view that this would properly be dealt with as a matter of defence and referred to the decision of Parkinson JR in Kelsall versus Brian Snooks (VI  202/94).

APPLICANT’S EVIDENCE

The applicant Francis Owen Jones was forty nine years of age and had been employed by the respondent for twelve years as a Director of Mining.  The applicant stated that approximately two hours before proceeding on annual leave he was advised to clear his desk and to vacate the premises of the respondent employer.  Further, he was told that on his return from annual leave he was to report to the Secretary of the Department and he would be no longer be working in his job.  At that point the applicant managed to meet with the secretary of the respondent department, Mr David Downie.  The applicant stated that Mr Downie requested that he consider postponing his leave and that he was again advised that there was no position in the Department for him and redundancy packages were discussed.  The applicant stated that in January 1994 he had arranged to take recreation leave commencing 4 February 1994.  The applicant stated that he had a mother aged eighty four who had had a stroke some time ago and that this lady was being cared for by the applicant’s aunt, herself recently having  been diagnosed suffering terminal liver cancer. 

There was no evidence produced as to whether the applicant was aware of these problems with his mother and his aunt when he applied for annual leave.  Further, the applicant stated that upon being advised by the respondent of his pending termination, Mr Downie suggested that the applicant remain in Melbourne to sort things out.  At no time did the applicant advise Mr Downie of any of the compassionate reasons behind the taking of annual leave at that particular time.

The applicant provided Mr Downie with his holiday address on the Gold Coast and the evidence indicated that in the month of February 1994, some five days after the conversation with Mr Downie, the applicant received a letter from the respondent advising that there was no suitable position in the new structure and offering the applicant a voluntary redundancy package.  The applicant rejected the voluntary departure package and accepted the equivalent of twenty four weeks pay in the form of a separation package.

After returning to Melbourne on 22 February 1994 evidence was placed before the court by the applicant that his employment ceased on 31 March and further that he applied for sick leave commencing 26 April 1994 on the basis that prior to termination he had arranged for an operation on his ear.  The applicant also applied for his annual leave to be credited to him on the basis that he would not have taken that leave had he been aware of his employment situation.

RESPONDENT’S EVIDENCE

Mr David Downie gave evidence on behalf of the respondent in his capacity as Secretary of the Department.  A restructuring of the Department commenced in September 1993 as a result of which the previous nine branches of the Minerals Division were reorganised into a new division of five branches which was called ‘The Resources Development’ division.  Mr Downie testified that the applicant’s position of Director of Mining was abolished and the new position of General Manager was created.

Mr Downie stated that as Secretary of the Department he had made the decision that there was no suitable position for the applicant within the Department, although others terminated at the same time had found positions. Logical reasons were provided to the Court for this decision which involved a detailed analysis of the skills and abilities of the applicant with regard to the new restructured Department.  Mr Downie arranged for the applicant (and another person) to be referred to the Work Force Management Unit for redeployment.

The evidence was that the applicant at the time of termination was in receipt of $71,753 per annum and that the new position which would take over from the applicant’s former position would be that of an Executive Officer with a remuneration range of $92,000 to $97,000.  Mr Downie testified that the applicant did not apply for the new job within the Department either orally or in writing.

Mr Downie stated that he was most concerned to discover that the applicant was going on leave at the time that he was told of his termination and from a range of options available Mr Downie considered that to delay advising the applicant of the news of the termination for a further month would mean delays in the restructuring processes and that this would adversely affect many other employees.  Mr Downie stated that at no time did the applicant state the compassionate reasons for his need to take annual leave.  Mr Downie asked the applicant if he wished to cancel leave so that he could seek advice about his position and to pursue other job appointments and to have discussions with the Government’s Work Force Management Unit.  Mr Downie confirmed that the applicant advised he would proceed with recreation leave.

As the position was to be abolished Mr Downie wrote to the applicant pursuing to the Section 78 of the Public Section Management Act 1992 and in an attachment from that letter evidence was produced to the court that the separation package of the applicant comprised four weeks pay in lieu of notice, $55,058, two weeks pay for years of service, maximum of ten years, equalling twenty weeks pay being the sum of $27,502.92 providing a total of $33, 003.50.

As well as this the applicant was paid recreation and long service leave entitlements.  Mr Downie stated that in addition the applicant was advised of his superannuation entitlements which included a retrenchment benefit.  Mr Downie confirmed to the court that the applicant received a total $61,283.35 other than superannuation entitlements. 

FINDINGS

1.  On the 4 February 1994 the applicant was advised that his position was likely to be terminated.  That termination was for a valid reason and was based upon the operational requirements of service that there was no suitable position for the applicant within the new restructured department.  This is a matter which must be decided on the facts and on the facts I find that this is a case of genuine redundancy.  A redundancy has been defined as occurring where an employer no longer desires to have that work performed by anyone.  This definition of redundancy is as stated by Bray C.J. in R v The Industrial Commission of South Australia; Ex parte Adelaide Milk Supply Co-operative Limited (1977) 44SAIR 1202 at 1205.

2.  The applicant argued that there was a lack of procedural fairness about the manner in which he was advised of his forthcoming employment termination and that the manner in which it was done was harsh and unjust.  It was common ground between the parties that the applicant was advised of the forthcoming termination some short while before he was due to go on annual leave.  At that time the applicant failed to advise the respondent of certain compassionate circumstances surrounding his need to travel to Queensland.  From the evidence before the court the respondent learned only of these compassionate circumstances at the commencement of the hearing and it seemed that these circumstances were not referred to by the applicant during the conciliation process.  In light of the lack of knowledge as to the compassionate circumstances on the part of the respondent, the lack of which was not his fault and which lack could have been remedied by the applicant, I find that the applicant denied the respondent the opportunity of making the termination seemingly less harsh  and unjust.

3.  The applicant argued that some of the duties performed previously by him were still being performed by an employee of the respondent and questioned the allegation of redundancy.  In this instance I refer to the judgement of Ryan, J.R. in the matter of Papadopoulos v The Colonial Mutual Life Assurance Society Limited (VI 437 of 1994).  There it is stated:

“I am quite happy to accept the proposition expounded in Needham v Shepparton Preserving Company Limited (1991) AILR395 that just because redundancy is the reason for dismissal does not mean that that dismissal may not be harsh, unjust or unreasonable.  In Needham the Industrial Relations Commission accepted the following view of redundancy set out in Bunnett’s case (1989) AILR356

‘A redundancy has been described as a situation where the employer no longer requires to have the work done by anyone;  see Termination, Change and Redundancy case (1984) 8IR34.  However it is not necessary for all the work to have disappeared.  Organisational restructuring may result in a position being abolished and the functions or some of them being given to another or split amongst others.’ ”

4.  The applicant had admitted that he had received a termination payment comprising twenty four weeks annual leave together with other monies which total sum the applicant had rolled over.  The applicant could not tell the court if this amount included a redundancy payment or not.  The court heard evidence the applicant received a total of $61,282.35 other than superannuation entitlements and no evidence was produced to the court that the applicant queried any of these payments.

5.  In order to assist the applicant re-locate within the Public Service the applicant was offered the services of the Work Force Management Unit.  The applicant relied solely on the efforts of this organisation.  Those efforts to re-locate the applicant within the Public Service bore no fruit - and the applicant further failed to apply on his own behalf for any suitable positions within the Public Service.

In his affidavit the applicant stated:

“It was obvious that the job that I was doing, although challenging and demanding, was in no way equipping me for a return to the private sector.  My experience and technical knowledge was becoming dated.”

Under cross examination the applicant admitted that he had only applied for jobs within the private sector.

I find the applicant could have done more to mitigate any alleged loss he may have suffered as a result of the redundancy.

6.  The applicant had a base salary of $72,000 and I find that the correct construction of Section 170 CD is that applicants not employed under an award who earn $60,000 per year or more are not covered by that Section unless application is made before the commencement date, being 30 June 1994.

7.  Compensation sought by the applicant for four weeks sick leave claimed in respect of an ear operation commencing 26 April 1994 I find was properly not paid by the employer as the view was taken that the applicant’s employment had been terminated.

8.  The applicant applied for a re-crediting of recreation leave which application was correctly denied because the applicant actually took that leave.  However the week the applicant returned to Melbourne to see the Work Force Management Unit he was recredited with that.  I find that those are reasonable actions on the part of the respondent.

MINUTES OF ORDER

THE COURT ORDERS THAT

1.The time in which these proceedings may be commenced be extended        to 22 May 1994.

2.That the Application by the respondent has already received an amount in excess of the jurisdiction of the Court be dismissed.

3.That the Application of the applicant for the termination by the respondent of the Employment of the Employee has contravened Division 3 of Part VI A of the Industrial Relations Act (1988) be dismissed.

I certify that this and the preceding five (5) pages are a true copy of the Reasons for Judgement of Judicial Registrar Tomlinson.

Associate  :

Date  :          20 September 1994

Solicitors for the Applicant                :          In person

Counsel for the Applicant                  :          In person

Solicitors for the Respondent            :          Department of Business & Employment

Counsel for the Respondent              :          Ms. N. Feely

Date of Hearing  :          12 September 1994

Date of Judgement  :          20 September 1994