Keys v Lange Transport Pty Ltd
[1996] IRCA 93
•21 March 1996
DECISION NO: 93/96
DECISION NO: 93/96
C A T C H W O R D S
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - alleged UNLAWFUL TERMINATION - truck driver - whether AWARD applies - whether relevant wages include workcover payment - whether termination for the prohibited reason of family responsibilities - REDUNDANCY - lack of consultation - alleged gross misconduct after termination interview - COMPENSATION
INDUSTRIAL RELATIONS ACT 1988 Ss 170CD(1), 170CD(2), 170CD(4), 170DB(1), 170DB(4), 170DB(5), 170DC, 170DE(1), 170DE(2), 170DF(1)(f), 170EA, 170EE(2), 170EE(3)
THE TRANSPORT WORKERS (SOUTH AUSTRALIA) AWARD 1995, Cl 5
Siagian v Sanel Pty Ltd (1994) 122 ALR 333
Association of Professional Engineers, Scientists and Managers Australia (APESMA) & Others v Skilled Engineering Pty Ltd & Others (1994) 122 ALR 471
Ardino v Count Financial Group (1994) 126 ALR 49
Brown v Listaglen Pty Limited (1994) 1 IRCR 440
Kenefick v Australian Submarine Corporation (1995) 131 ALR 197
Quality Bakers of Australia v Goulding (1995) 60 IR 327
W Devis and Sons Limited v Atkins (1977) AC 931
MICHELLE ANN KEYS -v- LANGE TRANSPORT PTY LTD - WI 95/2308
BEFORE: BOON JR
PLACE: PERTH
DATE: 21 MARCH 1995
IN THE INDUSTRIAL RELATIONS )
COURT OF AUSTRALIA )
WESTERN AUSTRALIA )
DISTRICT REGISTRY ) No. WI 95/2308
BETWEEN: MICHELLE ANN KEYS
- Applicant
AND: LANGE TRANSPORT PTY LTD
- Respondent
MINUTE OF ORDERS
BEFORE: BOON JR
PLACE: PERTH
DATE: 21 MARCH 1995
THE COURT ORDERS THAT:
The respondent pay to the applicant the sum of $700 by way of payment in lieu of notice as required by the provisions of Section 170DB.
The respondent pay to the applicant the amount of $5,600 by way of compensation for the contravention of Section 170DE.
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 ) No. WI 95/2308
BETWEEN: MICHELLE ANN KEYS
- Applicant
AND: LANGE TRANSPORT PTY LTD
- Respondent
BEFORE: BOON JR
PLACE: PERTH
DATE: 21 MARCH 1996
REASONS FOR JUDGMENT
This is an application under Section 170EA of the Industrial Relations Act 1988. The applicant is seeking compensation in respect of the alleged unlawful termination of her employment by the respondent. The applicant alleges that the provisions of the Industrial Relations Act were breached in a number of ways. In the first place, it is alleged that the employment was terminated without notice contrary to Section 170DB of the Act. Secondly, it is argued that there was no valid reason for the termination and that the termination was in all the circumstances harsh, unjust or unreasonable within the meaning of Section 170DE of the Act. Further, it is alleged that the applicant's employment was terminated because of her family responsibilities contrary to Section 170DF(1)(f).
It is the respondent's position that the applicant was excluded from the relevant provisions of the Industrial Relations Act on the basis that the applicant's relevant wages exceeded the amount worked out pursuant to the formula set out in Section 170CD(1)(b). Further, the respondent alleges that in any event the applicant's employment was terminated for a valid reason based on the operational requirements of the respondent's undertaking within the meaning of Section 170DE(1). The respondent denies that the applicant's employment was terminated because of her family responsibilities and says that the applicant was made redundant due to a downturn in work and financial problems being suffered by the respondent.
BACKGROUND FACTS
The applicant, Michelle Keys, is a 35 year old woman who resides in Midvale on the outskirts of Perth. Ms Keys has two dependent children aged 11 and 13 years. She is a single mother with sole responsibility for the care of her children. Her husband committed suicide seven years ago. At the end of 1992 Ms Keys enrolled in a training course which took approximately 12 weeks to complete. She was trained in the loading, unloading and operation of trucks. She obtained her truck driving licence just over three years ago and spent some time gaining experience driving trucks with the assistance of various friends and owner/drivers of trucks.
Lange Transport Pty Ltd is a company which operates a transport business in Adelaide. In the course of its business, Lange Transport sends drivers and trucks to Melbourne who load trailers in Melbourne and bring them back to Adelaide. The loads are then sent from Adelaide to Perth on a road train. Lange Transport currently employs about 30 people. The business owns a number of trucks and trailers and also on occasion employs subcontractors who own their own vehicles. An interstate truck driver who drives a road train from Adelaide to Perth generally receives $700 each way, making a total of $1400 per return trip. Interstate drivers who drive "two up" would receive $700 each per return trip. "Two up" drivers can make two interstate return trips per week, whereas single drivers can only make one return trip per week. In a "two up" situation the truck drivers take turns driving the truck and sleeping.
Lange Transport did not usually pay its employees if they did not do a trip. However, if there was insufficient work for its interstate drivers, there was an option for the drivers of taking a week's holiday, for which they would be paid $500, or remaining in Adelaide doing yard work, for which they would also receive $500 per week. There was a maximum of four weeks' holiday per year. A third alternative was to simply have the week off without pay.
Ms Keys was first employed by Lange Transport in May 1994. She obtained a position as a "two up" driver of road trains on the Adelaide to Perth route, on the recommendation of an experienced employee with Lange Transport, Gordon Thyer. Ms Keys continued to reside in Perth and worked as a co-driver with Mr Thyer, doing two return trips a week. The evidence was that Mr Reg Lange, the managing director of Lange Transport, knew from early on in this period of employment what Ms Keys' family situation was. Ms Keys employed a full time live-in housekeeper to care for her two daughters.
Ms Keys gave evidence that prior to February 1995 she had spoken to Mr Lange several times about the fact that she had difficulty working with Mr Thyer. She said that driving "two up" put pressure on the members of the "two up" team. According to Ms Keys, Mr Thyer used to mentally abuse her and threaten to hit her, as the pressure of the job was getting to him. Her evidence was:
"I'd informed Reg of the situation a few times. We'd spoken about it and I had quit a couple of times, I said to Reg 'I can't handle it' and Mr Lange ended up talking me back into it with my help too because I wanted the job so I kept trying but in February I just totally refused to drive with him any more".
Further, the transcript shows that Ms Keys' evidence was:
"When I refused to drive with Gordon any more Mr Lange said to me that there wasn't anything available at this stage, but if anything came up he would give me a call".
The pay records show that that period of employment "terminated" on 13 February 1995. Ms Keys was paid one weeks' holiday pay and received no further wages until after she was re-employed on 16 March 1995. According to Ms Keys, Mr Lange telephoned her in March and asked her to fill in for him as he was very busy. After a few weeks Mr Lange offered Ms Keys a job as sole driver of one of the company's vehicles known as the Ford II truck. The evidence was that Ms Keys worked for Lange Transport as the Ford II driver doing trips from Adelaide to Perth and back again practically every week. Occasionally, if things were quiet, the drivers would take it in turns of not going. On other occasions Ms Keys needed time off for personal reasons and this was granted. There was a two week period from 17 July 1995 to 30 July 1995 when Ms Keys was paid a total of $2,800 WorkCover in respect of an injury suffered in the course of her employment.
Ms Keys gave evidence that she enjoyed being a road train driver. She was proud of the fact that she was the only female road train driver crossing the Nullarbor. Although Ms Keys said that she presumed her job was safe, and alleged that Mr Lange had said several months before October 1995 that her job was secure, she had heard a rumour that she was going to be the first to go if things didn't pick up. She had heard that the respondent's business was "a bit quiet".
Ms Keys said that she drove from Perth to Adelaide and arrived in Adelaide on 26 October 1995. On Friday 27 October she went down to the respondent's yard and was informed that Mr Lange wanted to see her. She said that Mr Lange told her that things were a bit quiet, and that seeing as she lived in Perth it was "unfair to the boys that you get to go to Perth each week" and that he would have to let her go. According to Ms Keys she told Mr Lange that it was unfair as she had been with him longer than some of the other drivers. Mr Lange said to her that he had no complaints about her driving. Ms Keys said that she had never been given any idea that the other truck drivers were unhappy with the situation. Ms Keys said that she suggested to Mr Lange that they do "Mundrabilla turnarounds" whereby she would drive to Mundrabilla and meet a truck which had driven from Adelaide. Mr Lange, however, rejected the idea.
It is common ground that Ms Keys drove the truck back to Perth and finished work on 29 October 1995. She was paid $700 for that trip. It is also common ground that Ms Keys carried Gordon Thyer, who was at that stage no longer an employee with the business, as a passenger in the truck back to Perth with her. This was against company regulations. Ms Keys said that she did this as she was very upset after having been told that her employment was to be terminated.
THE QUESTION OF JURISDICTION
Section 170CD(1) states as follows:
"170CD(1) [Employee not employed under award conditions] The following Subdivisions do not apply to a termination of employment of an employee who is not employed under award conditions if :
(a)in respect of an employee who was continuously employed by the employer during the period of twelve months immediately before the termination day - on the termination day the employee's relevant wages exceeded the applicable amount; or
(b)in respect of an employee who was continuously employed by the employer for a period less than twelve months immediately before the termination day - on the termination day the employee's relevant wages exceeded the amount worked out using the formula;
Days Employed x applicable amount
365
170CD(2)[Amount] The applicable amount for the purposes of subsection (1) is:
(a) subject to paragraph (b), $62,200 ...."
The Applicability of the Award
It is submitted on behalf of the applicant that the provisions of Section 170CD do not apply in this case as the applicant was subject to the provisions of the Transport Workers (South Australia) Award 1995. The provisions of Section 170CD apply only to employees who are not employed under award conditions. The respondent, however, points to clause 5 of the award which states as follows:
"Clause 5. Locality
This award shall have effect throughout the State of South Australia and on any contract of employment made in South Australia and substantially performed in such State although some portion thereof may be performed in any other State or Territory of Australia."
It was submitted by counsel for the respondent that this award is intended to cover drivers based in Adelaide but who occasionally have to drive outside the South Australian border. It was submitted that where the essence of the contract of employment is to travel interstate all the time, the award does not apply. I agree with that submission. Ms Keys was employed by Lange Transport to drive a truck from Adelaide to Perth and back again. It cannot be said that the contract of employment was "substantially performed" in South Australia. In these circumstances, I find that Ms Keys was "an employee who is not employed under award conditions" within the meaning of those words in Section 170CD(1).
The Relevant Employment Period
Counsel for the applicant submitted that Ms Keys was an employee who was continuously employed by the employer during the period of 12 months immediately before the termination day within the meaning of those words in subparagraph (a) of Section 170CD(1). He relied in this regard on the 1995 group certificate issued to Ms Keys by Lange Transport which states that the period of employment was from 1 July 1994 to 30 June 1995. The relevant form states clearly that "If not employed for full year, state period employed". No break in employment was indicated by the employer on that form. Mr Lange's evidence in relation to that form was that there was not enough room on the form "to state two lots of starts and finishes". If subparagraph (a) of Section 170CD(1) does apply, then Ms Keys' relevant wages fall short of the applicable amount of $62,200.
It is my view, however, notwithstanding the group certificate, that Ms Keys was not continuously employed by the respondent over the 12 months' period immediately prior to termination. This is because of the clear evidence from Ms Keys and from Mr Lange that Ms Keys "quit" her employment with the respondent as a 'two-up' driver. She received one week's holiday pay upon termination of that employment. She received no further pay from the respondent until she was re-employed approximately one month after resigning. I take the view that although what is stated on the group certificate is some evidence of the period of employment, this is outweighed by the clear verbal evidence of Ms Keys and Mr Lange. I find that Ms Keys was not continuously employed by Lange Transport for a period of twelve months immediately prior to the termination day. I find that the relevant period of employment for the purposes of Section 170CD(1) is 16 March 1995 until the "termination day". The term "termination day" is defined in Section 170CD(4) as meaning "the day on which the employer terminated the employee's employment". Mr Lange called Ms Keys into his office on 27 October 1995 and advised her that her employment was terminated. Although Ms Keys worked until 29 October 1995, I find that the relevant termination day in this case is 27 October. In the case of Siagian v Sanel Pty Ltd (1994) 122 ALR 333, Wilcox CJ said at page 351:
"... given that the Courts have sometimes recognised the possibility of a difference between a termination of employment and a termination of the contract of employment, it seems preferable to treat the words 'termination of ... employment' in Div 3 of Pt VIA of the Industrial Relations Act as including any act that brings to an end the employer-employee relationship, whether or not the Act or any acceptance of it, also brings to an end the contract of employment."
In the case of Association of Professional Engineers, Scientists and Managers Australia (APESMA) & Others v Skilled Engineering Pty Ltd & Others (1994) 122 ALR 471, Gray J said at page 482:
"Both the requirement that expressions in Div 3 of Pt VIA be given the same meanings as in the Convention and the form of the provisions of Div 3 therefore suggest that 'termination' refers to what is done by an employer attempting to bring about the end of the employment. The legislative intention is to permit applications under Section 170EA of the IR Act if an employer has done some act terminating or purporting to terminate the employment, irrespective of whether the act is effective to bring about the termination without some further action on the part of the employee. The 'termination' referred to in Section 170EA and in Section 170EE is the act of the employer."
Further on, at page 484, his Honour regarded the "giving of notice" as the "termination". In those circumstances, I consider that the termination day in this case is 27 October 1995 rather than 29 October 1995 which is the day upon which Ms Keys actually finished work.
Whether the WorkCover Payments are to be Included in the Calculation of "Relevant Wages"
The next question to be decided is whether the $2,800 paid to Ms Keys by way of WorkCover in July 1995 is to be included in considering Ms Keys' 'relevant wages' within the meaning of Section 170CD. Counsel for the applicant submitted that these payments should be excluded from the calculation. It was submitted that the WorkCover payments should be included in the calculation as WorkCover is paid to the employer, who is obliged to pay wages to the employee.
The term "relevant wages" is defined in Section 170CD(4) as follows:
"relevant wages" in relation to an employee, means the total amount of wages that the employee received, or was entitled to receive, from the employer in respect of:
(a)if paragraph (1)(a) applies to the employee - the period of twelve months referred to in that paragraph; or
(b)if paragraph (1)(b) applies to the employee - the lesser period referred to in that paragraph;
but, in relation to an employee whose contract of employment prescribes normal hours for the performance of work (whether by prescribing the number of hours in which, or the times at which, work is normally to be performed in a particular period), does not include any wages, additional to normal wages, in respect of additional hours of work performed or in respect of work performed at other times ....."
In the case of Ardino v Count Financial Group Pty Ltd (1994) 126 ALR 49, Wilcox CJ said at page 54-55 that:
"I agree with counsel that the definition of 'relevant wages' is concerned only with payments that are wages, strictly so called. I do not think it includes payments made by an employer on behalf of an employee pursuant to a binding antecedent obligation, whether statutory or contractual".
Further, at page 55, his Honour said:
"The word 'wages' is not defined by the Industrial Relations Act, so in Section 170CD it bears its ordinary meaning. The shorter Oxford English Dictionary defines 'wage' as:
A payment to a person for service rendered; now esp the amount paid periodically for the labour of service of a workman or servant. Freq pl.
The Macquarie Dictionary gives the primary meaning of 'wage', noting that it is often plural, as 'that which is paid for work or services, as by the day or week; hire; pay'."
Further, in the case of Brown v Listaglen Pty Limited (1994) 1 IRCR 440, Murphy JR, in deciding that the term 'relevant wages' does not extend to payments of commission, referred to the fact that Parliament has distinguished between wages in Section 170CD and 'remuneration' in Section 170EE. Section 170CD deals only with wages. As wages are a payment to a person for a service rendered, payments of workers' compensation do not, in my view, constitute part of an employee's relevant wages. Payments of WorkCover, or workers' compensation, are payments made pursuant to a statutory obligation by way of compensation to an employee who is unable to earn wages because he or she has been injured in the course of his or her employment. Although in many cases they amount to remuneration to an employee at the same rate as that employee's ordinary wages, it is not in itself a wage. For these reasons I consider that the WorkCover payments should be excluded from the calculation of relevant wages.
The Calculation of the Relevant Wages
During his closing submissions, counsel for the respondent provided me with some calculations relating to the application of the formula in Section 170CD(1)(b). The calculations were carried out on the basis that Ms Keys' total gross wages for the period 16 March 1995 to 27 October 1995 amounted to $41,050. However, that amount included the $2,800 paid to Ms Keys by way of WorkCover. I find that the relevant wages for the period 16 March to 27 October 1995 in fact amount to $38,250.
The formula set out by counsel for the respondent for the period of 16 March 1995 to 27 October 1995 inclusive indicates that there were 225 days for that period. In fact, that period amounts to a total of 226 days. I find that the formula should read as follows:
226 x $62,200 = $38,512.87
.365
Ms Keys' relevant wages therefore just fall short of the amount worked out using the formula set out in Section 170CD. On that basis, I find that Ms Keys is not excluded by the provisions of Section 170CD.
THE NOTICE PERIOD
The applicant contends that she should have been paid two weeks' pay in lieu of notice pursuant to the provisions of Section 170DB. The respondent's argument was firstly that it did not need to give Ms Keys any payment in lieu of notice as she was an excluded employee. I have already found that Ms Keys was not excluded by the provisions of Section 170CD. Secondly, the respondent argues that it has paid Ms Keys an adequate amount by way of payment in lieu of notice.
Section 170DB(1) requires an employer to give at least one week's notice if the employee's period of continuous service with the employer is not more than one year. I have already indicated that in my view Ms Keys was continuously employed by Lange Transport for a period of less than one year during her second period of employment. She is therefore entitled to a period of notice of at least one week or payment in lieu of notice.
The respondent argues that it did give Ms Keys one week's notice. The evidence is that when Mr Lange terminated Ms Keys employment on 27 October 1995, he required her to drive the Ford II truck back to Perth. Ms Keys did this and was paid $700 for the one way trip. The respondent argues that even though Ms Keys normally did one return trip per week in the course of her employment, in the final week of her employment the only work the respondent required Ms Keys to do was a single trip. Ms Keys was paid $700 for the trip from Adelaide to Perth.
Section 170DB(4) states:
"170DB(4) [Amount of compensation instead of notice] The amount of compensation instead of notice must equal or exceed the total of all amounts that, if the employee's employment had continued until the end of the required period of notice, the employer would have become liable to pay to the employee because of the employment continuing during that period."
Further, Section 170DB(5) states as follows:
"170DB(5)[Calculation of compensation amount] That total must be worked out on the basis of:
(a) the employee's ordinary hours of work (even if they are not standard hours) ..."
It is common ground that Ms Keys generally did one return trip per week, for which she was paid $1400. In these circumstances I consider that Ms Keys should have been paid a total of $1400 during the notice period. As she was only paid $700, I consider it appropriate to make an order requiring the respondent to pay a further $700 by way of payment in lieu of notice.
DID THE TERMINATION OCCUR FOR A VALID REASON?
(a) The Operational Requirements of the Respondent's Business
Mr Lange gave evidence that from about April or May 1995 his business took a downturn. He said in his evidence in chief that there were fewer trips going to Perth than there had been in the previous 12 months. He said that between May and October 1995 the business "got worse". There were weekends when they only had three or four road trains going to Perth. He said that he was an optimistic person and expected things to improve but by late August or September he and his wife were getting very worried. They had borrowed $200,000 from the bank. He said that they didn't borrow the money lightly because some five or six years previously they had nearly become bankrupt and his wife had a policy of not ever wanting to borrow money again. They borrowed the $200,000 knowing that they were going badly but even that money didn't pay all of the bills. He and his wife then had to use all of their savings to put into the business.
Mr Lange said that during the same time there were drivers on the Perth to Adelaide run who were not getting a run each week. Michelle Keys was given a run each week because she lived in Perth and was not able to stay in Adelaide to do yard work or simply miss out on a trip as she and her family resided in Perth. This caused some discontent amongst the other drivers, who felt it unfair that Ms Keys should get a load each week whereas they had to take turns on missing out. The position was that the company would not know until the Friday of each week how many trips there would be and whether or not each driver was needed. This was because the loads did not arrive from Melbourne until the Friday. Mr Lange said that one of his trucks was getting old and he decided that that truck would simply be put out of commission. As he paid his drivers $500 per week when they did not do trips and instead stayed in Adelaide to do yard work or took a week's holiday, Mr Lange saw that he would save money if he made one driver redundant and took one truck out of commission. By this time he had already stopped using one of his subcontractors.
During cross examination Mr Lange was questioned about his statement that there was a downturn in the number of trips being undertaken by the company. Mr Lange was shown documentation from the company's records which showed that in fact the number of trips had remained fairly steady during 1995. His response was that although it appeared that the number of trips did not appear to have declined during the course of 1995, if one had compared the records with the records for the previous year, it would show that there had definitely been a downturn. Those records were not available in Court at the time of the hearing.
Mr Graham Bray, the operations manager of Lange Transport at the relevant time, gave evidence that during 1995 the company had a fairly good start to the year but that in April it started to taper off. He said that in the early part of the year the company had some contracts which allowed it to consolidate loads together to give the company a greater profit level on loads sent out. When that particular job finished, the company was back to the normal competition for loads that every other transport company is involved in. Mr Bray said that during 1995 many companies used the rail system between Melbourne and 0000000Perth to transport their freight to Western Australia. Mr Bray distinguished between the number of trips and the profit level for each trip. He said that the profits during 1995 decreased. This would seem to explain why the company experienced a downturn and why Mr Lange found it necessary to borrow money.
Although Mr Lange's initial evidence that the number of trips undertaken by the company declined in 1995 was not fully supported by the evidence, I accept Mr Lange's evidence that the company was experiencing financial difficulties, that he found it necessary to borrow money and that there was a genuine reason, based on the operational requirements of the respondent's business, for Mr Lange deciding that one of its drivers should be made redundant. I find that the reason for the termination given by Mr Lange was genuine. In the case of Kenefick v Australian Submarine Corporation (1995) 131 ALR 197, Wilcox CJ said at page 208 after approving of dicta from Northrop J to the effect that "valid" should be given the meaning of sound, defensible or well founded:
"I think it follows that the reason must be genuine, that there must be a causal relationship between the reason and the termination and that the termination must be a logical response to the employee's capacity or conduct or the employer's operational requirements. Of course, there is often more than one logical way of dealing with the problem. While the subsection requires the employer to establish that the termination was a logical way of dealing with the problem of employee capacity or conduct, or operational requirements, that gave rise to it, it does not require proof that this was the only logical cause. The subsection was designed to inhibit capricious terminations, not to put the Court in the employer's managerial chair."
I find that the employer has proved under subsection (1) of Section 170DE that there was a valid reason for the termination based on the operational requirements of the employer's undertaking, establishment or service. The company was faced with financial difficulties and given that a number of truck drivers were missing out on trips each week, it was a logical response to the difficulties faced by the company that one truck driver be selected for redundancy. The fact that Ms Keys lived in Perth made her the logical choice. She could not be available at short notice if required and she was unable to stay in Adelaide for a week if she was not required. All of the other drivers with the respondent company were based in Adelaide and were therefore not subject to those difficulties.
(b)Did the Employer Terminate the Employee because of her Family Responsibilities
Counsel for the applicant argued strongly that Lange Transport, in terminating Ms Keys' employment, breached the provisions of Section 170DF(1)(f). The relevant parts of that section read as follows:
"170DF(1) [Employer not to terminate on certain grounds] An employer must not terminate an employee's employment for any one or more of the following reasons, or for reasons including any one or more of the following reasons:
... (f) .... family responsibilities ..."
It was argued on behalf of Ms Keys that Mr Lange was well aware of her family situation. It was submitted that the decision to terminate Ms Keys was made because of the problems experienced by the company as a result of Ms Keys wanting to get back to her family rather than stay in Adelaide if there was not enough work. It was submitted that one can't distinguish between the family responsibilities of Ms Keys and her location.
Mr Lange gave evidence that as far as he knew, most of the truck drivers based in Adelaide also had family responsibilities. He said that he did not discriminate against Ms Keys and that this was shown by the fact that after her first period of employment ended in February 1995 he chose to re-employ her the following month, knowing full well that she had family responsibilities in Perth.
In this case I am not satisfied that the employer chose to terminate Ms Keys for reasons including her family responsibilities. The reason for the termination was based on the employer's operational requirements. If there had been no downturn in the business it is unlikely that Ms Keys' employment would have been terminated. I consider that given that there was a downturn, it is likely that Ms Keys' employment would have been terminated even if she had had no family responsibilities. She was chosen for redundancy because she resided in Perth. If she and her children had lived in Adelaide, it is quite conceivable that she would not have been the person chosen for redundancy. The fact that she resided in Perth had special difficulties associated with it for the company and this made her the logical choice for redundancy. I find there has been no breach of Section 170DF.
(c)The Question of Consultation
The respondent admits that it did not consult with Ms Keys prior to making the decision to choose her for redundancy. Mr Lange said that he could have simply not given Ms Keys any work until she "got the message" that she was no longer required by Lange Transport. Mr Lange said that he wanted, however, to do the right thing by Ms Keys and tell her face to face that her employment was to be terminated. This is what he did during the interview on 27 October 1995. Although there is evidence that once Ms Keys was told of the termination she put forward a few suggestions for alternatives, this cannot seriously be regarded as "consultation". Mr Lange's evidence was that even if there had been consultation it would not have made any difference because his decision would not have been influenced by any suggestions Ms Keys could have put forward on her own behalf. That is entirely a matter for conjecture at this stage because the fact remains that Ms Keys was not consulted and was not given an opportunity to put forward any suggestions on her own behalf.
The respondent relies on the Kenefick case in which Wilcox CJ decided that there was no breach of Section 170DE(2) because of a failure to consult directly the employees who were made redundant. In that case Wilcox CJ said that the provisions of Section 170DC did not apply to a case in which the termination occurred because the position of the employee was made redundant. His Honour said, however, at page 208 "... there may be cases where Section 170DC does not apply, because the termination was not for reasons related to the employee's conduct or performance, yet the termination decision is effected by procedural fairness making it harsh, unjust or unreasonable". In Kenefick's case about 50 people were made redundant because of a reduction in the amount of work the respondent was required to do for the Defence Department. In that case there was some consultation with the applicants' union. Wilcox CJ decided that case on its own facts and at page 210 distinguished a situation in which there is "the elimination of a relatively small number of specific jobs, their occupants being readily identifiable and able meaningfully to be consulted".
The applicant relies on the case of Quality Bakers of Australia v Goulding (1995) 60 IR 327. That case involved a decision by Quality Bakers to reduce the number of bread trucks that it had on the road. Justice Beazley said at page 334:
"The need for consultation with employees and, if applicable, the employees' union, in the case of workplace change or restructuring, has consistently been recognised as an essential element of fairness in the relationship between employee and employer."
In that case her Honour decided that even though there were some negotiations with the union, the termination of Mr Goulding's employment was harsh, unjust or unreasonable because there was no consultation with Mr Goulding himself.
As the Kenefick case was decided on its own facts, and as the circumstances surrounding Ms Keys' termination are much more similar to the circumstances in the Quality Bakers' case than to the circumstances surrounding the termination of the employees in the Kenefick case, I consider myself bound by the decision of her Honour Justice Beazley in the Quality Bakers' case. That being so, I find that the total failure to consult Ms Keys in relation to the redundancy made her termination harsh, unjust or unreasonable within the meaning of the words in Section 170DE(2) of the Act. It is impossible to say at this stage what would have happened if Ms Keys had been consulted prior to the termination of her employment. I do not accept that it necessarily would have made no difference at all. There was clear evidence before this Court that during quiet times truck drivers employed by the respondent often took one or two weeks off work. There was no satisfactory explanation of why it was not possible to offer Ms Keys and the other drivers the chance to work fewer weeks in the year to retain their employment with the respondent, other than that it was more convenient for Mr Lange to terminate her employment. Bearing in mind Ms Keys' personal circumstances, the termination may be seen to be harsh and unjust.
(d)Alleged Gross Misconduct After the Termination Interview
Ms Keys gave evidence that after her interview with Mr Lange on 27 October 1995 during which he told her that her employment was to be terminated, she was extremely upset. She had to drive the truck from Adelaide to Perth and admits that she took a passenger with her on that trip contrary to company regulations. The passenger was Mr Gordon Thyer, the company's former employee, with whom Ms Keys had previously worked as a "two up" driver. Ms Keys' evidence was that she took Mr Thyer with her because she was extremely upset and distressed about being terminated and she wanted to have someone with her.
The respondent's evidence is that it also required Ms Keys to drop off some Optus cable to a client at a point along the journey. Ms Keys failed to do this. Ms Keys' evidence in this regard was that she was unaware that she was required to drop off the cable. Often in such cases the truck driver is told verbally by the company that he or she is to make a stop of this kind. There was no evidence that Ms Keys was told verbally about this on 27 October. The respondent relies on the fact that the truck driver's instructions are written down on a manifest form which is kept in the toolbox of the truck. The truck driver should always check the form prior to setting off on a journey. Mr Lange's evidence was that sometimes truck drivers may be carrying dangerous materials and that they should always check the manifest form in case they needed to take extra care with their load. Ms Keys said that she did not check the form in this case and that was probably because she was so upset at the time. I accept Ms Keys' evidence that this was an oversight on her part due to the distress she was suffering as a result of being told that she was terminated.
Once Ms Keys arrived back in Perth she did not complete all of the usual requirements associated with the journey. She did not return to Northam to collect one of the trailers and she drove the truck straight to her residence, some ten kilometres away from the respondent's yard at Perth. Ms Keys admits that she telephoned the yard and told them to collect the truck from her home. She says that she did this because she was too distressed to continue. I accept that Ms Keys was distressed but I do find fault with her for failing to complete the journey.
The respondent alleges that the actions of Ms Keys in taking a passenger with her to Perth, in failing to deliver the Optus cable as required and in failing to complete the journey to the Perth yard amount to "gross misconduct of which the employer was not aware at the time of termination". Counsel for the respondent referred this Court to the case of W Devis and Sons Limited v Atkins (1977) AC 931. In that case, the House of Lords held that since the amount of compensation for unfair dismissal had to be assessed in accordance with what was "just and equitable in all the circumstances", the tribunal in assessing the compensation might take into account evidence of misconduct which came to light after the dismissal, and reduced the compensation which would otherwise have been awarded to a nominal or nil amount. Although it was Mr Lange's clear evidence that he would dismiss any employee caught taking a passenger in a truck, this situation must be viewed in light of the circumstances surrounding the events of Ms Keys' last few days of employment. It was Ms Keys' evidence that she would not have taken a passenger if she had not been told that her employment was to be terminated. She did so because she was distressed and felt she wanted someone with her. Further, the failure to deliver the Optus cable was an oversight. I do not consider that the matters complained of by the respondent relating to the events of 27, 28 and 29 October amount to "gross misconduct" on behalf of Ms Keys. As I have said, I do find fault with her in not completing the tasks required of her at the Perth end of the journey. It appears to me that her actions in this regard were petty. However, they must be seen in light of the fact that she was extremely distressed at being terminated and felt, understandably, that she had been treated unfairly by Mr Lange.
THE APPROPRIATE REMEDY
The primary remedy in respect of a contravention of the unlawful termination provisions of the Industrial Relations Act is intended to be reinstatement. It is only in cases in which reinstatement is impracticable that the Court may grant compensation as a alternative remedy. Ms Keys is not seeking reinstatement as she feels that she would not feel comfortable working for Mr Lange again. It is the respondent's position that reinstatement would be impracticable, particularly in view of the fact that Ms Keys' employment was terminated on the grounds of redundancy. In these circumstances I accept that reinstatement would be impracticable.
Section 170EE(2) provides that if the Court thinks that reinstatement would be impracticable it may "if the Court considers it appropriate in all the circumstances of the case, make an order requiring the employer to pay to the employee compensation of such amount as the Court thinks appropriate". Section 170EE(3) provides that in working out the amount of the compensation, the Court is to have regard to the remuneration that the employee would have received or would have been likely to have received if the employer had not terminated the employment. Ms Keys gave evidence that she has only had limited employment since her position with the respondent was terminated. Taking into account the circumstances surrounding the termination, including the fact that there was a downturn in the respondent's business and the fact that if Ms Keys' employment had not been terminated, I think it is likely that she would have either spent many weeks during which she would have made no trips or would have been employed at a weekly wage of approximately $500 instead, I consider it appropriate to award to Ms Keys an equivalent of four weeks' wages by way of compensation. I propose to make the following orders:
That the respondent pay to the applicant the sum of $700 by way of payment in lieu of notice as required by the provisions of Section 170DB.
That the respondent pay to the applicant the amount of $5,600 by way of compensation for the contravention of Section 170DE.
I certify that this and the preceding 21 pages are a true copy of the Reasons for Judgment of Judicial Registrar Boon.
Associate
Date:
Counsel for the applicant: Mr D R Sands
Solicitors for the applicant: Marks Healy Sands
Counsel for the respondent: Mr A Siopis
Solicitors for the respondent: Parker & Parker, Perth and
Thomsons, Adelaide
Hearing date: 31 January & 1 February 1996
Judgment date: 21 March 1996
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