Liu and Textile Clothing and Footwear Union of Australia v Leading Spinning Pty Ltd; and Xing and Textile Clothing and Footwear Union of Australia v Leading Spinning Pty Ltd
[1997] IRCA 7
•28 January 1997
DECISION NO:7/97
C A T C H W O R D S
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - whether first named applicant volunteered for REDUNDANCY - VALID REASON - whether VALID REASON for selection of second named applicant for redundancy - PROCEDURAL FAIRNESS - whether employer is required to give the employee a further opportunity to respond to performance related allegations already the subject of a formal warning
Workplace Relations Act 1996 ss 170DC, 170DF(1)(b), 170DF(1)(d)
Kenefick v Australian Submarine Corporation Pty Ltd (1996) 65 IR 366
MIN SU LIU & TEXTILE CLOTHING & FOOTWEAR UNION OF AUSTRALIA - v - LEADING SPINNING PTY LTD
No. VI 1712 of 1996
and
ZHANG XING & TEXTILE CLOTHING & FOOTWEAR UNION OF AUSTRALIA -v- LEADING SPINNING PTY LTD
No. 1713 of 1996
Before: Judicial Registrar Millane
Place: Melbourne
Date: 28 January 1997
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 1712 of 1996
B E T W E E N :
MIN SU LIU &
TEXTILE CLOTHING & FOOTWEAR UNION OF AUSTRALIA
Applicants
AND
LEADING SPINNING PTY LTD
Respondent
B E T W E E N :
ZHANG XING &
TEXTILE CLOTHING & FOOTWEAR UNION OF AUSTRALIA
Applicants
AND
LEADING SPINNING PTY LTD
Respondent
MINUTES OF ORDERS
Judicial Registrar Millane 28 January 1997
THE COURT DECLARES THAT:
On 27 April 1996 the respondent terminated the employment of the first named applicant, Min Su Liu, in contravention of Division III Part VIA of the Workplace Relations Act 1996.
AND THE COURT ORDERS THAT within 21 days of the date of making these orders:
The respondent reappoint Min Su Liu to a position on terms and conditions no less favourable than those on which he was employed immediately before his termination on 27 April 1996.
The employment of Min Su Liu be deemed to have been continuous for all purposes from 27 April 1996 to the date of reinstatement.
The respondent pay to Min Su Liu the remuneration lost by him because of the termination.
In default of agreement on the sum to be paid, there be liberty to either party to apply to the Court on reasonable notice in respect to the calculation of the amount of the remuneration lost referred to in the preceding order.
AND THE COURT FURTHER ORDERS THAT:
The application of the second named applicant, Zhang Xing, is dismissed.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 1712 of 1996
VI 1713 of 1996
B E T W E E N :
MIN SU LIU &
TEXTILE CLOTHING & FOOTWEAR UNION OF AUSTRALIA
Applicants
AND
LEADING SPINNING PTY LTD
Respondent
B E T W E E N :
ZHANG XING &
TEXTILE CLOTHING & FOOTWEAR UNION OF AUSTRALIA
Applicants
AND
LEADING SPINNING PTY LTD
Respondent
Before: Judicial Registrar Millane
Place: Melbourne
Date: 28 January 1997
REASONS FOR JUDGMENT
The two applicants were formerly employed by the respondent in the autocoro section of its Tullamarine spinning mill. On 27 April 1996 both men were terminated allegedly as a result of redundancies in the autocoro section of the mill based on the respondent’s operational requirements.
With regard to the first named applicant, Min Su Liu, it is alleged by the respondent he volunteered for redundancy on or about 25 and 26 April 1996 and therefore there was no termination at its initiative. The first named applicant contests this allegation and in his case there is no factual basis for concluding that if there was no voluntary redundancy he was properly selected for redundancy. This is so whether or not the employer establishes the nexus between the reduction in its workforce and its operational requirements.
The second named applicant, Zhang Xing, alleged that there was no valid reason for the termination and, if there was one, in any event, he was denied procedural fairness throughout the termination process. Accordingly, the respondent as against this applicant carries the initial burden of proof to establish on the balance of probabilities that there was a valid reason for the termination it initiated.
At the outset one matter should be borne in mind. That is that where there is a redundancy based on the operational requirements of a business which involves a decision by an employer to reduce its workforce and that decision culminates in the termination of the employment of particular employees, there are, in effect, two reasons for the termination of the employee’s employment. There is the decision to reduce the workforce and the subsequent application of selection criteria to the employee, which process leads to the individual termination. This means that the respondent carries the onus of proving or justifying both steps. Further, if the basis for selection from the existing pool of employees involves a choice or evaluation of employees by reference to performance or conduct criteria, then the requirements of section 170DC of the Workplace Relations Act 1996 must be met (for discussion of these matters see the Full Court decision in Kenefick v Australian Submarine Corporation Pty Ltd (1996) 65 IR 366).
In the present case it is apparent that at least the second named applicant was selected by reference to some performance related criteria. Although the first named applicant’s name appears on the chart (Exhibit R4) prepared by the respondent to compare and evaluate the particular characteristics of each of its employees, it was said by the respondent that it did not reach the point where it selected the first named applicant for redundancy because he volunteered to go.
A further allegation made by both applicants was that one of the reasons for the termination of their employment was to do with their union activities in the months preceding the terminations and, in this regard, they alleged contraventions of section 170DF(1)(b) of the Act. By reason of these allegations the respondent also carried the onus of proving that any decision to terminate was not tainted by a reason or reasons prohibited by that section of the Act. In the first named applicant’s case it seems to me that any evidence of the existence of a prohibited motive for termination is only relevant to the preliminary question of whether he volunteered to go or not. This is because the respondent conceded that if the first named applicant was found not to have volunteered then that was the end of the defence it raised in answer to the allegation of unlawful termination.
WITNESSES
The respondent called three employee witnesses as follows:
- Kenny Sukri (Sukri), manager of production;
- Saek-Yan Wong (Wong), supervisor; and
- Lionel Ng (Ng), logistics manager.
Each applicant gave evidence on his own behalf.
BACKGROUND
The respondent operates two plants, one at Campbellfield and the other at Tullamarine. It is a textile manufacturer whose principal business is to spin yarn from cotton, most of which cotton is imported. The head office of the company is located at Tullamarine and this was also the location at which the two applicants were employed as machine operators in what was referred to as the autocoro section of the plant.
It was alleged by the respondent that it was driven to reduce its workforce in both March and April 1996 as a result of losses of some $3 million dollars in the previous financial year, a downturn in the textile business and the increased costs incurred in importing its raw material for the production of its yarns. In an effort to reduce its costs the respondent determined to shut down certain sections of its plant. In March this led to the shut down of some thirty machines in the section of the factories producing jet spun yarn and as a consequence some twenty people were made redundant. By late April 1996 it was considered necessary to shut down part of the autocoro section of the plant leading to the redundancy of five more employees employed in that section.
At a meeting between the respondent’s representatives and a union representative and shop stewards on 24 April 1996, the issue of these further redundancies was raised and it was agreed that five workers from the autocoro section would be made redundant.
The respondent determined that it would take one person from the day shift and four from the rotational (afternoon/night) shifts. At the relevant time there were seventeen employees affected by this decision in the autocoro section. In its discussions with the union representatives and the shop stewards the applicant told the Court it agreed to first call for voluntary redundancies from the autocoro section and if there were insufficient takers the selection of the other workers would be conducted on a non-discriminatory basis. It was alleged by the respondent that in its discussions with the union and shop stewards it was agreed that selection would include “factors such as skills, length of services, misconduct, performance, attendance and punctual, etc. (sic)...” (see Exhibit R6).
The abovementioned matters were not contested by the applicants although the validity of the selection criteria ultimately used was challenged.
Following its meeting with the union representatives and the shop stewards, it was alleged that on instructions from Sukri given on the afternoon of 25 April 1996, Ng prepared and placed on the notice board the following notice (Exhibit A1):
“NOTICE TO ALL AUTOCORO MACHINE OPERATORS
Due to insufficient orders for the survival of the whole Autocoro Section, the company is forced to closing down part of the Autocoro Section (sic).
5 employees in the Autocoro Section will be affected. Redundancy packages will be offered to those workers affected and they will be notified individually.”
Contrary to what the respondent originally asserted it is clear from the contents of the notice that no call for volunteers is contained in that notice to the employees. However, Sukri maintains that the respondent met the requirement to call for volunteers by having Wong approach each of the workers involved and ask them directly. I was left to ponder why the notice ignored any reference to voluntary redundancies.
THE FIRST NAMED APPLICANT’S CLAIM
Sukri gave evidence that on the morning of 25 April 1996 after his night shift had finished, the first named applicant approached him “... and then asked me whether he want volunteer. He said he want volunteer. ... and I said that, okay if you want volunteer I have to check with the section manager and supervisor whether I can accept your volunteer or not. And then I ask him to go home because work in the night shift and that I will call you approximately lunchtime or after lunchtime. And then I asked - I did ask him too whether at that time you sleep or not, and he said it doesn’t matter, you can call me. And then okay. And then I said, you can go, I’ll call you. At 1 o’clock or approximately 1, 1.30, I did call him. I told him, your volunteer has been accepted and please come to work tonight, right, and I will talk to you further. So on the - sorry. ... he said, I want to volunteer because I still study. He show me - he tried to show me the student cards. I said, I believe you, you don’t need to show me. All right. He’s about to show me already. I said, I believe you, I trust you, but I have to check again with the section manager there, and then he went. So the next day on Saturday and then morning when he finish work, I call him together with Lionel was there, and then I said to him again, your volunteer has been accepted and then I passed him the letter. And then I told him during - you’re working less than one year, you’re entitled to have one week notice. We’re entitled to give you one week notice and, during this notice, we ask you to work. And then he said to me, no because due to my exam and already commit with my wife, I can’t work any more, and I don’t want to work any more. I said, in this case you can’t get payment during that week. He didn’t say anything. And then he asked me to show him the textile award because I did mention to him everything is according to the textile awards, like less than one year you’re entitled to have one week notice working. He asked me to show him the textile award, and then I asked Lionel to bring the textile award. And then we have only the copy. We have the copy and then I show him the copy. And then he said, no I want to see the original. And I said, I don’t have original is kept in the office. And then Monday we said approximately 10 o’clock you can come. He did came on Monday morning at 10 o’clock. And then I show him the original, and then said, all right. And then he asked whether I can pay him the one week notice while he’s not working. And I said, okay from the generosity of the company I’ll give you one week’s payment without work. And then he said - I ask him, anything else? And then he said, no more. Everything clear? Is clear. And then he shake my hand and then - that’s about it. (sic)”
At first it was alleged by Sukri that Ng was present during both meetings he held with the first named applicant. However, this was subsequently contradicted by Sukri and denied by both Ng and the first named applicant. What was said was that Ng attended the last meeting which took place on 27 April 1996.
The first named applicant’s evidence is that he was told by work colleagues that there was to be redundancies and subsequently he was approached by Wong who asked if he would volunteer. The first named applicant responded by telling Wong that he definitely would not leave. As a result he claims that Wong then told him “... whether you will be a volunteer or not you will be sacked for sure” and “... your service with this company is less than one year and whats more the boss doesn’t like you”.
The first named applicant was upset by Wong’s approach and told Wong that even if he was sacked he would continue his studies at RMIT for a Diploma of Interpretation. The relevance of this alleged retort seems to be connected with the first named applicant’s claim that he had acted as an interpreter for Mandarin speaking employees during strikes and industrial unrest at the respondent’s plant in the months preceding the redundancies. This role, he claimed, brought him into contact with Sukri and on one occasion he, as representative of the workers, told Sukri in effect that everything the company did should accord with the award otherwise the employees would go out on strike.
Sukri denied the abovementioned encounter and claimed that his only contact with the applicant until termination had been to greet him in passing but not to engage him in any conversation or to discuss issues relating to any industrial action.
According to the first named applicant when Wong could not persuade him to volunteer for redundancy he left and returned shortly thereafter and informed the first named applicant that Sukri wished to see him. He attended on Sukri and was told “You want to be a volunteer don’t you ...”. The first named applicant claims that he said “No” to Sukri’s statement and went on to say “I know you will sack me but the point is I will show you that I - we are not completely rely on the company for my living, I can still keep on with my studies”. After this comment he was allegedly told by Sukri to go home which he did, next returning for a shift he then said commenced at midnight on the following Sunday.
The witnesses for both the respondent and the applicants themselves consistently confused the dates and days of the various events. Some of this confusion may have had something to do with English not being their native tongue as well as the fact that night shifts worked by, for instance, the first named applicant, started at midnight and went to 8.00am the next day. Whatever the reason was for this confusion it did make it difficult to understand on what dates and days the various meetings occurred.
Wong and Ng in the main corroborated the evidence given by Sukri insofar as that evidence related to their role in the discussions with the first named applicant. Wong was the supervisor and he claims that he was asked by Sukri on the afternoon of Wednesday, 24 April 1996 to go to each autocoro operator and tell them about the redundancies and ask “... if anybody wanted to be a volunteer”. He claims to have commenced this task the same evening and to have spoken to each employee over a number of shifts. With the first named applicant he alleges that he spoke to him on the morning of Thursday, 25 April 1996 telling him that the respondent was asking for volunteers.
Wong claims that the first named applicant asked him what would happen if there were no volunteers to which question he responded by saying that the company would select five employees by reference to their skill, performance and length of service. After this conversation Wong alleges that the applicant then came to him on the Friday morning, which was 26 April 1996 and told him he wanted to be a volunteer. At the same time Wong alleges that the applicant asked Wong how much he would “get”. Because Wong did not know the answer to that question, Wong told the first named applicant to see Sukri and had no further discussions with him on the subject. In cross-examination it was not put to the applicant that there were two meetings on two successive days between he and Wong. In any event, it is clear from the evidence that the applicant disputes ever indicating a desire to leave voluntarily. Even if Wong’s evidence on this matter is correct, it only indicates that the first named applicant was then attempting to clarify the terms of any voluntary redundancy package. Wong gave no evidence to the effect that Sukri made contact with him as the first named applicant’s supervisor to determine whether or not to accept the applicant’s voluntary redundancy even though it was asserted by Sukri that this step was a necessary prerequisite to accepting the voluntary redundancy. In this case the first named applicant, because his service was less than one year, was not entitled to a redundancy package. If he sought to resign he was required to give one week’s notice and if he was terminated the statutory minimum for notice was also one week. In the circumstances of this case there was no logical or reasonable basis for the respondent to conclude that it was in a position to refuse what it characterised as a resignation. It had agreed to offer voluntary redundancies in the section affected by redundancies and the offer from the first named applicant was an apparent response to it asking him to accept voluntary redundancy.
Ng gave evidence that the chart evaluating each of the workers (Exhibit R4) was prepared by him on 23 April 1996 which was the day before the respondent met with the union and shop steward representatives informing them that it intended to effect redundancies. This indicates that by then it had already determined the selection criteria whether or not this matter was raised by the respondent at the meeting.
The notice (Exhibit A1) was also prepared by Ng on 25 April 1996 and posted by him on a notice board that same afternoon.
On 26 April 1996 he alleges that he was asked to prepare what he called five letters of retrenchment to all the retrenched workers. He did this, including the letter dated 26 April 1996 addressed to the first named applicant (Exhibit R3), stating as follows:
“The company regrets to advise you that your employment will be terminated at the close of part of the Autocoro Section in Tullamarine on 3 MAY 96.
There will be no more work offered to you due to insufficient orders for the survival of the whole Autocoro Section, part of the Autocoro Section is forced to close down and redundancy is an inevitable outcome.
5 employees in the Autocoro Section will be affected by closing down of part of the Autocoro Section.
The company has followed the appropriate redundancy procedure and criteria in accordance with the Textile Industry Award, 1994 (Clause 48 Redundancy) and held discussions with you union (TCFUA).
You will be paid Award entitlements in respect of in lieu of notice pay and redundancy pay on the day 8 MAY 96. Attached is a breakdown of your entitlements.
Leading Spinning wishes you all the best for the future. Should a suitable position come available in the future, we will advise you and should you apply for such position, you will be considered in accordance with you skill.”
The abovementioned letter is the letter the first named applicant says he was handed by Sukri together with a statement of his final pay on 27 April 1996. The first named applicant’s evidence was that he received the letter from Sukri at a meeting attended by both Sukri and Ng on the Saturday and this was the date of his last shift and not the Sunday as originally stated.
If as is alleged by Wong and Sukri the first named applicant had indicated on Thursday morning to Wong and again on Friday morning to Sukri that he sought voluntary redundancy, it is remarkable that the letter drafted by Ng on instructions from Sukri on the Friday afternoon completely ignores this arrangement and treats the termination as a compulsory redundancy.
On the date of the meeting at which Ng was present he alleges that Sukri handed the letter to the first named applicant and informed him that his application for voluntary redundancy had been accepted as well as requesting the first named applicant to do one more week’s work to 3 May 1996. According to Ng the first named applicant did not respond to the first statement made to him and, in respect to the request to work one further week, declined because of his study at RMIT and because of a “promise” to his “wife”.
In cross examination Ng could not recall the applicant mentioning “exams” at that meeting and agreed that he could not remember everything that was said during the meeting of some twenty minutes duration. He also agreed that the first named applicant asked Sukri why he was not receiving any payment for redundancy and that was when Sukri asked Ng to obtain a copy of the award. During the further meeting allegedly on the following Monday Ng claims that the first named applicant said “... that he just happy, he satisfied of here and everything is clear and he left the company. (sic)” The first named applicant denied any further meeting on the Monday after he was terminated on the previous Saturday, only recalling an attendance at his employer’s plant to collect an employment separation certificate for social security benefits.
The difficulty I have with the respondent’s case is to do with its plausibility. The documentary evidence points to a redundancy with no mention of any voluntary redundancy or resignation in circumstances where the letter dated 26 April 1996 was allegedly prepared after Wong and Sukri had what they say was a clear indication from the first named applicant that he would take a voluntary redundancy. It is apparent from the payments prepared that the respondent did not intend to pay him any money in lieu of notice and if it treated his departure as a resignation it might at least avoid this additional payment and have him work out the one week’s notice he was required to give on resignation. The first named applicant denied having any exams pending in April 1996 and also denied having a wife, much less one to whom he had made a promise not to continue work. I accept his evidence on the lastmentioned matters because he had, prior to the discussion of redundancies, undertaken a course of study throughout the whole period he was employed by the respondent and there was no suggestion that he took time off then to attend exams. The only time this was allegedly raised was when the employer wanted to reduce its workforce.
The first named applicant’s evidence was that at the date of termination he was still completing his course of study and since 27 April 1996 he has been unable to obtain alternative employment. All these circumstances make it more probable than not that the first named applicant did not resign and that the respondent’s conduct led to termination. Accordingly, I am satisfied that the first named applicant has discharged the burden of proof he carries to establish the threshold issue that there was a termination at the respondent’s initiative. Because of this finding it is not necessary for me to deal with any question of discriminatory behaviour in the termination process.
So far as a remedy is concerned for this employee I note from Exhibit A2 that by September 1996 the respondent had commenced advertising for employees and, in particular, process workers. Sukri denied that the advertisement related to autocoro workers, however, I am satisfied that in the present case reinstatement is practicable in all the circumstances and I propose to make appropriate orders for reinstatement and the payment of any remuneration lost.
THE SECOND NAMED APPLICANT’S CASE
With regard to the decision to reduce the respondent’s workforce in the autocoro section of its plant, the second named applicant did not seriously challenge the respondent’s evidence on this matter. I am satisfied that the respondent discharged the burden it carries to show that there was a valid reason for this preliminary decision. So far as the second named applicant is concerned there remains the question of whether the respondent has discharged the onus it carries of showing that there was a valid reason for selecting him for termination and that he was afforded procedural fairness in the selection process which led to his selection ahead of other employees by reason of, inter alia, a warning given to him in February 1995.
There is also the question of the section 170DF(1)(d) allegation, however, I am satisfied on the evidence that the respondent discharged the burden of proof it carried to show that any involvement the second named applicant had in industrial action taken by all the employees was not a matter which formed any part of the reason for terminating his employment.
The chart comparing the seventeen employees and prepared by Ng (see Exhibit R4) was drawn up on the basis that it compared the employees by reference to their period of service, the receipt by them of any warning, any absenteeism, late arrivals or early leavings and, lastly, any bonus paid for outstanding performance.
The second named applicant complained about the arbitrariness of selection criteria which compares the employees by reference to their length of service and which is applied to select employees in the categories of less than one year’s service and one to two years’ service. Those employed for over two years were not subject to any redundancy. The likely reason for this is that the respondent would pay lower or no redundancy packages if it terminated employees with shorter service. The only two employees of less than one year’s standing (including the first named applicant) were made redundant. Of the remaining three, who were all of one to two years’ standing, one was allegedly a voluntary redundancy with the other two (including the second named applicant) distinguishable from all the others in the group considered for redundancy because of a warning they each received.
From the shifts worked, a day shift and rotational (afternoon/night) shifts, including the voluntary redundancy, there were five redundancies with only one compulsory redundancy being drawn from the day shift workers. The second named applicant claims that this process showed an unfair distribution of the compulsory redundancy burden between shifts.
It is not the province of the Court to stand in the shoes of management. Where there are compulsory redundancies the Court should not be quick to criticise selection criteria unless those criteria are unreasonable or cannot be justified in all the circumstances. Where objective selection criteria are decided upon, the employer must still act reasonably in giving weight and priority to each of the factors used to decide whether an employee stays or goes and, as with the composition of the selection criteria, this may depend on balancing the interests of the employees against the interests and needs of the operation of the employer. In my view where other criteria provide no basis for distinguishing employees in a pool of employees from whom selection is to be made, length of service may ultimately provide a reasonable and justifiable basis for choosing one employee ahead of another. However in this case the effect of applying that criterion at first to all employees in the section immediately reduced the pool from which selection was to be made to eight employees and the two employees on the rotational shifts who had less than one year’s service were automatically earmarked for redundancy unless five longer serving employees accepted voluntary redundancy. By adopting and applying selection criteria in the way it did, the respondent narrowed the evaluation process to a group of six employees in the one to two year service group. In his opening to the Court Mr Alstergren, the respondent’s counsel, said that had the first named applicant not resigned he probably would not have been chosen for redundancy. In fact, the process adopted by the respondent suggests the contrary would have been the case because the first named applicant was one of the two employees working with the respondent for less than one year.
Apart from saying that the unions approved all of the criteria decided on, Sukri was unable to provide any other meaningful explanation for giving so much initial weight to the length of service criterion. Nor was he able to provide any explanation for deciding to select only one employee from the day shift and the rest from the rotational shift.
Of the eight employees who were in the groups from which redundancies were drawn only two, including the second named applicant, had a warning recorded against their names. Another three employees in the autocoro section also had warnings recorded against their names but because they had service of more than two years they were not considered for redundancy at all even though they all worked in the same section.
In his evidence-in-chief Sukri claimed that he selected the second named applicant because of the warning, high absenteeism “... and the performance and the skill and the value to the company ...”.
On the morning of 27 April 1996 Sukri met with the second named applicant in the presence of Ng and gave him his letter (Exhibit R2) and said ““Zhang Xing, you are the one that’s nominated as a redundant. As you know already the order from the company is going down and we already put on notice board there’s five autocoro people have to go as of - so you are the nominated” and then so I give him the letter and I ask him: “You want to ask me anything? Anything else that you want to ask?” and then he said “Based on what criteria you choose?” So I did mention to him against the criteria that according to the Textile Award plus also the skill, performance, ability, last in and first out, which is always discussed with the union one. (sic)”
Sukri says the only other discussion concerned the second named applicant’s reluctance to work out the notice period for which period he was eventually paid even though he did not fully work that period.
In cross-examination Sukri agreed that before he spoke to the second named applicant he made his decision based on the chart comparing the employees and discussions with Wong about their performance. Therefore, any discussions he may have had with the second named applicant about the selection criteria followed the decision to terminate. He also agreed that whilst absenteeism was a significant factor he knew nothing about the reasons for the second named applicant’s thirteen days of absenteeism. There was no evidence to suggest that any absenteeism was not authorised. With regard to the written warning (Exhibit R5) he alleged that the second named applicant had been warned on 16 February 1995 for failing to place waste material in the pocket of his work apron as instructed. He did not give the second named applicant that warning, nor was he in a position to personally contradict the second named applicant’s allegation that he was not told to follow this process when he started and had, in fact, placed the sliver waste in a bin which was referred to as the sliver can.
Wong was the person who gave the warning and who allegedly trained the second named applicant in the operation of the machine. In fact, Wong did not observe the second named applicant breach the instruction regarding the placement of the waste but acted to give a written warning to him on the advice of a manager. He alleges that he told the second named applicant not to “... do that any more and that’s the warning for you and then he signed - he didn’t argue at all (sic)” and told Wong that he would not do it any more.
Wong also told the Court that before warning the second named applicant he asked him whether he actually put the sliver (that is to say, the waste cotton material) inside the machine, to which question the second named applicant responded in the affirmative.
It was not contested that the written warning was signed by the second named applicant.
Although Wong was at first adamant that he trained and instructed the applicant on the particular procedure to be followed in using the machine, in cross-examination he eventually conceded that whilst it was his job to train each operator in matters to do with the operation of the machines, he could only say what he normally did but could not tell the Court what he did with any individual employee one and a half years earlier.
In cross-examination Wong also conceded that when he spoke to the second named applicant about the incident the second named applicant’s story was consistent with that of the manager’s; in that the manager had seen the second named applicant put the sliver in what was called the sliver can and not in the apron pocket. After telling him this the second named applicant apologised to Wong and “guaranteed” he would not do it again.
At the time he gave the written warning to him there was no indication from Wong that the warning would remain on the second named applicant’s record to be relied on in the future.
When giving his evidence-in-chief the second named applicant gave no evidence concerning his training; although in cross-examination he denied being told by his manager and Wong “to put sliver in your apron before and after you got the warning”.
Clearly at the date of termination Sukri had already decided to terminate the second named applicant and there was no opportunity for the second named applicant to comment on the fact that he was warned for not following an instruction he says he did not receive. In my view the correct approach to take to the Full Court’s decision in Kenefick’s case is that where selection is made by reference to performance or conduct issues, an employer may rely on formal warnings given in the past in respect to any performance or conduct issues without revisiting those issues in full if those allegations have been the subject of a proper opportunity to respond at the time of the alleged warning. Otherwise, employers would be faced with the difficult task of having to reconsider the matter possibly months or years after the event. In this case the second named applicant appears to have had an opportunity to respond to a specific allegation at the relevant time and has signed a document acknowledging the fact that he received a warning regarding his performance in “... not following the instruction to work” (Exhibit R5). It is not an acknowledgment of more than that. Notwithstanding the limitations applicable to the warning, it is apparent that there was at the relevant time an opportunity to respond and the applicant provided an explanation but received a warning in any event.
On Sukri’s evidence it is clear that he did not turn his mind at all to the timing of, the contents of or the seriousness of any of the warnings recorded against the names of the employees. Of the seventeen employees in the section, five (three in the day shift and two in the rotational shifts) had warnings recorded but only two (including the second named applicant) of those in the rotational shifts were considered for redundancy because they were in the group of employees who had less than two years’ service. Others in the group of longer serving employees had warnings recorded for as late as March 1996. Because of the way in which the respondent gave priority to the length of service criterion and confined the selection to only one in the day shift, there was never any real consideration given to the warnings other than the fact that two men in the group under consideration had received a warning at some stage in their employment.
In view of my observation on the effect of the Full Court decision, I am not satisfied that the second named applicant has shown that he was denied the opportunity to respond to any allegation concerning his performance even though the decision to terminate occurred ahead of any meeting with him. On the evidence it is apparent that he had an opportunity to respond to the matter being the substance of the warning in February 1995. From the evidence it is apparent that the warning was the only matter in issue relating to performance. Therefore, I am not satisfied that there was a contravention of section 170DC of the Act. If the second named applicant has any reason to complain about the reasonableness of the selection process, it was a result of the application of the length of service criterion first which narrowed down the field of candidates from which to select employees for redundancy as well as the restriction of the selection to only one employee from the day shift group.
One other matter raised by the second named applicant was that he questioned his redundancy because he believed that there were volunteers who should go first. He alleged that Sukri told him that this decision could only be made by a manager. Such a response is consistent with Sukri’s position that the respondent would decide whether or not to accept any voluntary redundancies and I am satisfied that this comment was probably made at that meeting.
In considering the selection process overall and the way in which it worked as against all seventeen employees, it certainly would have been preferable to have not given so much weight to length of service before considering all of the other factors relevant to selection and to have discussed the selection criteria in more depth with the second named applicant before terminating his employment. However, practically speaking, the second named applicant was one of five employees in the autocoro section who had been warned during the currency of their employment. If length of service and the number of employees to be taken from any shifts had not been given priority, then it is likely that the second named applicant would have been selected in any event because of the warning and his comparatively high absenteeism figure.
Bearing all the abovementioned matters in mind, I am satisfied that on balance the selection was justified in all the circumstances. Accordingly, the order I propose to make is that the second named applicant’s application is dismissed.
MINUTES OF ORDERS
THE COURT DECLARES THAT:
On 27 April 1996 the respondent terminated the employment of the first named applicant, Min Su Liu, in contravention of Division III Part VIA of the Workplace Relations Act 1996.
AND THE COURT ORDERS THAT within 21 days of the date of making these orders:
The respondent reappoint Min Su Liu to a position on terms and conditions no less favourable than those on which he was employed immediately before his termination on 27 April 1996.
The employment of Min Su Liu be deemed to have been continuous for all purposes from 27 April 1996 to the date of reinstatement.
The respondent pay to Min Su Liu the remuneration lost by him because of the termination.
In default of agreement on the sum to be paid, there be liberty to either party to apply to the Court on reasonable notice in respect to the calculation of the amount of the remuneration lost referred to in the preceding order.
AND THE COURT FURTHER ORDERS THAT:
The application of the second named applicant, Zhang Xing, is dismissed.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
I certify that this and the preceding twenty (20) pages are a true copy of the reasons for judgment of Judicial Registrar Millane.
Associate:
Dated: 28 January 1997
Solicitors for the Applicants: Maurice Blackburn & Co
Counsel for the Applicants: Mr W. Friend
Solicitors for the Respondent: Phillips Fox
Counsel for the Respondent: Mr W. Alstergren
Date of hearing: 20 & 21 November 1996
Date of judgment: 28 January 1997
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