Mcnamara v Oakey Creek Coal Pty Ltd
[1996] IRCA 312
•16 July 1996
DECISION NO: 312/96
CATCHWORDS
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - REDUNDANCY - Summary dismissal, without consultation with the applicant or his union - HARSH and UNJUST and UNREASONABLE - Another job was available which the applicant could have taken, but was not offered - Termination UNREASONABLE for that reason - Subsequent significant deterioration in the financial position of the respondent, resulting in a large number of redundancies - REINSTATEMENT IMPRACTICABLE - COMPENSATION.
Industrial Relations Act 1988 ss: 170DB(1), 170DB(2), 170DE(1), 170EA
Quality Bakers of Australia Limited -v- John Golding and Bob Wickham 60 IR 327
Corkery -v- General Motors-Holden’s Limited (1986) 63 SAIR 531
McNAMARA -v- OAKEY CREEK COAL PTY LTD
QI 1430 of 1995
Before: PATCH JR
Place: SYDNEY (Heard in Brisbane)
Date/s of hearing: 12 & 13 MARCH 1996
Date of judgment: 16 JULY 1996
IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
QI 1430 of 1995
BETWEEN:
Patrick Daniel McNAMARA
Applicant
AND:
OAKEY CREEK COAL PTY LTD
Respondent
MINUTES OF ORDERS
16 July 1996 PATCH JR
THE COURT ORDERS THAT:
The respondent pay the applicant the sum of $542.10 (gross) as damages for lack of proper notice of the termination of his employment.
The respondent pay the applicant the sum of $24,233.50 (gross) as compensation for the unlawful termination of his employment.
In respect of each of Orders 1. and 2. the respondent is to pay to the applicant only the amount remaining after the deduction of that amount of tax which it is obliged, by law, to deduct.
The parties attempt to reach agreement on the correct amounts of taxation to be deducted from the amounts referred to in Orders 1. and 2..
If agreement is reached, Consent Orders may be filed in accordance with Order 35 Rule 10.
If agreement is not reached, written submissions are to be filed and served by each party no later than 3.00pm, 7 August, 1996.
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
QUEENSLAND DISTRICT REGISTRY
QI 1430 of 1995
BETWEEN:
Patrick Daniel McNAMARA
Applicant
AND
OAKEY CREEK COAL PT LTD
Respondent
REASONS FOR JUDGMENT
16 July 1996 PATCH JR
This is an application under section 170EA of the Industrial Relations Act 1988 (“the Act”).
The applicant seeks reinstatement or, if the Court were to find that to be impracticable, compensation, for the alleged unlawful termination of his employment.
Background Facts
The applicant was employed by the respondent company from 27 January 1983 until 30 November 1995, when his employment ended, following notice given on 30 October 1995. However, the applicant had worked for the Mt Isa Mines group of companies (with which the respondent corporation is associated) from March 1970.
The applicant has a long history of service with the Mt Isa Mines group. From 1970 to 1974 he worked in various positions in mines, underground. In October 1974 he was transferred to the Ambulance Security Department. In this position he worked at the gates to the mine at Mt Isa, then, after having obtained his first aid certificate, he worked as a First Aid Officer, attending to emergencies, and also as a Security Officer.
From 1977 to 1979 he worked as a Security Administration Officer. In this position he did work in connection with the budgets, uniforms, and annual leave of about 60 people. It involved a considerable amount of administrative work. He also still worked as a security officer, making sure that all the gates were covered.
He continued working at Mt Isa Mines until 27 January 1983 when he transferred to the new Oakey Creek Coal Mine which was just being established. He worked as a Protection Services Officer for the respondent until June 1994. His duties in that position included security, ambulance work, maintaining mine rescue equipment, maintaining the fire tender, and attending to all emergency situations - being in charge until the supervisors arrived.
From 1991, when the respondent constructed a new warehouse, the applicant learnt some new skills from working in the warehouse. He learnt how to receive equipment and record it in the computer. He learnt how to issue equipment to employees, again doing that via the use of a computer. He learnt how to do stock taking - in respect of about $7,000,000 worth of stock. In short, the applicant acquired a considerable amount of computer skills.
In 1994 the applicant transferred to the Induction Centre, and the principal part of his employment was training new employees.
The circumstances leading up to the termination of the applicant’s employment.
Ms Simone Wetzlar has been the Employee Services Manager of the respondent since May 1995. She is in charge of the Employee Services Department, within which the applicant was employed.
In 1995 she conducted a review of the Department’s personnel. It was that review which lead to the termination of the applicant’s employment.
That termination was expressed to be a redundancy. The applicant does not dispute that the termination of his employment was a “genuine redundancy”.
The acceptance that that was the case followed proceedings in the Industrial Relations Commission in late 1995.
Without objection, a document which was handed to the Commissioner during those proceedings, with the heading “WHY POSITION OF INDUCTION OFFICER IS REDUNDANT”, was tendered in these proceedings. It became Exhibit 14. That document reads as follows:
“BASIS
As a result of the following a decision was made to make the position of Induction Officer redundant.
1. Completion of job descriptions and performance reviews for all staff in Employee Service.
2. Reduction in the number of Open Cut and Underground Induction courses required at Oakey Creek Coal.
3. On review of the Induction Officer’s job description I believed the key result areas defining the function of the job did not justify the position of Induction Officer. I decided that these functions could be adequately carried out by others in the Employee Services team and by the PSOs who report to the Supply Department Management.
One of the key result areas of the Induction Officer’s position was the responsibility of checking the emergency vehicles. This responsibility has been returned to the Supply Department ie. the PSOs who previously held responsibility for these functions.
The remaining key result areas of the Induction Officer’s position will be carried out by the Administrative Assistants in the Employee Services team.
(Signed)
Simone Wetzlar
Employee Services Manager”
Valid Reason for the Termination of the Applicant’s Employment
The evidence of Ms Wetzlar, together with exhibit 14, establish that a genuine decision had been made that no one would be employed in the position in which the applicant was employed prior to the termination of his employment. It follows that the applicant’s concession that the termination of his employment was for reason of a “genuine redundancy” was correct.
It follows from that that there was a “valid reason”, in terms of section 170DE(1) of the Act, for the termination of the applicant’s employment.
Was the Termination of the Applicant’s Employment Harsh, Unjust or Unreasonable?
In Quality Bakers of Australia Limited -v- John Golding and Bob Wickham 60 IR 327, Justice Beazley confirmed the proposition that, even the case of a genuine redundancy, the termination of employment of a particular employee may be harsh or unjust or unreasonable.
Her Honour cited with approval the comments of Justice Stanley in Corkery -v- General Motors-Holden’s Limited (1986) 63 SAIR 531 at 538, where Stanley J stated, in the case of a redundancy, that:
“(a) The employer (should) give as much warning as possible of impending redundancies so as to enable the union and the employees who may be affected to take early steps to inform themselves of the facts, to consider possible alternative solutions and if necessary to find alternative employment either with the employer or elsewhere.
(b) The employer (should) consult with the union (or employees) to seek to establish the criteria to be applied in selecting the employees to be made redundant.
(c) In attempting to decide the criteria to be applied attention should be paid to such matters as length of service, efficiency, experience and attendance records where such matters can be objectively checked, and do not depend solely on the opinion of the person making the selection.
(d) The employer (should) then seek to see that the selection is made fairly in accordance with the established criteria and will consider any representations that may be made in respect of the selection.
(e) The employer (should) seek to see whether instead of dismissal the employee can be offered alternative employment.”
On 30 October 1995, at about 1.00pm, the applicant was asked to attend Ms Wetzlar’s office.
On doing so, he was handed a letter of that date (exhibit 4), and was verbally informed that his employment was terminated as he was being made redundant due to a restructuring of the Employee Services Department. He was given one month’s notice until 30 November 1995.
He said to Ms Wetzlar “There must be other jobs?” to which she said there were not. He also discussed with Ms Wetzlar the impact that the termination of his employment would have on himself and his family, including the possibility that his wife would lose her job, and that his son (who was then about to start year 12) would have his schooling disrupted. (As it turned out neither of these things occurred).
The applicant gave evidence, which was not contested, that he had not been told, before the meeting in Ms Wetzlar’s office, either that his position was to be made redundant (and his employment thereby terminated) or that the Department was being restructured.
It is clear that the termination of the applicant’s employment came as a complete surprise to him, and he was not aware that his employment was in jeopardy.
Although Ms Wetzlar did not make the decision to terminate the applicant’s employment until about 15 October 1995, she had been examining the question of restructuring the Department since July 1995, and had started considering the abolition of the applicant’s position (ie the termination of his employment as a result of a redundancy) in July or August 1995.
At no time during that lengthy process did she consult with either the applicant, or the union of which he was a member (the Australian Collieries’ Staff Association, which represented the applicant at the trial of the matter).
If the applicant or his union had been informed in advance that the question of his redundancy was under consideration, he could have looked for alternative employment well before the time that he was forced to do so by the abrupt announcement that he had lost his job. It may well be that he could have found another permanent position. Many employees find it easier to find another job whilst still employed. That fact alone often helps their employment prospects.
No attempt was made by Ms Wetzlar to explore the possibility of the applicant being found another job with the respondent corporation or with the Mt Isa Mines group of companies until after the decision had been made to terminate the applicant’s employment on about 15 October 1995. Ms Wetzlar gave evidence that she consulted within the Oakey Creek operation and with two other mines in the area, and that no suitable position could be found for the applicant.
It stands to reason that, if such enquires had been made by her prior to the decision to terminate the applicant’s employment, a suitable alternative position may, in the many months that had passed from July or August (when the consideration of his redundancy began) until the end of October, well have been found. Furthermore, consideration might have been given to keeping a position open for the applicant, instead of giving it to someone else. In any event, by 15 October 1995 the position was such that Ms Wetzlar’s enquiries were, according to her evidence, fruitless. That may not have been the case if those enquiries had been commenced at an earlier time.
In my opinion, the failure of the respondent to consult with both the applicant and his union, and the failure of the respondent to investigate whether or not there were any alternative positions available for which the applicant might be suitable until after the decision had been made to terminate his employment on about 15 October 1995, made the termination of his employment harsh, and unjust, and unreasonable. The fact that the applicant had worked for the Mt Isa Mines group of companies since 1970, and for the respondent company in particular since 1983 is a matter which a reasonable employer should have taken into account in the degree to which it consulted with the applicant and his union, and in the efforts which it made to find him another job.
Furthermore, I do not accept Ms Wetzlar’s evidence that there was no another position available for the applicant.
Exhibit 11 is a notice which was placed on some notice boards at the Oakey Creek Coal Mine for the position of a “pay clerk”.
The person who had been employed in that position resigned on 3 November 1995.
However, Ms Wetzlar knew, prior to the termination of the applicant’s employment, that there was a real possibility that the person in that position would resign. That person had been on extended leave, and was actively considering whether to resign or to return to work. Ms Wetzlar knew that.
The advertisement listed a number of qualifications that were required for the position, including “a basic knowledge of payroll systems”. Ms Wetzlar agreed that that was the only qualification for the position that the applicant lacked.
She asserted in her evidence that it would have taken about 3 months to train Mr McNamara to a level where he could perform the job reasonably well, but also agreed that some training was necessary for anybody taking the job. No reasoning process as to how she determined that it would have taken about 3 months to train Mr McNamara was adduced in her evidence. In my opinion, that was an exaggeration.
As the applicant’s employment history shows, together with the documents tendered in his case as to his experience and training, he is a person who can aptly be described as “multi skilled”. Over the years, he has shown an ability to adapt to new duties in the various positions that he has held.
In my opinion a reasonable employer, taking into account the applicant’s work history and multiplicity of skills (many of which were suitable to a clerk’s position) and, importantly in this case, the applicant’s long work history with the respondent and the Mt Isa Mines group of companies, would have offered the position of pay clerk to the applicant.
In my opinion the termination of the applicant’s employment was, for that reason, “unreasonable”.
For the above reasons the termination of the applicant’s employment is deemed to be not for a valid reason, and unlawful.
Remedy
The situation of the respondent company has changed dramatically since the termination of the applicant’s employment.
A one metre thick layer of stone in the “long wall” of the mine has resulted in a dramatic drop in coal production.
Furthermore there was a lot of heavy rain in the area, resulting in an inrush of water, which meant that the long wall was flooded, and six weeks production was lost.
As a result of those matters a large number of staff were, at the time of the hearing of the evidence of this case in March, being made redundant. The evidence of Mr Russell Albury, who is the Development Co-ordinator at the Oakey Creek Coal Mine is that the “current situation fronting the company is the need to have a certain number of redundancies urgently”. Mr Albury is also the president of the Australian Collieries’ Staff Association at Oakey Creek - which is, for practical purposes the same as being the union delegate on the site.
In these circumstances I find that it is impracticable to order the reinstatement of the applicant. I make that finding reluctantly, and in the knowledge that the applicant has found it difficult to find another permanent job. However, the Court cannot ignore the situation of the respondent corporation - in particular the proven fact that a large number of other employees are currently being made redundant. The pay clerk’s job has long been filled.
Compensation
On 8 December 1995 the applicant commenced a new job, in a temporary position as a control officer at the mine at Gordonstone. Gordonstone is another mine roughly in the region of the town of Tiery where the Oakey Creek Coal Mine is situated. He obtained that position through an employment agency, and is not a direct employee of the company which runs the Gordonstone Mine. In his evidence he said that “At the moment, it looks good for another three weeks”, referring to the likelihood that his temporary employment would continue only for that short time. He said that it looked as if his employment in that position “would be finished” at the end of that three week period.
The applicant gave evidence that he had been looking for other jobs, and had been looking in the newspapers, but had been unable to find another permanent job. I accept that he has been making genuine attempts to find another full time position. The applicant is a man with a proud working history, and can also be proud of his commitment and service to the various communities in which he has lived. He has been a member of the local council and has served on the Managing Board of his employees’ health fund. He is quite clearly a diligent and responsible person.
At the time of the termination of his employment the total remuneration package that the applicant was receiving was, according to the evidence of Ms Wetzlar (which was not contested) $49,467.00 per annum.
In my opinion, the applicant’s difficulties in finding full time employment are likely to continue. The evidence establishes that no new mines will be opening up in the region for a minimum of two years. Other mines in the region have undergone redundancies.
The applicant received a substantial redundancy package. The respondent submits that I should take this into account when determining the amount of compensation to be awarded to the applicant.
I decline to do so. The applicant received as a redundancy package that which was his right. The component of the package which consisted of payment recognising his years of service for Mt Isa Mines before he moved to Oakey Creek was in accordance with the practice in the industry, and the practice of the Mt Isa Mines group of companies.
In my opinion, the applicant is likely to suffer an ongoing economic loss such that his actual lost remuneration as the result of the unlawful termination of his employment will be well in excess of the maximum amount the Court can award. This is because he is likely to remain unemployed for longer than 6 months.
The maximum amount that the Court can award under the Act is half of the remuneration that he was receiving at the time of the termination of his employment. That maximum amount is $24,233.50. The respondent will be ordered to pay the applicant that sum, less tax to be deducted on the basis that it is an Eligible Termination Payment.
Damages for failure to give proper notice of termination
The applicant was given one month’s notice only (31 days).
As he is over the age 45, and as he has worked for the respondent for more than 2 years, he was entitled to 5 weeks (35 days) notice, or pay in lieu.
He is, therefore entitled to damages for the 4 day shortfall. See s170DB(1) and (2).
I divide $49,467.00 by 365 (to reach the daily rate) and multiply the result by 4 (to reach the figure for 4 days). The result is $542.10.
The respondent is ordered to pay the applicant the sum of $542.10, as damages for lack of his employment. The respondent is to pay to the applicant the amount remaining after the deduction of PAYE tax.
I certify that this and the preceding twelve (12) pages
are a true copy of the Reasons for Judgment of
Judicial Registrar Patch.
Associate: Renee Cauchi
Dated: 16 July 1996
APPEARANCES
Industrial Advocate for the applicant: Mr G Norris Counsel appearing for the respondent: Mr J Murdoch Solicitor for the respondent: Mr K Macfie Dates of hearing: 12 & 13 March 1996
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