Mitchell-Collins v The Latrobe Council
[1995] IRCA 422
•25 August 1995
CATCHWORDS
INDUSTRIAL LAW (CTH) - TERMINATION OF EMPLOYMENT - REDUNDANCY - VALID REASON - HARSH, UNJUST OR UNREASONABLE - bona fide re-structuring - detailed economic justification of re- structuring unnecessary - procedural unfairness - insufficient consultation with employee or union as required by Award - a position of significantly lower salary/benefits not an "alternative position" - reinstatement.
Industrial Relations Act (1988) ss 170DE, 170EA, 170EDA, and 170EE
Selvachandran v Peteron Plastics Pty Ltd (unreported judgment of Northrop J of 7 July 1995
R v Industrial Commission of South Australia; Ex parte Adelaide Milk Supply Co-operative Limited (1977) 44 SAIR 1202
Gromark Packaging v FMWU (1992) 46 IR 98
Bunnett v Henderson's Federal Spring Works Pty Ltd [1989] AILR 356
Quality Bakers of Australia Limited v John Goulding (unreported judgment of Beazley J of 23 June 1995)
Corkrey v General Motors Holden Limited [1986] AILR 439
Cheesman v Kinhill Engineers Pty Ltd (1992) 59 SAIR 168
Corporation of the Town of Gawler v Day (1988) 55 SAIR 369
Federated Clerks Union v Victorian Employers' Federation (1985) 54 ALR 489
Liddell v Lembke (1994) 127 ALR 342
Gregory v Philip Morris (1988) 80 ALR 455
Jones v Department of Energy and Minerals, (unreported judgment of Ryan J 16 June 1995)
Ricky Bruce MITCHELL-COLLINS V THE LATROBE COUNCIL
No. TI 95/1039
SPENDER J
BRISBANE (heard in Launceston)
25 August 1995
IN THE INDUSTRIAL RELATIONS )
)
COURT OF AUSTRALIA ) No. TI 95/1039
)
TASMANIA DISTRICT REGISTRY )
BETWEEN : Ricky Bruce MITCHELL-COLLINS
Applicant
AND : THE LATROBE COUNCIL
Respondent
CORAM: Spender J
PLACE: Brisbane (heard in Launceston)
DATE: 25 August 1995
MINUTES OF ORDER
THE COURT DECLARES
That the termination of the employment of Mr Mitchell-Collins by the Latrobe Council was harsh, unjust and unreasonable.
THE COURT ORDERS THAT:
The Latrobe Council reinstate the applicant to a position on the Latrobe Council on terms and conditions no less favourable than those on which he was employed immediately before the termination.
For all purposes, the respondent Latrobe Council treat the applicant as having been continuously employed by it from the date of termination to the date of reinstatement.
The respondent Latrobe Council pay to Mr Mitchell-Collins the remuneration lost by him because of the termination, less the amount paid to the applicant by the Devonport Development Corporation for work performed by him for the Devonport Development Corporation between the termination and his reinstatement.
Note: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.
IN THE INDUSTRIAL RELATIONS )
)
COURT OF AUSTRALIA ) No. TI 95/1039
)
TASMANIA DISTRICT REGISTRY )
BETWEEN : Ricky Bruce MITCHELL-COLLINS
Applicant
AND : THE LATROBE COUNCIL
Respondent
CORAM: Spender J
PLACE: Brisbane (heard in Launceston)
DATE: 25 August 1995
REASONS FOR JUDGMENT
This is an application pursuant to s. 170EA of The Industrial Relations Act 1988 ('the Act') in respect of the termination of employment of Ricky Bruce Mitchell-Collins from the Latrobe Council ('the Council').
Mr Mitchell-Collins alleges that the termination of his employment which took effect on 17 March 1995 was wrongful in that the termination was harsh, unjust or unreasonable within the meaning of s. 170DE of the Act; that he was not accorded procedural fairness prior to the termination of this employment; and that the Latrobe Council failed to discharge the statutory duty pursuant to s. 63(2)(b) of the Local Government Act 1993 to ensure that its employees received fair and equal treatment without discrimination. He further alleges that the Latrobe Council terminated his employment in circumstances where it failed to give him reasonable notice of that termination. He seeks reinstatement to employment in the Council pursuant to s. 170EE(1)(a)(ii). In addition to the claims pursuant to the Act, the applicant seeks damages in contract for wrongful dismissal in the associated jurisdiction of the Court.
Section 170EA provides:
"(1) A person ('the employee') may apply to the Court for a remedy in respect of termination of his or her employment.
... "
Section 170DE provides:
"(1) An employer must not terminate an employee's employment unless there is a valid reason, or valid reasons, connected with the employee's capacity or conduct or based on the operational requirements of the undertaking, establishment or service.
(2) A reason is not valid if, having regard to the employee's capacity and conduct and those operational requirements, the termination is harsh, unjust or unreasonable. This subsection does not limit the cases where a reason may be taken not to be valid. "
By s. 170EDA(1)(a) a termination is taken to have contravened s. 170DE(1) unless the employer proves that, apart from s. 170DE(2), there was a valid reason or valid reasons of a kind referred to s. 170DE(1); and, by s. 170EDA(1)(b), if the employer proves there is a valid reason or valid reasons of that kind, the termination is nevertheless taken to have contravened s. 170DE(1) if the applicant proves that, because of s. 170DE(2), the reason or reasons proved by the employer were not valid.
Section 170EE(1) and (2) provide:
"(1) In respect of a contravention of a provision of this Division (other than section 170DB or 170DD) constituted by the termination of employment of an employee, the Court may make the following orders:
(a)an order requiring the employer to reinstate the employee by:
(i)reappointing the employee to the position in which the employee was employed immediately before the termination; or
(ii)appointing the employee to another position on terms and conditions no less favourable than those on which the employee was employed immediately before the termination; and
(b)if the Court makes an order under paragraph (a):
(i)any order that it thinks necessary to maintain the continuity of the employee's employment; and
(ii)an order requiring the employer to pay to the employee the remuneration lost by the employee because of the termination.
(2)If the Court thinks, in respect of a contravention of a provision of this Division (other than section 170DB or 170DD) constituted by the termination of employment of an employee, that the reinstatement of the employee is impracticable, the Court may make an order requiring the employer to pay to the employee compensation of such amount as the Court thinks appropriate. "
The Latrobe Council denies that the termination contravened s. 170DE and alleges that Mr Mitchell-Collins had been made redundant as a consequence of a major restructuring of the Latrobe Council and had been paid reasonable termina- tion pay.
In September 1989 Mr Mitchell-Collins was employed by the Latrobe Council as a Deputy Council Clerk, which position was permanent, full-time and of unlimited tenure. In July 1993 he was appointed by the Council to be the Manager of Community Services. He is a member of the Australian Public Sector Union, and it is common ground that his employment with the Council was subject to the Municipal Officers (Tasmania) Award 1970.
The case for the Council is that the termination was the result of a restructure of the operations of the Council put in place by Mr Palmer, the general manager of the Latrobe Council. He had commenced with the Council on 23 August 1993. He has had fifteen years experience in local government; eleven in senior positions with the Latrobe and Brighton Councils; he is a civil engineer by qualification and has a graduate Diploma in Management.
Prior to the rearrangement brought about by Mr Palmer, the organisational structure of the Council provided for a General Manager in charge of four divisions, each division with a manager, being the Manager of Health and Building Services, which was concerned with health and building; Manager of Technical/Engineering Services concerned with design and works; Manager of Financial Services who was concerned with accounting, office management and computer and information services; and the Manager of Community Services, who was concerned with planning, community services and secretarial aspects of the Council.
Mr Mitchell-Collins was the Manager of Community Services. Mr Shane Warren was the Manager of Health and Building Services. Mr Mark Nugent was the Manager of Financial Services, and Mr Jeff Breen was the Manager of Technical Services. Mr Breen is a qualified engineer who was appointed to that position in January 1994.
Mr Palmer sought to have the managers accept fixed term performance-based contracts but was unsuccessful in securing unanimous agreement from the managers for this proposal. He then sought to achieve salary packages with the managers, but was again unsuccessful.
There were senior management team meetings conducted weekly and they occupied something in the order of two hours. I accept that in the course of these meetings there had been discussion in 1994 concerning a possible re-allocation of some functions within the different managerial divisions. There were discussions of what were said to be functional anomalies, an example of which was the placing of the elderly persons unit in the health and building services area, it being thought more appropriate to be in the community services division.
At a senior management team meeting on 30 November 1994, all the managers were present, and the minutes record:
"A general discussion on the running of the organisation, individual departments requirements etc took place. The discussion 'cleared the air' on a number of matters. "
Of more direct relevance is the reference:
"The General Manager advised that he had made a decision with respect to the reorganisation of duties and that Council would be advised on Monday with Managers soon after.
The General Manager advised that the only outstanding issue was whether there were four Departments or three Departments and one section. "
The managers made no response to this pronouncement, but it was clear that the announcement came as a shock to Mr Mitchell-Collins. There had been no prior discussion of any restructuring involving a possible reduction in managerial positions, either with the managers for their input, or with the union.
On 5 December, there was a Council meeting. The minutes of that meeting make no reference to any proposal for restructuring, but the fact was that Mr Palmer raised the question of a restructure of the Council's operations at that meeting. I think a fair inference is that the Council wished to distance itself from any responsibility for organisational change and left the matter very much in the hands of Mr Palmer. Importantly, there was no written proposal by Mr Palmer concerning his proposal put to Council nor was there any detailed financial analysis of the impact of any such restructure.
It is important to note that when Mr Palmer orally spoke with Council concerning his proposal to restructure the operations of the Council by reducing the number of managerial positions, the managers (including Mr Mitchell-Collins) were asked to leave the Council room and the proposal was discussed without any prior communication of any sort to Mr Mitchell-Collins or the other persons likely to be affected.
It is important also that while some attention will have to be directed at Mr Palmer's motivation in implementing his restructure, there had never been any formal complaint made to Mr Mitchell-Collins concerning his performance in the planning area, or in the other area for that matter, and no written complaint was ever placed in his personnel file prior to his receiving notice of termination of his employment.
At a managers' meeting on Monday, 12 December 1994, Mr Palmer spoke to the managers concerning his proposal to restructure the Council's operations. The minutes record:
"For a period of time, evident from the Senior Management Team minutes, I have been concerned with the functional based [sic] of the existing Departments. I have also been aware of a lack of professional advice in a number of areas.
I have spoken to Council about the changes and they have said 'let the Manager manage'. "
The changes that he proposed did not affect the engineering department, which did not gain or lose any major functions. The minutes of that meeting record:
"As from February 6, 1995, the organisational structure of Latrobe Council will be substantially altered in order to:-
.provide greater human resources at the 'grass roots' level;
.cater for the increasing dependence of land-use planning and environmental issues;
.provide resources to cater for Council's increased responsibilities in environmental management and pollution control;
.increase Council's professional land-use planning skills;
.reduce the number of staff involved in the development of policies, strategic planning and Council meetings i.e. a reduction in the number of Managers and
.increase secretarial support. "
Mr Palmer advised that all existing managers' positions would be "spilt" and advertised initially internally and then externally, if not filled, and that new position descriptions were being prepared for the positions.
The two new managerial positions were Manager, Corporate Services, and Manager, Planning and Development. New positions of Senior Development Officer and Secretary - Planning and Development, were proposed, and the question of whether a position of Community Services Officer would be needed, and if so whether it would be full-time or part-time, was still the subject of assessment by Mr Palmer. He proposed that the managers' and professional positions would be on a four yearly performance based contract with salary packages to be offered. He told the meeting that the new position descriptions would include the skills, experience and qualifications required for the position, and he further advised that, if the managers obtained a position, the previous salary commitments would be honoured and that, if the managers were unsuccessful in obtaining a new position, Council would be prepared to offer redundancies.
Under the new structure, there would be three divisions, headed by the Manager of Corporate Services, the Manager of Engineering Services, and the Manager of Planning and Development. Community services, community facilities and cultural registrar would be functions outside those three divisions directly under the control of the general manager.
Draft duty statements/ contracts were prepared and forwarded to all of the managers. In a letter dated 16 December 1994, Mr Mitchell-Collins was advised that the effect of the changes was that his position as Manager, Community Services, was made redundant. The draft contract for the position of Manager, Planning and Development, set out in Schedule 3 the skills and qualifications for that position. The qualifications and experience included:
"Appropriate planning qualifications;
A minimum of five years experience in land-use planning; "
While Mr Mitchell-Collins had experience in matters of planning acquired during his extensive service in local government, he had completed only eight of twenty-four units of a planning course with the University of New England and did not have any planning qualifications. As a consequence, the criteria in the draft contract for the position of Manager, Planning and Development, precluded Mr Mitchell-Collins from being a successful applicant. Neither the position of Manager, Financial Services nor the other professional position, Senior Development Officer, required tertiary qualifications.
Mr Mitchell-Collins unsuccessfully sought that the draft contract be amended to state that planning qualifications were highly desirable. He applied for the position of Manager, Planning and Development. Mr Palmer, somewhat curiously, advised that he did not require a formal application but answers to five questions, which included:
"In what form do you see local government in Tasmania taking in five years' time?
Where will Latrobe Council fit into your vision of local government?
What can you offer Council with respect to the position and how to [sic] you see the position developing over the next two to five years?
Why should I appoint you to the position? "
At an interview with Mr Rick Mitchell-Collins on 24 January 1995, one of the questions asked by Mr Palmer at that interview was:
"Why do you think I am re-organising the structure of Council? "
The notes of Mr Palmer of that interview note:
"During the interview no mentioned [sic] was made of the planning problems or the Councillor/staff management relationship. "
In his evidence, Mr Palmer alleged that in a number of instances, including the implementation of an interim planning order, the performance of Mr Mitchell-Collins had been wanting, including an incident where the sealing of a subdivision had been proposed by him where the subdivision had not been approved by Council. However, it does not appear that any matter adverse to Mr Mitchell-Collins was raised with him at any time either prior to the proposed restructure or during the course of interviewing for the positions the subject of the restructure.
Mr Mitchell-Collins was a senior manager in the Council; he had been employed since 1989; he had been the acting Council Clerk and acting General Manager in the absence on leave of Mr Palmer; he was effectively second-in-charge of the Council for six years and had not been subject to any criticism in relation to his work performance. There was no job description for his position as Manager, Community Services, and if the General Manager had been unhappy with the way the planning work was being done, consideration should have been given to the implementation of a system by which that work could have been done in a more effective and efficient manner. Moreover, a job description might have been adopted against which Mr Mitchell-Collins's performance might be measured.
On Monday, 6 February 1995 Council resolved to create the position of Manager, Planning and Development, Secretary to the Manager, Planning and Development, as well as a Community Development Officer (a temporary position for twelve months). On the following day, Tuesday, 7 February, Mr Palmer advised Mr Mitchell-Collins that he was not prepared to appoint him by means of transfer to the position of Manager, Planning and Development, but that he was prepared to offer to him the temporary position for twelve months of Community Development Officer. He expressed that the reason for his decision not to appoint him to Manager, Planning and Development was that he did not possess the necessary planning qualifications coupled with planning skills and experience to carry out the duties of the position.
The position of Community Development Officer involved a significant downgrading in salary and status. The salary was $35,875.00, approximately $11,000.00 lower than Mr Mitchell-Collins's previous salary. In addition, a vehicle was not provided with the position (previously he had a vehicle provided on the conventional lease-back arrangement). Mr Palmer frankly conceded that the arrangement was so as to enable Mr Mitchell-Collins time to look for another position. At that discussion Mr Palmer said:
"The choice is yours - accept the position of Community Development Officer (temporary) as offered or, alternatively, take a redundancy. "
Both Mr Palmer and Mr Mitchell-Collins gave evidence and were cross-examined. I make no adverse finding against either. I found Mr Mitchell-Collins an impressive witness with a deep concern for community services in the Latrobe Council area, and with a patent commitment to the Council. Mr Palmer, I think, had genuine concerns about the planning strengths of council officers, and one of the reasons for restructure proposed by him was the opportunity it afforded of diverting planning responsibility from Mr Mitchell-Collins and placing it in the hands of a qualified planner. This is in fact what has eventuated. The restructure and its costing had never been previously formulated in writing prior to bringing it before Council, and had not been the subject of any discussion with Mr Mitchell-Collins, Mr Nugent or Mr Warren.
In a sense, Mr Palmer embarked on a plan, from which Council chose to remain aloof. As a consequence of all this, some aspects of his proposal were developed on-the-run.
Contrary to some notations made by Mr Palmer, I do not accept that Mr Mitchell-Collins ever expressed his agreement to or approval of the restructuring proposal. I think the better view is that Mr Mitchell-Collins was of the opinion that some rearrangement of duties and responsibilities was required. However, he contended that alternative options should have been explored and that the present structure organised by Mr Palmer does not adequately address community services in the Latrobe Council district.
On 8 February 1995 Mr Palmer wrote to Mr Mitchell-Collins confirming that his position of Manager, Community Services had been made redundant and offering to him the temporary position of Community Development Officer under the terms that I have indicated. The letter concluded:
"If you are not prepared to accept this position, I regret that your employment will cease, after a four week notice period, on March 10, 1995. "
Mr Palmer had made no contact with the Australian Services Union prior to 19 January 1995. He wrote to Mr R. Mecklenburgh of the A.S.U. on 16 February 1995. In that letter he advised that Mr Mark Nugent, previously Manager, Financial Services, had been appointed to the position Manager, Corporate Services. Mr Shane Warren, previously Manager, Health and Building Services, had been offered the position of Senior Development Officer (Environment). Mr Warren later accepted this offer. Notwithstanding the downgrading in status from Manager, Health and Building Services, to the position of Senior Development Officer, his salary suffered no reduction. The letter advised that Mr Mitchell-Collins's position of Manager, Community Services, had been made redundant and that Mr Mitchell-Collins had been offered the temporary position of Community Development Officer for twelve months to allow him time to obtain alternative employment. The letter said:
"As alternative positions have been offered in all circumstances, Council will only be offering Award conditions with respect to retrenchments. "
Mr Mitchell-Collins did not accept the offered temporary position. He ceased his employment with the Council on 17 March 1995. He has obtained a part-time position with the Devonport Council and has worked on a sporadic basis at an hourly rate of $25.00. He has unsuccessfully applied for local government positions in Tasmania and on the mainland on at least nine occasions since the restructuring was mooted.
Clause 20A of the Municipal Officers (Tasmania) Award 1970, which applied to the position of Mr Mitchell-Collins provided:
"Termination of employment by an employer shall not be harsh, unjust or unreasonable. "
That clause provided that where an employee's service was longer than five years, the employee was entitled to four weeks' notice.
Clause 20B headed "CHANGE" provided:
"(a) (i) Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure of technology that are likely to have significant effects on officers, the employer shall notify the officers who may be affected by the proposed changes and the Australian Municipal, Transport, Energy, Water, Ports, Community and Information Services Union.
(ii)'Significant effects' Include termination of employment; major changes in the composition, operation or size of the employer's workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work, the need for retraining or transfer of officers to other work or locations and the restructuring of jobs, provided that where the award makes provision for alteration of any of the matters referred to herein an alteration shall be deemed not to have significant effect.
Employer's duty to discuss change
(b)(i) The employer shall discuss with the officers affected and the Australian Municipal, Transport, Energy, Water, Ports, Community and Information Services Union 'inter alla' (sic), the introduction of the changes referred to in subclause (a) hereof, the effects the changes are likely to have an (sic) officers, measures to avert or mitigate the adverse effects of such changes on officers, and shall give prompt consideration to matters raised by the officers and/or the Australian Municipal, Transport, Energy, Water, Ports, Community and Information Services Union in relation to the changes.
(ii)The discussions shall commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in paragraph (a)(i) hereof.
(iii)For the purposes of such discussion, the employer shall provide in writing to the officers concerned and the Australian Municipal, Transport, Energy, Water, Ports, Community and Information Services Union all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on officers and any other matters likely to affect officers provided that any employer shall not be required to disclose confidential information the disclosure of which would be inimical to the employer's interests. "
I am quite satisfied that the requirements of the award were not met by Mr Palmer in the course of implementing his restructure.
Clause 20C dealing with redundancy made similar provisions for discussions before terminations.
"Discussions before terminations
(a)(i) Where an employer has made a definite decision that the employer no longer wishes the job the officer has been doing done by anyone and this is not due to the ordinary and customary turnover of labour and that decision may lead to termination of employment, the employer shall hold discussions with the officer directly affected and with the Australian Municipal, Transport, Energy, Water, Ports, Community and Information Services Union.
(ii)The discussions shall take place as soon as is practicable after the employer has made a definite decision which will invoke the provision of paragraph (i) hereof and shall cover, 'inter alla' (sic), any reasons for the proposed terminations and measures to mitigate any adverse effects of any terminations on the officers concerned.
(iii)For the purposes of the discussion the employer shall, as soon as practicable, provide in writing to the officers concerned and the Australian Municipal, Transport, Energy, Water, Ports, Community and Information Services Union all relevant information about the proposed terminations including the reasons for the proposed termin- ations, the number and categories of officers likely to be affected, and the number of workers normally employed and the period over which the terminations are likely to be carried out. Provided that any employer shall not be required to disclose confidential information the disclosure of which would be inimical to the employer's interests. "
Clause 20C(e) provided:
"Notification to the Commonwealth Employment Service
(e)Where a decision has been made to terminate officers in the circumstances outlines [sic] in subclause (a) hereof, the employer shall notify the Commonwealth Employment Service thereof as soon as possible giving relevant information including the number and categories of the officers likely to be effected [sic] and the period over which the terminations are intended to be carried out."
Clause 20C(f) provides for severance pay for persons whose continuous service exceeded four years of eight weeks in addition to the period of notice prescribed for ordinary termination.
The first issue for determination is whether there was a valid reason for the termination of Mr Mitchell-Collins's employment. In Selvachandran v Peteron Plastics Pty Ltd No VI 1322R of 1994, an unreported judgment of Northrop J of 7 July 1995, Northrop J held that:
"In its context in subsection 170DE(1), the adjective 'valid' should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of subsection 170DE(1). At the same time the reason must be valid in the context of the employee's capacity or conduct or based upon the operational requirements of the employer's business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must 'be applied in a practical, commonsense way to ensure that' the employer and employee are each treated fairly, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd, 5 May 1995, unreported, when considering the construction and application of section 170DC. "
It was submitted by Mr Doolan for the Council that there was a valid reason for the termination of the applicant's employment, being the operational requirements of the Council, namely, that as a result of the restructuring of the operations of the Council, the applicant's position was redundant, part of the duties of the position he was performing being allocated to other managerial positions and part of those duties, being those connected with community services, to be carried out under the General Manager's direction.
It is clear that 'operational requirements' of a business may include redundancy. A redundancy will arise where a job - as distinct from a particular employee - is no longer required. This could occur where an employer has labour in excess of the requirements of the business; where the employer no longer requires to have a particular job performed; or where the employer wants to amalgamate jobs: R v Industrial Commission of South Australia; Ex parte Adelaide Milk Supply Co-operative Limited (1977) 44 SAIR 1202 per Bray CJ at 1205; Gromark Packaging v FMWU (1992) 46 IR 98 per Franklyn J at 105. It was said in Bunnett v Henderson's Federal Spring Works Pty Ltd, a digest of which appears at [1989] AILR 356, that:
"Organisational restructuring may result in a position being abolished and the functions or some of them being given to another or split amongst others. "
In this case I am satisfied that Mr Palmer bona fide believed that the performance by Mr Mitchell-Collins in respect of the planning aspects of his position as Manager, Planning and Community services, was deficient and that the planning aspects of the Council's function required a person with tertiary planning qualifications. I think that an important reason for the restructuring was to achieve this object. The restructuring proposal, however, was made without any prior discussions with the persons likely to be affected by it. Moreover, it was made without any previous attempt being made to remedy any perceived deficiencies. No complaint was made to Mr Mitchell-Collins of what was thought to be inadequate performance, nor was he ever given an opportunity by notice to rectify perceived deficiencies.
It was submitted by Mr Tremayne for the applicant that there was an onus on the Council to satisfy the court that there was a need to restructure. Otherwise, an employer could resort to restructuring simply as a means of getting rid of an employee who was not wanted. That, it was said, was one of the things that the Act was aimed at stopping. It was further submitted that the restructuring proposal was poorly thought out, was ad hoc, achieved no tangible benefit and, if anything, actually cost the employer money.
There is validity in these criticisms but I do not accept there is an onus on the Council to satisfy the court that there was a need to restructure. If the restructuring was mala fide, it would not, of course, constitute a valid reason for the purposes of the Act. On the other hand, it is not necessary that an employer prove that a restructuring was justified on economic or financial grounds. That proposition was rejected by Beazley J in Quality Bakers of Australia Limited v John Goulding No RWIR 142 of 1994, an unreported judgment of 23 June 1995. Her Honour said at p. 14:
"If the submission was correct, it would be necessary in every case of termination because of a redundancy for an employer to call expert economic or financial evidence to support an operational decision to make jobs redundant and the court would become the arbiter of whether the employer's operational decision was justified. There is nothing in the Act to justify such an approach. "
Ryan J, in Jones v Department of Energy and Minerals, an unreported judgment of 16 June 1995, said:
"...it is within the employer's prerogative to rearrange the organizational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions. It is inappropriate now to attempt an exhaustive description of the methods by which a reorganization of that kind may be achieved. One illustration of it occurs when the duties of a single, full-time, employee are redistributed to several part-time employees. What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organization, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant in the sense in which the word was used in the Adelaide Milk Co-operative case. "
While I accept the criticisms that have been made of Mr Palmer's decision concerning the restructure, subject to s. 170DE(2), the Council has established that there was a valid reason for the termination of Mr Mitchell-Collins's employment based upon the operational requirements of the Council. However, even in the case of a genuine redundancy, the termination of employment of a particular employee may be harsh, unjust or unreasonable: Corkrey v General Motors Holden Limited [1986] AILR 439; Cheesman v Kinhill Engineers Pty Ltd (1992) 59 SAIR 168; Needham v Shepparton Preserving Company Limited [1991] AILR 395; and Hemmings v CPS Credit Union (1991) 58 SAIR 421.
From Corkrey, a failure to consult with an employee or union about the issue of redundancy may mean a termination on that ground is harsh, unjust or unreasonable. This is not a case where there has been an offer of suitable alternative employment with the employer. Such a failure may justify a conclusion that the termination was harsh, unjust or unreasonable: see Corporation of the Town of Gawler v Day (1988) 55 SAIR 369 at 383. In this particular case, the employment offered to Mr Mitchell-Collins could not on any view be regarded as an alternative to that which he previously performed. There is, however, a need for consultation with employees, and in cases such as the present, with the employees' union. So much is clear from the terms of the award to which I have previously referred. The reason for the need for such consultation is reflected in the observation concerning technological change made by the Full Bench of the Commonwealth Conciliation and Arbitration Commission (1968) 122 CAR 339 at 344-5 where it said:
"When employers are contemplating the introduction of computers and other automatic devices which may have serious effects on employees such as termination of employment or transfer interstate it is essential that both the employees and the union concerned should be informed of and involved in the planning as soon as possible. Many real human problems may be involved which may not be known to company executives and they, with the best will in the world, may take steps which do not help to solve them. It is our view that employees and their welfare are as important in the planning of a change of the kind we have had to consider as any other aspect of the change and that they, both individually and through their union, should be brought in at the planning stage. When brought into the planning both employees and the union should in their turn attempt to understand the problems which the employer faces and co-operate with him to try to find a reasonable solution. "
Wilson J referred to this passage approvingly in Federated Clerks Union v Victorian Employers' Federation (1985) 54 ALR 489. He said at 511:
"Consultation between employers and employees, preceded by the distribution of adequate information is not only sensible but essential if commerce and industry are to meet the challenge of progress in a spirit of harmony and with some regard for human dignity. "
The principle of fairness which these passages highlight was considered in detail by Beazley J in the Quality Bakers Case to which I have referred. Her Honour reviewed the authorities, including White v Douglass Diagnostic (1993) 60 SAIR 142, the well known observations by Stanley J in Corkrey v General Motors Holdens Limited (1986) 53 SAIR 531; Wynn's Winegrowers Pty Ltd v Foster (1986) 16 IR 381 at 384; and Cheesman v Kinhill Engineers Pty Ltd (1992) 59 SAIR 168. In the latter case, Perry C said that the Corkrey guidelines were:
"Equally appropriate to redundancy arising in circumstances of economic stringency or restructuring. "
The prohibition in the Act against a termination that is harsh, unjust or unreasonable incorporates an obligation to accord procedural fairness to an employee: Byrne v Australian Airlines Ltd (1994) 120 ALR 274 per Black CJ at 276 and Gray J at 327. In Gregory v Philip Morris (1988) 80 ALR 455, Jenkinson said at 457:
"The question whether the termination was unreasonable is, I think, one of fact. This question requires a determination, by reference to moral values and prudential considerations current in the community, of what the tribunal of fact thinks a reasonable employer in the circumstances would have decided to do at the time when the respondent terminated the appellant's employment. The process is similar to that by which the questions whether a personal injury or damage to a chattel has been caused by a person's negligence are resolved: what does the tribunal of fact think that a reasonable person placed in the circumstances in which that person was placed would have done? "
Here I am quite satisfied that there was an absence of procedural fairness, and that in the circumstances of this case, the termination of Mr Mitchell-Collins's employment was harsh, unjust and unreasonable. The required consultation with the employee was completely absent and consultation with the union was late and inadequate. The requirement that it was necessary that the Council have a tertiary qualified planner managing the planning aspects of the Council's operation was a decision made solely by Mr Palmer. There was a failure to consider possible alternative solutions to any difficulties that were perceived by the General Manager. Other options were not seriously considered. There was no discussion with the employee concerned as to the grounds and reasons for the restructuring, and no appropriate counselling or advisory services to assist Mr Mitchell-Collins in a time of considerable personal trauma were attempted to be provided.
I am satisfied that the termination was in contra-vention of the Act as being harsh, unjust and unreasonable.
The primary remedy sought by Mr Tremayne on the applicant's behalf in final submissions was an order by the court appointing the employee to a position in the Council on terms and conditions no less favourable than those in which the employee was employed immediately before the termination (s. 170EE(1)(a)(ii)).
In Liddell v Lembke (1994) 127 ALR 342, Wilcox CJ and Keely J said at 360:
"Plainly, it was Parliament's intention that the primary remedy for unlawful termination should be reinstatement and that compensation should be available only where this was impracticable.
The precise meaning of 'impracticable' in this context should be left to another day; the question is one of general importance and it was not fully argued in this case. But, although 'impracticable' does not mean 'impossible', it means more than 'inconvenient' or 'difficult'. The imposition of such a stringent limitation on the court's power to award compensation, rather than order reinstatement, is inconsistent with the notion that Parliament intended the court to have an open discretion whether to intervene at all. "
See also Gray J at 367-8.
The Council was informed, prior to the appointment of a person as Manager of Planning Services, of Mr Mitchell-Collins's application seeking reinstatement. In those circum-stances, brought about by its own deliberate choice after notice, an employer cannot seriously argue that reinstatement by virtue of that decision has become impracticable. It is clear from the evidence that Mr Mitchell-Collins is an impressive municipal officer with particular competence and expertise in matters of community services. There is clearly a significant area of employment at present unfilled for the utilisation of these qualities and I do not think it impossible for the Council, with goodwill on all sides and particularly between Mr Palmer and Mr Mitchell-Collins, to be fashion a position which adequately reflects the salary to be paid to Mr Mitchell-Collins and which draws on his qualities and experience.
I propose to order reinstatement pursuant to s. 170EE(1)(a)(ii) and to make ancillary orders. In those circumstances, it is unnecessary to consider the alternative claim for damages based on the common law claim for wrongful dismissal. In that regard, however, it is at least very strongly arguable that the eight weeks' notice given to Mr Mitchell-Collins, in the context of the seniority of position and the length of his service, was unreasonable: see Grout v Gunnedah Shire Council (1994) 125 ALR 355; Grout v Gunnedah Shire Council, an unreported judgment of Moore J of 13 February 1995; and Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567, at 580-81.
Further, it had been submitted on the question of whether the termination was harsh, unjust or unreasonable that the court should have regard to the offer of temporary employment so as to permit Mr Mitchell-Collins to obtain alternative employment, and it was further submitted that his failure to avail himself of this offer amounted to a failure to mitigate his damages. If in fact the termination had been lawful, there would be force in these submissions. There is, on the other hand, the practical consideration that any future application for managerial employment from a person who had been previously a manager but who was now employed in a more lowly position, would have reduced chances of being successful.
For the above reasons, I would declare that the termination of the employment of Mr Mitchell-Collins was harsh, unjust and unreasonable. I order that the Latrobe Council reinstate the applicant to a position on terms and conditions no less favourable than those on which he was employed immediately before the termination. For all purposes, the respondent Latrobe Council is to treat the applicant as having been continuously employed by it from the date of termination to the date of reinstatement, and for the respondent Latrobe Council pay to Mr Mitchell-Collins the remuneration lost by him because of the termination, less the amount paid to the applicant by the Devonport Council for work performed by him for the Devonport Council between the termination and his reinstatement.
I certify that this and the preceding twenty-seven (27) pages are a true copy of the reasons for judgment herein of the Honourable Justice Spender.
Associate
Date: 25 August 1995
Appearance for the applicant : Mr G Tremayne of Crisp Hudson & Mann
Appearance for the respondent : Mr G Doolan of Doolan and Brothers
Dates of Hearing : 8-9 August 1995
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