Organ v State Bank of NSW Limited
[1996] IRCA 270
•21 May 1996
DECISION NO: 270/96
CATCHWORDS
INDUSTRIAL LAW - complaint of UNLAWFUL TERMINATION -
REDUNDANCY - whether redundancy was genuine - decision to terminate applicant made without consultation - applicant denied PROCEDURAL FAIRNESS - ONUS OF PROOF on employer to show both excess of labour and proper application of criteria for selection of the particular employee - alleged discrimination against applicant due to changed family circumstances - REMEDY - whether COMPENSATION payable
Industrial Relations Act 1988, ss 170 DC, 170 DE, 170 DF, 170 EDA
Sinclair v Anthony Smith & Associates, (unreported) Von Doussa J 1 December 1995, Industrial Relations Court of Australia SI 260 of 1995
Association of Professional Engineers v Deniliquin Council (1995) 134 ALR 267
Kenefick v Australian Submarine Corporation, (1955) 131 ALR 197
Quality Bakers of Australia Limited v John Goulding & Anor, (1995) 60 IR 327
Erroll Lloyd v R. J. Gilbertson (Qld) Pty Ltd, Madgwick J (unreported) 14 June 1996, Industrial Relations Court of Australia 252 of 1996
Bostik (Australia) Pty Ltd v Gorgevski, (no 1) [1992] FCR 20
May v Lilyvale Hotel Pty Limited, Wilcox CJ, 1 December 1995, (unreported)
ORGAN -v- STATE BANK OF NSW LIMITED
NI 4843 of 1995
Before: TOMLINSON JR
Place: SYDNEY
Date: 21 MAY 1996
IN THE INDUSTRIAL RELATIONS
COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NI 4843 of 1995
BETWEEN:
Deborah Marie ORGAN
Applicant
AND: STATE BANK OF NSW LIMITED Respondent
MINUTES OF ORDER
21 May 1996 TOMLINSON JR
THE COURT ORDERS THAT:
It is a finding the respondent breached the Industrial Relations
Act. The application of Deborah Marie Organ for compensation is dismissed as the Court finds adequate compensation has been paid.
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
NEW SOUTH WALES DISTRICT REGISTRY
NI 4843 of 1995
BETWEEN:
Deborah Marie ORGAN
Applicant
AND:
STATE BANK OF NSW
LIMITED
Respondent
REASONS FOR DECISION
21 May 1996 TOMLINSON JR
This is an application for compensation under the Industrial Relations Act (“the Act”) allegedly arising out of an unlawful termination. The applicant sought leave to proceed notwithstanding the application was lodged out of time however that issue was not the subject of contest. The applicant stated she commenced employment as a graduate trainee in the finance section some eleven years ago of the respondent having completed a bachelor’s degree in Economics from the University of New England. In 1990 the applicant was promoted to the position of manager in corporate banking and she subsequently transferred to Coffs Harbour to work in the respondent’s Business Banking Centre as an accounts manager. Prior to moving to Coffs Harbour the applicant stated she had a conversation with Alan Whitehead the then head of the respondent’s business banking department, who allegedly assured her of guaranteed advancement in light of her forthcoming transfer to the country centre of Coffs Harbour. At Coffs Harbour Phil Walker was the manager of business banking. The duties of the applicant involved her in the management of all the accounts domiciled at the Coffs Harbour (North) branch of the respondent bank. It was the evidence of the applicant that she and her assistant worked hard and raised the standard and quality of all the existing accounts in her portfolio from a “D” rating to a much higher “B”” rating and that her managers, Phil Walker, Alan Whitehead and Graham Chapple were particularly pleased with her efforts in that regard.
The applicant stated that in March of 1993 she had a coffee meeting with Alan Whitehead who advised her that he had spoken with Credit Administration and that in the event that Phil Walker left Coffs Harbour she would have his job as manager. From November 1993 the applicant stated Phil Walker took four months leave and during that time the applicant took over the management of his accounts. In April of 1994 the applicant advised Phil Walker she was expecting a baby and arranged for three months maternity leave. The child Christopher was born on 12 September 1994 and the applicant returned to work on 28 November 1994 as the acting manager of the respondent’s Business Banking Centre at Coffs Harbour.
The applicant’s early return to work was occasioned by Phil Walker being transferred from Coffs Harbour to Wollongong. The manager’s position of Phil Walker was not offered to the applicant and the applicant stated on the day she returned from maternity leave she learned the position had been filled by a John McGregor from Tamworth. The applicant sent an Email to Alan Whitehead stating her position concerning the manager’s position. She allegedly received no response. In early December 1994 the applicant had a meeting with Mr Whitehead in Sydney and the matter of her being passed over was discussed. It was the evidence of the applicant that he said words to the effect to her that her changed family situation had been taken into account when the new appointment was considered, the inference being that the new baby was regarded by the respondent as a bar to the applicant’s appointment. Exhibit 2 was the diary note the applicant made of that meeting between herself and Mr Whitehead and on the basis that Mr Whitehead has left the bank and neither party in these proceedings apparently proposed to call him as a witness I am unable to afford that exhibit much weight.
Throughout 1995 the applicant stated she received no advice nor comment about her performance. In 1994 the respondent bank was acquired by CML. In 1995 the decision was made to re-organise the respondent to achieve greater efficiency and profitability and so a Profit Enhancing Scheme (“PEP”) was undertaken. Mr Owen Eaton was the respondent’s officer whose responsibility it was to put the PEP into place. In accordance with PEP on 14 June of 1995 the Coffs Harbour office of the respondent was visited by Messrs Eaton and Chapple. Mr Chapple was the applicant’s area manager. At meeting on 14 June 1995 Mr Eaton advised staff how the restructure was going and that staff would be kept updated by the PEP Implementation Newsletters. On or about 30 June 1995 the respondent issued all business banking staff, via PEP Implementation Newsletter No. 6, with Personal Employment Preference Forms, (exhibit B). Business banking staff were reminded to complete the forms and return them in Newsletter no. 7 on 7 July 1995 and Newsletter no. 12 on 11 August 1995, (exhibit A). Newsletter No. 12 states:
“All preference forms which have been submitted have now been
collated and will provide valuable information during the Area
Managers team selection process.
Just a reminder. There is still an opportunity to submit a form, or
change any preferences previously supplied.”
On 5 September 1995 Owen Eaton visited Coffs Harbour and apparently a general, non specific meeting took place between Mr Eaton and the applicant and it seems restructuring of the Coffs Harbour branch was discussed. During the course of that meeting the applicant said she would consider going back to Sydney but only at a promoted level of employment. The applicant stated that during this interview Mr Owen had his thoughts elsewhere and that his mind was not on his job. In cross examination the applicant agreed that she stated to Owen Eaton in interview that her husband Nick was committed to the Coffs Harbour area for a while and agreed that she stated her skills were better suited to the management of the bigger credit accounts than to the ones she was in fact managing. The applicant agreed that Mr Eaton commented that her portfolio was not as large as those managed by others at her level in the Coffs Harbour office.
On about 20 October 1995 the applicant stated she received a telephone call from Owen Eaton advising there was no position for her in the restructured Coffs Harbour office and that re-deployment options for her future employment were being considered by management. On 25 October 1995 Owen Eaton and the personnel manager visited the applicant at Coffs Harbour and handed to her a retrenchment package. It was the evidence of the applicant that she was never asked if she would consider voluntary redundancy or any other option.
Admitted into evidence were a series of the respondent’s Newsletters published from May of 1995 entitled “PEP Newsletters”. The respondent published these newsletters specifically to inform all employees of the effects and progress of the forthcoming re-structuring. The applicant acknowledged she had read the newsletters. The applicant stated she was aware the purpose of the re-structuring was to improve efficiency in the bank. Marked as exhibit B was a document headed Personal Employment Preference Form. The evidence showed that form was attached to the back of PEP Newsletter no 6. It was the evidence of the applicant that at no stage did she fill out such a form. I agree with the submission on behalf of the applicant that nowhere in the PEP Newsletters admitted into evidence as exhibit A do the words “retrenchment”, “redundant” or “termination” appear.
At the time of termination the applicant had been employed by the respondent for nearly eleven years. In January of 1993 the applicant commenced a Masters degree of Business Administration and that degree is nearly completed. To date the applicant has achieved five Distinction levels and one credit. As part of the redundancy package the respondent made outplacement counselling available to the applicant. The applicant’s evidence was that she attended one session when her resume was drafted. The applicant did not attend for further assistance. In relation to seeking other work, the applicant stated she had placed two telephone calls one each to ANZ Bank and the other to Westpac and that she had submitted no job applications nor answered any advertisements. The applicant stated since termination she has lectured at university, her remuneration for which is in the vicinity of $2,000.
On behalf of the applicant the Court heard from Ms Julie Engel a former employee of the respondent’s and friend of the applicant’s, but upon considering the evidence this witness, although credible, I am unable to accord it much weight on the grounds of relevance.
On behalf of the respondent the Court heard from Mr Owen Eaton presently employed as a Zone Manger with the respondent and who stated he had been with the respondent some seven years and that he had known the applicant for that time. In 1994 the Colonial Mutual Company purchased the respondent bank and implemented a Profit Enhancing Programme - or PEP as it was earlier referred to as a result of commercial assessment of the market place. In 1995 the respondent underwent a major re-structuring and it was the job of Mr Eaton to implement that programme for the northern area of the respondent’s operations. The purpose of the re-structure was to move away from a hierarchal approach and to give local areas more autonomy - some 100 employees were retrenched overall as a result of the PEP restructuring. Mr Eaton told the Court that the Coffs Harbour office was re-structured to contain a business development manager responsible for new clients, secondly business relationship managers responsible for existing clients and providing new business to those clients and thirdly a business service manager who was to attend to all administrative matters. The restructure involved the re-assessing of the different tasks performed by staff at Coffs Harbour and accorded different weighting’s in relation to their measure of importance. The PEP implementation newsletter - already admitted to evidence - provided information to all employees all over the state as to the proposed re-structure and how it was developing. Mr Owen stated he had no management control as to what was published in the newsletter.
Mr Owen confirmed he visited Coffs Harbour in June 1995 with his manager Graham Chapple and the staff there were advised of the intentions of management to re-structure. Some employees did fill out exhibit B and return it to management. Mr Eaton confirmed he did have an individual discussion with the applicant on 5 September 1995 a part of his plan “to get to know all the area employees -their strengths and weaknesses and also to come to grips with local issues”. In cross-examination Mr Eaton agreed that at no time during this meeting with the applicant were the words “retrenchment”, “redundancy” or “termination” used. In his evidence in chief Mr Owen was taken through exhibit 3 and I have to say for the purpose of these proceedings I am unable to place a much weight on it as I find it to be largely self-serving. Exhibit 3 was a file note of the applicant’s dated 6 September 1995 concerning the meeting the applicant had with Mr Eaton. Much of its contents were refuted by Mr Owen. Exhibit C was a copy of the personal notes/jottings made by Mr Eaton during the interview on 5 September 1995 and I found those notes to be scrappy, inconclusive and of poor quality. In cross-examination Mr Eaton agreed he did not examine the personnel record of the applicant nor did he contact those people who had commented on her work performance and speak with them. Accordingly at the time of the re-structuring of the Coffs Harbour Business Banking Centre the person largely charged with the responsibility of that undertaking was not familiar with comments made by the applicant’s supervisors and managers. A move away from Coffs Harbour was discussed with the applicant and agreed the applicant stated to him at that time that she felt her skills were not being properly used in a smaller environment like Coffs Harbour. Exhibit 11 was a human resources print-out being a staffing list denoting hierarchical structure within Business Banking at Coffs Harbour. Mr Eaton agreed the applicant was the only woman accounts manager and also agreed that at the time of termination the applicant would have been the most senior woman employee employed by the respondent, and that there would have been in the vicinity of some 100 male employees at her level of seniority or above.
On 19 October 1995 Mr Eaton confirmed he telephoned the applicant and advised her that no place existed for her in the restructured Coffs Harbour branch and that he was looking at re-deployment elsewhere for her. He advised the applicant at that time if no suitable re-deployment existed then the respondent would look to its obligations upon retrenchment. On 25 October 1995 Mr Eaton visited the Coffs Harbour branch with Mr Terry O’Neill the personnel manager and with a redundancy counsellor. At that time the applicant was retrenched handed her retrenchment package by Mr Eaton.
The evidence of Mr Owen was that the old position of the applicant as it was no longer existed and that the employees who were given one of the new positions were more suited to the new positions than the applicant. Mr Eaton stated the applicant possessed undoubtedly superior credit skills which were not so much in demand as a result of the restructure.
On behalf of the respondent the Court heard from Mr Grant McHugh, the personnel manager of the respondent who stated that the management policy as defined in the staff manual provided that retrenchment was the last option to be considered in situations such as these. The witness was shown exhibit 8, a business document of the respondent being a memorandum dated 13 October 1995 from him to various zone managers entitled “Surplus Business Banking Staff” that stated inter alia:
“Peter Herington yesterday reviewed the final listing of surplus BB staff and the options identified by HR to date to effect redeployment. Attached is a listing which deals with those redeployment options and lists those staff slotted for outplacement now.
The following timetable was also agreed and you might please note the specific activities required of you in ensuring the program comes to a successful conclusion.”
Mr McHugh stated Mr Owen was responsible for selecting the staff to be offered positions on the new teams and that he Mr McHugh was responsible for re-deploying staff surplus to requirements. Neither it seems were ultimately responsible for the decision to retrench. Exhibit D was a copy of EMAIL correspondence to and from Peter Herington dated 20 October 1995 to various members of management including Mr McHugh that stated inter alia:
“Listed below are those staff who fit that profile - could you please again review your needs and IMMEDIATELY advise me of any individual that can be accommodates within your structure to the benefit of the Bank...If not selected by your for redeployment the staff indicated will cease employment next week PLEASE ENSURE CONFIDENTIALITY - NONE HAVE BEEN FORMALISED ADVISED AS YET. Those staff are:...Debbie Organ - Account Manager Coffs Harbour..”.
Mr McHugh told the Court that the respondent conducted its business so that ordinarily the employee only learns about his or her retrenchment on the actual day that it takes place and not beforehand.
CONCLUSION
The applicant has correctly stated that the respondent bears the onus of proving that first there was a valid reason for her termination. In Quality Bakers of Australia Limited v John Goulding & Anor, (1995) 60 IR 327 where Beazley J. said in dealing with the question of onus that:
“The meaning of this section (s 170 EDA) is clear. The onus
is on the employer to establish that there was a valid reason
for the termination of employment in the terms of S 170 DE.
Once it is established that there was a valid reason or reasons
for the termination, the onus is upon the employee to prove that
the termination was harsh, unjust or unreasonable.”
It is noted the applicant does not contest the proposition that there was a valid reason for the reduction of staff.
Did the respondent have established criteria as a basis for selection for redundancy
In the case before the Court applicant was retrenched due to a re-structuring of the Banking Business Centre in Coffs Harbour. It is well established that a retrenchment can be a valid reason for termination and in certain respects the application of Ms Organ is similar to that of Mr Goulding in the Quality Bakers case where Beazley J stated:
“There was no dispute that “the operational requirements” of a
business may include redundancy. A redundancy will arise where
an employer has labour in excess of the requirements of the business; where the employer no longer wishes to have a
particular job performed; or where the employer wishes to
amalgamate jobs: R v The Industrial Commission of South
Australia; Ex Prate Adelaide Milk Supply Co-Operative Lt
(1977) 44 SAIR 1202 per Bray CJ at 1205; Gromark Packaging
v FMWU (1992) 46 IR 98, per Franklyn J at 105. It is not
necessary for the work to have disappeared altogether.
As was said in Bunnetts’ Case (1989) AILR 356:
“Organisational restructuring may result in a position
being abolished and the functions or some of them being
given to another or split amongst others.”
The evidence showed that prior to the restructure, the Coffs Harbour Business Banking Centre of the respondent had seven employees being the manager, three account managers and three account officers. After the restructure, the branch had five employees, being an account development manager, three account relationship managers and a business services manager. The Court heard evidence of many “restructures” during the course of the applicant’s employment, which probably would fall into the category of “reorganisations” rather than schemes involving retrenchments. It was a management directive that a PEP scheme be put into place and to that end senior management visited local branches and assessed the impact the altered direction of PEP would have on existing employees in order that greater efficiency be achieved. The evidence before the Court demonstrates that the respondent did have established criteria a as a basis of selection for redundancy - it was not disupted that the applicant possessed skills and abilities not entirely suited to the new structure. It is my view that the respondent did have established selection criteria for redundancy.
Did the respondent have a valid reason to terminate the applicant
The applicant argued the respondent failed to satisfy the satisfy the onus that it had a valid reason for her particular retrenchment as it failed to prove that her performance and qualifications were such that she was appropriate for selection for retrenchment. The applicant argued that the termination was accordingly harsh and unjust. In the case before the Court the respondent did have established criteria and each employee’s relative skills were considered in light of the re-structuring taking place as an attempt to achieve greater efficiency and particularly to attract new business. From the evidence of the applicant and the evidence of Mr Eaton at the hearing of the claim it was established the applicant lacked the skills to attract new business and her skills in credit assessment were not so that they could be utilised in the Coffs Harbour area. The respondent correctly submitted in my view that the applicant’s background of corporate lending had not called for particular skills in sales and the role of the new Business Services Manager involved primarily administrative tasks. The fact that there was a change in the relative weightings of various aspects of the employees job did not mean the applicant was somehow dismissed for poor performance. The respondent submitted that neither the applicant’s competence, skill, conduct nor performance were attacked and in my opinion that submission is supported by the evidence .
Did the respondent have a valid reason to terminate the applicant for redundancy
In Kenefick & Ors v Australian Submarine Corporation Pty Ltd, (1955) 131 ALR 197 the Full Court held that a respondent bears the onus of proving that it had valid reason to terminate each applicant. The applicant argued that the respondent has failed to consider all alternatives and in this regard cited Association of Professional Engineers v Deniliquin Council (1995) 134 ALR at 286 where Moore J stated:
“It cannot be assumed that section 170 DE(1) operates to treat
a termination has having been for a valid reason if the employee occupying a position which is abolished as a result of a restructuring might be placed in another position created by that restructuring.”
The applicant argued that as a matter of policy, the fact is that , as Moore J recognises, the law requires that an employer should consider voluntary early retirement as an option. The applicant submitted that the respondent has not discharged its onus because it failed to consider an alternative to the retrenchment of the applicant, namely seeking volunteers for redundancy. I agree with that submission based on the evidence before the Court.
Did the respondent afford the applicant procedural fairness
In selecting the applicant for redundancy the applicant contended that in failing to review the personnel files of the applicant the respondent failed to fundamentally to comply with procedural fairness. The respondent stated that Mr Eaton would not have made a different decision had he read the personnel files. The matter of reading an employee’s personnel file was discussed Gray J in Bostik (Australia) Pty Ltd v Gorgevski (no 1) [1992] FCR 20 where it was held by Gray J :
“An employer genuinely investigating an allegation of misconduct or neglect of duty, or some other act or omission which might provide a ground for dismissal is required to carry out a proper investigation, and not merely go through the motions. The employer is required to ascertain whether there are any mitigating factors, either associated with the alleged ground for dismissal, or arising from the employee’s past record and future prospects. An employer is unable to overcome procedural deficiencies by establishing to the satisfaction of the court that the dismissal concerned would not be harsh, unjust or unreasonable on substantive grounds.”
In the case of Ms Organ did not involve an employer investigating an allegation of misconduct or neglect of duty and so although to examine the personnel file may have been prudent, it cannot be said that failure to do so of itself constituted a denial of procedural fairness.
The applicant submitted that the respondent failed to afford procedural fairness to her as it failed to consult with her as to the best thing to do for her in the circumstances. It is clear that the meeting of 5 September 1995 was part of the process of re-structuring and not one where the final selection of staff for retrenchment was taking place and as such that meeting seemed more to fall into the category of a familiarisation process. The Court did not hear from Mr Herington the person who allegedly made the retrenchment decision in relation to the applicant and so I am unable to find otherwise than in accordance with the evidence of Mr Owen that when he telephoned the applicant on 19 October 1995 the final decision to terminate the applicant had not been made.
With regard to being accorded procedural fairness and the necessity to consult in circumstances such as these the applicant relied upon Sinclair v Anthony Smith & Associates (Von Doussa J 1 December 1995, unreported, Industrial Relations Court of Australia SI 260 of 1995) where His Honour stated:
“The requirement of consultation is in the Award not only to permit the possibility of arriving at some rearrangement of the workplace which has lesser consequences that dismissal, but also to allow for time for the employees to deal with the emotional, family and domestic stresses that are likely to descend upon them when their employment is brought to an end. The importance of those non- workplace personal factors cannot be underestimated, and finds expression in the reasons of various tribunals that have had to consider clauses of this type. To put it into colloquial terms, it is desirable, as the Award recognises, that employees whose security is about to be shattered be let down gently. If they are forewarned and counselled they are more likely to be able to accommodate to their new situation, to adjust themselves to the search for other work, and the like. Moreover, it is generally recognised that if an employee is in work and is given time off to go and look for other work, the prospects of finding new employment are somewhat better than if the person concerned is required to seek work as an unemployed person on social security. The failure to consult is a significant matter in this case. In my view it was also significant that no forewarning was given, and significant that no counselling was provided. Those are matters that should have been attended to, to render the dismissal in the circumstances, reasonable and fair”.
Although the Court heard no evidence of a governing Award, it is clear that His Honour outlined the matters pertaining to the Industrial Relations Act that are significant for an employer to follow in redundancy situations.
In Kenefick the proposition was established that section 170DC applies to situations where some employees are chosen from a larger pool of employees for redundancy. As Ryan, Beazley and North JJ stated:
“Section 170 DC(a) is directed to the individual termination of
one employee’s employment. Where it speaks of the reasons for
termination, it is speaking of the reasons for the individual
termination. In the circumstances of the present case, the
decision to reduce 170 hull shop employees by numbers 9
welders, did not, on its own, lead to the termination of
employment of any individual. It was one step in a two step
process. Only after the second step had been taken, was it possible
to identify an individual as a person whose employment would be
terminated. The two steps were both necessary to produce the
result of the individual termination of employment. The excess
of labour and the application of the criteria for selection were
both reasons for the termination of the individual. In other words,
there were two reasons for the termination of each appellant...
In our view, the statement that the employees were selected for termination “because of employment/performance characteristics” indicates that those factors can properly be described as “reasons” for the termination within the meaning of s 170 DC.
It would be anomalous if s.170DC can be construed as providing an opportunity to an employee to defend himself or herself against allegations of misconduct or inadequate performance made in isolation but as denying the same opportunity to an employee against whom similar allegations are made in the context of a need to select a few employees for termination from a larger pool because of an excess of labour. In both cases an assessment is made by the employer of performance and conduct. In both cases the assessment determines whether or not the employee’s employment is terminated. There is an equal need for the employee to have an opportunity to respond because, in each case a convincing defence to the allegations may persuade the employer not to terminate the employment of that employee. The need for an opportunity to defend is illustrated in the evidence of the appellants in this case. For example, the fifth appellant was selected for retrenchment in part because of the quality of his workmanship...”
It is finding of this Court that the procedures adopted by the respondent in effecting the retrenchment of the applicant were not proper and correct practices having regard to its responsibilities. I do not agree with the submission of the respondent that at the meeting on 5 September 1995 the applicant was afforded the opportunity to defend herself against the criticism that somehow she had not pushed herself in the Coffs Harbour office. The respondent stated that the smaller commercial and rural loans which the applicant managed in Coffs Harbour did not utilise the applicant’s corporate lending skills but that all of the evidence suggests, and I agree with the conclusion, that the applicant was good at her job. It was further submitted, again correctly, that as the restructure unfolded between May 1995 and October 1995, the applicant was not selected for any of the new positions in the Coffs Harbour BBC. What is crucial is that the applicant was not included in any way in discussions concerning her future, her retrenchment, her re-deployment or her redundancy. In fact, it could be said, the respondent concealed the reality of her position from her and simply adopted the policy of advising the applicant after all decisions had been taken. I am unable to place much weight on the fact that the applicant did not complete a Personal Employment Preference Form - exhibit B - as there is nothing to show the applicant was aware her own job was at risk.
In Erroll Lloyd v R. J. Gilbertson (Qld) Pty Ltd Madgwick J (unreported) 14 June 1996, Industrial Relations Court of Australia 252 of 1996 in dealing with the issue of whether Mr Lloyd’s termination was contrary to the Act, Mr Lloyd having been terminated on the grounds of redundancy, His Honour stated:
“Insofar as there was an element of redundancy in the termination,
there was lacking that degree of reasonable and proper consultation,
duly respectful of the status of employees as other that industrial
serfs, which will ordinarily be required to save a termination
on redundancy grounds from being harsh, unjust or unreasonable:
see Quality Bakers of Australia v Goulding & Wickham (Industrial
Relations Court of Australia, Beazley J, 23 June 1995, unreported,
and Hockey v Multiskip Pty Ltd (Industrial Relations Court of
Australia, Marshall J, 29 September 1995, unreported).
Accordingly it is a finding of this Court that the applicant was denied procedural fairness and that s 170 DC of the Industrial Relations Act has been breached.
Did the respondent discriminate against the applicant because of her personal situation
The applicant submitted that the Court should infer that s 170 DF(1) has not been complied with. That section states:
“An employer must not terminate an employee’s employment
for any one or more of the following reasons, or for reasons
including any one or more of the following reasons:
(f) race, colour, sexual preference, age, physical or mental
disability, family responsibilities....”.
The applicant was the only woman senior account executive employed by the respondent. Taking into account the re-structuring and the Profit Enhancement Programme from the affirmative action and equal opportunity point of view, and noting the lack of senior female executives employed by the respondent generally, it is perhaps unfortunate that the respondent saw fit to retrench the applicant in that it failed to be more accommodating and sensitive in light of modern business practices. However the Court heard no evidence of actual discriminatory policies or procedures and so the matter in that regard can be taken no further. The evidence showed that the applicant took maternity leave and had her son Christopher towards the end of 1994 and that during her absence a vacancy occurred in the position of Manager at Coffs Harbour. The evidence showed the applicant felt she should have been appointed to this position and during December 1994 the applicant sought an explanation from the then head, Mr Alan Whitehead who allegedly made the statement “I’d be lying if I said your changed personal position wasn’t a factor.” The respondent correctly submitted that the evidence is that Mr Whitehead left his position with the bank in May 1995 and had no involvement in the restructure of the respondent in 1995.
I am unable to infer from the comment attributed to Mr Whitehead ten months earlier that the fact that at a later point of time the applicant had a child was a factor taken into account when the respondent was selecting her for redundancy. From the paucity of relevant evidence I am unable to find that the respondent has failed to comply with s 170 DF(1)(f) of the Act.
Remedy
As stated earlier, the applicant now does not seek reinstatement and so in light of the breaches of the Act it is appropriate to look at the question of compensation. The respondent submitted that the amendments of the Act which took effect in January 1996, confirm that the Court has a discretion to decline a remedy if it is appropriate to do so in all the circumstances the case; s 170 EE(1). Further it should be noted that the applicant has received the amount of $44,331 representing 36.5 weeks pay. That figure is made up of 32.5 weeks’ pay ,calculated at the rate of three weeks’ pay per year of service or part thereof for ten years and ten months of full time service, plus four weeks pay in lieu of notice. This amount was calculated using the applicant’s total remuneration package of $63,400 rather than her base salary of $51,045.
On behalf of the applicant it was submitted that as a result of her termination her loss has been significant and that from her redundancy payment she was required to pay $20,000 in order to purchase her motor vehicle from the respondent. I reject that argument on the basis that the applicant elected to purchase the vehicle and that if she had not done so she would have had the use and benefit of the money in other directions. Further the applicant submitted that it should not be forgotten the applicant now has to pay the sum of $5000 being university fees formerly paid by the respondent. I reject that argument as the applicant has not referred to any income tax deductions which more than likely would be available to the applicant. It cannot be argued that by remaining in Coffs Harbour the applicant has lost everything. One of the main reasons the applicant did not wish to move from the area was that her husband had on-going commitment to the area. That is a factor that cannot be ignored as it was put forward by the applicant when the suggestion of her transferring back to Sydney was ventilated prior to her termination.
In Lloyd v Gilbertson (supra) the applicant was made redundant in a similar fashion to Ms Organ. In Mr Lloyd’s case the applicant received 20 weeks redundancy payment after some 20 years of employment. In finding there had been a breach of the Act, Madgwick J dealt with the question of compensation and found that after the length of service involved and the fact that Mr Lloyd was 47 years of age that four months would have been reasonable notice, however in Mr Lloyd’s case the factors governing notice payments were different. payable is at least four weeks.
In Lloyd v Gilbertson Madgwick took into account what had already been paid overall to the applicant when assessing compensation. Johns v Gunns Limited (1995) 60 IR 258, Northrop J allowed deductions from payments ordered under s. 170 EE(1)(b)(ii) for pay in lieu of notice and holiday pay received by the employee on termination of employment, and for other income since termination; p.273. Offset against the small amount of notice payments paid by the respondent should be the income the applicant has received since termination. The applicant submitted that any payment made to her does not reduce the cap fixed by section 170 EE(3)( May v Lilyvale Hotel Pty Limited. Wilcox CJ, 1 December 1995, Industrial Relations Court of Australia, unreported). It comes off her total loss. I do not agree with the applicant’s submission that the total loss of the applicant involves the calculation that her future economic loss can be estimated on the conservative basis that even if she and her family left Coffs Harbour in two years, and she moved to the city, she would not be able to find employment earning more than half her previous remuneration during that period. There was no evidence to support that contention, only the fact that the applicant seemingly did little to mitigate her loss.
Having considered those matters and all the circumstances before the Court it cannot be overlooked the applicant received a generous redundancy package based on the annual salary of her total remuneration package rather than her base salary. Accordingly it is inappropriate the applicant receive any further compensation and so the applicant’s claim for compensation is dismissed although breaches of the Industrial Relations Act are found.
I certify that this and the twenty three (23) previous pages are a true and correct copy of the Reasons for Decision of Judicial Registrar Tomlinson as recorded in the transcript and revised by the Judicial Registrar.
Associate: J A Liston
Date: 21 May 1996
Appearances
Applicant
Counsel: Mr M Christie
Solicitors: Edward T Davis & Co
Respondent
Counsel: Mr R Crow
Solicitors: Phillips Fox Solicitors
IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NSW DISTRICT REGISTRY
NI 4843 of 1995
BETWEEN:
Deborah ORGAN
Applicant
AND:
STATE BANK OF NSW
LIMITED
Respondent
CORAM: Tomlinson JR
PLACE: Sydney
DATE: 2 July 1996
CORRIGENDUM
Date of Judgment on pages 1,2,3 and 24 should read 2 JULY 1996.
J A Liston
Associate to
Judicial Registrar Tomlinson
24 July 1996
0