Patterson v Excel Enterprises Pty Ltd
[1997] IRCA 231
•03 July 1997
DECISION NO:231/97
CATCHWORDS
INDUSTRIAL LAW - complaint of UNLAWFUL TERMINATION -
VALID REASON - whether OPERATIONAL REQUIREMENT - consideration of applicant’s permanent status where non-permanent and casual staff existed - whether applicant had other skills and experience - whether additional employees engaged after the termination of employment - whether any discussions had taken place regarding redundancy - PROHIBITED REASON - whether reason for termination union activity -
ASSOCIATED JURISDICTION - claim for recovery of debt arising from the improper classification of applicant - whether engaged in defined duties as described by the AWARD -
REMEDY - whether reinstatement impracticable where applicant has obtained alternative employment - COMPENSATION - consideration of the likely period the employment would have continued but for the unlawful act of employer - DAMAGES - whether failure to accord applicant NOTICE OF TERMINATION -
Workplace Relations Act 1996 ss170DB, 170DE, 170DF, 170EA, 170EDA, 170EE
Johns v Gunn Limited (1995) 60 IR 258
PATTERSON -V- EXCEL ENTERPRISES PTY LTD
VI 2626 of 1996
Before : PARKINSON JR
Place : MELBOURNE
Date : 3 July 1997
IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 2626 of 1996
B E T W E E N:
Trevor PATTERSON
Applicant
A N D
EXCEL ENTERPRISES PTY LTD
Respondent
MINUTES OF ORDERS
3 July 1997 PARKINSON JR
THE COURT ORDERS THAT:
Pursuant to Subsection 170EE(3) of the Workplace Relations Act, 1996 the respondent pay to the applicant compensation in the sum of $4884.00.
Pursuant to Subsection 170EE(5) of the Workplace Relations Act, 1996, the respondent pay to the applicant damages in the sum of $814.00.
Payment in accordance with Orders 1 and 2 herein to be made within 21 days of the date of this Order.
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
VICTORIA DISTRICT REGISTRY
VI 2626 of 1996
B E T W E E N:
Trevor PATTERSON
Applicant
A N D
EXCEL ENTERPRISES PTY LTD
Respondent
REASONS FOR DECISION
3 July 1997 PARKINSON JR
This is a decision in relation to an application made pursuant to Section 170EA of the Workplace Relations Act 1996.(‘the Act’) The applicant, who is 57 years old, was employed by the respondent between November 1993 and August 1996. He was initially employed by the respondent as a piece worker receiving $1.00 for each chair completed and working approximately 20 hours per week. In January 1994 his employment became permanent, with the position being funded by a 16 week wage subsidy from the Commonwealth Department of Education and Training in the sum of $200.00 per week. The wage subsidy ran from 24 January, 1994 to 13 May, 1994. The applicant was principally engaged in the assembly of chairs. There is some dispute in this proceedings as to the correct classification to be attributed to the applicant and the relevant salary rate to which he was entitled during the course of the employment. The applicant, in addition to remedies under Section 170EE of the Act, also seeks to recover monies which he alleges were underpaid wages and recoverable as a debt.
The applicant contends that there was no operational requirement to terminate his employment and that the work upon which he was engaged continued to be performed after the termination of his employment and that persons who were employed after him, and in a casual capacity, were continued in the employment in preference to him, notwithstanding that he was a permanent employee and had been in the employment for a longer period of time. The applicant contends that his employment was terminated without valid reason in contravention of Section 170DE(1) of the Act and for the reason or in part for a reason proscribed by Section 170DF(1)(b) of the Act, in that the applicant’s employment was terminated shortly after he had indicated to the employer an intention to join the relevant union. The respondent contends that the applicant’s employment was terminated as a consequence of operational requirements. The respondent contends that the applicant’s employment was terminated as a result of a decision by the respondent not to continue importing and assembling chairs, but rather to purchase the assembled product. The respondent denies that the applicant’s potential union membership formed any part of the reason for the employment terminating. Mr Kyriacou, the General Manager of the respondent, gave evidence that the decision to alter the manner of operation, by ceasing to import chairs from New Zealand and the Philippines, meant that the applicant’s position was no longer required and that he was redundant. I turn now to consider the issues arising pursuant to Section 170DE(1) and Section 170DF(1)(b) of the Act.
I am not satisfied that the respondent had valid reason for the termination of the applicant’s employment based upon the operational requirements of the business. The evidence establishes that the number of employees in the business had been growing substantially since the applicant’s employment. When the applicant commenced employment there were 11 employees. At the date of the termination of the employment there were between 50 to 60 employees, including a number of casual employees. The evidence was that whilst additional employees were engaged by the respondent after the termination of the applicant’s employment.
The applicant and Mr Theodorou were the only employees whose employment was terminated on 15 August, 1996. At the time of the termination of the applicant’s employment the evidence is that there remained a number of weeks work to be performed and that in the event that work was performed by other employees after the applicant left. The evidence of the applicant, which I accept, was that he had worked in a number of the work areas of the respondent and had not been solely engaged in chair assembling during the employment. His evidence was that he had worked on and operated most of the machinery in the premises and was familiar with the tasks performed and competent to perform those tasks.
Prior to the termination of the employment, no discussions occurred between the respondent and the applicant or any other employee as to their various capacities to perform tasks in the workplace. Further, notwithstanding that there were a number of non-permanent or casual employees also employed, the applicant’s employment was terminated without any consideration being given to his permanent employment status. The evidence is that there was a decision taken by the respondent to cease importing and assembling chairs. It is apparent that a decision such as this must necessarily involve a substantial lead time, however no notice or information was given to the applicant by the respondent in relation to this decision and there was no opportunity given to the applicant to consider his options or future and to make any alternative arrangements for employment in a reasonable period of lead time to the termination of his employment. No explanation for this failure was provided to the Court and there is no evidence of any circumstances which would have made it unreasonable to expect that such steps be taken by the respondent. This is particularly so in the context of their continuing to be work of the applicant’s particular type available and performed for some time after his employment terminated.
Whilst the respondent contends that the applicant was selected because it was his work which was disappearing and because he was not skilled at performing other duties in the workplace, this is not supported by the evidence of the skills and experience of the applicant and the actual range of work performed by him for the respondent during the course of the employment. Nor was the Court informed as to the reason for selecting the applicant for redundancy instead of persons who were employed later than him, or on a casual basis.
The failure of the respondent to explain these matters have lead me to conclude that the termination of the employment of the applicant was nor for a reason which was sound, defensible or well founded. The timing of the termination was neither sound, nor defensible, having regard to the evidence of the Managing Director, Mr Brokenshire, that at the date of the termination there remained approximately 5000 chairs requiring assembling. With an assembly rate of 50 per day there was consequently continuing work for at least 3 months. His evidence was that chair assembling continued to be performed after the employment terminated. This evidence establishes the conduct of the respondent in terminating the employment as capricious. Further there was evidence from this witness as to the respondent hiring additional employees after the termination of the applicant’s employment, however no wages or time records were produced to the Court and therefore it is difficult to ascertain from the evidence exactly how many employees were hired or remained in the respondent’s employ after the applicant’s employment terminated.
Having regard to the above matters I am not satisfied that the respondent had valid reason based upon the operational requirements of the business for the termination of the applicant’s employment on 15 August, 1996. Consequently the respondent has contravened Section 170DE(1) of the Act. I turn now to consider the matters arising from Section 170DF(1)(b) of the Act.
In this proceeding, the respondent bears what has been described by Northrop J in Johns v Gunn Limited, (1995) 60 IR 258, as the reverse onus of proof provided for by Section 170EDA(2) of the Act. That is, it is for the respondent to satisfy the Court that the reason for the termination of the employment did not include a reason which is prohibited by Section 170DF of the Act. In this regard I am satisfied that the respondent, by its solicitors, was on notice as to the fact of and the nature of the allegations made by the applicant pursuant to Section 170DF(1)(b) sufficiently prior to the date of the trial not to be taken by surprise by the particulars of the Section 170DF(1)(b) claim. It is submitted by counsel for the respondent that Section 170DF(1)(b) cannot apply in relation to the applicant’s employment, because the applicant was not at the time of the termination of the employment a member of the union. It was submitted “the applicant was never a union member. Thus s170DF(1)(b) cannot be relevant”. It is submitted by counsel for the applicant that “the phrase ‘participation in union activity’ in s170DF(1)(b) must include an indication by an employee of an intention to join the union”. I do not accept the submission on behalf of the respondent that the applicant’s membership of the union is a prerequisite to the operation of the Section.
Section 170DB(1)(b) provides:
“An employer must not terminate an employees employment for any one or more of the following reasons or for reasons including any one or more of the following reasons:
(b)union membership or participation in union activities outside working hours or with the consent of the employer during working hours. ... ”
There are two aspects to the provision. The first involves union membership. The second is participation in union activities. There is nothing in that Section to suggest that the latter is to be read as confined to participation by a union member in union activities. It seems to me that the attendance at a workplace by a union for the purpose of recruiting members and a resulting indication by an employee that he intended to join the union, represents an example of a participation by the employee in the activities of the union by signifying to the employer of an intention to join the union. Further the attendance at meetings, and the indication by the employee of support for the idea of a Federal Award are all examples of participation in activities. I am satisfied that the circumstances contended for by the applicant fall within the operation of Section 170DF(1)(b) of the Act. I turn now to consider the facts.
Approximately one month before the applicant’s employment was terminated, officers of the Construction, Forestry, Mining and Engineering Workers Union, (“the CFMEU”), attended at the workplace seeking to address the employees and to enrol new members. Arrangements were made for an alternative time for the union to attend. The applicant’s evidence is that approximately a month before his employment was terminated, he enquired of Mr Kyriacou as to his views of him joining the union and that Mr Kyriacou replied:
“if you want to join the union, I’ll sack people, 10 people tomorrow and 10 next week and then I’ll go back to making fine furniture and then you bastards won’t have a job”.
Mr Kyriacou’s evidence as to this conversation was that he informed the applicant some weeks later, in the context of a discussion as to a Federal Award being obtained for the workplace:
“if the costs were too high and the company could not afford to pay these rates it would be employing less people and would be looking at sacking at least 10 people because just not producing.”
Mr Brokenshire’s evidence was that whilst he was present during the course of that discussion he was unable to recall precisely what Mr Kyriacou had said. Mr Theodorou confirmed the applicant’s version of the conversation. I prefer the applicant’s evidence to that of Mr Kyriacou. The evidence is also that shortly after the union attended at the site, the respondent’s foreman, Mr Steve Tolley, approached each employee in the factory and asked them whether it was their intention to join the union and that he noted their response in this regard. Mr Tolley’s evidence was that he took this step off his own initiative and Mr Brokenshire’s evidence was that Mr Tolley took this step for the purpose of conducting a ballot of the employees on the site. The evidence is that the applicant, together with one other employee, Mr Theodorou, replied that he was likely to join the union. On 15 August, 1996 the applicant’s employment was terminated by the respondent. The evidence is that on 15 August, 1996 Mr Theodorou’s employment was also terminated by the respondent. No other employees were made redundant on that day.
Having regard to the above matters, I am not satisfied that the applicant’s indication of intention to join the union did not form part of the reason for the termination of his employment. Whilst this factor is expressly denied by Mr Brokenshire and Mr Kyriacou, it is apparent that there was significant union activity on the site shortly before the termination of the employment and that there was an expression by the respondent’s manager that consequences would flow in the event that the employees became unionised. Further, as I indicated earlier in this decision, the evidence as to the basis for which the respondent contends is unsatisfactory in that available materials which would establish the trading and employment numbers in the respondent were not produced to the Court. In the absence of a satisfactory alternative explanation for the termination of the employment, the Court is entitled to draw an inference unfavourable to the respondent, based upon the evidence of union activity and the applicant’s own activity in that regard. I am not satisfied that the respondent did not have as part of its reason for terminating the employment of the applicant a matter prohibited by Section 170DF(1)(b) of the Act. Consequently the respondent did not have valid reason for the termination of the employment. I turn now to consider the accrued claim.
As to the claim in the accrued jurisdiction for recovery of a debt arising from the improper classification of the applicant, I am not satisfied that the applicant was engaged in the performance of the duties of a cabinet maker as defined by Clause 9 of the Award, as opposed to performance of the duties of an assembler/labourer. Whilst I have formed the view that the contractual arrangement between the parties having regard to the initial employment agreement, as evidenced by the Wages Subsidy Agreement, did contemplate the operation and application of the former Furnishing Trades Award, I am not satisfied that the Award classification operated, even contractually, without the need to have regard to the actual duties which formed the principal or substantive duties of the applicant. In this case I am not satisfied that the major or principal duties of the applicant fell outside of the classification of Production Employee and within the classification of Furniture Tradesmen, notwithstanding that the applicant held trade qualifications. The claim in the accrued jurisdiction of the Court for the recovery of a debt or underpayment pursuant to the former state Award is dismissed. I turn now to consider the question of remedy arising under Section 170EE of the Act.
The applicant obtained alternative employment in March 1997, some 7 months after the termination of the employment. He does not seek reinstatement in view of now being settled in the alternative job. In the circumstances I am satisfied that an order for reinstatement would be impracticable. The applicant seeks compensation. I am satisfied that an order for compensation ought be made and that the applicant is entitled to an order representing compensation for wages in a period of 3 months from the time of the termination of the employment. I make this assessment having regard to the length of the employment of the applicant by the respondent and what I regard as a likely period in which it may have been expected that the applicant’s employment would have continued, but for the unlawful act of the respondent. I have assessed the compensation based upon the applicant’s evidence that he earned a gross weekly wage of $407.00. The amount of the compensation is $4,884.00. This sum is a gross amount and payable as such. The applicant is accountable for any taxation obligation which may exist in relation to the compensation. In addition, the applicant is entitled to an order pursuant to Subsection 170EE(5) in the sum of $814.00, being damages on account of the failure by the respondent to accord the relevant period of notice, as prescribed by Section 170DB of the Act. The Court will order in those terms.
I certify that this and the preceding eight (8) pages
are a true copy of the reasons for decision of
Judicial Registrar Parkinson.
Associate :
Dated : 3 July 1997
APPEARANCES
Counsel appearing for the applicant : Ms. R. Doyle
Solicitors for the applicant : Slater & Gordon
Counsel appearing for the respondent : Mr. J. Bailey
Solicitors for the respondent : Karavias & Associates
Date of hearing : 21 April 1997
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