Raymond David Jones v Concrete Constructions (ACT) a division of Concrete Constructions Group Pty Ltd ACN 008 390 074

[1995] IRCA 373

C A T C H W O R D S

INDUSTRIAL LAW - termination of employment - redundancy - procedure - role of Union - valid reason - onus of proof

INDUSTRIAL RELATIONS ACT 1988, ss 170EA, 170EDA(1)(a), 170DE(1)

Jones v. Department of Energy & Minerals (VI 94/527, Judgment 16 June 1995, 259/95), unreported

RAYMOND DAVID JONES v. CONCRETE CONSTRUCTIONS (A.C.T.) a division of CONCRETE CONSTRUCTIONS GROUP PTY LTD ACN 008 390 074  

NO. ACT I 1041 OF 1995

Before :       Linkenbagh JR

Place:         Canberra

Date:     10 August 1995

IN THE INDUSTRIAL RELATIONS COURT    )
OF AUSTRALIA  )
AUSTRALIAN CAPITAL TERRITORY        )
DISTRICT REGISTRY                   )    No. ACT I 1041 of 1995

RAYMOND DAVID JONES

- Applicant

CONCRETE CONSTRUCTIONS (A.C.T.) a division of CONCRETE CONSTRUCTIONS GROUP PTY LTD ACN 008 390 074

- Respondent

MINUTES OF ORDER

BEFORE:             JUDICIAL REGISTRAR LINKENBAGH

DATE:          

PLACE:              CANBERRA

THE COURT ORDERS THAT:

IN THE INDUSTRIAL RELATIONS COURT    )
OF AUSTRALIA  )
AUSTRALIAN CAPITAL TERRITORY        )
DISTRICT REGISTRY                   )    No. ACT I 1041 of 1995

RAYMOND DAVID JONES

- Applicant

CONCRETE CONSTRUCTIONS (A.C.T.) a division of CONCRETE CONSTRUCTIONS GROUP PTY LTD ACN 008 390 074

- Respondent

BEFORE:             JUDICIAL REGISTRAR LINKENBAGH

DATE:          10 August, 1995

PLACE:              CANBERRA

REASONS FOR JUDGMENT

This is an application under Section 170EA of the Industrial Relations Act, 1988, in which the Applicant seeks a remedy arising out of the termination of his employment with that Respondent, which occurred on 31 January 1995. The termination was caused by a decision of the Respondent that some of its employees in the Australian Capital Territory were no longer required, because of a significant downturn in work. The issue for determination was that of the selection of the Applicant as one of the employees who were to be no longer required, there being no contest that redundancies in the total number of positions as actually determined by the Respondent were necessary.

At the conclusion of the evidence, I invited the representatives of the parties to make submissions as to the entitlement to a remedy, and these reasons address my decision on that aspect.

Justice Ryan in Jones v. Department of Energy & Minerals (VI 94/527, Judgment 16 June 1995, 259/95), unreported, said "The authorities in this area support the view that the content of the duty of fairness, in the sense of the procedures to be followed before deciding to dismiss an employee, will vary according to the circumstances of each case.  No generally applicable rule can be formulated as stipulating, for example, the required extent of consultation with the employee facing dismissal, or the lengths to which the employer must go in attempting to find other work for that employee."  His Honour confirmed the need for flexibility in determining the appropriate process.

The process in this case included application of the terms of the Building & Construction Industry (ACT) Award, 1991, and an Enterprise Agreement registered in the Industrial Relations Commission.  Part 2 of the Agreement provides for Industry Standards to be set and maintained, and for payment of loaded hourly rates  based on a system of skills levels applicable to individual employees.  Clause 1.10 of the Agreement provides that "Should the company find it necessary to terminate the services of any employee covered by this Agreement by virtue of him being redundant,......, his services will be terminated, all things being equal, on the basis of last on, first off."  The words I have underlined in this extract and these provisions of the Agreement, are of fundamental significance in this application, and I will return to them.  The clause further provides that there be full consultation with the Union regarding terminations, and the Agreement confirms the role of the Union as the "sole, legitimate representatives" of the employees.

Detailed evidence was led by both parties as to the procedure undertaken in determining the redundancies.  The evidence shows that the Union restricted the performance of its allotted charter as the representative of the employees, by taking the stance that the choice of those to be made redundant was the responsibility of the employer, thereby opting out of the consultative role it had undertaken under the terms of the Enterprise Agreement.  It is therefore not open to the Union, or the applicant, to complain that there was in fact no discussion as to the reasons for the selection of the Applicant for redundancy, prior to that selection being made by the Respondent.

The actions of the Respondent in selecting the Applicant for redundancy are open to scrutiny by this Court.  The Respondent must satisfy the Court that there was a valid reason for the termination of the employment of the Applicant (Section 170 DE (1)).  Whilst it is common ground that there was a need for redundancies, Section 170 DE (1) requires that there be a valid reason in relation to the particular termination.  I find that the Respondent has not discharged the onus placed on it by Section 170 EDA (1)(a), for the reason that it failed to comply with its obligations under Clause 10 of the Enterprise Agreement.  I find that on a proper consideration of the facts, all things were at least equal, and at most the scales were weighted in favour of the Applicant, and the seniority and skills levels of the Applicant should have prevailed to preserve his employment.

The facts were:

.The Applicant commenced employment with the Respondent in July 1990.

.The employment terminated on 31 January 1995

.The Applicant was employed as a Level 10 Crane Operator, on an average weekly wage of $1,429.25 at the time of termination.  Level 10 indicates the highest level in the scale for competence and experience.  The Applicant reached Level 10 on 12 October, 1993.

.The Respondent's business is that of builders of large commercial and public buildings.

.During 1994, two of the Respondent's major contracts came to an end, and it did not win an anticipated major contract.

.By September 1994, it was apparent that the Respondent would not have sufficient work in the foreseeable future to enable it to maintain its current number of employees and retrenchments were inevitable.

.The Applicant was aged 62 years, and has extensive experience in the construction industry, and in the operation, rigging and working of cranes, and in effecting repairs to cranes and rigging.  He holds "tickets" in the operation of the kinds of cranes used by the Respondent.  He has experience in demolition work and on excavators.

.The Applicant has a "Train the Trainer" qualification certificate following a course from 2-6 August 1993, and he has completed various other courses, including an Assessors' Course in June 1994.

.The Respondent placed greater emphasis than it had done previously on the need for staff to have training ability and qualifications following the conclusion of the Enterprise Agreement on 4 January 1993.

.In early September 1994, Mr Tozer for the Respondent, undertook a process of assessment of all employees as the first step in the procedure for determining which employees were to be made redundant.  The company also assessed the staff numbers and skills which would be required for the work available in the foreseeable future.

.Mr Tozer discarded his initial comparison of the employees and then undertook a comparison on a different basis.

.Mr Tozer's final assessments were provided to the District Monitoring Committee on 27 and 30 September 1994, and the Union personnel present took no part in any discussion as to the individual employees who were proposed for retrenchment.

.The list of persons to be retained was posted in the workplace on 30 September 1994.

.The Applicant's name was not on the list, and he appealed to the District Monitoring Committee, which rejected his appeal on 21 October 1994.

.The Applicant took leave and his retrenchment was effective from 31 January 1995.

.The Applicant competed with a Mr G Parry in the assessment process undertaken by the Respondent.

.Mr Parry commenced work with the Respondent on 25 May 1993, and was at Level 7 in September 1994.

.Mr Parry's qualifications were substantially the same as those of the Applicant and his years of experience in the industry were fewer.  He did not complete an Assessors' Course until October 1994.

.The determining factors in the selection of Mr Parry over Mr Jones were, that he was perceived to have more experience as a trainer, and that he could drive a Bobcat.

.Mr Tozer, who made the assessments, was under a mistaken impression that the Applicant suffers an infirmity in his knees.

.In the summary of initial assessments, which were discarded by Mr Tozer, the Applicant significantly outranked Mr Parry.

The selection process undertaken by Mr Tozer, came down to "very fine shavings", to use his words.  It could be said that the terms of Clause 1.10 of the Enterprise Agreement, were included in the Agreement as a mechanism for resolving redundancy choices which had reached such a level.  The Respondent was bound to apply the terms of Clause 1.10 in this case if all things were equal, and Mr Jones, being senior in both years of service with the Respondent, and in age, should have been preferred over Mr Parry.  It may well be said, of course, that all things were not equal, if full meaning is to be given to the Skills Assessment Levels system, on which Mr Jones rated 10, significantly higher than Mr Parry, who was at Level 7.  In either case, the application of the Agreement to the facts gives Mr Jones preference for retention over Mr Parry.

I also note the manner in which the redundancies were notified to the workforce. The Union left the selection of the particular employees to the Respondent, which, having made its choices, posted a handwritten list of those persons to be retained in the Respondent's employ, on a notice board in the meal room at the site.  The employees who were to be retrenched therefore became aware of their fate by scanning the list, and not finding their names on the list, in the presence of any other employees who were present in the room at the same time.  Such a process illustrates an attitude in the Respondent which to say the least, displays a lack of sensitivity and courtesy to those whose names were not on the list.

I therefore determine that the Applicant is entitled to a remedy, and shall invite further oral submissions before determining the orders I shall make.

I certify that this and the preceding   pages are a true copy of my Reasons for Judgment

Maria Linkenbagh
Judicial Registrar

Representative of the Applicant:     Ms. N. Rutherford
  Construction Mining  Forestry and Engineering    Union 
Counsel for the Applicant:      Mr. J. Harris
Solicitors for the Respondent:  Corrs Chambers Westgarth

Date of hearing:     13 14 and 15 June, 1995
Date of judgment:    10 August 1995

C A T C H W O R D S

INDUSTRIAL LAW - termination of employment - redundancy - procedure - role of Union - valid reason - onus of proof - reinstatement impracticable - compensation - relevance of Social Security benefits and other benefits in calculating compensation

INDUSTRIAL RELATIONS ACT 1988, ss 170EA, 170EDA(1)(a), 170DE(1)
       170 EE 

Jones v. Department of Energy & Minerals (VI 94/527, Judgment 16 June 1995, 259/95), unreported

RAYMOND DAVID JONES v. CONCRETE CONSTRUCTIONS (A.C.T.) a division of CONCRETE CONSTRUCTIONS GROUP PTY LTD ACN 008 390 074  

NO. ACT I 1041 OF 1995

Before :       Linkenbagh JR

Place:         Canberra

Date:     10 August 1995

IN THE INDUSTRIAL RELATIONS COURT    )
OF AUSTRALIA  )
AUSTRALIAN CAPITAL TERRITORY        )
DISTRICT REGISTRY                   )    No. ACT I 1041 of 1995

RAYMOND DAVID JONES

- Applicant

CONCRETE CONSTRUCTIONS (A.C.T.) a division of CONCRETE CONSTRUCTIONS GROUP PTY LTD ACN 008 390 074

- Respondent

MINUTES OF ORDER

BEFORE:             JUDICIAL REGISTRAR LINKENBAGH

DATE:               11 AUGUST 1995

PLACE:              CANBERRA

THE COURT ORDERS THAT:

1. The respondent is in breach of Section 170 DE (1) of the Industrial relations Act, 1988.
   2. That the respondent pay to the applicant the sum of $37,160.50 by way of compensation pursuant to Section 170 EE (2) of the said Act.

Settlement and entry of Orders is dealt with in Order 36 of the Industrial Relations Court Rules

IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA

AUSTRALIAN CAPITAL                  NO  AI 1041 of 1995
TERRITORY DISTRICT REGISTRY

RAYMOND DAVID  JONES  Applicant

CONCRETE  CONSTRUCTIONS
  (A.C.T.)
  Respondent
 11 AUGUST 1995

REASONS FOR JUDGMENT AS TO REMEDY

REVISED FROM THE TRANSCRIPT

I propose to deliver a judgment which is to be read with the written judgment which I delivered yesterday in this matter.  This part of the judgment relates to the appropriate remedy to which the applicant is entitled pursuant to the provisions of 170EE of the Act.  the Act provides in section 170EE(2) that if reinstatement is impracticable then the court may order compensation, and  the first task of the Court in assessing what remedy is appropriate is therefore to look at the impracticality  or otherwise of reinstatement.

I find in this matter that reinstatement would be impracticable within the meaning of section 170EE(2) only for the reasons that the respondents business in Canberra is now considerably less extensive than it has been in the past few years and its work force in Canberra is, I am told today by Mr Jarvis, down to something like 15 employees and that number is to be decreased further over the short term.  To reinstate the applicant as a crane driver in the circumstances which have been described to the court by Mr Jarvis and by the other witnesses would not, in my view, be in the interests of the respondent.  I find  also find great difficulty in seeing how returning to the work force  in those circumstances could be seen to be in the real interests of the applicant.

There is no obvious  job to which Mr. Jones might be reinstated, and the respondent has no capacity to find a position which is on terms and conditions no less favourable within the meaning of Section 170 EE (a) (ii).

The finding that reinstatement is impracticable means then that I look at the other remedy available, and that is compensation. it is very clear to me in the circumstances of this case that compensation should be payable for the full period of 26 weeks which is available under the provisions of Section 170EE (3). I calculate the 26 weeks at $1429.26 per week making a total of $37,160.50.

Ms Rutherford submitted that I should add to that sum the other benefits which Mr. Jones enjoyed by reason of his employment in the construction industry but I take the view that as he was in fact terminated, benefits such as the contribution to the Construction Employees Redundancy Fund and superannuation funds are not appropriate.

Mr. Harris has asked that I deduct from the full amount which might otherwise be due, the amount which Mr. Jones received from the Construction Employees Redundancy Fund Pty. Limited on his termination, which was $9052.00. I do not think it is appropriate to deduct that sum for the reason that that sum is an entitlement which Mr. Jones would have had regardless of the manner of the termination of his employment, except for the exceptions which are noted in Clause 14 (1) (a) of the Award, which are unlikely to have ever been applicable in this case.

Mr. Harris also submitted that I should deduct from the amount otherwise due, a sum equal to any moneys which Mr. Jones has received by way of benefits from the Department of Social Security since his termination. I note the decision of the Chief Justice of this Court in Malaney v. Active Concrete which is No. NI 747 R of 1994 delivered on 3 May 1995. In that Judgment the Chief Justice elected not to reduce the amount of compensation to which the applicant is otherwise entitled because of Social Security payments. I have some difficulty in understanding his interpretation of the word “remuneration” as used in Section 170EE (3) but, nonetheless, it is quite clear to me that his view is, as expressed in that judgment, that Social Security payments should not be deducted. In addition to what the Chief Justice has said on the matter, my own view is that the Department of Social Security pays benefits to applicants to it on terms, and those terms are dictated by the relevant legislation which governs the Department, and its practices and policies.

Mr. Jones has obligations to the Department which arise from the nature of the benefits which he receives from the Department and one would expect that Mr. Jones would honour those obligations, whatever they may be. Were I to deduct the amount of benefits from the amount of compensation, the respondent receives a benefit which is not appropriate given the terms of, and the reasons for, this legislation. I therefore propose to make no deductions from the amount which I consider to be the appropriate amount of compensation in this case being $ 37,160.50. The Orders that I make in the matter are, therefore, that the respondent is in breach of Section 170 DE (1) of the Act and that the respondent pay to the applicant by way of compensation pursuant to Section 170 EE (2) of the Act the sum of $37,160.50.

I certify that this and the preceding  two pages are a true copy of my Reasons for Judgment as to Remedy in these proceedings.

Maria Linkenbagh
Judicial Registrar

The appearances were as before.