Sheila Rivenell and Andrew L Fraser and JUSTAFLEX Pty Ltd T/As ROSDEN Nursing Home

[1995] IRCA 131

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI 1883 of 1994
VI 1913 of 1994

BETWEEN:

SHEILA RIVENELL & ANDREW L. FRASER
Applicants

AND

JUSTAFLEX PTY LTD T/AS ROSDEN NURSING HOME
Respondent

REASONS FOR JUDGMENT

31 March 1995  Judicial Registrar Fleming

Findings Of Fact

Mrs Rivenell

The applicant was employed by the respondent on 29 March 1985 as a nursing attendant.  She was employed on a part time basis working 18½ hours per week.  Mrs Rivenell gave evidence that she first became aware that her employment was in jeopardy when she received the letter marked Exhibit A and dated 16 September 1994.  Mrs Rivenell's evidence was that she had not had any discussion with the employer prior to receiving this letter except for signing a form:

"that we were willing to do any duty they asked us to do and we just filled in the form."

In cross examination Mrs Rivenell gave evidence that she attended a meeting which Mr Rathner, the administrator, convened.  It was at this meeting that Mrs Rivenell heard that the prospective purchaser had agreed to retain at least 75% of the existing staff.  Mrs Rivenell also said that Mr Rathner had attended the hospital on quite a few occasions to speak to the staff.

Mrs Rivenell gave evidence that she received a letter of termination dated 16 September 1994 which stated:

"As administrator to the Deed of Company Arrangement for the above company, I have negotiated a Contract of Sale on the nursing home and it is anticipated that settlement will occur on or about 30 September, 1994.

In accordance with the terms of the contract the purchaser is required to employ to a minimum of 75% of the existing staff and to advise me of those staff members who will not be offered ongoing employment.

I have been advised that you will not be offered a position following the change.  As a result, it is likely you will be eligible for a redundancy payment in accordance with the award.  Any such entitlement will be calculated and payment effected in the final pay under my administration.  I wish to advise that your last day of employment will be 30 September, 1994.

I would like to take this opportunity of thanking you for your support during this difficult and uncertain time and wish you well for the future.

It is not my policy to provide a written reference, however should you require a "Certificate of Service" please contact Nasah Management on 571 8611.

Thank you once again for your support and assistance."

Mrs Rivenell's employment was accordingly terminated on 30 September 1994.  Mrs Rivenell said that she did not have any discussion with Mr Rathner after she received the letter of termination but that she made a few phone calls "but couldn't get through or anything”.

Mr Fraser

Mr Fraser's evidence was that he was employed by the respondent in approximately May/June 1992 as a nursing attendant.  Mr Fraser was employed on a permanent part time basis and performed similar duties to Mrs Rivenell.

Mr Fraser gave evidence as follows:

"The home was in financial difficulty and that it was in the process of being sold ... we received some notices on the board in the staff room ..."

Mr Fraser said that:

"we first knew of it, we were having trouble being paid and we hadn't been paid for something like three weeks, a little over three weeks [and that was] ... just between Christmas and March [1994] ... there was also meetings that Mr Rathner addressed the employees ... Mr Rathner informed us that the group of nursing homes which was owned by one group of people I guess, was in financial difficulty and that he would do everything in his power to continue our jobs and continue the running of the nursing home ... and he came on another two occasions."

Mr Fraser gave evidence that he had an interview with the new purchasers, whose names he could not recall, on 15 September 1994 and that he left the interview:

"feeling that I had no trouble with my future employment:  that I would be there."

I accept Mrs Rivenell's evidence and Mr Fraser's evidence that they understood from quite early in the piece that the purchasers would be retaining at least 75% of the work force at the nursing home and that they understood that there was a possibility that some people would be put off.

Mr Fraser gave evidence that after receiving the letter of dismissal dated 16 September 1994 there was no communication between him and the respondent except for a telephone call he made to Mr Rathner.

Although Mr Fraser could not recall the exact date I accept that this telephone call occurred on 30 September 1994 on the basis of Mr Rathner's evidence which included a diary note made that date.  Mr Fraser agreed he telephoned Mr Rathner and asked him for his termination pay to be paid electronically and furthermore Mr Fraser gave evidence that he was angry on the phone and that he told Mr Rathner it was unfair he had been made redundant.

Mr Rathner gave evidence that:

"immediately following my appointment I contacted the major interest groups, being the HSUA, the ANF, the Commonwealth Government, the Department of Health, my solicitors obviously and the secured creditors to form a committee to try to negotiate the Deed which would be the format for the solution to the group and I was of the view that that represented most of the creditor interest groups and therefore most creditors positions would be looked after in the negotiations.  ... the negotiations actually commenced very early on.  I would say it would have been around may that I - late April, early may I started discussing it with them ... I attended at the homes on three occasions specifically to meet with staff ... actually immediately upon my appointment their wages were brought up to date ... upon my appointment I decided that no staff were to be terminated unless they chose to leave, that was the only way they were going to go, so no staff was ever made redundant for the purposes of the sale, and no employees were offered position either.  In other words unless they were already there.

... both the Deed and the Contract were only executed by me following confirmation by the unions that they were in agreement with both documents ... normally in a sale agreement there is no clause in the contract requiring any staff to be taken on by a purchaser.  I was trying to preserve jobs which had been the basis for the negotiations with the unions and put - I couldn't put in a 100% because I was of the view that commercially it would have been difficult to find a buyer and I decided that 75% was a reasonable figure without jeopardising the sale or the sell price ... the unions were in support of that figure and they certainly had no complaint about it when I presented it to them ... I couldn't impose on a purchaser to take everyone of them ... upon the contract being executed by the purchaser I then attended the home to explain to them the basis of the contract; in other words, that there was a 75% minimum requirement whilst of course I would hope that more jobs would be offered ... I certainly said to them that there was a minimum requirement, I couldn't guarantee that all jobs would be preserved or kept on, but certainly a minimum of 75% have to be.  I obviously could not speak for the purchaser and did not do so.  I also advised who the purchaser was, that there would be interviews in due course for the staff to meet the purchaser, and just generally that the - when I anticipated settlement to occur."

The letters of termination to Mrs Rivenell and Mr Fraser are Exhibit A and B.  Mr Rathner gave evidence that the purchaser delayed the settlement of 30 September and that it was rescheduled for 14 October however that was again delayed by the purchaser until 31 October and later the purchaser again delayed until 24 November with the actual settlement taking place finally on 30 November.  Mr Rathner gave evidence that by 24 November he was getting very annoyed with the purchaser for constantly delaying settlement.  I accept Mr Rathner's evidence that he had nothing to do with the delay of the settlement.

Mr Rathner gave evidence that there were sixty-one employees at the respondent's nursing home and that eight of them were made redundant.  The eight people who were made redundant were a gardener, a handyman, a weekend cleaner, five nursing assistants and one charge nurse.  In the absence of any submissions in relation to the appropriateness of these eight employees being made redundant compared to the other remaining fifty-three employees I find that they were selected appropriately.

Valid Reason For Termination

The reason for the termination has been set out in full in the letters of termination marked Exhibits A and B. I accept that the reason given was for redundancy and that this is a valid reason pursuant to section 170DE(2) of the Act.

Harsh, Unjust or Unreasonable

Mr Clancy made a persuasive and articulate submission that the dismissal was unfair or harsh and he relied on the decision of Lotte and he quoted:

"I believe that in the modern context, expressions used in the older cases, such as harsh, oppressive and unconscionable as determinants as to whether intervention by an Industrial Authority is in its discretion permissible are properly interpreted on the basis simply of firstly deciding in all the circumstances even though the dismissal be it summary or on notice the employer has not exceeded his common rule and/or award rights where the employee has received less than a fair deal."

Mr Clancy then refereed to the award provision namely clause 43(1)(a) which states:

"Where an employer has made a definite decision that the employer no longer wished the job the employee 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 discussion with the employees directly affected and with the Union or Unions."

Mr Clancy's submission was that the award is to be used as a guide as it sets out the minimum obligation of the employer.  I accept that the award does set out a minimum requirement for the employer and that the employer is compelled to use it as a guide.

Mr Clancy also relied on the Industrial Relations Act, Schedule 11, Recommendation 116 of the Convention which I do not propose to paraphrase here.

Mr Riordan submitted that it was reasonable for the employer not to continue the employment of Mrs Rivenell and Mr Fraser until the actual settlement date on 30 November 1994.  I accept this submission and I accept the evidence of Mr Rathner.  Mr Rathner was put in a position where he had arranged for a settlement on 30 September 1994 and had everything in place for that but because of the lack of preparedness of the purchaser that could not proceed.  Negotiations in relation to the settlement continued intensively for the next two months.  If Mr Rathner had the benefit of hindsight perhaps he would have continued the employment of Mr Fraser and Mrs Rivenell however this was never put.

Mr Clancy did not put that there had been a breach of the award but rather submitted that the award was to be used as a guideline to provide a minimum standard.  I find that the employer although unaware of the award relied upon advices from the unions involved and at all stages he communicated with the unions in relation to the sale of the nursing home.  I accept that given the evidence his conduct was reasonable.

I find that although Mrs Rivenell and Mr Fraser did not have individual discussions with the employer that Mr Rathner did discuss directly with all employees who may be directly effected by the redundancy and he did have discussions with the unions.  I find therefore that there has been no breach of the award.

In all the circumstances I find that the decision to terminate Mrs Rivenell and Mr Fraser was not harsh, unjust or unreasonable for the reasons given above.

I accordingly dismiss the applications and made no further order.

Order Of The Court

1. The Application of Mrs Rivenell be dismissed.

2. The Application of Mr Fraser be dismissed.

I certify that this and the preceding six (6) pages are a true copy of the reasons for judgment of Judicial Registrar Fleming.

Associate:

Dated:  

Representative for the Applicants: Counsel for the Applicant:	Health Services Union of Australia Mr J. Clancy
Solicitor for the Respondent: Counsel for the Respondent:	Mills Oakley McKay Mr Riordan
Dates of hearing:	16 February 1995
Date of Judgment:

CATCHWORDS

INDUSTRIAL LAW - Termination of employment - redundancy.

Industrial Relations Act 1988, ss.170DC, 170DE and 170EE.

Lotte -v- Holloway (1971)

SHEILA RIVENELL
NO. VI 1883 of 1994 -v- JUSTAFLEX PTY LTD T/AS ROSDEN NURSING HOME

ANDREW L. FRASER
NO. VI 1913 of 1994 -v- JUSTAFLEX PTY LTD T/AS ROSDEN NURSING HOME

Before:     FLEMING JR

Place:       MELBOURNE

Date:        31 MARCH 1995

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI 1883 of 1994
VI 1913 of 1994

BETWEEN:

SHEILA RIVENELL & ANDREW L. FRASER
Applicants

AND

JUSTAFLEX PTY LTD T/AS ROSDEN NURSING HOME
Respondent

MINUTES OF ORDER

31 March 1995  Judicial Registrar Fleming

THE COURT ORDERS THAT:

1. The Application of Mrs Rivenell be dismissed.

2. The Application of Mr Fraser be dismissed.

NOTE:  Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.