Smith v Media Monitors A.C.T. PTy Limited

[1996] IRCA 351

DECISION NO:  351/96

IN THE INDUSTRIAL RELATIONS COURT

OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY

DISTRICT REGISTRY  No  AI  1388  of  1995

Between  BETTY LORRAINE SMITH
Applicant

and  MEDIA MONITORS ACT PTY LIMITED

(A.C.N. 008 597 939)
Respondent

CORAM:     Judicial Registrar Linkenbagh
PLACE:       Canberra
DATE:          15 July 1996

REASONS FOR DECISION

Delivered ex tempore and revised from the transcript

This is an application pursuant to the provisions of Section 170EA of the Industrial Relations Act 1988 in which the applicant seeks a remedy arising out of the termination of her employment with the respondent. That employment subsisted between 28 January 1988 and 1 December 1995.

The applicant was employed as a Reader and her duties can generally be described as being one of a team of people whose task it was to read daily newspapers and extract from them clippings which contained items of interest to clients of the respondent.The clients’ interests were notified to the respondent in the form of a Profile provided on behalf of each of the clients.  It has to be said, that the job is quite a unique job and one which would require special skills on the part of those who undertake the work. 

The applicant's work was performed generally in the early hours of the morning and, in addition to a shift of three hours or more on each of five days a week between approximately 4 am and 7 am, the applicant did other work for the respondent at her home.  It goes without saying that the job requires special skills and there can be no doubt a high degree of the skill is necessary in each person who undertakes the work.  The applicant was engaged over a period of some years, as apparently were some of the other Readers in the workplace. 

The employment came to an end on 1 December 1995 when the respondent issued a letter to the applicant, which is attached to the application in these proceedings, and it reads in part:

As you may be aware, our sales of press services have not reached budgeted levels for some time and the loss of a recent major client has required a review of our operations in all areas with a view to re-positioning the company for growth in the future. 

As a result of the review, a number of measures to improve our operating performance have been put in place.  As labour is a major component of our costs, a thorough consideration of our needs, including skills and numbers, has, of necessity, been a part of that review. 

The letter goes on to say that the employment is terminated because the applicant has been identified as being in excess of operational needs.

The respondent commenced at the hearing because of the reversal of the onus of proof by Section 170EDA of the Act.  The respondent's evidence was that during 1995 it was conducting a general review of its operational efficiency and staff conditions and that in addition to that, on 24 November 1995, it was notified that one of its clients, which represented approximately 10 per cent of its gross revenue, was to cease its contractual arrangement with the respondent. The loss of that client put the respondent, in the words of its General Manager, Mr Prendergast, in evidence before me, "into crisis mode." 

Mr Prendergast's evidence was that a committee of managers in the respondent was established very quickly after 24 November 1995.  Various aspects of the operation of the respondent's business were reviewed with a view to minimising expenditure, and after that exercise the committee turned its attention to savings that could be made in the area of labour costs.  A decision was taken that the number of Readers employed by the company in Canberra should be reduced by two or three. 

On 29 and 30 November 1995, Mr Prendergast conducted an exercise of identifying which of the staff would be likely candidates for redundancy, and his process of elimination identified two persons of the rank of the applicant.  One of those persons had indicated an intention to resign in any event and Mr Prendergast then determined that the applicant should be the one whose position would be made redundant.  Another employee had indicated an intention to resign as well. 

On the respondent's case there was no consultation with staff or any employees' organisation, neither in relation to the proposal to make one or more positions redundant, nor as to the procedure by which those positions to be made redundant would be identified.  Mr Prendergast saw the applicant on 1 December.  While the evidence shows that there was some discussion between them at that stage, the evidence is also that the decision had already been taken, and at the meeting the applicant was handed the letter to which I have referred and from which I have quoted. 

Mr Prendergast's evidence is that the determining factor in his selection of the applicant’s position for redundancy was that her performance was not as good as that of other employees, in what is described as a "clip count".  The clip count is used to measure the productivity of the Readers.  The table relating to the clip count for January to November of 1995, which is part of exhibit D, indicates that the applicant had the lowest clip count of seven employees during that period.  The clip count is also used to calculate bonus payments to the employees.  The clip count is converted to a dollar figure using a formula, the details of which are not entirely clear to me, but which I accept involves some means of weighting the figures to take account of variations in the number of hours worked, and the style of newspaper read, by the various Readers in the course of their work. 

The table of bonus figures, which is also part of exhibit D, is not in respect of the same period as is the clip count table to which I have already referred.  Mr Prendergast's evidence is that the bonus figures are a more reliable indicator of productivity because in reaching the bonus figures, the weighting factors have been taken into account.  The bonus table shows the applicant as being the second lowest bonus earner for the period July 1994 to June 1995. Mr Prendergast's evidence was that that was the determining factor and that the employee whose bonus figures for the same period were lower than those of the applicant was one of the employees who resigned in any event.

As I have said, this is a job which involves, of necessity, a high degree of skill and accuracy and it must be very difficult for an employer to decide between competent employees when there is an issue of redundancy to be determined.  The applicant's case did not point to any other manner in which the employees could be separated.  The applicant's case is that there was no reason for her selection for the redundancy or, to put it another way, the respondent has not demonstrated that there was sufficient reason for selection of the applicant for the redundancy.  I am of the view that there was a valid reason for the termination of the employment of an employee as at 1 December of 1995.

The respondent is in breach of the provisions of Sections 170DC and DE(2) to the extent that there was no consultation either generally or in particular with the staff and the applicant prior to the decision being taken to make the applicant's position redundant and to terminate her employment.  If, in fact, the performance criteria or the bonus and clip count figures were the measure of performance, then the provisions of Section 170DC require the respondent to have at least put the matters to the applicant and given her an opportunity to explain the deficiencies or the apparent deficiencies in her performance based on those figures prior to the decision being taken.  The same factors are relevant to some extent in consideration of whether there has been a breach of Sections 170DC and DE(2). The failure to consult introduces an element of harshness, unjustness or unreasonableness to the whole process, and it is in that sense that there is a breach of Section 170DE(2).

The applicant also asserted that there was a breach of Section 170DF(1)(b)(d) and (e).  Those sub-sections of Section170DF relate in general to activity by the employee relating to participation in union activities, or making complaints, or participating in proceedings relating to the assertion of rights on behalf of the employee or employees in general.  I find that there is no evidence adduced before me today to support a finding that the termination of this employment was for any of those reasons or for reasons including any one or more of those reasons.

Certainly, the applicant was active in the area of making inquiries about entitlements, but equally, the respondent was engaged in the whole of 1995 in a process of re-evaluating terms and conditions of employment for all of its employees, and I note Mr Prendergast's evidence to the effect that he was appreciative of the fact that the applicant had made the complaint because that drew attention to aspects of the terms and conditions of the employment in the work place, not the least of which was that the employees had been being overpaid in some respects.

I turn then to the question of the appropriateness of a remedy.  The amendments to Section 170EE(1) and (2) which came into effect on 15 January 1996 apply to these proceedings and, in particular, those amendments require the Court in considering either reinstatement, or compensation in lieu of reinstatement, to take into account all of the circumstances of the case.  In this matter there are some circumstances which are particularly relevant to consideration of whether a remedy is appropriate.

The first is that on termination the applicant was paid the equivalent of eight weeks pay as a redundancy payment and that equated to $2508. She was also paid pro rata Long Service Leave of $686.34, or the equivalent of Long Service Leave in that amount, although strictly in all of the circumstances the respondent was probably not obliged to pay that to her.  I note that she was also paid 17½ per cent leave loading on unpaid annual leave at the time of termination in the sums of $414.95 and $47.25.  Those payments indicate an attitude of what might be described as generosity on the part of the respondent, and certainly the applicant has had the benefit of receipt of those moneys as at 1 December.

Another factor relevant to remedy is the conduct of the applicant in removing from the work place documents which were the property of her employer.  The evidence is that on 1 December the applicant was requested, both in the letter she received and orally, to return all property of the applicant, including a copy of the client Profile.  The applicant did not return the Profile on that day, although it was in her possession.  She told the Court that she was shocked and upset and did not know why she did not return the documents on the day, and also said that the folder and plastic sleeves in which the profile was kept were her own property.

I note, however, that she did not return the documents until after she had received a formal letter of demand from the respondent, which is worded in very strong terms, and that was on 19 December 1995.  I find that that conduct on the part of the applicant indicates an attitude which is a factor which I must take into account in determining the appropriateness of a remedy in these proceedings.  A further factor which is relevant to remedy is that on 22 June 1996 the respondent advertised for persons to fill positions for Readers in its Canberra operation.  The applicant had some telephone contact with the respondent and was invited to apply for a position, which she has done.

Mr Prendergast gave evidence that those applications have not been determined because of complicating factors to do with the arrangement of the respondent's business and the recent purchase by the respondent of a competing business.  It may be that there is a position available there for the applicant and I have no doubt that the respondent will consider her application on its merits along with other applications which are received and taking other factors relevant to the respondent's business operations into account.

Further, the applicant has not become re-employed since 1 December 1995 and there is no evidence before me whatsoever of any efforts on her part to obtain work in the meantime. I therefore must find that the applicant has not taken reasonable steps to mitigate her loss. Bearing all of that in mind along with the actual reason for the termination of this employment, that is, the genuine redundancy situation, and the fact that the breaches of the Act are what might be described as procedural breaches, and also bearing in mind the words of the Chief Justice in Nicholson v Heaven and Earth Galleries Pty Limited 126 ALR 223 that in considering the appropriateness of a remedy the Court must bear in mind whether or not the employment was likely to come to an end sooner rather than later, I can come to no other conclusion in this matter than that it is most likely that if the respondent had followed procedures which had not resulted in it’s being in breach of this Act the decision it would have made would have been that the applicant would have been selected for this redundancy in any event.

That may not be so, but it is my view on the evidence before me that it is very likely, particularly in the absence of any suggestions on the part of the applicant as to what other selection criteria may have been used.  It is very likely that the respondent in carrying out the difficult task of differentiating between members of a group of very competent employees had to use as objective a criterion as it could get and its measure of performance being the clip count and the bonus system has not seriously been challenged before me as a reasonable method of differentiating and on that basis it could well be said that objectively the applicant was the most likely person to be chosen for redundancy.

In all of the circumstances therefore, although I have found the respondent in breach of two of the provisions of the Act, I find that in the circumstances of this case it is not appropriate for me to make an order for reinstatement, nor is it appropriate for me to make an order for compensation.  And the orders then that I make are formal orders that the respondent is in breach of the provisions of Sections 170DC and DE(2) of the Act, and that in all the circumstances of the case I decline to make an order for reinstatement or compensation.

I certify that this and the preceding 5 pages are a true copy of the Reasons for Judgment of Judicial Registrar Linkenbagh

Renee Cauchi:
Associate:

Date:   31 July 1996

Representative of the Applicant:   Mr. M. White
  Media Entertainment and Arts Alliance

Representative of the Respondent:          Mr. M. Long
  Confederation of A.C.T. Industry

CATCHWORDS

INDUSTRIAL LAW  - TERMINATION OF EMPLOYMENT -UNLAWFUL TERMINATION - REDUNDANCY - BREACHES OF ACT - CIRCUMSTANCES OF THE CASE - NO REMEDY APPROPRIATE

Industrial Relations Act 1988, S 170 DC DE DF(1) EA EDA

BETTY LORRAINE SMITH V MEDIA MONITORS A.C.T. PTY LIMITED

No. AI  1388     of     1996

CORAM:     LINKENBAGH JR
PLACE:       CANBERRA
DATE:          15 JULY 1996

IN THE INDUSTRIAL RELATIONS COURT

OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY

DISTRICT REGISTRY  No  AI  1388  of  1995

Between  BETTY LORRAINE SMITH
Applicant

and  MEDIA MONITORS ACT PTY LIMITED

(A.C.N. 008 597 939)
Respondent

CORAM:     Judicial Registrar Linkenbagh
PLACE:       Canberra
DATE:          15 July 1996

MINUTES OF ORDERS

The Court finds that the respondent is in breach of the provisions of Sections 170 DC and 170 DE (2) of the Industrial Relations Act, 1988 and in all the circumstances of the case declines to make an Order for reinstatement or compensation.

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