United Voice v Wattyl Australia Pty Ltd
[2011] FMCA 692
•30 August 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| UNITED VOICE v WATTYL AUSTRALIA PTY LTD | [2011] FMCA 692 |
| INDUSTRIAL LAW – Workplace agreements – obligation to “consult” with employees in respect of proposals to be implemented that will impact on “terms and conditions of employment” – consideration of content of the obligation to “consult” – application for interlocutory injunction to restrain employer from proceeding with workplace restructure involving redundancy of employees. |
| Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and Ors (CEPU) v QR Ltd and Ors [2010] FCA 591 Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, 4th ed. |
| Applicant: | UNITED VOICE |
| Respondent: | WATTYL AUSTRALIA PTY LTD |
| File Number: | BRG 751 of 2011 |
| Judgment of: | Burnett FM |
| Hearing date: | 30 August 2011 |
| Date of Last Submission: | 30 August 2011 |
| Delivered at: | Brisbane |
| Delivered on: | 30 August 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr R. Reed |
| Solicitors for the Applicant: | Hall Payne Lawyers |
| Counsel for the Respondent: | Mr J.E. Murdoch SC |
| Solicitors for the Respondent: | Australian Business Lawyers & Advisors |
ORDERS
That the Application in a Case filed 29 August 2011 is refused.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRG 751 of 2011
| UNITED VOICE |
Applicant
And
| WATTYL AUSTRALIA PTY LTD |
Respondent
REASONS FOR JUDGMENT
(As corrected)
For many years the respondent, Wattle Australia Pty Ltd, has conducted operations at facilities located at Rocklea. The facilities included, among other things, a warehouse and tinting shed. On 17 May 2011, the respondent announced an operations restructure which would directly affect the persons employed by it at its Rocklea premises, and in particular those employed in the warehouse and tinting shed. As at that date approximately 23 of its employees worked in the warehouse conducted by the respondent at Rocklea. Twenty-one of the 23 warehouse and tinting shed employees were members of the applicant, United Voice, a registered industrial organisation and the applicant in this application.
On that date, at some time between 10.30 and 11.00 am a meeting was convened of the warehouse and tinting employees and an announcement was made concerning the respondent’s proposals for the Rocklea site. Mr Courtney, the respondent’s National Distribution Manager, says he delivered an announcement with the aid of a pre-prepared document which has been exhibited in the proceedings, which included him reading out statements to this effect:
“The business has undertaken a comprehensive review of its Australian and New Zealand operations with the objective of creating the most efficient operational structure possible. This is critical for the future of the business particularly in response to the loss of volume from Bunnings. A number of changes to our manufacturing and distribution footprint are planned. The outcome of the proposed changes will have an impact on a number of our employees and that this notification signals the start of the consultation process with our employees and the relevant unions. The proposed changes are listed below:
(1) Queensland Warehouse. The Rocklea warehouse has planned to cease operation and the site vacated and prepared for sale. The Darra warehouse is planned to be converted into a cross-dock facility with Queensland customers to be supplied from the Bessemer Street warehouse in Sydney. The other functions at Rocklea are planned to be relocated in the vicinity of the current Rocklea location.”
The announcement then proceeded to advise in relation to other matters not relevant to this application. Mr Courtney says in an affidavit filed in the application that he then answered a number of questions that were put to him by employees. In broad terms, so much of the foregoing is agreed, however dispute arises as to the nature of the questions asked and more particularly the answers provided. In particular, Mr McMullin a storeman employed in the warehouse who is also the union delegate, recalls questions and answers in the session immediately following the announcement in these terms: he stated, commencing at paragraph [24] of his affidavit:
“Mr Courtney announced that the plan is for the Rocklea warehouse to cease operation and the site will be vacated and prepared for sale. During the meeting of 17 May 2011, Mr Courtney stated words to the following effect, “The whole of the workforce at the Rocklea site will be made redundant.” At the conclusion of Mr Courtney’s address the workers asked various questions of him. A worker whose name I cannot recall asked the question in words to the following effect, “Will there be any jobs in the state or anywhere else in the company?” To which one of the management representatives responded in words to the following effect, “No. There are no other jobs for you within Wattle or within Solver.”
At that meeting, a worker whose name I cannot recall inquired of Wattle in words to the following effect, “Does that mean that everybody is going?” A management representative responded in words to following effect, “100 per cent.” A worker whose name I cannot recall made an inquiry in words to the following effect, “If we find other jobs will we be able to leave early?” Wattle responded to that question in words to the following effect, “We will judge that on a case by case basis.””
Mr Courtney has a different recollection. He says, commencing at paragraph [7] of his affidavit:
“After reading the document, I also said words to the following effect, “The business will look to redeploy or offer alternative employment where possible. This will be co-ordinated by Lynne Peter.” And after delivering the announcement I answered a number of questions asked by employees whose names I cannot recall. I cannot recall all the questions that were asked. I can recall the following questions and my responses to those questions using words to the following effect. Employee, “Is the whole site affected?” Me, “Yes.” And employee, “What will happen to the store?” Me, “The store will relocate within a close proximity to Rocklea.”
And employee, “If I secure a job earlier, will the company pay redundancy?” Me, “Each request for an early release will be looked at on a case by case basis taking into account the business needs.” And employee, “If I retire before closure will I get redundancy?” Me, “I will get back to you within two weeks to confirm my response, however it is safe to assume that each request for an early release will be considered on a case by case basis.” At the end of the meeting I said words to the following effect, “I will be available on site until 20 May. If any employee has any questions please come and see me.””
This divergence of recollection has significance in this dispute for reasons I will address shortly. However, before doing so, other relevant facts ought to be observed. Following the written and oral notice of 17 May, future activity occurred. In an employee announcement of 6 June 2011 the respondent advised employees under the heading “Operations Restructure Update”, in the following terms:
“On 17 May 2011 Wattle announced that it was proposing to restructure its operations and an announcement was made for employees and the relevant national office and state union branches. Since that time Wattle has undertaken consultation with employees and union organisers regarding the proposed changes. Also the 17 May announcement indicated that the consultation period would close on 17 June, is apparent from the outcome of consultation discussions that both the employees and union organisers wish it to move to the next phase of the process.
Therefore this announcement is to advise that from 10 June the consultation period will close and we will move to the next phase of working through how the process will occur. We will continue to have ongoing discussions and consultation with employees and unions from this point forward, but these discussions will focus on the change processes at the affected sites. Should you have any questions, please direct them to your supervisor or manager.”
No particulars have been provided but it would seem, at least, that before the notice some employees were provided with written estimates of redundancy payouts. The individual estimates varied reflecting the individual circumstances, particularly their classification and periods of service.
Mr McMullin, however, expressed the view that consultation had been unsatisfactory, at least insofar as it had addressed the termination date. In an email he sent to a member of management on 20 June 2011 he stated:
“I am one of the employees at the Rocklea distribution centre in Queensland that are being made redundant. On 17 May 2011 Noel Courtney advised myself of the company’s intention to make all warehouse personnel redundant in the near future. When asked about a settlement or termination date, Noel could not provide a date and ..... that it would be no earlier than 31 August 2011. Repeated requests with Brad Astill, acting distribution manager, has failed to produce and provide an appropriate response. Martin Robb sent out an employee announcement on 6 June stating that the consultation period for the restructure process would close on 10 June but this failed to include the requested termination date. This employee announcement directed us to seek answers from our supervisors or managers. But as stated earlier, they have either been unable or unwilling to provide a response. As you can appreciate, I need to be able to plan for my future and provide for my family both financially and emotionally. The inability to provide accurate and timely information is causing an uncomfortable amount of stress to my family and I.”
Although it is addressed in the first person and appears to be directed to Mr McMullin’s personal circumstances, it is difficult in the circumstances of this case to see how he could not also have been addressing matters on behalf of the membership, given the nature of the inquiry, which was addressed to the generic issue of a termination date and his status as the employee’s representative.
The respondent proceeded to provide the employees with an update on 24 June 2011. Relevantly, in its update entitled “Operations, Restructure – Update” it stated:
“On 17 May 2011 Wattyl announced restructuring of its operations and since that time has undertaken consultation with employees and union organisers regarding the proposed changes. As a result of this process, I can confirm that phase one of the restructure will take place as planned.”
And the various dot points relevant to this case include, dot point one:
“The consultation and planning process has unveiled a number of options which may result in the reduction of the number of planned job losses. We will continue to evaluate these options in detail over the next six to eight weeks.”
Next dot point two:
“The closure of the Rocklea warehouse will proceed as planned during August.”
It concluded with the observation:
“There will be further communication at site levels to advise progress and planning on the restructuring process.”
It is to be observed that this operation’s restructure update was forwarded to all employees, and as the minute itself makes apparent, it was directed to circumstances at various sites. The statement was also premised upon the contested premise that there had been consultation. As I have noted, the evidence presently before the court on this issue is limited. In making that observation, which I emphasise is not a finding, I note that the affidavits of various other employees represented by the applicant contend they consider they were not consulted properly. However, those affidavits have to be read with a degree of caution, for as Mr Murdoch in his submissions submitted, the expressions are or constitute loaded questions of fact and law, and are not helpful in the current context, given that they are devoid of any detail to support the basis for the expressed opinion. However, they do at least assist marginally in developing a basis for a prima facie claim on the issue of consultation.
However, in my view, the real contest in this proceeding arises from the events which follow 30 June. On 30 June a meeting was held on site during which the respondent’s director of transformation, Mr Martin Robb, informed the attendees that the respondent had decided to retain two permanent tinting roles. Mr McMullin recalls an exchange at the meeting and in his affidavit stated it proceeded in the following manner. Commencing at paragraph [52] he stated:
“During that meeting Mr Robb outlined that Wattyl had decided to retain two permanent tinting roles. Mr Robb said words to the following effect, “It was always our intention to retain these roles”. An employee inquired of Wattyl in words to the following effect, “Where will these employees be sourced from?” A representative of management responded to that question in words to the following effect, “We’ve got four people with the skills that are needed to perform those jobs, two are doing the jobs now and two are warehouse employees. We will be going through the process of asking these employees individually whether they would be prepared to stay on in such a role”. At the conclusion of the meeting on 30 June 2011, my fellow United Voice delegate Mr Glenn Williams, who was also employed by Wattyl as one of the tinting shed employees stated words to the following effect, “This is not on because you did not reveal it during the seven week consultation period. This is going to cause a blue”.”
A subsequent memo was then forwarded to all Rocklea employees, which succinctly summarised the position, particularly at points one, two and three where the memo noted:
“(1) Rocklea closure date. As we discussed at the meeting on 30 June, the current plans are working towards a planned warehouse closure date of 31 August. You will receive confirmation one month in advance of the closure date. We will be seeking two employees to finish several weeks after this date so that some final site work can be completed. If these dates do change, we will expect the impact to be no more than a delay of two to three weeks. If this does occur, we will communicate this immediately.
(2) Tinting positions. Two tinting positions are still required on an ongoing basis and therefore these two positions are not being made redundant. The resulting process for the four employees with tinting qualifications and experience will be discussed with them individually. Given the feedback we have received on this issue on 30 June meeting, I imagine this news will be a source of frustration to some employees. The retention of two tinter positions should be viewed as a good outcome. While most employees appear to have jumped to a certain conclusion around the redundancies, nothing is certain until the process has been worked through and employees have received a formal confirmation of redundancy. We’ve sent a copy of this letter to the Queensland and national office of United Voice and would suggest you to discuss the matter further with them if necessary.
(3) Redundancy process. An outline of the process is given below based on a closure date of 31 August. If for any reason there is a delay, the dates listed here may move out by several weeks.”
A process which I need not now particularise was explained. Four employees were identified as suitable for retention as tinters. Those employees have not been offered redundancy. The difficulty is that they would each like to take redundancy because of their personal circumstances. A notice of dispute was given in accordance with the provisions of the terms of clause of the Wattyl Group Enterprise Agreement 2010. The matter then proceeded to FairWork Australia. Two warehouse employees have indicated a willingness to be retained and would prefer that course to redundancy. However, because of regulatory issues, that proposal is unacceptable.
On Thursday 24 August 2011, I ordered that an injunction issue to restrain the respondent from terminating the two warehouse employees. Those orders were made principally because there appeared to be an issue concerning the advice to employees that all employees would be made redundant as the basis of dispute. If that was decided in the applicant’s favour, the two warehouse employees were arguably misinformed with respect to the prospect of ongoing employment and opportunities that might be available to them.
That is assuming there had been adequate consultation in respect of those matters. That matter would plainly be relevant to their attitude to redundancy and the balance of convenience factors favoured to maintaining the status quo until that issue was resolved.
In his initiating affidavit, Mr McMullin complained that until 3 August, no opportunity had been provided to the employees or United Voice to discuss the possibility of staff retraining. Other arguments are submitted concerning opportunities in the warehouse, however, I will not address them in the face of the applicant’s claim in respect of those matters being founded in speculation, particularly in the face of evidence now adduced by the respondent that the warehouse will close with effect from 31 August and that no functions performed by warehouse employees to that time have been or will be transferred to the respondent’s Rocklea trade paint centre and there will be no warehouse related jobs created at the trade paint centre. It follows that the only two jobs in contention on the evidence before me are the two tinting jobs which I have spoken of.
The applicant, however, seeks to extend the injunction to eight other employees to restrain the respondent from also terminating their employment pending resolution of the proceeding. In particular, reliance is had upon the allegation that there has been a failure to effect proper consultation. Clause 9 of the Enterprise Agreement provides for general consultation in the following terms:
“9. Consultation
(a) Where Wattyl has made a decision to introduce changes to production, program, organisation, structure, or technology that is likely to have significant effects on employees at a site, it will consult with the employees who may be affected by the proposed changes, the delegates and the union.
(b) Significant effects include termination of employment, major changes in the composition, operational size of the site’s workforce or in the skills required, the elimination or diminution of job opportunities, promotion opportunities or job tenure, the operational hours of work, the need for retraining or transfer of employees to other work or locations, and the restructuring of jobs.
(c) Consultation shall be genuine and comprise an exchange of views and information. It shall provide a genuine opportunity to influence the decision being made prior to final decision being made or changes being introduced.
(d) To meet the requirements of this clause, Wattyl will provide in writing to the employees concerned, the delegates and the union all relevant information about the changes, including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees.
(e) The parties recognise that consultation on business plans and business results are cleared, selling or passing on of business has to in accordance with the various laws and other such requirements that Wattyl must comply with.”
And relevantly -
“(f) Where Wattyl proposes to consolidate any existing sites, negotiations on the implementation and administration of the changes will take place between the national office of the union and Wattyl management.”
And, more particularly, in terms of redundancy, clause 45 provides:
“45. Severance and Redundancy
Severance and redundancy are provided for in the NES.
(a) Selection criteria. When the need to make redundancies as established, there will be a consultation between Wattyl and the delegates and the union to discuss the areas or competencies that Wattyl considers essential for its future operational requirements. Essential employees from these areas or those with the required competencies will be excluded from redundancy. Volunteers will then be called for and in the case of insufficient numbers, then Wattyl will retrench on the basis of last on first to go. In the event that excessive volunteers are provided, Wattyl will select the persons to be made redundant.”
The balance of the provision then deals with other issues. Here, a prima facie case arises, with respect, to consultation. However the fact remains that the failure to consult must represent more than a mere hollow loss to warrant equitable or other relief. That is to say, there must be some causal link between the breach of the Enterprise Agreement and the remedy.
In this case, for instance, against a background of redundancy there is proposed redundancy for all but two employees. Only those employees who are genuinely interested in the remaining positions and could be said to be causally impacted by the failure, if it is established, to consult such as to warrant the aid of equity to preserve their intended rights. Otherwise, although offended by the breach, if established, the real interest of other employees is no higher than that of other members of the community to see that the workplace laws are complied with and where they are not, those who contravene them are adequately punished.
There is no evidence from the eight employees to assist that case. In each instance, they give evidence to this effect, that is, that they do not wish for their redundancy to take effect until the determination of these proceedings and that they have enjoyed the benefit of being adequately consulted in accordance with the Enterprise Agreement about the restructure. The fact remains that none of these employees have expressed any desire or interest in the only two positions, which the evidence demonstrates, are available, they being the two tint positions. I should note in passing that the affidavits have been prepared in part, premised upon a belief by the employees that it was indeed the intention of the respondent to maintain or preserve in some form or another some warehousing positions.
As I have observed, the only evidence before me is the positive evidence of the respondent. It is not their intention that warehouse positions will be preserved. Respectfully, the complaints of the employees on this point are speculative, and I would have thought the positive evidence sworn to by the respondent should put that speculation to rest. In coming to my view about the utility of consultation, I am mindful of the observations particularly made by Logan J in two decisions which I will refer to. The first in National Tertiary Education Industry Union v Central Queensland University,[1] his Honour quite properly observed the importance of genuine consultation and the utility to achieve that being suspicion and mistrust in the workplace with the result of potential for industrial disharmony feed upon an absence of candid communication between employer and employee, not on the presence of such communication. Consultation at least allows employees, or where appropriate their trade union, to influence the taking of a decision by an employer. Likewise in CEPU & Anor v QR Ltd[2] his Honour, Logan J, in considering the nature and object of a consultation referred to Toohey J in TVW Enterprises Ltd v Duffy (NO 2) (1985) 7 FCR 172 where he observed: [3]
““Consultation” …is no empty term. Of course finality of decision making rested with boards of management…Well may it have been that employee consultation about the partial privatisation itself may have been unlikely to alter that announced position but it does not follow that how it was to be implemented was a sterile subject. Further, it is not for an employer bound by a clause such as cl 36 to make a priori assumptions about the outcome of consultation. As cl 36.1 states a genuine opportunity to influence the outcome must be extended”.
[1] [2008] FCA 481
[2] [2010] FCA 591
[3] At [145].
As his Honour subsequently noted at the penalty hearing the purpose of consultation clauses:
“…is to facilitate a change that is necessary, but to do so in a humane way which also takes into account and derives benefit from an interchange between a worker and a manager”.
These clauses involve a recognition that good workplace relations, and indeed good management, in modern times, benefits from consultation with a work force and an interchange between worker and management. It should not be overlooked that his Honour’s observations were made in the context of penalty hearings. I do not cavil with his Honour’s observations and in fact accept and adopt them. However, respectfully, they do not assist in this instance. What the applicants seek here is, in effect, specific performance of the bargain it reached, and is constituted in the Enterprise Agreement, and in particular of the terms of clause 9. It, in effect, contends without an injunction to preserve the status quo, its members would be terminated. Accordingly, it submits if it succeeded at trial, they would only have then common law remedies available, and in these circumstances that remedy is, in effect, no remedy at all.
However, as I have earlier noted, that if the employees sought to benefit from the injunction, the injunction granted to the other two employees, they too needed to be in the mix for consideration for the two tending positions. As they are not, a question of utility as to an order for specific performance remains alive. In Meagher, Gummow, and Lehane’s Equity: Doctrines and Remedies, fourth edition, at paragraph 20-145, the learned authors there addressed the exceptions to the remedy for specific performance which included an exception that specific performance would be futile. There the learned authors, in particular, made observation by reference to a number of authorities which provide that:
“While it may well be possible for a defendant to perform his obligations, a court may refuse specific performance if performance would be futile.”
In particular I note the authors’ summary of Tito v Waddell (No. 2),[5] where Sir Robert Megarry VC refused to grant a decree of specific performance which would have been futile in a sense of pointlessly wasting time and money by compelling the planting of isolated plots, access to which by the owners would be difficult or impossible, with coconut trees unlikely ever to bear fruit. Respectfully, in a case where employees are not seeking to enjoy the opportunity to negotiate and seek consultation in respect of negotiation for positions which are available to them and in respect of which they wish a right to apply for, it seems to me that any specific performance of a term which permits negotiation would be equally inutile.
[5] [1977] Ch 106; [1077] 3 All ER 129
On the present state of evidence it seems that any claim by the eight would fail in limine for want of an effective remedy. It follows that on that basis while an issue in fact in concept can be prima facie demonstrated, the cause of action itself is likely to fail, and on that basis there is no prima facie case entitling relief to be granted. In any event, even if I were wrong in my assessment of the strength of the applicant’s case, I consider the balance of convenience favours the respondent. As I had earlier noted, the preservation of a right to negotiate reflected in the consultation clause, clause 9, is inutile in circumstances where the relevant employees only wish for redundancy themselves or at least have not expressed a desire to apply for the two positions which the respondent wants to have retained.
Further, while an undertaking as to damages has been offered, in practical terms, given the short time that will prevail between 31 August and a judgment following the trial which is listed for hearing a short time after that date, any judgment if one was to be obtained in favour of the respondent would be largely illusory given the quantum of damages and the costs that would be accorded in enforcement if that were required. Finally for the respondent there are the attendant and unquantifiable costs involved in keeping the employees on staff following or pending the outcome of proceedings. By that I refer not to the costs which might form part of those subject to the undertaking of damages, that is the wages that would be paid, but rather the attendant on costs, and including those costs that fall within the general administration overhead, which are unlikely to be capable of reasonable computation and proof in the event that the respondent is successful in the proceeding.
In addition, there is the protraction of the overall restructure of which this is part. No doubt the addition of eight further employees will further complicate these matters involving the addition of further management time and attention, which such time and attention cannot be adequately compensated for. On balance, I do not consider that the balance of convenience favours the applicant’s claim, and I would refuse an injunction on discretionary grounds if nothing else. The application is refused.
I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of Burnett FM
Date: 20 December 2011
Corrections:
Front page, insert new citation: Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and Ors (CEPU) v QR Ltd and Ors [2010] FCA 652
Page 11, Paragraph 26 Line 19: Delete from “Consultation”
Page 11, Paragraph 27: Delete paragraph
Page 11, Insert new paragraph 26 Line 19 from “Consultation”
Page 11, Insert new paragraph 27
Delete the word “McMullen” and insert “McMullin”
[4] Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and Ors (CEPU) v QR Ltd and Ors [2010] FCA 652 at [49]
0
3
0