Kagan v Primus Telecommunications

Industrial Relations Commission (NSW)|2003-12-17|Before: Sams DP

CITATION : Burden and Barnardos Australia [2003] NSWIRComm 454 APPLICANT: PARTIES : Nadia Burden RESPONDENT: Barnardos Australia FILE NUMBER: 1064 of 2003 CORAM: Sams DP Termination of employment - unfair dismissal - sales and marketing position for a major charity - reasons for redundancy - whether bona fide redundancy - financial results - whether applicant given reasonable notice - whether applicant consulted - whether alternative options considered - redundancy provisions under the Award - whether dismissal harsh, unreasonable or unjust - principles of unfair redundancy. CATCHWORDS : Held, unnecessary to decide whether dismissal bona fide redundancy - applicant given no notice of redundancy - no consultation - no alternatives considered or asked for - redundancy pay - dismissal unreasonable - reinstatement impractical - compensation to include superannuation component - orders made. LEGISLATION CITED : Industrial Relations Act 1996 Colosimo and Banana Traders of Australia Pty Ltd t/as P W Chew & Co [2003] NSWIRComm 72 Huseyin Arslan and others and Berkeley Challenge (Commercial) Pty Limited and Others [2001] NSWIRComm 45 Kagan v Primus Telecommunications (Aust) Pty Ltd (No.2) [2000] NSWIRComm 185 Kenefick v Australian Submarine Corporation Pty Ltd (No 2) (1996) 65 IR 366 Neal and Shaw McDonald Pty Ltd and another [2003] NSWIRComm 298 CASES CITED : Outboard World v Muir (1993) 51 IR 167 Re Application for Redundancy Awards (1994) 53 IR 419 Shop, Distributive and Allied Employees' Association, New South Wales and W D & H O Wills Holdings Ltd [2000] NSWIRComm 98 Quality Bakers of Australia Ltd v Goulding and Another (1995) 60 IR 327

APPLICANT: Mr D O'Sullivan (Solicitor) Turner Freeman LEGAL REPRESENTATIVES: RESPONDENT: Mr R Hutchinson, Employers First

JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: SAMS DP 17 December 2003 Matter No IRC03/1064 Nadia Burden and Barnardos Australia Application by Nadia Burden re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION [2003] NSWIRComm 454

1 This matter concerns an application pursuant to section 84 of the Industrial Relations Act 1996 (the 'Act'), filed by Nadia Burden (the 'applicant'), in which she seeks relief from her alleged unfair dismissal by Barnardos Australia (the 'respondent') - a well known children's charity. At the time of dismissal the applicant was employed as the respondent's Merchandising and Sales Co-ordinator. She commenced employment on 22 May 2000 and was dismissed for reasons of alleged redundancy on 7 February 2003.

2 The applicant was provided three weeks notice during which she looked for alternative employment. Redundancy payments were made equivalent to 8.75 weeks pay in accordance with the relevant provisions of the Clerical and Administrative Employees (State) Award 296 IG 619 (the 'Award').

3 Shortly stated, the applicant contended that her termination of employment was not a bona fide redundancy, and even if it was, her redundancy was unfair within the meaning of Pt 6 ch 2 of the Act.

4 The application was subject to conciliation proceedings on 27 March 2003. However, as the matter could not be resolved, the Commission made a finding of unsuccessful conciliation and issued directions in preparation for the arbitration of the claim. These directions were later amended and the original hearing dates were rescheduled.

5 The applicant claimed she did not receive a job description when she was first employed. However, her duties were primarily to secure orders for products the respondent provides in order to raise funds for its charity work. The major activity was the Barnardo's Christmas card range. The applicant said that this work involved approaching businesses directly, advertising the product and updating information on corporate clients.

6 The applicant was shown her performance appraisal dated 20 September 2001 and her letter of appointment as Sales and Merchandising Co-ordinator of 18 July 2001. She agreed that the criteria of major tasks and responsibilities were identical in both documents. However, she emphasised that the performance appraisal was not her job description.

7 The applicant supervised two employees - the Warehouse Manager, Mr John Rivers and a Merchandising Assistant, Ms Sheree Watson, who was employed during peak periods from September to December. The applicant stated that her relationship with Mr Rivers was difficult. Mr Rivers was a senior citizen who had been with Barnardos for many years and was set in his ways. She believed he had a negative attitude. She said he would often make sexist comments and disparaging remarks about the organisation, management and other staff. When Ms Watson was employed in September 2002 for three months, the applicant claimed Mr Rivers had told her "you know Sheree is going to take over your role."

8 On 12 December 2002, the applicant met with the respondent's Marketing Director, Ms Glynis Sequeira. The applicant's evidence was that at this meeting the following exchange took place: We held our meeting and Glynis said words to the effect of " Last year I had to convince the Board to continue with this program. " I asked Glynis " Will I still have the job here next year ?" and Glynis answered " I want you to come back with a plan to show me how you are going to get the 3 big accounts that we need. Come back and tell me what changes you are going to make, what John is going to do, how you are going to get the sales next year. If you have to take the clients out to lunch to get the orders, I want you to take them to lunch, whatever you have to do ."

9 The applicant interpreted this conversation to mean that she would have to work extremely hard to meet the department's targets. She proceeded to formulate a business plan for the next year. The applicant denied she had any suspicions that her job may have been in jeopardy. Indeed, she had told Mr Rivers that the meeting had "gone well." Ms Sequeira had emphasised that she would need to go to great lengths to convince the Board to keep the marketing program going. The applicant said the same warning had been given a year earlier. When the applicant asked if she would "still have a job here next year," Ms Sequeira had not answered.

10 The applicant was shown the notes of meetings between herself and Ms Sequeira on this day and 20 January 2003. She said she had never seen these notes before and had never asked in the later meeting whether her "job was on the line." Moreover, she could not recall Ms Sequeira making notes at these meetings.

11 The applicant agreed she was responsible for the budget and sales figures in her area of the marketing department. These results would be constantly reviewed. She said she had no responsibility for the wages or conditions of other employees.

12 On 9 January 2003 the applicant met again with Ms Sequeira to review the situation. She said there was no mention of redundancy at this meeting.

13 On 20 January, the applicant was requested to attend a meeting with Ms Sequeira. It was at this meeting the applicant was informed she was to be made redundant. The applicant worked through her three weeks notice of termination. During this time, she noticed certain discrepancies in a sales report and reported it to Ms Sequeira. Ms Sequeira denied there was any discrepancy in the reports. The applicant also spoke to two Board members during this time; one of whom, Mrs Joan Groth had expressed surprise that the applicant had been made redundant.

14 The applicant stated that at no time during her notice period was she offered any alternative positions with the respondent; notwithstanding that a new position had been advertised at Waterloo. Another position was advertised after her redundancy. She said she would have gladly transferred or taken a demotion rather than lose her job.

15 The applicant said that at no time was she: 1. Given any notice of her redundancy. 2. Told of the criteria or selection process for her redundancy. 3. Provided with a financial breakdown explaining why she was not meeting her targets.

Given any opportunity to make suggestions for cost cutting. 5. Given an opportunity to defend her position. 6. Offered to work part time or on a " commission only " basis.

16 The applicant believed that, as all of the respondent's projects ran at a deficit, her redundancy was not genuine. The applicant denied that her reports to Ms Sequeira in January 2003 were intended to be suggestions for cost cutting.

17 The applicant claimed that after Ms Watson's contract had been extended, her assistant now performed her former duties. She believed that, even if her dismissal was a bona fide redundancy, she should have been given priority for any new positions. The applicant acknowledged that Ms Watson was offered her new role in December 2002; sometime before she was made redundant. The applicant believed that she could perform the tasks Ms Watson was now required to perform.

18 The applicant claimed that Ms Sequeira did not mention two data entry positions created in the marketing department. She agreed these positions were advertised internally before her redundancy and that she had not applied for either of them. She said this was because she didn't believe she would be successful.

19 The applicant's evidence was that she had responded to numerous job advertisements, but had been unable to find work until June 2003. Her new job was for a clothing importer at $135 per week less than she had been earning at Barnardos.

20 Mr Malcolm Sare, the applicant's husband, gave affidavit and oral evidence in support of his wife. Mr Sare agreed he had not been present at any of the meetings at the workplace involving his wife.

21 It was Mr Sare's evidence that his wife was very distressed when she was made redundant on 20 January. She had not been given any warning and was not told the terms of her redundancy. Mr Sare said both he and his wife were surprised and shocked by her redundancy. Mr Sare said his wife became tired, frustrated and unhappy. She lost confidence and was angry that her redundancy was not genuine, in that new positions were advertised after her redundancy.

22 Mr Sare gave evidence of his wife's numerous attempts at securing alternative employment. Many hours had been spent on computer searches and submitting employment applications. He said his wife became very stressed and short tempered with her inability to find another job. This had caused her to question their marriage plans. While they did go ahead with the wedding (in April 2003) they had not taken a honeymoon.

23 Mr Sare acknowledged that he had no medical or other qualifications to make the observations he made about his wife's health.

24 Ms Glynis Sequeira has been the respondent's Marketing Director for four years. She has worked for Barnardos for twelve years. She described the applicant's primary role as the promotion and sale of Christmas cards through the Barnardos' Christmas card program. Ms Sequeira believed the applicant was given a new job description on 18 July 2001 when she was appointed Sales and Merchandising Co-ordinator.

25 Ms Sequeira provided details of the respondent's financial returns for the past three years. These results disclosed budgeted income from 1 July 2002 - 30 June 2003 was $687,340.00 gross, whereas actual income was $329,502.00. Ms Sequeira added: The expenditure budget for the year 1 July 2002 to 30 June 2003 was $586,320, while actual expenditure was $303,073. Comparison of the figures provided the following results: 1. A profit of $101,020 was budgeted for the year 1 July 2002 to 30 June 2003. 2. In assessing the situation in January 2003, taking into account expenses to be incurred to 30 June 2003, it was apparent that the department would suffer a loss of $12,245. 3. Following redundancies and other cost cutting measures, when actual expenditure is deducted from actual income, a net return of only $26,429 is given for the year 1 July 2002 to 30 June 2003.

26 The majority of Christmas card income was obviously generated in the second half of the year. Ms Sequeira said that this meant it was most unlikely the applicant would have generated sufficient income to avoid her redundancy in the first half of 2003.

27 Ms Sequeira gave evidence that at the time of the applicant's redundancy there were 14 employees in her department. There are now 15 employees as a result of the transfer of two employees to her area in November 2002.

28 Ms Sequeira's evidence conflicted with the applicant's evidence as to what was said in the meeting of 12 December 2002. Ms Sequeira claimed the applicant opened the meeting by asking, "is my job on the line." Ms Sequeira said she and the applicant then discussed the poor sales figures. Ms Sequeira told the applicant she could not guarantee her job next year. She asked the applicant to review the figures and prepare a report to review and identify cost savings and staffing options, including "commission only" work.

29 Ms Sequeira said she had also told the applicant she had fought hard with the Board to save the department. The applicant had asked if she should start looking for a job. Ms Sequeira confirmed that there was nothing in her handwritten notes about the applicant's job security.

30 Ms Sequeira said she made notes of this meeting in the usual way, which were typed up later. Ms Sequeira's notes of this meeting were in two parts. This was so, she claimed, because there had been a lunch adjournment. The applicant did not believe there had been two meetings or that the meeting had been adjourned.

31 A further informal meeting was held on 9 January. Ms Sequeira said that the applicant hadn't examined any staffing options. However, there was no firm indication, at this stage, that the applicant's position was to be made redundant.

32 Ms Sequeira met the respondent's CEO, Louise Voight and Company Secretary, Mr Patrick Kerlin on 17 January to review the situation. Ms Sequeira met Ms Voight again on 20 January, when it was decided that the position of Sales and Merchandising Co-ordinator would be made redundant.

33 Ms Sequeira said she had considered a number of options to reduce expenditure. She accepted that other employees had not been considered for redundancy, nor had part time work been considered. Ms Sequeira claimed that "commission only" work had been proposed. Despite the respondent employing 200 full time employees, Ms Sequeira stated that, at the time, there were no job vacancies posted on the internal intranet service.

34 Ms Sequeira informed the applicant of her redundancy that same day at 2:00pm. Ms Sequeira denied saying that it was a Board directive, rather the CEO and herself had made the decision.

35 Ms Sequeira said that she informed the applicant that she would receive eight weeks' severance pay and three weeks notice. However, as the Company Secretary was on annual leave, confirmation of her entitlements was not able to be made until his return on 29 January 2003.

36 After the meeting, Ms Sequeira made notes of what had been discussed. She did not do so during the meeting because she didn't believe it was appropriate to do so during a termination meeting.

37 Ms Sequeira explained that it is quite likely Board members would have been surprised by the applicant's redundancy. This was because the Board is not involved in the hiring and firing of staff and the next Board meeting was not scheduled until 11 February.

38 Ms Sequeira claimed she did discuss alternative employment options with the applicant - in particular, two data entry positions. Ms Sequeira said the applicant was not interested in the jobs as they were not in sales. Because of this, the notes of the meeting do not record these positions being discussed; nor was there any note of discussions about other alternatives. In respect to the job at Waterloo and the receptionist/administrative position, Ms Sequeira said both jobs were advertised in March 2003 - after the applicant's redundancy. The applicant did not apply for either position.

39 Ms Sequeira said it was true that welfare programs were not designed to be income generating. However, the purpose of the marketing department was to generate income to supplement government grants for the welfare programs. All income generating departments were expected to meet budget and generate income.

40 Ms Sequeira stressed that the applicant's termination of employment was a bona fide redundancy. Her position was not replaced and her duties were distributed amongst other staff.

41 Ms Sequeira gave evidence that Ms Watson was now her personal assistant and also the Marketing Manager's assistant. This position became vacant in April 2003. Prior to this appointment, Ms Watson was on a fixed term contract which involved general research, gathering information, data entry and analysis. It was a completely different position to that of the applicant. The applicant was not considered for this job because her demonstrated skills did not meet the job requirements. The position was not, and never was a sales marketing role.

42 Mr O'Sullivan submitted that at some point during the applicant's employment a decision was made which accelerated her so-called redundancy. It was likely made during November 2002 when a decision was made to restructure the department, yet the applicant was not informed of her redundancy until 20 January 2003.

43 Further to that, Mr O'Sullivan put that the minutes of the meeting held on 12 December 2002 were not accurately recorded and Ms Burden's evidence should be preferred. Mr O'Sullivan submitted that what really took place at this meeting was an informal opportunity for the applicant to respond to the sales figures. He submitted that this conclusion was supported by past practice.

44 Mr O'Sullivan put that in terms of the respondent's review of the declining revenue, no alternatives were explored. The respondent had only considered the options of retrenching staff.

45 Mr O'Sullivan referred to the relevant authorities on unfairness in redundancy situations. While not conceding that this was a genuine redundancy, he put that the Commission need not decide the point. See Shop, Distributive and Allied Employees' Association, New South Wales and W D & H O Wills Holdings Ltd [2000] NSWIRComm 98. Relying on this authority, Mr O'Sullivan submitted that effected employees should be given reasonable notice. Such notice should begin at the stage where the decision to restructure is first made. While this may not be possible in each case, Mr O'Sullivan argued that at the very least, the applicant should have been informed that her position was being considered for redundancy.

46 Mr O'Sullivan directed the Commission to cl 39 of the Award. He submitted that there is a requirement that an employer should consult with employees in redundancy situations. The evidence here does not support such a finding. In fact, he put that the applicant was not even informed that her job was at risk. There was no discussion concerning the applicant's possible placement in alternative positions.

47 Mr O'Sullivan submitted that at no time did the respondent seek to cross examine the applicant as to her version of the conversations during the December meeting. On that basis he put that the applicant's evidence should be preferred and that the evidence of Ms Sequeira "should be taken with a grain of salt."

48 Mr O'Sullivan said that the respondent had a quick look on the internet for an alternate position for the applicant. No thought had been given to reducing the applicant's hours. In Mr O'Sullivan's submission, this was reflected in the letter from Ms Sequeira dated 20 January which stated, "your position has been abolished and we have no choice but to make you redundant."

49 Mr O'Sullivan put to the Commission that when making its decision attention should be paid to the fact that the respondent had only provided the minimum redundancy benefits. Further, he put that the respondent had not established a set of criteria for the selection of employees for redundancy. Effectively this meant that the applicant had no way of challenging the decision to terminate her employment. Mr O'Sullivan put that the Commission could make a finding of unfairness based on this factor alone.

50 Finally Mr O'Sullivan submitted that, given the applicant's age, length of service and her efforts to find alternative employment, an amount equal to twenty-six weeks salary, inclusive of superannuation, would be appropriate compensation in the circumstances. He further put that any amount ordered should not be offset by redundancy payments already received. In making this submission, he relied on of Neal and Shaw McDonald Pty Ltd and another [2003] NSWIRComm 298.

51 Mr O'Sullivan put the respondent on notice as to costs.

52 Mr Hutchinson put that the applicant's termination of employment was as a result of a bona fide redundancy. He put that it was accepted law that when an employer no longer wants a particular role performed and terminates the employment of an employee/s, such termination/s may be harsh, unreasonable or unjust on substantive or procedural grounds. However, the onus is upon the employee/s to prove the unfairness.

53 Mr Hutchinson submitted that it was clear that the applicant's claim was based on procedural unfairness. He agreed that a widely accepted set of principles, set down in WD & HO Wills should be applied in these circumstances.

54 Mr Hutchinson stated that the first principle is that of reasonable notice. He put that the applicant was acutely aware that there was a likelihood of redundancy as early as the 12 December meeting. The applicant was aware of the department's financial problems and her responsibility for budgets. He further put that the matter had been subsequently raised in the January meeting and that the contemporaneous notes made by Ms Sequeira support this contention. In any event, Mr Hutchinson put that the applicant received the statutory notice requirement.

55 Mr Hutchinson rejected the submission that the decision to terminate the applicant's employment was made during the meetings concerning the respondent's restructure in November 2002. Ms Sequeira had gone to great lengths to look for alternative cost savings. He put that it would be illogical to consider such redundancy prior to establishing whether the department had been profitable. Accordingly, there could be no finding that the applicant was denied reasonable notice.

56 Mr Hutchinson dealt with the second principle concerning adequate consultation. He put that the applicant was consulted as early as December, when she was informed that her position was under threat and its future would be contingent upon her report to management about the ongoing financial viability of her department.

57 In terms of principles three and four, Mr Hutchinson put that the applicant was offered two data entry positions on 20 January 2003. The applicant was not interested, because she lacked the necessary skills. Mr Hutchinson addressed the applicant's complaint that she should have received the data analysis and research position. He put that this position had been filled prior to the decision to terminate the applicant's employment. This much was conceded in the applicant's own evidence.

58 Mr Hutchinson submitted that no internal job opportunities were available before the applicant's dismissal. Mr Hutchinson put that, in any event, the applicant was aware of the later job vacancies and made no effort to apply.

59 Mr Hutchinson submitted that the fifth principle requires a reasonable amount of redundancy benefits to be paid. The applicant was paid the award entitlement. Mr Hutchinson submitted that the respondent satisfied the sixth principle, requiring sufficient ancillary services to be provided to the applicant, in that she received time off work to seek alternative employment.

60 In turning to the seventh principle, Mr Hutchinson submitted that the applicant was fairly selected for redundancy on the basis that the respondent needed to retrench the Sales and Marketing role in order to remain viable. The financial assessments suggested a loss of $12,000. The respondent determined the applicant's position was redundant as hers was the only sales role in the department. The Christmas card duties have now been distributed among the other staff. Mr Hutchinson put that there could have been no other alternative.

61 Mr Hutchinson submitted that in relation to the December and January meetings, the applicant's version of events should not be accepted. He put that Ms Sequeira's evidence should be preferred as her contemporaneous notes supported her recollections.

62 Mr Hutchinson argued that the applicant's employment did not properly fall within the coverage of the Award even though the applicant was "nominally classified" under the Award. Further, he put that as the applicant's employment totalled two years and nine months, the Commission should reject the submission that this was a major factor to take into account.

63 Finally, he put that as the applicant had admitted to several factual errors in her affidavit, the Commission should question the credibility of her testimony in its entirety.

64 Mr O'Sullivan rejected the submission that there were factual errors in the applicant's affidavit. He put that there was only one admission from the applicant - in reference to paragraph 27 of Exhibit 3. Mr O'Sullivan put that this was an example of the applicant's honesty. There could be no question as to the applicant's credibility. On the other hand, Mr O'Sullivan put that the Commission should consider Ms Sequeira's demeanour in the witness box. He put that she was evasive in answering questions and had given contradictory evidence.

65 Mr O'Sullivan pressed his submission that the applicant was not provided reasonable notice. He put that the respondent's argument, that the applicant was aware of her impending redundancy since December 2002 was false. He relied on the statement of Ms Sequeira in which she said "there was no firm indication on 9 January 2003 that Ms Burden's position was to made redundant."

66 Mr O'Sullivan reasserted the submission that the applicant was offered no alternative employment. He stated that the respondent sought to rely on the contemporaneous notes of Ms Sequeira in this regard. However, nowhere in the contemporaneous notes was there mention of discussion concerning alternative employment. On that basis, the respondent's evidence should be rejected.

67 Mr O'Sullivan put that the applicant had not asserted that other employees should have been made redundant in her place. Rather, he submitted that alternatives should have been explored.

68 Finally, Mr O'Sullivan submitted that it was not only the length of service that the applicant sought to rely on; but rather the applicant's age and difficulty in finding alternative employment. CONSIDERATION

69 Much of the evidence adduced in the case centred on whether the applicant's termination of employment was a genuine redundancy. On one view of it, the Commission is not required to make a finding on this question. I interpose at this point to observe that if this was not a genuine redundancy, it begs the question as to the real reason or reasons for the applicant's dismissal. This conundrum is often faced in cases such as this. However, it is not always easily answered.

70 Upon my inquiry to Mr O'Sullivan, he would not concede that this was a genuine redundancy. He submitted however, correctly in my view, that the Commission need not decide this point in order to conclude that the applicant's termination of employment was harsh, unreasonable or unjust.

71 On the other hand, it is relevant to note that there was no serious challenge to the respondent's financial situation as revealed in the direct evidence of Ms Sequeira and the respondent's financial reports annexed to her affidavit.

72 That being said, I take up Mr O'Sullivan's submission by observing that even if an employee is genuinely redundant, it may still be open for the Commission to conclude that the process leading to redundancy and the selection of the employee for redundancy was unfair. This line of principle is encompassed with particular reference to the selection of an employee, in the following passage from Outboard World v Muir (1993) 51 IR 167 where the Full Bench said: While in the ordinary case it may be that a redundancy genuinely occurring would not come within the parameters of Part 8, unfair dismissals, it takes little imagination to apprehend a situation which is both a redundancy and a harsh, unreasonable or unjust dismissal. For example, it may be that in selecting employees for redundancy an employer unilaterally decides to terminate an employee of long and exemplary service over another employee. The facts of the case may demonstrate both redundancy of one position but unfairness as against the employees selected. Once that position is accepted then it follows that an employee is not necessarily incapable of suffering an "unfair" dismissal in the context of a position becoming redundant.

73 Unfair selection, of course is not the only basis upon which a redundancy may be found to be unfair. In Shop, Distributive and Allied Employees' Association, New South Wales and W D & H O Wills Holdings Ltd, I identified seven obligations on an employer when it is considering making an employee redundant. In redundancy situations an employer is obliged to: 1. give reasonable notice to employees and/or their Unions; 2. adequately consult with employees and/or their Unions on the impact of the proposed changes; 3. explore genuine alternative options for redundancy, such as redeployment or relocation; 4. ensure such options are fairly offered to the affected employees; 5. provide reasonable standards of redundancy benefits; 6. provide appropriate ancillary services, such as time off to seek alternative work, retraining opportunities, outplacement services or financial planning; 7. ensure employees nominated for redundancy are fairly selected on an objective and unbiased basis.

74 I reaffirmed these obligations in Huseyin Arslan and others and Berkeley Challenge (Commercial) Pty Limited and Others [2001] NSWIRComm 45 and added at para 24 of that decision: Of course, a failure to properly, or exhaustively comply with each, and every one, of these obligations might not necessarily warrant an adverse finding against an employer. Each case will be determined on its own particular set of facts and circumstances.

See also, Kenefick v Australian Submarine Corporation Pty Ltd (No 2) (1996) 65 IR 366, Quality Bakers of Australia Ltd v Goulding and Another (1995) 60 IR 327, Neal and Shaw McDonald Pty Ltd and another [2003] NSWIRComm 298, Colosimo and Banana Traders of Australia Pty Ltd t/as P W Chew & Co [2003] NSWIRComm 72.

75 Both Mr O'Sullivan and Mr Hutchinson, appropriately addressed the Commission on the above criteria. However, Mr O'Sullivan submitted that most of the employer obligations referred to in WD & HO Wills had not been complied with. Before turning to each of the seven criteria referred to in that case, I comment on Mr Hutchinson's submission that the Award does not apply to the applicant. I reject this submission for the following reasons.

76 Firstly, the respondent referred in the applicant's letter of appointment, to the applicant being "nominally classified" under the Award. In my opinion, it was much more than a nominal application of the Award. In any event, an employer can't have it both ways; that is to apply the Award when it suits and disown it when it doesn't. Indeed, the respondent itself applied the terms and conditions of the redundancy provisions of the Award.

77 Secondly, even if the Award did not apply, the redundancy provisions under it are well established standards of this Commission and have general application across the workforce. Moreover, these standards are required to be included in all Awards of this Commission pursuant to s19 of the Act.

78 The redundancy provisions under the applicant's Award are expressed in cl.39, which is annexed in full to this decision. These provisions are reflective of the minimum standards for redundancy established by this Commission.

Was the applicant given reasonable notice of her redundancy?

79 Even on the respondent's evidence it must be accepted that the applicant was not expressly given any prior warning that her position was to be made redundant. Ms Sequeira's evidence was that the decision was finally made on 20 January 2003 - the same day the applicant was informed of the decision. Indeed, she was told the decision was final.

80 I accept that the evidence of what was said at the 12 December meeting was not entirely clear. At its highest, the best that can be said is that the applicant might have had some inkling that her position was not secure. However, even if she held that view, it cannot satisfy the requirement that the applicant be given reasonable notice of her redundancy.

81 I note Mr Hutchinson's submission that similar concerns had been raised a year earlier. Having not lost her job on that occasion, it was reasonable for the applicant to conclude that it might not happen this time. Moreover, I hardly think an employee would proceed on annual leave if a definite decision had been conveyed to her at the time.

82 Significantly however, Mr Hutchinson's submission that the applicant was on notice on 12 December is easily rebutted by his own witness' evidence. Para 20C of Ms Sequeira's affidavit stated, "there was no firm indication on 9 January 2003 that Ms Burden's position was to be made redundant." In my opinion, until 20 January 2003 Ms Sequeira's responses were equivocal and not put in precise and positive terms. There was ample room to doubt the respondent's intentions.

83 Accordingly, I find that point 1 of the criteria was not satisfied.

Was there adequate consultation on the impact of the proposed changes?

84 That question is easily answered by reference to the preceding discussion. If the applicant was only told on the day she was given notice, this question must be answered in the negative. I find accordingly.

Did the employer consider genuine alternatives to redundancy?

85 I rely on Ms Sequeira's evidence to answer this question. The decision conveyed to the applicant by Ms Sequeira on 20 January 2003 was final. She conceded that there was no consideration given to the applicant working part time. There were no job opportunities across an employer with 200 employees. In my view, this evidence would not be sufficient to accept that genuine alternatives were considered. More importantly, however, there was no evidence that the applicant was invited to suggest alternative options that she might find acceptable. In my view, it was not sufficient to simply say there were no jobs in sales.

86 There was conflicting evidence as to whether the applicant was asked about working on a "commission only" basis. At the time this was proposed, (assuming it was) it was not put in the context of an alternative to actual redundancy. That being so, it can not be seen as a real alternative.

87 There was further conflicting evidence concerning whether the applicant was aware of, and offered the data entry jobs. Ms Sequeira claimed that the applicant expressed no interest in these positions, had not applied for them and was unsuited for the positions in any event. The applicant maintained that these positions were never offered or discussed. The applicant agreed she had not applied for these jobs. Having considered the evidence of both witnesses, I cannot be satisfied that Ms Sequeira's recollection of events is correct. While producing detailed notes of the meeting of 20 January (albeit prepared after the meeting was held), there was no mention of the offers. Such a matter would have been a relatively important one to notate. Even so, there was no suggestion that the applicant was offered retraining for these positions if she was insufficiently skilled.

88 I find the respondent did not genuinely explore options to the applicant's redundancy. Further, it is axiomatic that point 4 of the criteria (ensuring such options are fairly offered) was not complied with.

Did the applicant receive reasonable standards of redundancy benefits?

89 As mentioned earlier, all awards of this Commission are required, by s19 of the Act, to include minimum redundancy/retrenchment standards arising from test cases before Full Benches of this Commission. See Re Application for Redundancy Awards (1994) 53 IR 419. Some awards will have redundancy benefits in excess of the minimum standards and some employers, whether by agreement or some other arrangement, such as company policy, will pay more generous benefits.

90 The applicant was paid 8.75 weeks' severance pay and given three weeks' notice. I am comfortably satisfied that these amounts were reasonable in the circumstances of two years, nine months service.

91 There was no argument that the applicant was allowed time off during the notice period in order to seek alternative employment. I am satisfied this criterion was met.

Was the applicant fairly selected for redundancy?

92 It follows from my earlier findings that I do not accept that the applicant was fairly selected for redundancy. At the risk of repetition, I find that the applicant was not consulted about her redundancy. It was presented as a fait accompli at the meeting on 20 January 2003. No genuine alternatives to redundancy were explored or offered.

93 These findings alone would, in my judgement, render the applicant's dismissal as unreasonable within the meaning of Pt 6 ch 2 of the Act.

94 Having regard for the circumstances disclosed in this case, the applicant's age and the fact she secured alternative employment (albeit at a reduced rate of pay) I accept the submission that reinstatement or re-employment would be impractical.

95 I propose therefore to make a monetary order for compensation of twelve weeks' pay at $915.30 per week.

96 I have determined a weekly rate of $915.30, notwithstanding that the parties disagreed as to whether an amount of superannuation of $67.80 should be included for the purposes of calculating the weekly rate of pay.

97 In so deciding I have had regard for the express language used in s89(5) as to what constitutes compensation. It is defined as an amount "not exceeding the amount of remuneration of the application during the period of six months immediately before being dismissed" (my emphasis). The use of the expression "remuneration" is interesting in the following context. In my view, the term "remuneration" should be given a wide meaning and operation such as to usually include all amounts paid by the employer in addition to the weekly wage or salary. See Kagan v Primus Telecommunications (Aust) Pty Ltd (No.2) [2000] NSWIRComm 185.

98 I am helped to this conclusion by the commonly accepted approach to the definition of "remuneration" in s83(1)(b); the provision which exempts an employee from the unfair dismissal provisions of the Act if the employee's annual remuneration is greater than that prescribed by the regulations.

99 In calculating the annual remuneration of an employee for the purposes of s83(1)(b) it has generally been accepted by industrial parties that superannuation contributions made by the employer on behalf of an employee are included in the calculation of "annual remuneration". I note, however, that in Kagan at para 23, the Full Bench expressed some doubt as to whether an employer's mandatory Superannuation Guarantee Contribution ("SGC") should be included. In any event, as I understand it, there has been no Full Bench authority which has decided this point.

100 That being said, it would be a strange result indeed, if the definition of remuneration in one section of Pt 6 ch 2 of the Act was markedly different to another section within the same Part.

101 Pursuant to s89(5) and (6) of the Industrial Relations Act 1996 the Commission orders that: 1. The respondent, Barnardos Australia shall pay to the applicant, Nadia Burden, an amount of $10,983.60 equivalent to twelve weeks' pay at $915.30 per week. 2. The amount so ordered shall be paid within 21 days from today.

Any application for costs must be made by notice of motion within 21 days of today.

Unless otherwise advised, these proceedings are concluded.

(i) Application - (a) This clause shall apply in respect of full-time and part-time employees. (b) This clause shall only apply to employers who employ 15 or more employees immediately prior to the termination of employment of employees. (c) Notwithstanding anything contained elsewhere in this clause, this clause shall not apply to employees with less than one year's continuous service and the general obligation on employers shall be no more than to give such employees an indication of the impending redundancy at the first reasonable opportunity, and to take such steps as may be reasonable to facilitate the obtaining by the employees of suitable alternative employment. (d) Notwithstanding anything contained elsewhere in this clause, this clause shall not apply where employment is terminated as a consequence of conduct that justifies instant dismissal, including malingering, inefficiency or neglect of duty, or in the case of casual employees, apprentices or employees engaged for a specific period of time or for a specified task or tasks or where employment is terminated due to the ordinary and customary turnover of labour.

(ii) Introduction of Change - (a) Employer's duty to notify - (1) Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer shall notify the employees who may be affected by the proposed changes and the union to which they belong. (2) "Significant effects" include termination of employment, major changes in the composition, operation or size of the employer's workforce or in the skills required, the elimination or diminution of job opportunities, promotion opportunities or job tenure, the alteration of hours of work, the need for retraining or transfer of employees to other work or locations and the restructuring of jobs. Provided that where the award makes provision for alteration of any of the matters referred to herein, an alteration shall be deemed not to have significant effect. (b) Employer's duty to discuss change - (1) The employer shall discuss with the employees affected and the union to which they belong, inter alia, the introduction of the changes referred to in paragraph (a) above, the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees, and shall give prompt consideration to matters raised by the employees and/or the union in relation to the changes. (2) The discussion shall commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in paragraph (a) of this subclause. (3) For the purpose of such discussion, the employer shall provide to the employees concerned and the union to which they belong, 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, provided that any employer shall not be required to disclose confidential information the disclosure of which would adversely affect the employer.

(a) Discussions before terminations: (1) Where an employer has made a definite decision that the employer no longer wishes the job the employee has been doing to be done by anyone pursuant to subparagraph (1) of paragraph (a) of subclause (ii) above, and that decision may lead to the termination of employment, the employer shall hold discussions with the employees directly affected and with the union to which they belong. (2) The discussions shall take place as soon as is practicable after the employer has made a definite decision which will invoke the provision of subparagraph (1) of this paragraph and shall cover, inter alia, any reasons for the proposed terminations, measures to avoid or minimise the terminations and measures to mitigate any adverse effects of any termination on the employees concerned. (3) For the purposes of the discussion the employer shall, as soon as practicable, provide to the employees concerned and the union to which they belong, all relevant information about the proposed terminations including the reasons for the proposed terminations, the number and categories of employees likely to be affected, and the number of workers normally employed and the period over which the terminations are likely to be carried out. Provided that any employer shall not be required to disclose confidential information the disclosure of which would adversely affect the employer.

(iv) Termination of Employment - (a) Notice for Changes in Production, Programme, Organisation or Structure - This subclause sets out the notice provisions to be applied to terminations by the employer for reasons arising from "production", "programme", "organisation" or "structure" in accordance with subclause (ii)(a)(1) above. (1) In order to terminate the employment of an employee the employer shall give to the employee the following notice:

Period of continuous service Period of notice Less than 1 year 1 week 1 year and less than 3 years 2 weeks 3 years and less than 5 years 3 weeks 5 years and over 4 weeks

(2) In addition to the notice above, employees over 45 years of age at the time of the giving of the notice with not less than two years continuous service, shall be entitled to an additional week's notice. (3) Payment in lieu of the notice above shall be made if the appropriate notice period is not given. Provided that employment may be terminated by part of the period of notice specified and part payment in lieu thereof. (b) Notice for Technological Change - This subclause sets out the notice provisions to be applied to terminations by the employer for reasons arising from "technology" in accordance with subclause (ii)(a)(1) above: (1) In order to terminate the employment of an employee the employer shall give to the employee 3 months notice of termination. (2) Payment in lieu of the notice above shall be made if the appropriate notice period is not given. Provided that employment may be terminated by part of the period of notice specified and part payment in lieu thereof. (3) The period of notice required by this subclause to be given shall be deemed to be service with the employer for the purposes of the Long Service Leave Act 1955, the Annual Holidays Act 1944, or any Act amending or replacing either of these Acts.

(1) During the period of notice of termination given by the employer, an employee shall be allowed up to one day's time off without loss of pay during each week of notice, to a maximum of five weeks, for the purposes of seeking other employment. (2) If the employee has been allowed paid leave for more than one day during the notice period for the purpose of seeking other employment, the employee shall, at the request of the employer, be required to produce proof of attendance at an interview or the employee shall not receive payment for the time absent. (d) Employee leaving during the notice period - If the employment of an employee is terminated (other than for misconduct) before the notice period expires, the employee shall be entitled to the same benefits and payments under this clause had the employee remained with the employer until the expiry of such notice. Provided that in such circumstances the employee shall not be entitled to payment in lieu of notice.

(e) Statement of employment - The employer shall, upon receipt of a request from an employee whose employment has been terminated, provide to the employee a written statement specifying the period of the employee's employment and the classification of or the type of work performed by the employee.

(f) Notice to Centrelink Where a decision has been made to terminate employees, the employer shall notify Centrelink thereof as soon as possible giving relevant information including the number and categories of the employees likely to be affected and the period over which the terminations are intended to be carried out.

The employer shall, upon receipt of a request from an employee whose employment has been terminated, provide to the employee an "Employment Separation Certificate" in the form required by Centrelink. (h) Transfer to lower paid duties - Where an employee is transferred to lower paid duties for reasons set out in paragraph (a) of subclause (ii) above, the employee shall be entitled to the same period of notice of transfer as the employee would have been entitled to if the employee's employment had been terminated, and the employer may, at the employer's option, make payment in lieu thereof of an amount equal to the difference between the former ordinary time rate of pay and the new ordinary time rate for the number of weeks of notice still owing.

(v) Severance Pay - (a) Where the employment of an employee is to be terminated pursuant to subclause (iv) above, subject to further order of the Industrial Relations Commission, the employer shall pay the following severance pay in respect of a continuous period of service: (1) If an employee is under 45 years of age, the employer shall pay in accordance with the following scale: Years of Service Under 45 Years of Age Entitlement Less than 1 year Nil 1 year and less than 2 years 4 weeks 2 years and less than 3 years 7 weeks 3 years and less than 4 years 10 weeks 4 years and less than 5 years 12 weeks 5 years and less than 6 years 14 weeks 6 years and over 16 weeks

(2) Where an employee is 45 years of age or over, the entitlement shall be in accordance with the following scale:

Years of Service 45 Years of Age and over entitlement Less than 1 year Nil 1 year and less than 2 years 5 weeks 2 years and less than 3 years 8.75 weeks 3 years and less than 4 years 12.5 weeks 4 years and less than 5 years 15 weeks 5 years and less than 6 years 17.5 weeks 6 years and over 20 weeks

(3) "Weeks pay" means the all-purpose rate of pay for the employee concerned at the date of termination and shall include, in addition to the ordinary rate of pay, overaward payments, shift penalties and allowances provided for in the relevant award.

(b) Incapacity to Pay - Subject to an application by the employer and further order of the Industrial Relations Commission, an employer may pay a lesser amount (or no amount) of severance pay than that contained in paragraph (a) above. The Industrial Relations Commission shall have regard to such financial and other resources of the employer concerned as the Commission thinks relevant, and the probable effect paying the amount of severance pay in paragraph (a) above will have on the employer.

(c) Alternative Employment - Subject to an application by the employer and further order of the Industrial Relations Commission, an employer may pay a lesser amount (or no amount) of severance pay than that contained in paragraph (a) above if the employer obtains acceptable alternative employment for an employee.

(vi) Savings Clause - Nothing in this award shall be construed so as to require the reduction or alteration of more advantageous benefits or conditions which an employee may be entitled to under any existing redundancy arrangement, taken as a whole, between the union and any employer bound by this award.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

At a glance

Court

Decision date

Before

Source

Judgment (132 paragraphs)

Parties

Cases Cited (9)