MELBOURNE, 29 and 30 November, 1-3, 6-10, 13-15 December 1993

with Mr L. Kaufman

Solicitors for the respondent: Phillips Fox

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

KEELY J Messrs Seaman, Neilson and Innes (the applicants) by application filed on 14 September 1993, as amended, seek the imposition of penalties, under s.178 of the Industrial Relations Act 1988 (the Act), upon First Mildura Irrigation Trust (the respondent - sometimes referred to in documents as the Trust) for alleged breaches of clauses 21, 22 and 23 of the Victorian Local Authorities Interim Award 1991 (the award) arising from the termination of their employment by notice given on 15 July 1993. They have also sought damages for breach of contract and for breach of statutory duty and orders that any penalties imposed be paid to them.

2. The hearing of the case occupied thirteen days. Evidence was given by each of the applicants and by Mr Chris Hawken, an organiser employed by the Australian Municipal, Administrative, Clerical and Services Union (the union), who had responsibility for members of the union employed by the respondent. Witnesses called by the respondent included Mr R. P. Byrnes, its Chief Executive Officer, and Mr Gary Rayson, a former employee of the respondent. The latter's evidence related primarily to the claim by Mr Innes for damages for breach of contract and for breach of statutory duty - which claim will be dealt with later in these reasons for judgment.

3. The full text of the three clauses of the award will be set out later but it is convenient to state at this stage the general nature of the obligations imposed by each clause, insofar as they are relevant to the application. Clause 21 required the respondent to discuss with the employees affected and the union the introduction of certain changes which the respondent had decided to introduce, the likely effects of those changes upon employees, and measures to avert or mitigate the adverse effects of those changes on employees. It also required the respondent to provide in writing to the employees and the union all relevant information about the changes. Clause 22 provided that termination of an employee shall not be harsh, unjust or unreasonable. Clause 23 required the respondent, if it had "made a definite decision that (it) no longer wishes the job the employee has been doing done by anyone", to hold discussions with the employees directly affected and with the union. It also required the respondent to provide in writing to the employees and the union all relevant information about the proposed terminations.

4. It was conceded by counsel for the respondent that:

(1) the respondent is and was at all relevant times an incorporated

body capable of being sued;

(2) the respondent is and was at all relevant times a respondent to

and bound by the award;

(3) each of the applicants was at all relevant times a member of the

Union;

(4) the applicants were at all material times employed by the

respondent; and

(5) at all relevant times the applicants' employment was subject to

the award.

The financial problems faced by the respondent and some of the events relevant to the respondent's decision to terminate the applicants' employment are detailed in documents which are exhibits and were the subject of oral evidence.

5. In late 1992 the respondent first heard that it might have to pay a diversion levy and on 4 May 1993 it was informed by the Rural Water Corporation that it would be required to do so.

6. On 26 May 1993 the respondent distributed a newsletter to its staff and to the relevant owners or occupiers of holdings (the growers - sometimes referred to as the ratepayers) which included the following:

"The harvest has been completed and published information

suggests that the total returns to growers will be

dramatically low. The Trust wishes growers every success in

coping with the trying financial and climatic conditions

experienced to date.

Items of interest are as follows:

. . .

4. Diversion Charge: The Rural Water Corporation has

verbally advised the Trust that it will be required to

pay a charge of approximately $4.80 per megalitre for

each megalitre (Ml) diverted from the River Murray

from 1993/94 Irrigation Season for its share of the

cost of operational and maintenance of River Murray

regulation structures and headworks. This impost will

result in an additional annual cost of between

$300,000.00 and $400,000.00 per annum which translates

to a 10% to 13% rate increase. The Trust Board is

investigating options to reduce the impact of passing

these costs onto growers for the 1993/94 Irrigation

Season.

5. Trust Tariff Rebate: This financial year has been

unusually wet with over 500mm of rain to date - the

only financial years with more rain than this were

1974 with 875mm and 1918 with 544mm.

With around half the usual volume of water being

ordered and pumped, the Trust's revenue will be

significantly reduced by:

- Extra Water sales to growers using in excess of

their entitlement normally provides around 10%

of revenue, but this year will be negligible.

- The Trust's Policy of refunding half the

irrigation rate where growers use less than half

their entitlement reduces revenue even further.

There has been much debate on reform, and the Trust

board prior to setting the 1993 tariff carefully

evaluated all arguments and decided that the existing

tariff structure with reducing marginal extra water

rates and refunding half the irrigation rate where

growers use less than half their entitlement continued

to be the most equitable to all growers.

It was considered that the existing tariff best served

growers by equalising differing crop requirements and

soil types, supported by crop protection from frost

and sun burn, and facilitated grower financial

management and minimised their interest cost while

still adequately addressing user-pays issues."

(Exhibit D)

On 22 June 1993 the respondent wrote the following letter:

"Dear Ratepayer, 22 June 1993

We would like to keep all growers fully informed as to how

we are trying to manage increasing costs, to ensure that you

are not hit with a significant rate increase. Commencing

this week, we plan to re-organise aspects of the Trust to

improve efficiency.

The wet season of 1992-3 has had a negative impact on the

Trust's revenue in that $140,000 was returned to growers as

rebates and $300,000 of budgeted water sales was not

realised. As a consequence, revenue this year has fallen

dramatically.

In addition, the Trust has been advised of the introduction

of a government diversion charge of $4.80 per megalitre for

water diverted from the Murray River which would commence in

the 1993-94 year. This charge would result in additional

costs of approximately $400,000 per annum. This alone

translates to a rating base increase of 14% per annum. It

is not feasible to use reserves as the diversion levy is an

ongoing commitment.

We are aware that many growers face financial pressures and

that containing the rate is essential. We strongly believe

that an increase like this cannot and will not be passed on

to growers.

Over the past three years our long term planning has helped

prepare us for such change. We have become debt free, fully

appreciated our assets to ensure they can be maintained in

the future, along with reduced operating costs. The Trust

is considered to be one of the best managed and financially

prudent of all irrigation authorities within Australia.

The Board has just completed a special in depth operational

review of options to determine where efficiency gains can be

obtained while ensuring services are maintained and continue

to meet grower's needs. The option we are adopting is the

introduction of further cost effective technology and a

reduction in our workforce. An action we do not take

lightly. We regret loss of staff but we have endeavoured to

introduce cost-conscious measures before considering the

loss of jobs. We plan to offer voluntary redundancies to

workers in an effort to contain the impending rate increase.

This decision has been difficult but is necessary to ensure

that the FMIT remains a viable business while protecting

growers from unreasonable rate increases. We will, within

the next month, inform you of the details of the

restructuring and advise you of the 1993-94 irrigation

tariff. Your support during these difficult times is

appreciated.

Yours sincerely

SIGNED

Mr Barry Kilpatrick Chairman

FIRST MILDURA IRRIGATION TRUST" (Exhibit C)

On 25 June 1993 the respondent distributed the following memorandum:

"MEMO

TO: All Staff

FROM: Ray Byrnes, Chief Executive Officer

SUBJECT: Re-Organisation of the FMIT for Greater

Efficiency

The Trust is currently facing significant increases in

operating costs due to the introduction of a government

diversion charge. The charge for diverting water from the

Murray River will result in an additional $300,000 to

$500,000 costs per annum.

As you are aware, revenue this year was well below expected,

due to the unseasonally wet year; $140,000 was returned to

growers as rebates for unused water and $300,000 of budgeted

water sales was not realised.

Growers this year have had to contend with a poor year, with

higher operating costs and fifty percent less yields. Ten

years ago water costs constituted approximately five percent

of total costs to growers, now it is ten percent. Grower

(sic) are facing financial pressure and cannot withstand a

significant rate increase.

Wednesday night the Board made a definite decision to

introduce, where feasible, cost-effective technology which

will lead to a reduction in the size of the Trust.

We would like to give some staff the opportunity to take

voluntary redundancy.

I would be happy to meet with anyone who is interested, next

week to discuss the offer and give specific details.

SIGNED

RAY BYRNES

CHIEF EXECUTIVE OFFICER" (Exhibit B)

7. The respondent convened a meeting of employees at its depot on 25 June 1993 (the 25 June meeting) and on the same day wrote to Mr Michael Innes, the third applicant in these proceedings, who was at that time, and had been for about six years, the union's shop steward at the respondent's establishment. That letter was as follows:

"Dear Mick, Friday 25th June

This morning we held a staff meeting to discuss changes

announced by the Board.

At this meeting I gave details regarding the financial

pressures facing the Trust, and Growers, I also explained

that new technology was being considered which would have a

flow on impact to staff.

I announced that voluntary redundancies were being sought

from interested employees. Next week further details will

be available.

I feel it is necessary that all staff be kept fully

informed. As you were on leave when this meeting was held I

felt it was important to give you this information and

invite you to see me when you return for an update.

Yours sincerely

SIGNED

Chief Executive Officer" (Exhibit N)

The respondent on that day also advised the General Secretary of the union of its decision on 23 June "to introduce changes likely to have significant effects on employees". That letter was in the following terms:

"Dear Mr Cochrane,

The First Mildura Irrigation Trust Board, at its meeting on

Wednesday 23 June, made a definite decision to introduce

changes effecting (sic) the use of technology and

organisational structure. We would like to inform you,

under Clause 21 of the Award, that the change is likely to

have significant effects on employees.

Staff will be addressed this Friday on the financial

pressures facing growers and the decision to introduce

cost-effective technology to help meet escalating costs due to

new government diversion charges.

Staff will be presented with the option of voluntary

redundancies and the opportunity to contribute to further

cost-conscious measures.

The organisation and delivery of water services in rural

Victoria have experienced considerable changes to meet

demands for increased efficiency, cost-effectiveness and

financial self-sufficiency.

The FMIT is not a state or local government body, so

maintaining a long term viability is a critical problem.

The current market environment in the fruit industry is not

good. Growers also had to contend with a seasonally poor

year, receiving only half of their previous year's

production. Growers are facing financial pressures and

can't withstand significant rate increases.

The attached growers letter (Exhibit C) outlines the

problems the Trust is facing in relation to this year's poor

return and impending increase to operating costs. As the

increased costs are primarily ongoing, due to new

government charges, levies and electricity costs, we are

forced to restructure and make significant changes in how we

provide water to growers.

We will endeavour to work with our staff and growers in

implementing workable change which will increase our overall

efficiency and cost effectiveness. In line with Clause 21,

we would like to discuss the proposed changes with you as

soon as possible. Please contact the undersigned for a

mutually convenient meeting date.

Yours sincerely,

SIGNED SIGNED

CHAIRMAN CHIEF EXECUTIVE OFFICER"

(Exhibit DD)

8. On 30 June 1993 Mr Byrnes and Mr Hawken agreed to hold a meeting on 5 July - later deferred to 9 July 1993. On the same day the respondent sent to all staff a memorandum seeking expressions of interest in a voluntary departure package (the package). The terms of the memoranudm were as follows:

"MEMORANDUM

TO: All Staff

FROM: R.P. Byrnes (CEO)

SUBJECT: Voluntary Departure Packages

DATE: 30 June 1993

I refer to my discussion with Staff on Friday 25 June, 1993

regarding financial impost and need to restructure the

Trust.

The Trust has developed a voluntary departure package and

expressions of interest are sought from Staff.

Interested Staff are requested to contact the Chief

Executive Officer to discuss their options with all

discussions carried out on a 1:1 basis with all discussions

confidential. The offer for voluntary departure packages is

in excess of the award and this offer will close at the

cease of business Thursday 8 July, 1993.

I will keep you informed of further developments regarding

this matter.

Please contact the undersigned should you have any concerns

regarding this matter.

R.P. BYRNES

CHIEF EXECUTIVE OFFICER." (Exhibit E)

By agreement between the respondent and the union the date for acceptance of the package was later extended from 8 July to 9 July 1993.

9. The document containing the package was handed out to employees who came to see Mr Byrnes in response to his invitation in Exhibit E. It included the following:

"Information

To assist in the reduction and re-organisation of the FMIT

workforce, the Board has made a Voluntary Departure Package

available.

You can lodge an expression of interest with the CEO no

later than close of business on Thursday 8th July 1993.

An expression of interest will not bind you in any way.

Just as your application will not be binding on the Trust.

Management must consider all plans and objectives and the

availability of funding for the package before deciding to

accept or reject any application.

1. How To Apply

You need to lodge your expression of interest no later than

Thursday 8th July 1993. Any enquiries about your

eligibility, your estimated benefit, or how to apply for the

Package should be directed to the CEO.

2. Steps in the Process

A. Meeting with CEO to discuss the VDP option and

collect package of information.

B. Lodge your expression of interest on the

attached application form. Sign, date and

return by close of business on 8th July.

C. The Trust Board will consider applications. The

CEO will advise applicants if offer has been

accepted or rejected.

D. If accepted a formal letter will detail your

benefits and departure date. You will need to

sign and return the form to finalise the

agreement.

3. How to Accept

You accept a Package by signing an acceptance form. The

form will be attached to a letter of offer sent to you by

the Board of Management. You can nominate whether the offer

and acceptance form are sent to your work or home address.

To accept, simply sign the acceptance form and return it as

directed in the letter of offer.

Your resignation or retirement will be effective on the date

shown on the acceptance form. This will be 10 working days

from the date of the offer. You are free to negotiate an

earlier date agreed to with management.

4. Estimates of Benefits Provided

A schedule attached to the acceptance form will provide

detailed estimates of your wage related resignation or

retirement benefits. When you accept VDP, a final estimate

of your superannuation benefit will be calculated by your

Local Authority Superannuation Board manager.

4. (sic) Voluntary Departure Package

Payment 1

The award severance payment.

Severance pay calculated on the period of continuous

service completed by the employee, ie -

1 year or less Nil

1 year and up to the completion of 2 years 4 weeks pay

2 years and up to the completion of 3 years 6 weeks pay

3 years and up to the completion of 4 years 7 weeks pay

4 years and over 8 weeks pay

"Weeks pay" means the ordinary time rate of pay for

the employee concerned.

Payment 2 4 additional weeks pay

Payment 3 Voluntary departure incentive - lump sum of

$1,000

Other entitlements -

. pay in lieu of long service leave (if over 10 years of

continuous service)

. pay in lieu of outstanding annual leave

. superannuation benefits as specified in your scheme

. . . " (Exhibit MM)

10. On 9 July 1993 two meetings were held at the depot between the respondent, the employees and the union in relation to the proposed changes. On that day the union was given the following document:

"Background for MEU

RATIONALE FOR CHANGE

The organisation and delivery of water services in rural

Victoria have experienced considerable change to meet

demands for increased efficiency, cost effectiveness and

financial self-sufficiency.

In moving towards a more productive commercial organisation

the FMIT over the past few years has modified its corporate

structure and has introduced new methodology and technology.

The time has come where the structure and operation need to

be reassessed with the view to introducing significant

change to enable the FMIT to remain financially viable.

The first reason for change in the delivery of rural water

is that the whole water industry in Victoria is undergoing

fundamental change - change which includes new technology,

new systems for establishing water rights and capacity. The

precise consequences of these changes are uncertain,

however, it is clear that greater flexibility and different

methods of delivery will be required.

The second reason for change is the present system's

financial situation. There has been a downturn in income

due to seasonal variation. 1993-94 was unseasonally wet,

therefore demand for irrigation water was much lower than

projected which resulted in less income while costs remained

stable. This shortfall, coupled with poor grower output and

return, has undermined the ability of growers to meet

increased charges to cover any deficit.

The `last straw' for the FMIT is the increasing number of

new levies and increased charges which are being introduced

in the 1993/94 financial year. As these costs will be

ongoing, it is critical that the FMIT restructures to ensure

long term viability.

Increasing water salinity is a major concern to the water

users of the Murray River. Saline problems will continue to

place a significant demand on the Trust to protect the

environment by carrying out more works activities. The

Sunraysia Salinity Management Plan has recently been

completed by an independent ad hoc task force. The plan

outlines the required work needed to minimise salinity

effect on the Murray River in the Sunraysia District. The

Government has endorsed the plan which stipulates that local

users must financially contribute to the cost of works.

This will end up as another ongoing levy on the FMIT.

There is also emerging a number of new financial pressures -

. government diversion charges

. government dividend tax

. government return on equity

. increase in SEC charges as a result of

de-regulation

A government diversion charge was verbally outlined by the

Rural Water Corporation to commence in the 1992-93 year. It

was indicated that a charge of $4.80 per mega litre for

water diverted from the Murray River was likely. This

charge would result in an additional $300,000 to $500,000 to

costs per annum. This translates to a rating base increase

of 10 - 17% per annum on an ongoing basis.

In 1992-93 the Victorian State Government introduced a $100

levy on water supply to urban consumers. The Rural Water

(Corporation) has since received directives from the

Government to return a $1million dividend. This could have

serious ramifications for the FMIT in being called upon to

collect further levies to help cover this government

dividend payment.

Government is also examining the feasibility of wanting a

return on equity. This is a more remote possibility but is

a factor that will continue to be examined over the coming

years.

The SEC is currently being privatised and has advised the

Trust that competition will exist between power generation,

and cross subsidisation will be eliminated. This may result

in an increase in tariff charges to the FMIT. Even a 1-2%

increase would be significant and increase operating costs.

The potential impact on rates to growers is unclear at this

time.

FMIT PLANNED RESTRUCTURE

The FMIT is facing major financial problems. This is not a

one-off unusual year where a dip into reserve would solve

the short-fall.

The increase in the costs of operating the Trust is

significant and will be imposed on an annual basis.

The FMIT believes that downsizing and reorganising how water

is delivered is the only action which will result in

significant savings, sufficient to enable the FMIT to

continue in business.

The FMIT has, over the past five years, introduced many new

ways of delivering water in a bid to contain operational

costs. Wherever feasible, cost conscious work practices

have been introduced. Downsizing is a last resort; a

decision we do not make lightly. We believe that we must

act now to implement change which will give the Trust

greater flexibility to ensure long term viability and

provide long term secure employment for staff.

The Trust has a strong commitment to providing the best

possible water at the cheapest possible price. Recent poor

grower output and return has undermined the ability of

growers to meet additional increases. The increasing

financial pressures, if passed on to growers, could

seriously effect the industry.

As a result, the FMIT Board has decided to contain rising

tariffs by restructuring the Trust's operations to gain

further efficiencies.

Proven technology will be introduced which will lead to

improved quality and efficiency, but will also result in a

reduced number of employees. We hope to make the future

more secure for our remaining employees.

1. The Board would firstly like to give employees an

opportunity to accept voluntary departure packages.

2. Depending on the outcome, the Board would then decide

if opportunities exist for internal transfers.

3. Ultimately some positions will be made surplus to

requirements and some incumbents may be transferred,

offered early retirement or made redundant.

4. Final numbers cannot be concluded until the voluntary

departure packages are complete.

5. The FMIT will endeavour to find a fair and reasonable

settlement for redundant workers which growers can

afford. The Trust is not a local or state government

institution with reserves made specially available to

compensate workers. We do regret the loss of staff

and we will try to look after redundant workers to the

best of our ability." (Exhibit FF)

11. After the respondent met the union and the employees, the union held discussions with the employees and later a delegation from the employees met with the respondent in the afternoon to continue discussions and to consider the package (the 2 meetings collectively "9 July meetings"). At the second meeting of the members of the union on that day the package representing the final position of the respondent was voted on and, as Mr Hawken put it (transcript 336), was accepted by "every one of my members employed by the Trust" as "an appropriate package . . . for those who wanted to become redundant". In due course five employees accepted the package.

12. On 13 July 1993 the Board of the respondent met and decided that the five acceptances of the package they had received were insufficient and that compulsory redundancies would be required. The Board decided upon the eight employees whose employment was to be terminated. They were so advised on 14 July 1993 by letter and by interview with Mr Byrnes. In the case of the applicants, the terminations took effect from 28 July 1993 and the letters to them were in almost identical terms. The one to Mr Seaman read as follows:

"14th July 1993

Mr Bob Seaman

Plant Operator

First Mildura Irrigation Trust

Dear Bob,

Due to unrelenting financial pressure that is beyond our

control, we have been forced to restructure the Trust and

consequently make some positions redundant.

It is with great regret that we are forced to terminate your

employment with the FMIT, as the position of Plant Operator

has been declared surplus to requirements.

We would like to sincerely acknowledge the considerable

contribution you have made during the time you have worked

for the Trust.

A termination day of Wednesday 28th July has been set. The

attached schedule outlines the details of your redundancy

package and includes estimates of your payments (apart from

your superannuation entitlements which are available from

your Superannuation Fund).

We are disappointed that the Trust is forced to downsize and

that this will result in personal loss to you.

We have developed an outplacement service which will

provide, on request, financial advice and counselling, job

and business counselling and job search skill development.

I will provide further details of the type of assistance

that you might be interested in. A meeting is tentatively

scheduled for Friday 23rd July.

Yours sincerely

SIGNED

Ray Byrnes

Chief Executive Officer

FIRST MILDURA IRRIGATION TRUST" (Exhibit G)

On the following day the respondent advised the union by letter of the compulsory redundancies.

13. Mr Seaman was first employed by the respondent as a casual pipe layer for approximately two years. He then left the employ of the respondent and returned about one year later to be employed in a permanent position for approximately five years until the date of his termination. His job description was plant operator and his prime responsibility was operating a machine, called a `Kato', which dug trenches for the laying of pipes. The parties agreed that in the 1992/1993 financial year 1012 hours out of a total of 2312 hours worked by Mr Seaman were spent operating machinery and the remainder was spent doing labouring or maintenance work or other work as required.

14. Prior to his termination, Mr Seaman was one of three employees who operated plant and machinery and who did other work as required. Following his termination and the restructure there was a reduction in the respondent's capital works program so that that type of work only occupies 4-8 weeks of the year.

15. Mr Neilson was first employed by the respondent on a casual basis and after approximately two years was employed permanently for approximately another fifteen years until the date of his termination. He was employed as a drainage ganger which entailed the maintenance of drains and silt boxes and spraying with insecticides the areas surrounding the drains. Mr Neilson did this work with an assistant who, after Mr Neilson's termination, was employed in Mr Neilson's position; an additional employee then filled the assistant's role. Mr Byrnes agreed that prior to the restructure the respondent employed a drainage ganger and a drainage labourer and following the restructure two persons were still employed in these positions.

16. Some evidence was given by Mr Neilson and Mr Byrnes as to a conversation they had concerning Mr Neilson's proposal to continue working for the respondent until he was eligible for retirement. Mr Neilson's evidence was that, although there was a time when he had decided to retire early, to allow him and his wife to travel around Australia, he later changed his mind and so advised Mr Byrnes. Mr Neilson gave evidence that in a conversation in early 1993, in the context of a discussion concerning Mr Neilson's classification under the award, he told Mr Byrnes that he intended to work at the Trust and not take the early retirement and that Mr Byrnes said that will be all right, or words to that effect.

17. As to the manner in which Mr Neilson was selected for compulsory redundancy, Mr Byrnes said that the Board looked at the age profile, the flexibility and skills of its employees and decided that Mr Neilson did not have the skills or the flexibility of other employees and that the respondent would be served best by making an internal transfer and declaring Mr Neilson redundant. In cross examination he said that whilst age was considered (Mr Neilson was 57 at the time of the hearing), it was not the major or primary factor in the respondent's decision. He agreed that Mr Neilson had been trained to use a drainage rodding machine approximately 3 years ago, had undertaken the training satisfactorily and had operated the machine from that time. In re-examination, he said that the respondent had retained an employee w ho was a construction ganger and aged 63 and that Mr Neilson's age was not a major factor in the decision to make him redundant. In the case of the construction ganger, the Board considered that he was more flexible with more skills to contribute and that Mr Neilson did not have the same degree of flexibility.

18. Mr Innes was employed by the respondent as a pipe layer for approximately 2 years and was then employed as a water bailiff (more commonly referred to as a "water ganger") for approximately another 11 years until his termination on 28 July 1993. Both Mr Innes and Mr Byrnes gave evidence as to how the irrigation system worked and the role of the water gangers. They were allocated an area in the district serviced by the respondent and were responsible for the distribution of the water, pumped by the respondent from the Murray River, to the growers who were rate payers of the respondent in that area. The water ganger opened the valves and gates to allow the water to flow from the respondent's channels and pipes to the growers' land. The water was requested by the growers by reference to the area of their land with the standard of measurement being ten acres.

19. In April 1993 the respondent had made enquiries of the Department of Water Resources of New South Wales to extend the centralised water ordering scheme to include specific areas of the irrigation district. The purpose was to allow growers to telephone the respondent and place their order for water; a computer would then schedule the provision of the water and the grower would then be advised when the water would be available. There was evidence that the respondent anticipates that this will substantially reduce the work done previously by the water gangers and that the extension to the water ordering system will be implemented by approximately September 1994, in time for the 1994/5 irrigation season.

20. The respondent employed seven full-time and two part-time water gangers prior to Mr Innes' termination. After the termination and the restructure the respondent no longer employed any water gangers as the work had been contracted out; the work being done by the successful contractors is identical to that previously done by Mr Innes and the other water gangers.

21. The question whether there were breaches of clauses 21, 22 and 23 depends largely on factual matters concerning: (1) the decisions made; (2) the nature of the changes to be introduced and their effects on the applicants; (3) the discussions held between the applicants, the respondent and the union and the provision of information in writing to the applicant's and union by the respondent.

22. Mr Byrnes was the only person called to give evidence re Trust Meetings in relation to the conduct of the respondent. The respondent conceded that the decisions made by the Board fell within the meaning of `definite decision' in both clauses 21 and 23. It also conceded that the definite decision to introduce major changes was likely to have significant effects on employees within the meaning of clause 21 or lead to terminations under clause 23.

23. On 17 June 1993 the Board of the respondent (the Board) met to hear Dr Lois Beckwith PhD (Melb.) discuss her report and the issues it raised. Mr Byrnes' evidence was that Dr Beckwith stated that the two major costs to the respondent were obtaining power and wages. She concluded that because they were unable to make any impression on the power costs, the only opportunity to make sufficient savings was to reduce labour costs.

24. The Board adjourned to 23 June 1993 and at this meeting Dr Beckwith answered questions and then left to allow the Board to discuss their options. The Board concluded that the levy would be imposed by the Rural Water Corporation and that the only way for the respondent to pay it would be to restructure bearing in mind the bad growing season and the growers consequent inability to afford any increased rates. The Board based their assessment of the growers' financial situation on their personal knowledge of growers in the region and, as some Board members were growers, from their own experience.

25. The Board decided that the only option available to it was to restructure and reduce staff. It was decided that voluntary redundancies would be sought and that the process should be conducted subject to consultation with the union. Mr Byrnes said that the Board, on his recommendation, decided "to adopt the thrust of the Beckwith report".

26. Mr Byrnes also conceded that the decision fell within clause 21 and that, although the manner in which the restructure would be conducted depended on the number of acceptances of voluntary redundancy, it was likely that some compulsory redundancies would be made. He said that on 13 July 1993 a definite decision was made by the Board that the respondent would no longer employ full time water gangers and that he first considered restructuring after he heard about the diversion levy.

27. As to the time frame for the restructure and introduction of change, Mr Byrnes said that the Board decided that it had to make the changes before 1 September 1993 because they could not be introduced during the watering season (commencing around that time) because it was too busy and he believed that the respondent could not have made the required savings unless it terminated the applicants and other employees when it did.

28. Mr Byrnes gave evidence that he first became aware of the possibility of a new charge being levied by the Rural Water Corporation under the Water (Amendment) Act 1993 (Vic) for the diversion of water from the Murray in late 1992. When the respondent was preparing its business plan for the 1993/4 year as required by the Water Act 1989 (Vic), it received notice from the Department of Water Resources that the plan should provide for the diversion levy although no figure was suggested to them. On or about 4 May 1993, Mr Byrnes was told by the Rural Water Corporation's general manager for the Sunraysia district that the diversion levy would be equivalent to approximately $4.80 per megalitre of water. Further that it had already been levied on all of the other water boards which divert water from the Murray, charges which had been gazetted in February 1993. On the respondent's calculations, the total diversion levy would be between $300,000 and $500,000 per annum - based on the suggested figure of $4.80 per megalitre.

29. Mr Byrnes informed the Board of this information and contacted the Department of Water Resources which confirmed the information he had received from the general manager. He also made representations to the Government through two local members of parliament. They advised Mr Byrnes that the diversion levy was "not negotiable" and would be imposed for 1993-1994. Mr Byrnes assented (transcript 485) to the proposition that the Government, in introducing the legislation in relation to the diversion levy, had put the respondent in the position where it was "forced to either put growers who could not afford to pay the (levy) in the position of going out of business, or put employees in the position of being made redundant". The bill received by the respondent for the diversion levy for the 1993/94 financial year was $296,240.

30. In addition to the diversion levy, there were other financial constraints on the respondent. Due to an extremely wet season during 1992/93 less water than had been budgeted for had been ordererd by the growers. As they were levied quarterly in advance (with any additional water being included in the fourth instalment) substantial rebates were due to growers. As at the Board meeting on 23 June 1993 the respondent considered that there had been approximately $300,000 in terms of foregone water sales (ie $300,000 of lost revenue) and that they would be liable for approximately $150,000 in rebates to growers. Although this amounted to approximately 15% of the respondent's annual revenue it considered that it had sufficient reserves to cover it. Those reserves were not considered sufficient to cover the diversion levy. Another possible financial burden was the likelihood of the State Electricity Commission (the SEC) increasing its tariffs as part of its deregulation. Mr Byrnes also referred to an additional security charge which may be imposed in relation to the diversion levy.

31. Mr Fenwick argued that as the respondent could afford to put aside approximately $378,000 per year as part of an asset replacement program it could in fact absorb the diversion levy particularly in light of the fact that the respondent was debt free and could borrow funds to replace the equipment. Mr Byrnes pointed out that the diversion levy was a continuing cost.

The meetings between the employees and the respondent

32. Mr Seaman could not recall the date of this meeting but stated that he did attend one at the depot where Mr Byrnes spoke about the respondent's financial position and other associated matters. He recalled that Mr Byrnes talked about the financial problems facing the respondent and particularly the diversion levy, and mentioned voluntary redundancies. At that meeting he did not ask any questions although he thought others did. He said that Mr Byrnes did not mention the amount of money the respondent needed to save nor did he suggest a figure for the number of redundancies sought by the respondent but that there were rumours amongst the staff about the number of redundancies. Mr Neilson's recollection was similar to that of Mr Seaman as to what occurred at the meeting including a reference to voluntary redundancies. He said that Mr Byrnes also referred to the respondent's obligation to pay rebates to growers as a consequence of the reduced amount of water supplied by the respondent to the growers.

33. Mr Byrnes' evidence of what occurred at this meeting was that all staff on duty were invited to attend; that he outlined the background to the decisions made by the respondent, explaining the financial position of the respondent in respect of the diversion levy and that a consultant, engaged to look at the respondent's operations, had concluded that a restructure was required. Further, that the consultant had identified two major costs to the respondent, namely wages and power costs, and had concluded that only the former could be reduced.

34. Mr Byrnes said that a copy of his memorandum to all staff, dated 25 June 1993, re "re-organisation" of the respondent (set out earlier in these reasons, Exhibit B) was handed to each staff member present and that he told them that the respondent would be seeking voluntary redundancies. He concluded the meeting by answering the questions asked by employees and inviting all present to contact him with any questions or concerns. He was confident that he had referred to a consultant being engaged by the Board, although he could not be sure that he referred specifically to Dr Beckwith or that he said that a written report had been produced. I accept Mr Byrnes' evidence of what was said at the meeting, but am not satisfied that he referred specifically to Dr Beckwith or to a written report.

35. Mr Hawken attended the respondent's depot on 9 July and met with the union members employed by the respondent. He outlined the substance of the correspondence which had passed between the union and the respondent and explained to them what their rights were under clause 21. The members expressed their concern in respect of the proposed organisational restructure and their concern that "it was basically management's position to do away with day labour and bring in contractors".

36. At 11:00 am a meeting was held in the respondent's Boardroom between Mr Byrnes, the Chairman of the Board, Mr B Kilpatrick, Mr Hawken, Mr Innes, Mr C Burnie and Mr G Rayson. Mr Hawken's evidence was that he immediately asked for information on the new technology to be introduced. In reply he was handed exhibit FF (which is set out earlier in these reasons) which he read quickly. Mr Byrnes did not read the document verbatim but rather used it as a basis for discussion. Mr Hawken objected to the lack of detail in the summary and in particular a failure to provide the basis for the figures dealing with the diversion levy. Mr Byrnes explained the information he had on the diversion levy and outlined the various communications he had had with the Rural Water Corporation and the local members of parliament.

37. Mr Hawken stated that the majority of the meeting was spent discussing the financial position of the respondent and in particular the information Mr Hawken had obtained previously in respect of the respondent's financial viability. He asked for details on how many voluntary redundancies were being sought and what total figure of savings was required. In response to each query, Mr Byrnes said that he could not give a definite answer as the Board itself did not know and would not know until they received applications from employees for the package.

38. Mr Hawken also asked Mr Byrnes to show him in diagrammatic form what the structure of the respondent would be following the restructure but was told that this was not possible because the respondent did not know what the structure would be. Mr Hawken said that he also queried who was advising the respondent and that Mr Byrnes referred only to himself and the Board. Mr Hawken believed that Dr Beckwith was not mentioned, saying that the detail of the decisions of the respondent, and the information on which the respondent based them, was of particular concern to him. Mr Byrnes' evidence was that he had mentioned a consultant and was not sure whether he referred to a report.

39. Mr Hawken expressed the view to Mr Byrnes that the contents of the proposed package (Exhibit MM) fell well short of the type of package being offered by other local government bodies. He gave Mr Byrnes a copy of packages offered to employees of the City of Kew and of the City of Prahan as examples of the industry standard, which Mr Hawken considered to be more appropriate. Mr Byrnes agreed to cost the packages over the lunch break and later advised Mr Hawken that the respondent could not afford to offer similar packages.

40. In response to a question from the court as to what he considered, in his own mind, the purpose of the meeting to be, Mr Hawken replied:

"My purpose was to look at other ways which would reduce the

need for a voluntary departure package, and also to verify

either, there or if I needed help in the way of an

accountant or whatever, to verify what the Trust was telling

me in the way of the rebates that it was going to have to

pay, the division - the water diversion charge, the SEC

tariffs, etcetera." (transcript 382, ln 30-35)

41. Mr Byrnes account of the meeting was not dissimilar and he gave evidence that the discussion was in the same vein as the meeting he held with the employees on 25 June 1993.

42. Mr Byrnes agreed, in cross examination, that the meeting was primarily concerned with him explaining what the respondent proposed to do.

43. At approximately 12:30 pm, Mr Hawken had a further discussion with the union members who instructed him to go back to Mr Byrnes to negotiate further on the terms of the package. Some of the members raised concerns about the possibility of compulsory redundancies being required if there were insufficient voluntary redundancies.

44. At the second meeting between the respondent and the union, the issue of the possibility of compulsory redundancies was put to Mr Byrnes and he was asked for a commitment that neither voluntary nor compulsory redundancies would be sought within the next twelve months to two years. Mr Byrnes said that he could not give any such commitment as it would depend entirely on the number of acceptances of the package. Mr Hawken also queried why downsizing was the only option and Mr Byrnes responded by saying that a number of options had been considered and that this was the only viable option. Mr Hawken asked further questions about the diversion levy and Mr Byrnes explained that other than the details he had already given, he had no further information.

45. Mr Hawken said that, in answer to a question from Mr Innes as to whether the respondent was seeking "to reduce, well, to cut, to do away with the water gangers role", Mr Byrnes said, in substance, "that the (respondent) had no . . . targeted work groups or functions". In response to queries on the numbers of redundancies and any target groups Mr Byrnes stated that it all depended on which and how many employees accepted the package and what salary they were paid. In cross examination, Mr Hawken conceded that at the time of the meeting it would have been difficult for Mr Byrnes to give a definite number of how many voluntary redundancies were required. He also accepted that Mr Byrnes had mentioned "that the savings that had to be made were" in the range of $300,000; $400,000 or $500,000. The balance of the meeting was spent negotiating the package.

46. On 14 July 1993 Mr Byrnes held a personal interview with each of the applicants separately. He handed a letter to each applicant and read the letter aloud (the terms of which are set out earlier). It stated that "due to unrelenting financial pressure that is beyond our control (the respondent had) been forced to restructure and consequently make some positions redundant". The letter then said that the applicant's position fell into this category and so the respondent was forced to terminate the employment.

47. On 15 July 1993 Mr Byrnes wrote to the General Secretary of the union as follows:

"Dear Sir

We would like to inform you, under Section 23 of the Award,

and following our letter of 23 June, 1993 when we advised

you that the First Mildura Irrigation Trust had made a

decision to commence restructuring in an effort to retain

viability. We now would like to provide you with an update.

The First Mildura Irrigation Trust currently has 32

employees. We sought voluntary redundancies during the past

eighteen (18) days and have negotiated a settlement with

four (4) employees with one (1) further application pending

formalisation on return from sick leave.

At last night's Board meeting a decision was made to make

further staff reductions.

I believe you are fully aware of the introduction of new

Government diversion charges which has had an enormous

impact on our business. We have had no choice but to

downsize and develop new ways of delivering an irrigation

and drainage service to growers in the Trust District.

It is anticipated that eight (8) positions will be declared

redundant and the incumbents will likely be terminated on

Thursday 29 July, 1993. Affected staff will be interviewed

on Thursday 15 July, 1993 by the Chief Executive Officer

individually and at that time will be given written details

of their redundancy package and out placement services.

The position categories include:

1 Engineer

3 Water Gangers

1 Drainage Ganger

1 Plant Operator

1 Fitter and Turner

1 Works Foreman

Under Section 23 of the Award, we will make ourselves

available for discussion with your representatives at a

mutually acceptable time.

Yours faithfully

SIGNED

R. P. BYRNES

CHIEF EXECUTIVE OFFICER" (Exhibit GG)

48. The meeting referred to in the last sentence of that letter was held at the respondent's offices on 20 July 1993 and lasted for approximately one hour, relating primarily to the need for the respondent to reduce staff and to implement redundancies. Mr Byrnes' evidence was that he repeated the information he had given to Mr Hawken as to why the respondent needed to implement the changes and that he gave Mr Saunders, the union representative, all the information that he had available to him.

(h) Telephone conversations - Messrs Hawken and Byrnes

49. Prior to the meeting on 9 July 1993, Mr Hawken had a number of telephone conversations with Mr Byrnes concerning the proposed restructure. The first took place on or about 29 June when Mr Hawken called Mr Byrnes after receiving a letter from the respondent dated 25 June 1993. The contents of the letter were discussed and the issues of voluntary redundancies, the respondent's financial position, the foregone water sales and rebates due to growers and the decision not to increase rates to pay the levy were canvassed briefly. Mr Hawken said that the union's view was that redundancies, be they voluntary or compulsory, ought to be the last option. He also referred to the specific obligations contained in clause 21. The men discussed arranging a meeting as soon as possible. A further telephone conversation was held on 7 July and paragraph (c) of exhibit EE in particular was discussed. Mr Hawken raised a concern that if union members were to be made redundant they would have difficulty getting work due to the high levels of unemployment in Mildura.

Correspondence between the respondent and the union

50. By letter dated 25 June 1993 (exhibit DD - set out earlier) the respondent advised the union that the respondent had made a definite decision on 23 June 1993 that it was to introduce changes to the respondent in respect of new technology and the organisational structure; the contents of it were discussed by Mr Hawken and Mr Byrnes on about 29 June 1993. By letter dated 29 June 1993 Mr Hawken proposed various times for a meeting between the parties and said "I trust that the status quo shall remain in place until such time as I have had the opportunity to meet with you".

51. In a letter dated 7 July 1993 the union advised the respondent that it considered the package circulated to its members to be inadequate in the light of packages recently agreed on in the Victorian local government industry. The letter stated that the union was available to attend a meeting to discuss the package and in particular the items listed as follows:

"a. the service of your outdoor staff in the past

b. the high unemployment in the Mildura region

c. the economic impact, which could be potentially

experienced by our members, should they be made

redundant."

52. Dr Beckwith contacted the respondent on 3 March 1993 to invite representatives to attend a symposium she was running in association with the Office of Labour Market Adjustment. Mr Byrnes attended the symposium along with two employees. The symposium concerned small businesses and how they were coping with restructuring and the pressures of the recession. As she had received funding from the government, Dr Beckwith made herself available to assist businesses in respect of these matters.

53. Dr Beckwith met with two water gangers and developed an understanding of what water distribution involved and offered to produce a "thumbnail sketch" of possible options for restructuring the respondent. Mr Byrnes accepted the offer. The Board decided to engage Dr Beckwith to produce a "warts and all type statement; they wanted everything to be explored and there are numerous options that are explored".

54. Although Dr Beckwith was not given written instructions on what the Board wanted her to do, her task was primarily to look at how the respondent could meet the levy. Mr Byrnes agreed in cross examination that part of Dr Beckwith's instructions were to find a way to deal with the diversion charge without changing the respondent's business plan which included remaining debt free.

55. Her report was completed and was then distributed to the Board on 17 June 1993 (the Report). It was approximately 100 pages in length and was marked "confidential" by Mr Byrnes. Once the decision to adopt the thrust of the Report was made, each copy was handed back to Mr Byrnes.

56. The Board and Mr Byrnes treated the Report as being confidential, Mr Byrnes' view being based on the sensitive information it contained. He explained that the Report contained figures, employees' salaries and other information which he considered should not be available to other organisations in a similar position to the respondent. He also considered that the Report was sensitive because its contents may have impacted upon negotiations that would be required with the union. A further basis was because it dealt with the matter of contracting out the water distribution work done by the water gangers and this information, if generally available, may have undermined the tender process. In cross examination, Mr Byrnes agreed that the release of the Report to the union and others may have resulted in the Board being obstructed from its implementation.

57. A further concern was that the Report contained some description of the respondent's structure which would be affected by the number of redundancies accepted; the report and particularly this section could have been read out of context. In cross examination, Mr Byrnes conceded that the context could have been explained if the Report had been released and that in effect he had explained the context during the 25 June meeting. In response to a question from the court, Mr Byrnes agreed that with hindsight he could have released the Report with the figures and other sensitive matters blacked out. He said that he did not do this because (a) he believed exhibit FF to be an accurate summary of the Report; and (b) the union did not ask for it.

58. Although the Report itself was not in evidence, in the course of his evidence My Byrnes outlined in some detail its areas of concern and the general nature of the matters included in the report. In cross examination he conceded that in answering questions in court he had not been required to reveal anything "inimical" to the interests of the respondent and that if he had disclosed the information (given in court) in June/July 1993 to the applicants and union it would not have been "inimical" to the interests of the respondent. Mr Byrnes then said that he did not believe that what he had said in court was much different to what he said to the employees and union.

59. Dr Beckwith identified the two major costs of the respondent to be wages and power costs. Her assessment was that the trust had in recent years done all it could to reduce power costs by introducing changes in tariffs and buying high voltage pump stations. The consequence was that this cost to the trust could not be reduced; she then presented a number of options for the respondent to consider in regard to restructuring.

60. A further option set out in the Report was contracting out the water distribution work. The Report went further and costed the contracting out of this work, including an estimate of the market price for this work and how much the respondent would be prepared to pay a tenderer.

61. The Report made recommendations about the composition of the workforce, its size and operations, the need to re-train or transfer employees and the introduction of technology. It also outlined the respondent's obligations under the award. It spelt out how the terminations should be carried out and went on to refer to the provision of counselling and outplacement services.

62. Mr Byrnes asserted throughout his evidence that exhibit FF was an accurate summary of the Report and that it contained all the information he believed the employees and the union required and all the information the respondent was obliged under the award to provide, particularly in the context of the discussions held with the employees and the union.

63. Mr Byrnes agreed that exhibit FF did not outline how the changes would impact on the employees and did not mention how many employees would be affected although at the 25 June meeting Mr Byrnes did note that the amount of manual work done by water gangers would be reduced. He said that exhibit FF specified what the respondent was doing and why the changes were being made in terms of the levy. It outlined the availability of the package and the possibility of internal transfers subject to the number of acceptances of packages.

64. Having considered all of the evidence, both documentary and oral, and the written and oral submissions advanced by counsel for the applicants and by counsel for the respondent, I have not been persuaded that the respondent has breached a term of the award as contended by the applicants.

" 21 - INTRODUCTION OF CHANGE

Employers Duty to Notify

(a) (i) Where an employer has made a definite decision

to introduce major changes in production,

program, organization, 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 relevant Union.

(ii) "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.

Employers Duty to Discuss Change

(b) (i) The employer shall discuss with the employees

affected and the relevant Union "inter alia",

(sic) the introduction of the changes referred

to in subclause (a) hereof, the effects the

changes are likely to have on employees,

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 relevant Union in

relation to the changes.

(ii) The discussions shall commence as early as

practicable after a definite decision has been

made by the employer to make the changes

referred to in subclause (a)(i) hereof.

(iii) For the purposes of such discussion, the

employer shall provide in writing to the

employees concerned and the relevant 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

provided that any employer shall not be required

to disclose confidential information the

disclosure of which would be inimical to the

employer's interests."

66. As to sub-clause 21(b)(i) I am not satisfied that the respondent failed to discuss with the employees affected and the union the introduction of the major changes which the respondent had decided to introduce, the likely effects of those changes on employees and measures to avert or mitigate the adverse effects of those changes on employees. I accept the submission by the respondent's counsel that the obligation to "discuss" those matters was an obligation to "talk or write about" them and to provide an opportunity for the employees and the union to talk or write about them. In my opinion the evidence establishes that the respondent discussed those matters during the period 25 June 1993 to 9 July 1993. Accordingly the respondent did not breach sub-clause 21(b)(i) of the award.

67. As to sub-clause 21(b)(iii), on the evidence, I am not satisfied that the respondent failed to "provide in writing to the employees concerned and the relevant union all relevant information about the changes" as required by the sub-clause. I accept the submission by the respondent's counsel (transcript 388) that on its true construction the sub-clause did not impose upon the employer an obligation to provide copies of all documents relating to the changes. The duty imposed by the sub-clause is narrower than the obligation in court proceedings to give discovery of documents. The provision requires the employer to supply to the employees and the union in writing (as distinct from orally) all relevant information. In my opinion, on the evidence the respondent did not breach sub-clause 21(b)(iii) of the award.

68. It should be added that if, contrary to the opinion expressed above, sub-clause 21(b)(iii) obliged the respondent to provide a copy of the Report to the employees and the union (subject to the proviso to the sub-clause) then I would not uphold the submission by the respondent's counsel that that Report "was properly withheld" by reason of the proviso "that any employer shall not be required to disclose confidential information the disclosure of which would be inimical to the employer's interests". In my opinion that proviso did not permit the respondent to withhold the whole of the Report. It would only have permitted the respondent to withhold those parts of the Report "the disclosure of which would be inimical to the employer's interests". A copy of the Report could have been supplied with those parts removed or obliterated. However, for the reasons given above, in my opinion sub-clause 21(b)(iii) did not impose upon the respondent an obligation to make available to the employees and the union a copy of the Report.

69. Clause 23 of the award relevantly provided as follows:

" 23 - REDUNDANCY

Discussions Before Termination

(a) (i) Where an employer has made a definite decision

that the employer no longer wishes the job the

employee has been doing done by anyone and this

is not due to the ordinary and customary

turnover of labour and that decision may lead to

termination of employment, the employer shall

hold discussions with the employees directly

affected and with the relevant union/s.

(ii) The discussions shall take place as soon as is

practicable after the employer has made a

definite decision which will invoke the

provision of paragraph (i) hereof 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 terminations

on the employees concerned.

(iii) For the purposes of the discussion the employer

shall, as soon as practicable, provide in

writing to the employees concerned and the

relevant Union 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 any

confidential information the disclosure of which

would be inimical to the employer's interests."

70. The clause imposed upon an employer certain obligations that are similar to those imposed by clause 21 e.g. the duty to hold discussions with the employees and the union and the duty to provide in writing to the employees and the union all relevant information about the proposed terminations. Similar observations, to those made above in relation to clause 21, could be made as to clause 23. However, as the respondent's counsel observed, clause 23 only applies where "an employer has made a definite decision that the employer no longer wishes the job the employee has been doing done by anyone . . . ".

71. I accept the submission in the respondent's outline, dated 9 December 1993, that, on the evidence, "no such decision was made by the (respondent)". In sub-clause 23(a)(i) the words "the job" refer to the work being performed by the employees concerned and the sub-clause does not apply unless the employer has definitely decided that he "no longer wishes (that work) done by anyone". I accept the respondent's submission (transcript 760) that the word "anyone" means any person, including the employees of independent contractors. It should be added that I also accept the respondent's alternative submission (9 December 1993) that, if clause 23 applied, the necessary discussions took place on July 15 and 20 and that the respondent provided in writing all relevant information about the proposed terminations.

72. Clause 22 of the award relevantly provided that:

" 22 - TERMINATION OF EMPLOYMENT

Unfair Dismissals

(a) Termination of employment by an employer shall

not be harsh, unjust or unreasonable.

For the purposes of this Clause, termination of

employment shall include terminations with or without

notice. . . . "

I have not been persuaded that the termination of the employment of any of the three applicants was harsh, unjust or unreasonable.

73. In Bostik (Australia) Pty Ltd v Gorgevski (No 1) [1992] FCA 209; (1992) 41 IR 452, the Full Federal Court considered how the words "harsh, unjust or unreasonable" should be interpreted. It said at 459:

"These are ordinary non-technical words which are intended

to apply to an infinite variety of situations where

employment is terminated. We do not think any redefinition

or paraphrase of the expression is desirable. We agree with

the learned trial judge's view that a court must decide

whether the decision of the employer to dismiss was, viewed

objectively, harsh, unjust or unreasonable. Relevant to

this are the circumstances which led to the decision to

dismiss and also the effect of that decision on the

employer. Any harsh effect on the individual employee is

clearly relevant but of course not conclusive."

74. In his amended outline of award breaches, handed up by the applicants' counsel on 8 December 1993 as part of his final address, the following matters were relied upon as showing that each of the terminations was harsh, unjust and unreasonable.

"(1) the applicants employment was purportedly terminated

by reason of the introduction of technological change

when there has not been introduced any technological

change such as would necessitate the termination of

their employment;

(2) the respondent failed to explore with any of the

applicants any alternatives to his dismissal;

(3) the respondent failed to consult with any of the

applicants before making the decision to terminate

their employment;

(4) the respondent failed to investigate alternatives to

the termination of the applicants' employment;

(5) the respondent failed to afford any of the applicants

an opportunity to persuade it to take action which

fell short of the termination of their employment;

(6) the respondent failed to ascertain from any of the

applicants what alternatives he might propose to the

termination of his employment;

(7) in responding to new costs the respondent preferred

adherence to its business plan over consideration of

all its options with respect to its employees; and

(8) the respondent failed to comply with its express

obligations pursuant to clauses 21 and 23 of the Award

to notify the applicants of its definite decisions, to

hold discussions with them and to provide them with

all relevant information in writing."

75. On my examination of the evidence before the court the following comments may be made on those eight contentions, each of which is rejected:

1. Their employment was not purportedly terminated by reason of the

introduction of technological change. The terminations were made

because the respondent, as its counsel submitted (Outline dated 9

December 1993), had to implement savings of at least $300,000.

2. The applicants had the opportunity to suggest alternatives to

dismissal; neither they nor the union proposed alternatives.

3. The applicants were consulted and were discussing with fellow

employees the likelihood of compulsory redundancies.

4. The respondent considered alternatives.

5 The applicants were given the opportunity to suggest to the

respondent action

6. short of termination and there was no duty on the respondent to

ascertain whether any applicant "might propose" alternatives.

7. The respondent had been placed in a very difficult position by

reason of the legislation introduced by the Government which

forced it to choose between action which might put the growers out

of business and reducing its labour force (see transcript 485).

In relation to the choice made the respondent's counsel, in their

outline of argument, dated 9 December 1993, pointed out that:

"The employees were given two weeks notice of

their termination and were paid benefits in

excess of Award requirements. They were offered

and provided with outplacement services,

financial advice and were put in touch with

relevant Government services."

8. The respondent did not fail to comply with its obligations under

clauses 21 and 23 of the award.

76. As the respondent's counsel pointed out, the respondent had statutory service obligations to its ratepayers under the Water Act 1989 (Vic.) and in particular under ss.124(7), 221(1) and 222 of that Act. In my opinion, on the evidence before the court the respondent did not breach clause 22 of the award.

77. The claims by the three applicants for damages were based upon the decision of a Full Court in Gregory v. Philip Morris Ltd (1988) 80 ALR 455. After judgment had been reserved in the present matter a Full Court in Byrne and Anor v. Australian Airlines Limited (1994) 52 IR 10 (46 FCR) decided (7 February 1994) not to follow Gregory. It decided (1) that certain provisions of an award were not imported into contracts of employment independently of the intention of the employee and employer (2) that a term that those provisions formed part of the contracts of employment could not be implied (3) that the Act did not evince an intention to confer a right to damages upon any person injured by any breach of an award under the Act. Having regard to that decision and to my opinion in this matter that the alleged breaches of the award have not been established, the applicants' claims cannot succeed.