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Tasmanian Industrial Commission
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Industrial Relations Act 1984





For the Shop, Distributive and
Allied Employees' Association
- Mr. P. A. Fenton
For Farmers Ltd - Mr. G. J. Smith with
  Mr. P. O'Connor
28.9.88                   Launceston  

This notification comes before the Commission as a consequence of the termination of Mr. Peter Marshall by Farmers Ltd. On declining to accept an offer of a transfer from Burnie to Rosebery, Mr. Marshall's services were terminated with a week's notice. The reason given was redundancy. In fact, the evidence suggests he was retrenched.

The background of the dispute could be summarised as follows:

Mr. Marshall was, at the time of his dismissal, "Weekend Manager" of Farmers Burnie Store. As I understand the position, Farmers trade 7 days per week. Mr. Marshall worked regularly on weekends and at that time was in charge of the store. For the balance of his time he was Assistant Manager to the person who was in charge of the store on Monday to Friday.

He had been with the company for more than 12 years, having worked his way up to Assistant Manager or Weekend Manager by dint of experience and application. His career path was not always well defined and the road was sometimes rough. Moreover, there was uncontroverted evidence that he had been counselled at least once in his present position regarding his personal application to the job.

So far as could be established, no records are available to pin point with any precision exactly when Mr. Marshall was appointed to his present position; or for that matter, when he was appointed at all. This management peccadillo is as unfortunate as it is frustrating in the present circumstances. For that reason neither Mr. Fenton (for Mr. Marshall) nor Mr. Smith (for the company) was able to address that important point in any detail. However, the company now has a professional management team overseeing its administrative practices and one would expect that these matters, among others, will in future be properly accommodated.

Mr. Marshall's somewhat tenuous attainment of senior status was achieved by a circuitous route that perhaps quite properly in the circumstances, involved periodic relief work at other company stores of varying size situated in other northern and north western locations.

The anti climax to his management aspirations occurred when he was invited to travel to Rosebery to inspect a company house that he was advised he would occupy if he was prepared to accept a transfer and promotion as manager of the company's Rosebery outlet.

Mr. Marshall duly accepted the invitation to inspect the house and store. On his return to Burnie he discussed the matter with his wife and subsequently declined the offer.

In his evidence he explained that the house was in very bad repair. He also informed the Commission that at the time his wife was employed in Burnie but would have no job in Rosebery. In addition the family had recently moved into a new house in Burnie. Moreover, their child was an asthmatic who would be unlikely to adapt easily to the rigours of the West Coast climate.

On being informed of his decision, the company thereupon dismissed him with a week's pay in lieu of notice. The reason given was that due to rationalisation the company proposed dispensing with the Weekend Manager position. That task would thereafter be assumed by a casual employed only for weekend work. The position assumed by Mr. Marshall for 3 days per week would also be abolished.

In mitigation of the company's decision, Mr. Smith argued that Mr. Marshall was aware that the company was experiencing difficulties with its Burnie outlet and that some rationalisation was inevitable. It was put to the Commission that as a member of the management team, Mr. Marshall must have known that the Rosebery offer was part of that rationalisation. Moreover, as it was a promotion as well, the company's action in the circumstances was quite fair.

Mr. Smith argued that, although not recorded in any instrument of appointment, it was certainly implied and no doubt understood through custom and practice that a "pecking order" of promotion existed within the overall company hierarchy. In short, this meant that promotion usually came via a form of "carousel" arrangement whereby the first promotion might be assistant manager or manager of a smaller store. The manager of that store would then move to assistant manager of the next larger store and so on. In Mr. Marshall's case the carousel would move him to Rosebery and the Rosebery Manager to the next higher position in the company. If anyone resigned or retired the carousel would move again, or someone would be recruited into a vacant position in order to maintain the pecking order or hierarchical structure.

In Mr. Marshall's case a vacancy had occurred at Rosebery. And as rationalisation had to occur at Burnie (which meant that Mr. Marshall's job was at risk), he was to be "shunted" to Rosebery with a promotion carrying a very doubtful (in my opinion) salary increase of the order of $3,000 per annum.

In this regard it is almost legend that employment in the central West Coast area almost invariably attracts a special disability allowance in recognition of the extra costs and inconvenience of living and working in an isolated mining community. Nevertheless, the offer of promotion to Manager was real enough. However, Mr. Marshall's wife, as has been said, would have needed to have given up her Burnie job1 and the family would also have had to move out of their new home. Furthermore, there remained unanswered the reaction of an asthmatic child to the West Coast climate.

Although Mr. Marshall was qualified by experience to assume control of a store such as Queenstown where there was also a vacancy, or the smaller Ulverstone store (where a vacancy had recently been filled), these were not offered to him because of the company's alleged "carousel" policy of promotion.

Mr. Fenton submitted that Mr. Marshall should be reinstated in his former position without loss of pay or privilege. Mr. Smith, on the other hand, argued that as Mr. Marshall had decided not to accept the promotion offered. Furthermore the company was prepared to effect repairs to the Rosebery house. However, Mr. Marshall was not informed of this at the time.

I believe Mr. Marshall was retrenched. Redundancy usually occurs when restructuring takes place due to new technology or amalgamation, or circumstances of that kind. Retrenchment takes place when jobs are rendered forfeit due to economic downturn necessitating the shedding of staff. There are of course other ways in which retrenchment can occur. But generally speaking retrenchment results from economic downturn.

In this case I accept that an assistant manager should have been aware that the Burnie store was in some financial difficulty. But the onus was upon management to inform Mr. Marshall and other staff that non acceptance of a transfer or promotion could result in termination. In fact it was said during proceedings that other "rationalisation" may be necessary. I am of the opinion that the company was derelict in its fundamental responsibility to act fairly to a long-serving senior staff member. It should have told him of the consequences of non-acceptance of the Rosebery job. And he should have been informed of this before being invited to inspect the house. He should also have been advised of the company's willingness to upgrade the residence.

To my mind it is quite unacceptable that a reputable company such as Farmers could be so oblivious of its basic responsibility in circumstances such as those recounted during the hearing. Moreover, the complete absence of any documented personnel information such as the terms and conditions of Mr. Marshall's appointment is likewise unfortunate and, I believe, unforgivable.

Any employer of staff is obliged by law to keep proper records. Employment is a contract and parties to that contract have both common law and statutory rights. It is simply not to the point to suggest that an employee knows his classification and his terms and conditions of employment. These should always be set out in a duly executed instrument of appointment establishing the employment contract. Any alteration to the contract should also be documented in writing.

In the instant case, had Mr. Marshall been provided with a letter of appointment indicating, among other things, that his ongoing employment or his promotion prospects were conditional upon satisfactory service and the requirement to accept transfers when and if offered, the outcome of this case may well have been somewhat different.

As things now stand, he has lost a management position and is unlikely to secure a similar job in the same area. The company has not continued him in employment for anything like a reasonable period in order that he might find another position. Nor has it attempted to help find him another job. To terminate a senior employee after more than 12 years' service with one week's notice is, to my mind, an indictment on the company's personnel policy - notwithstanding the fact that the company is unquestionably experiencing a difficult period.

In the circumstances to order reinstatement of Mr Marshall without loss of pay during the intervening period would be justified, but to my mind would probably serve no useful purpose.

I accept Mr. Smith's submission that Mr. Marshall's substantive position has been abolished. This Commission has no wish to discomfit the corporate management plan designed to return the company to viability. Nevertheless Mr. Marshall is entitled to industrial fair play.

Accordingly I refrain from ordering reinstatement as no useful purpose would be served in doing so. Were that to happen the company would be quite within its rights to immediately terminate his employment in exactly the same way as before. The award requires only one week's notice of termination by either party.

However, in accordance with Section 31 of the Act, I intend to award him retrenchment pay calculated on the basis of one week's pay for each completed year of service. In addition, I award him a further week's pay in lieu of the reasonable notice that should have been given to him of the company's intention to terminate him on grounds of alleged redundancy. In my opinion the company was remiss in not carrying Mr. Marshall for a reasonable period of time and assisting him to obtain alternative employment.

Moreover, although the Commission cannot order that this take place, I am none the less of the opinion that Mr. Marshall should be given some priority in appointment to any vacancy that might occur within the company and for which he is qualified to apply.

In summary therefore I determine this matter by awarding Mr. Peter Marshall one week's pay for each completed year of service, together with one week's pay in lieu of reasonable notice on the occasion of his termination due to redundancy or retrenchment. The week's pay in lieu of reasonable notice is in addition to the week he received on termination. An order giving effect to this decision is attached.

L. A. Koerbin

Industrial Relations Act 1984


That in full settlement of Matter T.1604 of 1988, Farmers Ltd. pay to Mr. Peter Marshall one week's pay for each completed year of service, plus one extra week's pay in lieu of reasonable notice given to him on termination. Payment is to be at ordinary rates current at the date of his termination.

Payment of the above amount may be made by two equal instalments and shall be completed on or before 10 December 1988. The first instalment shall be paid on or before 10 November 1988.

By the Commission

L. A. Koerbin

10 October 1988

1 At the time this matter was heard she was out of work.