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T6910

 

TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984
s29 application for a hearing in respect of an industrial dispute

Helen Claire Hancock
(T6910 of 1997)

and

City Heart Business Association Ltd
(ACN 009 578 152)

 

PRESIDENT F D WESTWOOD

HOBART, 17 September, 1997

Industrial dispute - Termination of employment as a result of redundancy - Finding of unfair dismissal - compensation ordered

    REASONS FOR DECISION

This application was lodged by Mrs Helen Claire Hancock pursuant to section 29(1A) of the Industrial Relations Act 1984, for a hearing in relation to an industrial dispute with the City Heart Business Association Ltd (City Heart) re the termination of her employment.

Mr Warwick, representing the applicant, told the Commission that Mrs Hancock had been employed by City Heart as an Information Booth Attendant from 21 November 1992 through until 2 April 1997 - a period in excess of 4 years. It was the applicant's contention, he said, that her employment had been terminated as if she had been employed as a casual person, and on that basis the termination was considered to be harsh, unjust and unreasonable. He submitted that Mrs Hancock's employment had been continuous and that there were no circumstances in which her employment could reasonably have been described as casual. Mrs Hancock sought reinstatement, or if that was not practicable, a reasonable and fair redundancy package.

Mr Warwick explained that Mrs Hancock's former employer was a peak representative organisation of businesses in the Hobart Central Business District whose purpose was to assist and advise those businesses. To this end there was a booth in the Mall which City Heart shared with the Police Department, and it was from this booth that Mrs Hancock performed her duties which were "to provide information to people who found themselves in the Mall, and to the community generally, about businesses and services that were available in the Central Business District."1

Mr Warwick referred to, and tendered as part of Exhibit W.1, a letter dated 22 January 1997 which Mrs Hancock had received from Mr Pickard, the President of the City Heart Business Association concerning the review of the operation of the "Booth facility in the new Mall".

The letter stated in part:

"The Board however has come to the realisation that it cannot justify continuing to operate the facility on its own. A decision was made by the board on January 21 to withdraw our support for the continued operation of the booth.

Regrettably this decision has some results that may not assist some of the Board's work in the CBD nor your situation either, given our support was chiefly the staffing of the booth. The board's decision has been notified today to the Hobart City Council and we have given notice we will continue to operate the facility at least until April 2 if this suits both parties."2

Further reference was made to a letter included in Exhibit W.1, signed by Mr T Ritchie, of 6 February 1997 which stated:

"As mentioned in my recent letter, the Board has advised Council, City Heart will not continue to operate the Information Booth beyond April 2, 1997.

Accordingly under the terms of the Enterprise agreement this notice is formal advice that your services as a casual employee will not be required from that date."

Mr Warwick contended that Mrs Hancock's employment had not been casual, regardless of the view that the employer had expressed in that letter. He submitted that Mrs Hancock had been employed on a "continuous and therefore permanent basis"3. He said that the Enterprise Agreement4 applying to the employer tendered as an exhibit established at Part II that there were two classes of employees, Information Booth Officers and the Casual Assistants. Those classes of employees were defined as follows:

"2.1.1. Information Booth Officer

An Information Booth Officer shall be an employee engaged to attend The City Heart Business Association Ltd information booth.

The hours of work of such employees may vary from time to time at the discretion of the employer.

2.1.2. Casual Assistant

A Casual Assistant shall be an employee engaged by the hour as and when required.

Casual Assistants may be dismissed or leave the employer's service at any moment without notice."5

Mr Warwick argued that Information Booth Officers were not casual employees.

Mr Warwick submitted that Mrs Hancock had a reasonable expectation of ongoing employment with City Heart which "did not reach fruition and was not borne out over time" because of a choice made by the employer; something, he said, which was not imposed upon the employer.6

He acknowledged the length of notice of the termination and submitted that the length of notice (8 weeks) was not a reason for "not paying compensation if that's what the commission decides".7

In terms of an appropriate redundancy payment, Mr Warwick initially submitted that since Mrs Hancock worked weekends at a higher hourly rate than for week day work Monday to Friday inclusive, it would be appropriate to average her hours per week at 38 at a flat rate of $12.63 per hour which the agreement provided for Monday to Friday work.

In sworn evidence, Mrs Hancock confirmed that she had been employed by City Heart Business Association Ltd between 21 November 1992 and 2 April 1997. She said she had been employed as an Information Booth Officer in accordance with the Enterprise Agreement, from 1 October 1993. She tendered as an exhibit a day book document in which she had recorded the hours she had worked with City Heart between November 1992 and April 1997. She said she believed her employment had been far more secure than the casual assistants because of the regular hours she had worked on a continuous basis, and believed she had a reasonable expectation of ongoing employment with City Heart8, particularly in view of the fact that she had been issued with a uniform in November 1996 and had moved into a new purpose-build information booth.

Mrs Hancock said she had been employed in the Information Booth by the Hobart City Council from 3 April 1997. She said she had no contract or letter of appointment from the Council and she was employed on a "day-to-day, week-by-week basis".9

Mr Ritchie, for the City Heart Business Association Ltd, submitted that Ms Hancock's termination had been done in a lawful manner, and that approximately two months' formal notice had been given. He said there had been a valid reason for the termination in that there had been a structural change to the organisation and there was no dispute about the manner in which Mrs Hancock carried out her work and there was no suggestion of misconduct. Mr Ritchie submitted that the Association believed Mrs Hancock had been treated fairly and that he had played a role in assisting her to maintain her employment with an alternative employer.10

Mr Ritchie said there was no possibility of reinstatement as there were no positions available of information booth officer within the Association.

As to Mrs Hancock's working hours, he said:

"I've tendered the exhibit to inform the commission as to the true pattern of attendance and so during the winter months the pattern was a regular 54 hours on a fortnightly basis. That calculation is arrived at by adding 45 hours at the weekly rate and nine hours at a Saturday rate. So that then gives you an average of 27 hours per week during the winter months.

During the summer months, the calculation I made is 32.5 hours per week. That's based on a 65 hour fortnight. Again ... when we get to the real summer period ... the employment there was 52 hours during the week at $12.63 and 13 hours of a Saturday rate at $20.36."11

and further

"When you add 27 and you add 32.5 you will come up with an average per week, which is substantially less than 38."

That simple average is 29.75 hours.

Mr Ritchie directed the Commission's attention to the percentage of hours at the loaded rate. He said that twenty percent of hours worked in summer were paid at $20.36 and 80 per cent of the hours at the $12.63 rate; in winter the relevant percentage at the higher rate was 16.67.12

Mr Ritchie said that he had used the word "casual" in relation to Mrs Hancock's employment and said it was based on the wording in the enterprise agreement. However, the manner in which the employment was terminated was not, he said, consistent with the definition of a casual assistant. He confirmed that the position of Information Booth Officer with the Association had been made redundant and the Association did not have the capacity to reinstate Mrs Hancock.

I indicated to the parties that I felt the termination of Mrs Hancock from her employment was unfair and that she was entitled to some remedy. I urged the parties to negotiate a settlement based on the agreed number of hours worked, on average, per week.

The hearing adjourned on the understanding that the parties would advise the Commission when settlement had been effected to resolve the dispute. Should they not be able to reach a settlement I indicated that I would make a formal finding and determine the appropriate remedy.

Subsequently the applicant advised the Commission that although the parties had met for discussions, they had failed to resolve the dispute, and a resumption of the hearing was requested.

When the hearing continued Mr Warwick submitted that the average pay per week for Mrs Hancock during the three financial years 1994/95, 1995/96 and 1996/97 was $442.98. He sought 3 weeks pay per year for each of Mrs Hancock's four years of service. But he argued that there must be some "significant and persuasive argument based on exceptional circumstances" not to view two weeks for each year of service as the appropriate remedy.

Mr Ritchie said that Mrs Hancock continued to perform the functions of an information booth officer as an employee of the Hobart City Council, although he was not certain what the future held.

Given that there was no position with the Association to which Mrs Hancock could be reinstated, Mr Ritchie submitted that having considered the comments of the Commission, the Association was prepared to offer one week's pay for each completed year of service (viz. 4 years) at a weekly rate of $542.75, a total amount of $2171.00. That weekly figure, he said, was based on typical hours performed by an information booth officer during the peak period.

That offer was rejected by the applicant.

In the circumstances the Commission is required to decide the matter and, if considered necessary, issue an appropriate order.

FINDING

Having regard to the provisions in the Enterprise Agreement dealing with the definitions of Information Booth Officer and Casual Assistant, and the termination of employment provisions for Information Booth Officers (which require two weeks' notice), and given Mrs Hancock's regular and continuous employment with City Heart, and notwithstanding the 20% loading on the hourly wage rate paid in lieu of annual and sick leave, I am satisfied that Mrs Hancock was not a casual employee.

However, I have some difficulty with Mr Warwick's contention that Mrs Hancock was a "permanent employee". I note that Office Staff of the Association are permanent employees (see paragraph 1.1.1. of Part I of the Agreement), but that status, whatever it means, is not conferred on Information Booth Officers.

It is uncontested that Mrs Hancock was employed by the Association for in excess of 4 years. Her employment pattern, although dependent on seasonal demands, was regular and continuous. There was no criticism of her work performance, and in all the circumstances I consider it was reasonable for her to expect that her employment with City Heart Business Association would be ongoing.

However the Association was perfectly entitled to decide whether or not it should continue to provide the Information Booth services in the City Mall. The Association has decided not to continue such a service and the Commission, as currently constituted, will not interfere with that decision. I am satisfied that the Association gave Mrs Hancock fair notice of its intention to terminate her services following its decision to make the position redundant; however, I am not satisfied that the Association fairly compensated her for the loss of her job at the time her employment was terminated.

Accordingly I consider that Mrs Hancock was unfairly dismissed from her employment with City Heart Business Association Ltd when her position became redundant. I make such a finding although section 31(1C) of the Industrial Relations Act 1984 now specifically enables the Commission to deal with severance pay for employees whose employment has been terminated as a result of redundancy.13

Having heard from Mr Ritchie that City Heart no longer intends to operate the information booth in the Mall, and that Mrs Hancock's former position with the Association is redundant, and notwithstanding the primary remedy to this dispute of reinstatement which was sought by Mr Warwick, I consider that reinstatement of Mrs Hancock to her previous position, for the reasons advanced by Mr Ritchie, is impractical.

Before deciding whether or not I should make an order in respect of this industrial dispute, I am required, pursuant to section 31(1A) of the Act to take into account the standards of general application contained in Part II of the International Labour Organisation's Convention concerning the Termination of Employment at the Initiative of the Employer.

In the circumstances of this dispute, Article 12 of the Convention has relevance. It provides, amongst other things, that "a worker whose employment has been terminated shall be entitled, in accordance with national law and practice, to a severance allowance the amount of which shall be based, amongst other things, on length of service and the level of wages".

It is agreed that Mrs Hancock was employed by City Heart for four completed years. There was no dispute between the parties as to the level of wages received by Mrs Hancock; in particular the figure of $442.98 per week which was put forward by Mr Warwick as an average per week for the completed months from 1994 to 1997 was accepted by Mr Ritchie as being accurate.

However I have considered that calculation and I am not prepared to accept in these circumstances an average calculated over three years.

Mr Ritchie also put forward an estimate of the hours worked by Mrs Hancock which when reduced to weekly figures resulted in an average of 22.5 hours Monday to Friday, and 4.5 hours weekends in the winter months, and 26 hours Monday to Friday, and 6.5 hours weekends in the summer months. Using the hourly rates provided by the Agreement at the time of Mrs Hancock's dismissal, the following estimated average wages per week for the winter and summer months is as follows:

    Winter:
            22.5 hours x $12.63 per hour = 284.18
            4.5 hours   x $20.36 per hour = 91.62        $375.80 per week
    Summer:
            26 hours    x $12.63 per hour = 328.38
            6.5 hours   x $20.36 per hour = 132.34         $460.72 per week
                                                                        $836.52 per week

    Assuming an equal number of "winter"
    and "summer" months, that would result
    in an average per week of                                   $418.26

I have considered Mr Ritchie's submission that he assisted Mrs Hancock to continue her employment as an Information Booth Officer with the Hobart City Council and I accept that he had a part in that arrangement. However he was unable, naturally, to guarantee the life of that new employment and Mrs Hancock gave evidence to the effect that the arrangement was a day-by-day, week-by-week affair with no letter of appointment or contract. Accordingly I am not prepared to offset that circumstance against the level of compensation to which I consider Mrs Hancock is entitled.

In all of these circumstances, having determined that Mrs Hancock was unfairly dismissed from her position with the City Heart Business Association Ltd when her position was made redundant, and having taken into account Part II of the relevant ILO Convention, I make the following order.

ORDER

That in full settlement of this industrial dispute and pursuant to section 31(1) of the Industrial Relations Act 1984, I hereby order that City Heart Business Association Ltd pay to Mrs Helen Claire Hancock an amount by way of compensation equivalent to 2 weeks' pay for every year of her completed service (four years) with that employer up to her dismissal on 2 April 1997 at the rate of $418.26 per week; a total amount of $3,346.08. Such payment to be made to Mrs Hancock by City Heart Business Association Ltd by 8 October 1997.

 

F D Westwood
PRESIDENT

Appearances:
Mr R Warwick for Ms H C Hancock
Mr T Ritchie for City Heart Business Association Ltd.

Date and place of hearing:
1997
May 15
June 13
Hobart

1 Transcript p.5
2 Transcript p.5
3 Transcript p.5
4 City Heart Business Association Ltd Enterprise Agreement 1993
5 Enterprise Agreement p.7
6 Transcript p.19
7 Transcript p.21
8 Transcript p.12
9 Transcript p.12
10 Transcript p.25
11 Transcript p.29
12 Transcript p.30
13 Industrial Relations Amendment Act 1997 received Royal Assent on 27 June 1997 and became operative on 28 June 1997.