T7339
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Jennifer Marguerite Phillips and Murphy & McKay Funerals
Industrial dispute - termination of employment - valid reason for termination - insufficient notice of redundancy - order issued for payment of compensation in lieu of notice in full settlement of dispute REASONS FOR DECISION This application was lodged by Jennifer Marguerite Phillips pursuant to section 29(1A) of the Industrial Relations Act 1984 in relation to an industrial dispute with Murphy & McKay Funerals re the termination of her employment. The matter came before the Commission for hearing at Burnie on 4 February 1998. Mr Verney, a legal practitioner, sought, and there being no objection on the part of the respondent, was granted leave to represent the applicant. Mr and Mrs Parry, the owners of Murphy & McKay Funerals, represented themselves on 4 February 1998. On 12 February, Mr Friend, a legal practitioner, sought and was granted leave to represent the respondent. The following persons were called to give evidence: Mrs Rennie Irene Smith Mr Verney, in outlining his case, said the issue before the Commission was that his client's position as managing funeral director at Murphy & McKay Funerals at Devonport had been terminated on 29 October 1998. His client believed, Mr Verney said, there were three principal reasons why her employment was terminated: the first was that her employer was prejudiced against her in relation to her age; the second that he was prejudiced against her in relation to her gender; and the third reason was that she was related to the previous owners of the business. Mr Verney said Murphy & McKay had been owned by Mr Dennis and Mrs Denise Waterman, Mrs Waterman being the applicant's sister. The business had been sold to Vincent Funeral Services based in Burnie in July of 1995. Mr Verney said that, as he understood it, Murphy & McKay was the funeral directors' business in Devonport; Vincents was based primarily in Burnie. He said the reason given for the termination of Mrs Phillips' employment was that business was down and funeral numbers were fewer. Mr Verney submitted that in addition to evidence generally of Mr Parry's prejudice against Mrs Phillips based on her gender and her age, there would be evidence of a particular incident in March 1997 when Mr Parry had made it clear that he wanted to remove Mrs Phillips from the business, and that had been at a time when the business was going well. Mr Verney asserted that Mr Parry had made up his mind some time before the actual termination that Mrs Phillips would go, and he said it was at a time and for reasons which were quite inconsistent with the reasons he had subsequently given. He said Mrs Phillips had worked at Murphy & McKay for four and a half years prior to the change of ownership and then for two and a half years subsequent to the changeover. Prior to the changeover, July 1995, she had been working as a permanent employee, but working irregular hours. Subsequent to the changeover she had become the manager of the business in Devonport. As manager her duties were that she had to arrange funerals, direct funerals, arrange and conduct the transfer of bodies, full time office work, and also perform tasks such as cleaning. Out of hours she was on call so that bodies could be picked up, which was a task she had to do unassisted. She was receiving approximately $33,000 per annum at the time of her termination. Mr Verney said that on termination, she had been paid her holiday entitlements, two weeks' pay for each of the two and a half years that she had been employed by Mr Parry, and an additional two weeks' pay which effectively had been in lieu of notice, he said. Mr Verney submitted that if the Commission found that reinstatement of Mrs Phillips to her previous position would be impractical, the applicant would seek compensation based on actual lost earnings between the date of termination and 24 March 1998. In her evidence Mrs Phillips said she had become manager at Murphy & McKay Funerals on 31 August 1995. Prior to Vincent Funeral Services taking over the business in July 1995 she had been a "permanent casual" employee when her sister Denise, and Dennis Waterman had owned the business. Mrs Phillips said Mr Parry kept saying he would prefer a male manager for Murphy & McKay, as "a male could join Lions, Rotary and Apex and give themselves a much more public profile."1 Mrs Phillips said that it was a difficult task to get the stretcher holding a deceased person into the van as one end of a stretcher had to be physically lifted. She had not been offered help with the heavy part of the work. She said Mr Parry often said "You wanted be a funeral director, this is part of your job description so it has to be done".2 She referred to an occasion when she had been to Burnie to assist Mr Parry with a body preparation and she had to bring the deceased back to Devonport for a viewing. She said that drawing the coffin out of the station wagon and placing in onto a church trolley had been an extremely difficult job and that she did not receive any help. When staff members were offered the opportunity of taking part in an accredited embalming course, Mrs Phillips said she had expressed a keen interest, but Mr Parry had told her that her age was against her. She said she was 51 at the time. She said she had hoped to be able to work until retirement age. Mrs Phillips said that she had the feeling that Mr Parry had not liked the fact that she was still employed at Murphy & McKay as she was Denise Waterman's sister. At a staff meeting at which Mr Parry announced a change in policy relating to the conduct of funerals, Mrs Phillips had said that the new policy was the way funerals had been conducted by the previous owners. Mrs Phillips said she was humiliated by Mr Parry's reaction. Mrs Phillips said she felt that Mr Parry was prejudiced against her personally because of the fact she was related to the previous owners of the business, and because of her age and her gender. She said there had been many times when she felt she had wanted to resign, but financially she could not. She said she "loved" her job.3 Mrs Phillips said that she had been told a car would be available for her use, even during holidays, so she had sold her private car because it "became superfluous". Some six to eight weeks before her position was made redundant the decision was made to sell the company cars. She then had to purchase another car and currently had a house loan and a car loan and very limited means of managing both.4 In cross-examination Mrs Phillips denied there was an employment contract in her name and she denied ever having sighted such a document. She said it was more in the terms of an oral agreement that she would be paid a certain amount by way of wages and have a certain entitlement for holidays.5 Later she said that she did get a schedule (which dealt with her conditions of employment), but had not signed any agreement. She said she was aware that the number of funerals had declined in the last year that the Watermans had operated Murphy & McKay, and had declined still further after Mr Parry had taken over and she had been manager. She had understood that Mr Parry needed to take action and she was aware that he had endeavoured to reduce labour costs. She agreed that she had been the only employee of Vincent Funeral Services, including Murphy & McKay, since July 1995 who had attended a national funeral directors' conference; and that a number of other female employees, both from Burnie and Devonport, had been sent to one-day conferences.6 Mrs Phillips said they were the only two conferences she had attended. She said she was grateful for the chance to attend those conferences but it still did not eradicate her feelings that Mr Parry was prejudiced against her. Mrs Phillips said she had been unemployed since the end of October 1997 when her employment at Murphy & McKay Funerals had been terminated. Mrs Rennie Smith gave evidence that she had been an employee of Murphy & McKay between July 1995 and March 1997, and was now the manager of another funeral service in Burnie. She said she resigned from Murphy & McKay because felt she had been unfairly treated by Mr Parry. Mrs Smith referred to a conversation she had had with Mr Parry on 21 March 1997 when he had made comments about the way Murphy & McKay was being run and had said that he was not happy with Mrs Phillips' performance. She said he had told her he wanted to get rid of Mrs Phillips and offered to put her (Mrs Smith) in as manager at Murphy & McKay. Mrs Smith also referred to the staff meeting at Murphy & McKay in Devonport on 24 March 1997, when Mr Parry told staff that he was not happy with the way women were conducting funerals. He had said he would be going back to having the women look after the bereaved family and that the men would go back to the role of directing or conducting the funeral. She said at that time Mrs Phillips had made the comment that that was how the previous owners used to do it. Mrs Smith said Mr Parry had reacted strongly to the comment and had yelled at Mrs Phillips at the top of his voice, and it had been an extremely emotional or outburst to what she thought had been a relatively innocent comment. Mrs Smith described an instance when she, on her own, had to transfer a 22 stone deceased man from one location to another. Before performing the transfer she had protested that she would not be able to handle the job as two men had previously had great difficulty getting the body out of the van. But Mr Parry had said, "You will do it. This is the problem we have with having women in the funeral industry. They're not as strong as men, but I expect that man to be back at the crematorium for his cremation service tomorrow".7 She said it had been an enormous effort, but she had performed the task on her own. In relation to Mr Parry's alleged prejudice against Mrs Phillips because of her age, Mrs Smith referred to the occasion when Mrs Phillips, at the age of 51, had requested to do a course, and said Mr Parry said to her, "It's not worth me paying for you to do any courses, Jenny, because you're too old".8 Mrs Smith said that since Vincents took over Murphy & McKay in July 1995, the ratio of women to men and the average age of the staff had decreased. In cross examination Mrs Smith said that while employed by Mr Parry she had been to a one-day conference, "Women in Funeral Service", for which her fares and conference fee had been paid by Mr Parry's company. Mrs Denise Waterman said in her evidence that Mr Parry treated her "amicably" during the period of her employment with him which was for eight weeks after the sale of the business. However, she described an episode when, at a cremation service in Ulverstone she had had difficulty in getting a coffin from the hearse into the chapel and had asked another employee for assistance. Mr Parry had overheard her asking for assistance and, in front of mourners, had told the other employee to "Go out the back". Mr Parry had said at the time, "that was why women were unsuitable for the funeral industry because they weren't geared for it".9 She said Mr Parry was very angry, and had raised his voice. After leaving Murphy & McKay, Mrs Waterman said she had had little contact with her sister for 12 months because Mrs Phillips was very protective of her job and did not want to have much to do with her and her husband. Mr Friend called Mrs Margaret Churcher to give evidence on behalf of Murphy & McKay. Mrs Churcher said she found Mr Parry to be a good employer and had never seen him discriminate against any employee. She said her position had been made redundant due to the decrease in of the number of funerals. In cross examination Mrs Churcher agreed that Mrs Phillips had always dressed appropriately, and presented a good image as the manager of a business. Mr Stephen Parry said he was a director and equal shareholder with his wife, Allison, of Vincent Funeral Services and had been in that position since 1 July 1994. He had worked in the funeral business since 1981, commencing on a casual basis and becoming full time in October of 1986. He said that the company had three branches, operating in the north-west of Tasmania. The administration, main mortuary complex and coordination centre were at Burnie, there was a chapel and a crematorium at Ulverstone and a chapel at Devonport. The Devonport chapel was the one that traded as Murphy & McKay Funerals. Prior to the purchase of the Murphy & McKay business he said the Vincent Funerals Services operated with its main headquarters at Burnie, and with an unmanned branch at Ulverstone. He said there were only three crematoriums in the State and the north west coast's only crematorium was at Ulverstone. The contract for purchase of Murphy & McKay included the freehold land which included the buildings, the chapel complex, all the plant and equipment associated with running a funeral business and an additional item of $10,000 for stock, and the goodwill was the major component. At the time of transfer it was mutually agreed that Dennis Waterman would not work with him, Mr Parry said, but Denise Waterman was requested to stay on for 12 months to assist in the transition of the business. There was a written contract. Mrs Waterman resigned after 8 weeks, and on her recommendation Mr Parry said he appointed Mrs Phillips as manager at Devonport. He said Mrs Phillips had been very loyal and had never let him down on any occasion. He said she had been a good manager.10 She had never complained directly about the heavy work she had to do. Mr Parry said that as a result of discussion with staff he had implemented a policy that all body transfers were conducted through the Burnie branch by male staff wherever possible. For home transfers he said always two staff went and sometimes female staff, especially from Murphy & McKay, were required to attend to those transfers. Since he had taken over the business of Murphy & McKay Mr Parry said new funeral operators had commenced operating on the north west coast which had contributed to the decline in his business. Statistical information11 in relation to the number of funerals conducted by firms on the north west coast for the years 1994/95, 1995/96, 1996/97 and until February 1998 was presented. He said he met with the Devonport staff on numerous occasions and shared with them the profit and loss statements and indicated the decline in profit. He said his firm had fairly high staff numbers by comparison with other funeral firms. He said his first aim was to try to reduce expenditure, initially the cost of home phone accounts and by the sale of company motor vehicles which had been available for private use. Salaries were increased, although not proportionately, as compensation for the loss of the company vehicles and an allowance was paid for the home telephone. Mr Parry said that before Mrs Phillips' position had been made redundant, two other employees, both after hours phone answerers, had had their hours reduced and then eventually their positions had been made redundant, as were other employees. Mr Parry and his wife took over answering phones after hours. Mr Parry said that the decision to make Mrs Phillips' position redundant was an economic decision. It was found there was no need for a manager at Devonport as it could be run quite comfortably from Burnie.12 Mr Parry said he and his wife had deliberated for some time and then decided that that was the only way they could reduce expenditure further. Mr Parry said he had no bias against Mrs Phillips in relation to her sex. He said at times his staff had been more than 50 per cent female, including one in a senior role who still runs the financial side of the company in his absence. Mr Parry said that during her employment Mrs Phillips had attended the AFDA13 conference. He said that had been the first and only time they had sent another staff member to a national conference. Mrs Phillips also attended the Women in Funeral Services seminar in Melbourne. He said with a large number of female staff he felt it was important to send women to the conferences. In relation to the allegation in the evidence of Mrs Waterman that he would not allow a male employee to assist a female employee in carrying a coffin at a funeral in Ulverstone, Mr Parry explained that he had been complying with an instruction from the then managing director and disputed the allegation he had created a scene in front of mourners. When asked if he had made the comment to Mrs Phillips that he wanted a male manager so he could join the community groups like Rotary, Mr Parry did not deny it. But he said the reason was not only to have a male manager, but that a male joining some of those organisations would certainly supplement the business. Mr Parry acknowledged that he had introduced to Mrs Phillips, at the Devonport Office, a man for whom he was keen to find a position with Murphy & McKay. However that prospect had not eventuated because of the company's financial downturn. In relation to evidence given by Mrs Smith that she had to single-handedly move a coffin containing a very large deceased man, Mr Parry said he had no knowledge of the incident, and agreed it would be physically demanding. But he said that equipment was designed to help with that sort of situation. He agreed that complaints had been made, but he said they were about the awkward nature of the work rather than about the heavy nature of the work. Mr Parry denied having bias against Mrs Phillips because of her relationship to the Watermans. He referred to the fact that when Mrs Phillips' son had been unemployed he had been happy to employ him and he was still employed as a funeral assistant. Mr Parry also denied that he had any bias against Mrs Phillips because of her age. He said he and his wife had realised that it was going to be extremely hard for Mrs Phillips to get another job. That had weighed heavily on them, but he said there was nothing else they could do. In reply to evidence that Mr Parry would not allow Mrs Phillips to do an embalming course because of her age, he said there had only been room for 3 placements and he had had 9 applications. Because the embalming course took 3 years with two extra years to gain admittance to the institute, he said it would have taken between 6 to 8 years to get any benefit from the training. He said the courses cost about $9,000 each and he did not think it was going to be beneficial for Mrs Phillips to do the course. Another staff member had been denied for the same reason. He claimed that age was a factor in determining who should take that particular course. Mrs Phillips also would have had to relocate to Burnie. At that time Mrs Phillips was part of the Devonport team and logistically was required at Devonport. When asked whether he was aware that Mrs Phillips had purchased a new car at the end of September as a result of the sale of the company car in mid September, Mr Parry said he knew she had purchased a car, but was not aware of the date of purchase. He did not deny that at the time Mrs Phillips bought her new car he had already given a great deal of consideration to dismissing her. But he said he did not think it appropriate to warn her. It was agreed that the following termination payments had been made to Mrs Phillips:
Mr Friend submitted there was no link between the allegations of prejudice or discrimination and the dismissal. He said there were some isolated incidents, most of which denied, over a 7 year period which had been magnified and misconstrued. Mr Friend contended that the redundancy package that was paid to Mrs Phillips was quite fair in the circumstances and in respect to annual leave it had been generous. Mr Friend submitted that a successful reinstatement was not a realistic possibility, given that the employer would have to "terminate someone else" which would result in another unfair dismissal claim; the applicant's approach to the Australian Funeral Directors Association, and the animosity between the parties. As to any other remedy, Mr Friend submitted that the only amount that should be ordered to be paid was an amount to compensate Mrs Phillips from 11 November, until the date on which the matter was first listed for hearing which was 17 December 1997. Mr Verney agreed with the submissions of Mr Friend in relation to the question of reinstatement. Findings I have considered the submissions and evidence in relation to the claim that Mrs Phillips was dismissed from her employment because her employer was prejudiced against her because of her age, because of her gender, and because she was related to the previous owners of the business. While there were instances when Mr Parry may have made decisions affecting Mrs Phillips which were related to those factors, I am not satisfied that they were the reasons for her dismissal. I have found the evidence of Mrs Waterman, Mrs Churcher and, to a large extent, that of Mrs Smith, of little help to me in deciding this matter. Dealing first with the suggestion that Mr Parry was prejudiced against Mrs Phillips because of her age, I consider that the responsibility for determining who amongst his employees should be provided the opportunity to take the embalming course was solely a matter for Mr Parry. While Mrs Phillips' age was clearly a factor in his decision, I do not regard it as unreasonable, given the other factors involved, that Mrs Phillips was not selected to do the course. The other factors referred to by Mr Parry which I consider were relevant were the length of the course, its cost and the fact that the embalming process was performed at Burnie. I am not persuaded that Mrs Phillips was dismissed because of her gender. I note that Mr Parry expressed the view that a man could have provided a useful promotional avenue for his business by joining a number of service clubs, but I do not consider that issue was involved in Mr Parry's decision to make the position of manager at Devonport redundant. Male staff at Devonport and Burnie had also been made redundant. It is clear that Mr Parry had decided to rearrange staff responsibilities along gender lines to allow female staff to look after families of the bereaved and allow male staff to perform the more formal duties associated with the funeral service. This information was put to the Commission in the context of Mrs Phillips' relationship with the Watermans and I do not think Mrs Phillips regarded the rearrangement as sexual discrimination. In any event I consider that operational decision to be one which was open to Mr Parry. It is also clear that Mr Parry agreed that the transport of bodies of deceased persons could be awkward at times, but with the use of appropriate equipment females were capable of performing the tasks required of them. In that respect I note that Mrs Phillips continued to perform her duties even though she found some of the tasks to be extremely difficult. Mrs Smith confirmed a similar experience. The Parry's also arranged for Mrs Phillips to attend the AFDA conference, the first time a non-family member of the business had done so, and, along with other female employees, to attend a one-day conference. Mrs Smith's evidence, in part, was that Mr Parry was not happy with Mrs Phillips' performance and that he wanted Mrs Smith to be the manager of Murphy & McKay. However, Mrs Phillips remained manager for approximately a further six months and Mr Parry, in his evidence, said that he thought Mrs Phillips was a good manager. I accept his evidence on this point. In the circumstances I am unable to conclude anything of relevance from these two conflicting pieces of evidence other than that from Mrs Smith's point of view it seemed that Mr Parry had no objection to employing another woman as a manager. Taking the foregoing circumstances into account I find it unlikely that sexual discrimination was a factor in this dismissal. I am not satisfied that the claim that Mrs Phillips was dismissed because she was related to the previous owners has been substantiated. The fact that Mrs Phillips' son remained in employment with the Parry's also suggests that it is unlikely that the family relationship with the Watermans was a factor in determining whether or not an employee remained with the company. Certainly there is a history of animosity between Mr Waterman and the Parry's, and now between Mrs Waterman and the Parry's. However I am not convinced that that animosity was in any way directed at Mrs Phillips. On the material put to me I am satisfied that the reason that Mrs Phillips' employment was terminated was as stated by Mr Parry. That was because of the continuing reduction in the number of funerals conducted by firms on the North West Coast since the Parry's took over Murphy & McKay and the Parry's view that it was necessary to reduce the costs of running the Devonport operation. I am satisfied that the Parry's attempts to cut costs by various means, including finally, staff reductions, were genuine attempts to improve business efficiency, or in the language of the ILO Convention on Termination of Employment at the Initiative of the Employer, based on the operational requirements of the undertaking. In the circumstances I consider there was a valid reason to terminate the employment of Mrs Phillips and I do not intend to interfere with the employer's prerogative in this regard. I turn now to the question of notice and severance payment as provided for in the ILO Convention. I will deal first with the severance payment. Mrs Phillips was paid an amount of $3366 as a termination payment based on her length of service. I think that payment was appropriate and I will not interfere with it. Mrs Phillips was paid holiday pay of $3728.52. I consider in the circumstances that was appropriate also. However I am not satisfied that Mrs Phillips was given sufficient notice that her position was to be made redundant. I consider that the period of notice given to Mrs Phillips of her impending dismissal was unreasonable and inadequate for the following reasons. Mr Parry conceded that at the time Mrs Phillips purchased her new car he had already given a great deal of consideration to dismissing her. That was at the end of September, approximately one month prior to her dismissal. I am satisfied that the Parry's had considered making Mrs Phillips' position redundant well before that date. Mr Parry's reason for not telling Mrs Phillips that her position was to be made redundant is not acceptable. An employee is entitled to know as soon as is practicable what an employer has in mind regarding that employee's future so that the employee can plan and take action to maximise his or her opportunities. In these circumstances I consider Mrs Phillips should have been given at least 8 weeks notice of the employer's intention to restructure the Murphy & McKay operation at Devonport by making the manager's position redundant. For the purpose of explaining the order which follows, I note that Mrs Phillips received 2 weeks pay in lieu of notice as she chose not to remain at work following advice on 29 October that her employment was to be terminated in 2 weeks. Therefore the additional notice payable is 6 weeks. Accordingly, pursuant to section 31(1) of the Industrial Relations Act 1984, I hereby order that, in addition to termination payments already paid to Mrs Jennifer Phillips, Murphy & McKay Funerals pay to her an amount of $4,039.20, being the equivalent of six weeks' pay, as compensation in lieu of notice in full settlement of this industrial dispute. Such payment to be effected by 17 September 1998.
F D Westwood Appearances: Dates and places of hearing: 1 Transcript p.55 |