T7941
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Rick Andrew Allie and Island Block and Paving
Industrial dispute - termination of employment - alleged unfair dismissal - application dismissed REASONS FOR DECISION The background to this dispute is that Mr Allie had been employed by Island Block and Paving (the Employer) in a full time capacity since 3 November 1994. Prior to that he had been part time for a period of approximately six (6) months. He was employed as the Hobart Area Manager and responsible to the General Manager, who was based in the North of the State. His employment terminated on 13 August 1998. There was no evidence during the hearing of this matter to indicate that Mr Allie was anything other than a competent and hard working employee. This was reinforced by a history of salary increases to Mr Allie and a growing business in Hobart. On 25 June 1998 Mr W Fawdry Managing Director of Island Block and Paving advised Mr Allie that the business operation of the company would be changing and it was therefore contemplated that there would be a change to his salary structure. The business change would result from the implementation of an agreement that had been reached with Kemp and Denning (K&D) and was planned to be implemented from 1 September 1998. Mr Allie's salary at the time was $38,000 p.a. and he was provided with a company car. The new proposal put to him by the company was that his base salary would be reduced to possibly $25,000 p.a with a further proposal that he purchase a car and be paid commission on sales achieved. On being advised of the above, at a later meeting with Company management, Mr Allie raised the question of a possible redundancy payment, given that his employment status would change. After seeking advice from the Tasmanian Chamber of Commerce and Industry (T.C.C.I.) the Employer advised Mr Allie that he would be entitled to a redundancy and also advised him that he could apply for the restructured position when it was advertised. Mr Allie did not apply for the position and the company terminated him and paid a redundancy of two weeks pay for each year of service. Before addressing the respective merits of this case I feel constrained to make some observations about the attitude of both parties which has now resulted in this case being dealt with by the Commission. From the evidence it is clear that Mr Allie believed the restructured job was rightfully his and the Employer should offer it to him, he would not apply for it. The Employer on the other hand, appears to have taken umbrage at the Employee asking about a redundancy and from then on adopted the stance; if he wants the job he can apply for it and win it against all comers. Neither side would relax their position thus leading to the termination. A most unfortunate situation given that the employee is now unemployed and the Employers evidence was that Mr Allie was the preferred person for the job. Mr Allie's evidence in this matter is that the restructured position is primarily the same as the one he occupied for some years and it was rightfully his, he didn't see why he should have to apply for the position which he believed he created.1 He acknowledged that he was invited in writing to go to Launceston on 21 July 1998 to discuss the new position2 but he declined the invitation for the above reasons. In the same correspondence, Ex.T.4. that contained the abovementioned invitation from management the following words were included "Rick, you are welcome to apply for that position". Mr Turnbull appearing for Mr Allie in cross-examination of Mr Thurlow the Sales and Marketing Manager and in concluding submissions highlighted the use of those words in the correspondence to Mr Allie. Mr Thurlow acknowledged that the words did not give any commitment by the Employer to Mr Allie concerning the new position.3 It was simply an invitation to apply and he would be considered with other applicants. Mr Thurlow denied that the decision had already been made at the time of writing the letter that Mr Allie would not get the position even if he applied for it.4 Mr Allie's evidence was that from the time he was advised of the likely changes to the Hobart operations of Island Block and Paving he sought written advice on the restructured position but was unable to get appropriate responses from management. The Employer's evidence was that discussions over a period of time with K&D resulted in an ultimate agreement between the two Companies which then impacted on the Hobart operations of the Employer. Mr Allie's job as Hobart Area Manager would no longer be required and a new position of Hobart Technical Representative was to be created. Once this became clear the Employer had discussions with Mr Allie during which he (Mr Allie) raised the question of a redundancy. Following general advice from the T.C.C.I. the Employer calculated a redundancy payment for Mr Allie and commenced the process of filling the new position. The evidence of Mr Fawdry the Managing Director on the T.C.C.I advice and his response to it reads.- "Mr O'Neill xn And what did that advice indicate to you?............ It was a bit of a mixed bag. There was advice that, initially, I didn't have to pay a redundancy but there was a 'but' in it and the 'but' was that if at any time in the future it could be proven that we hadn't paid the same money, we could structure it with a retainer and a commission, but if, for whatever reason, that commission wasn't achieved, Rick could have a case that he should have got the same money he'd had before and I thought, well, the fact that Rick is concerned about a redundancy today - in five years time I couldn't see him improving. In other words, you mitigated against the risk and paid the redundancy with the view that Mr Allie was very much a part of the ongoing business organisation?............ Well, the idea for the redundancy was, it was explained to me by the TCCI that Rick wasn't redundant but the job was and when that happened, okay, I've got to pay him the redundancy, which I did. In doing so, we've got a new job and I wanted Rick to come up and talk to us about it. In fact, it was our intention that he spoke to us on the Tuesday morning about the job prior to K & D's representatives coming to our factory, so that if we could sort out what he wanted, we could then say, well, this is your man and that was our intention."5 As Mr Allie did not take up the offer to talk to company management, the Employer proceeded to fill the new position and terminated Mr Allie. Mr Fawdry gave evidence that the original position of Hobart Area Manager and the new position of Hobart Technical Representative were very different, with the new job designed to suit changed circumstances for the company's operation in Hobart. From a comparison of Ex T.2. a position profile of the Hobart Area Managers role and Ex T.6 containing a similar profile of the new position and consideration of the transcript of the evidence on the two roles, I conclude that the jobs are different. While many of the general requirements are the same for both positions particularly in relation to the technical responsibilities and skills there was no longer a responsibility for the management of an office, other staff, a budget and responsibility for the collection of monies. These are significant responsibilities, from the evidence not required in the restructured position. I therefore conclude that the Employer did have a genuine restructuring of its business in Hobart and the position previously occupied by Mr Allie was redundant as a result of the restructuring and a new position created. It follows that I therefore accept the right of the Employer to fill the restructured position with someone with appropriate skills and with a restructured or changed remuneration package. I am also inclined to accept the evidence of Mr Fawdry that initially Mr Allie was the preferred person for the restructured role however, that option was substantially less attractive to him once Mr Allie raised the question of a redundancy. While it is perhaps understandable that Mr Fawdry may have been taken aback by the question asked by Mr Allie I would have thought common sense would prevail over time. Instead each side adopted an entrenched position against the other, from the time the question of a redundancy was raised. During some persistent cross-examination by Mr Turnbull, Mr Fawdry responded to a question from me as follows:- "Deputy President King Well, Mr Fawdry, if I might just ask a question there. If it was your intention at that time to employ Mr Allie and you were surprised that he didn't apply for the job, did it ever occur to you to pick up the phone and ring him and talk to him and ask him why he hadn't applied and perhaps encourage him to?............ Actually it had been suggested - I spoke to the TCCI about this after - in fact I haven't even spoken with Steve about that - and it was suggested I should write him a further letter and ask him again and now I wish I had have because they said if you did that and he didn't come then you would have been seen to have done everything possible to have encouraged him to come to that - talk about that job. I didn't write that other letter and I agree I probably should have done."6 It is a sad fact that Mr Fawdry did not pick up the phone and ring Mr Allie or write to him. It is equally important to the outcome of this case that Mr Allie did not apply for the position or at least seek to talk to Mr Fawdry about the future. Mistakes which in hindsight have probably deprived the Employer of the best person for the ongoing role and deprived Mr Allie of a job at least for the short term. It follows that I believe the Employer handled this matter badly and there was a complete lack of a proper process leading up to the termination of Mr Allie. However, at the time of termination Mr Allie was paid his entitlements and a redundancy of two weeks pay for each year of service, not an unreasonable redundancy payment given the general standards established by decisions of this Commission. In relation to appropriate notice of termination it is clear that Mr Allie was provided with four weeks notice7 again not unreasonable in the circumstances. Mr Turnbull submitted that as Mr Allie had not accepted the redundancy payment (it is in an Ogilivie McKenna trust account) Mr Allie had in fact been dismissed by the Employer. The reality is, that while the actions of the Employer were far from appropriate, Mr Allie effectively terminated his own employment by not applying for the new position. It is not an unusual phenomenon in these times for employees to have to apply for their own or new positions following a restructuring of an employers business. This has been an ongoing feature of life in the Public Service in recent years. Again while I am critical of the Employer in this matter Mr Allie must also accept responsibility for his actions. He knew enough about the industrial relations system to raise the question of a redundancy, he should also have sought advice on the consequences of not applying for the new position. Having regard for the above and in accordance with Section 31 (1) of the Act this application is dismissed and I so order
J G King Appearances: Date and place of hearing: 1 Transcript pages 13 & 14 |