T7863
|
TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Leeann Loosmore and Pitt & Sherry Holdings Pty Ltd
Industrial dispute - termination of employment - position found to be redundant - valid reason for termination - Full Bench decision in T125, Job Protection, Termination and Change case considered - ILO Convention on Termination of Employment at the Initiative of the Employer considered - payment in lieu of notice unreasonable - further 11 weeks' pay ordered REASONS FOR DECISION This application was lodged by Leeann Loosmore pursuant to section 29(1A) of the Industrial Relations Act 1984, for a hearing in relation to a dispute with Pitt & Sherry Holdings Pty Ltd re the termination of her employment. The matter came before the Commission for hearing at Launceston on 21 September 1998. Mr McElwaine, a legal practitioner, sought and was granted leave to appear for the applicant and Mr Cameron from the Tasmanian Chamber of Commerce and Industry Limited appeared with Mr J Pitt for the company. Mr McElwaine gave a brief outline of Miss Loosmore's claim, following which Mr Cameron suggested that the parties confer before proceeding formally, and, with Mr McElwaine's concurrence, the hearing was adjourned into conference. After a brief discussion the parties requested the hearing be resumed. Background: Miss Loosmore originally commenced working with the company in a temporary capacity on 7 August 1995. By letter dated 1 July 1996 (Exhibit 1) the employer confirmed her employment in a position identified as Launceston Office Administration Manager. The letter dealt with and set out a number of employment conditions and professional development objectives. A position description was attached. At that time Miss Loosmore was accountable to Mr Holland, one of the directors of the company. After a period of about 12 months Miss Loosmore became personal assistant to the managing director of the company, Mr John Pitt. She did not receive a new contract of employment at that time, nor did she receive a separate position description. By about October 1997 Miss Loosmore was transferred into the administrative pool but she remained Mr Pitt's first "point of contact". The company commenced restructuring late in 1997 because of the contract it had negotiated to take over some of the work and some of the staff of the Department of Transport. The size of the company doubled overnight because of that acquisition. As a result five business units were set up to replace the original cost centres of Launceston, Hobart and Devonport. Whilst on annual leave in April 1998, Miss Loosmore sustained a back injury. She said she returned to work in May but lasted only two days. At the company's suggestion she visited a doctor chosen by the employer and had undergone surgery on 27 May. Some time after, in late May or early June, Mr Turner, the Launceston area office manager, who was then her direct supervisor, had visited her in hospital and told her that when she returned to work she would be doing a different job as "they had reshuffled things". She was told she would again be working for Mr Pitt as his assistant and as the corporate administration manager. During her sick leave, before she went into hospital, she worked on a part-time basis on some mornings. On 26 June, while still on sick leave, she had, by invitation, attended a social function at the company's office. Mr Turner had assured her that her position was safe, but advised her to contact Mr Pitt, as he would be her supervisor. As a consequence she made an appointment to visit Mr Pitt to discuss what her duties would be when she returned to work. At that meeting she told him she would be visiting her doctor on 10 July to establish when she could return. Mr Pitt handed her a new position description (Exhibit 2) for a position identified as Administration Manager - Corporate Office, which had her name on it. Mr Pitt told her he wanted to give it some more thought and they should discuss it after she had seen her doctor. They arranged the meeting for 14 July 1998. On 10 July she obtained a medical clearance to return to work. The termination: On 14 July 1998, at the pre-arranged meeting with Mr Pitt, Miss Loosmore told him that she had a clearance to return to work, but that she was not to lift heavy things and she was looking forward to starting again on the following Monday. She was then told that her former position had been upgraded and that consequently her old position was redundant. She was to be made redundant and her employment was to be terminated. She was told the new position would be advertised on the following Saturday and that an application from her would be welcomed. Miss Loosmore queried whether there would be any point in applying and she was told the applications would be independently assessed. She was asked to clear her personal belongings from the office or come back later if she was not feeling up to it. In the mail the next day she received a letter (Exhibit 3) from Mr Pitt confirming the termination of her employment and that her position had been declared redundant and a new position of Corporate Administration Manager had been created. The letter noted the company's willingness to receive an application from her for the new position. A cheque for $3512.80 was enclosed which included an amount of $2256.47 as a two-month redundancy package; the balance being in respect of two weeks' notice and annual leave payments. All less tax. She did not apply for the new position. Evidence of applicant: In her evidence in chief Miss Loosmore said she had been due for a "review" in January 1998 but that all reviews had been postponed because the company had decided to employ all staff under Australian Workplace Agreements. She said she had been aware since November 1997 that the Hobart office was to expand, but she was not aware that there would be a restructuring of the Launceston office. She claimed that the advertisement for the "new" position described duties which were not different from those she had formerly performed. She claimed she was experienced in and able to perform all of the duties in the position description. Miss Loosmore said she asked Mr Pitt, at the time of her dismissal, whether there were any other opportunities in the other offices and she was told there were none. She said there had been no prior warning or discussion with her about her redundancy. Miss Loosmore claimed that Mr Turner had told her after she was dismissed, that none of the other directors or managers of the company knew of Mr Pitt's intention to terminate her employment and that because she was away on sick leave "Mr Pitt got the taste of having someone else in that position". When asked if she was prepared to go back to her old job if given the opportunity, Miss Loosmore said she was, although there "would be difficulties", but that she was prepared to "work through them". In cross examination Miss Loosmore said her work generally had been supervised and she had not been responsible for initiating corporate work. She said the position she had occupied immediately prior to going on leave in April was in the common administrative pool consisting of three people. In answer to Mr Cameron's questions in relation to the new job description, Miss Loosmore said she had not been responsible for, or performed, some of the duties in the position description, and agreed that some of the duties were different. Evidence of employer: Mr John Pitt, the managing director of the company, said in evidence that he had been an employee of the company when it was established in 1984. His work more recently had become focused on directing and leading the company and developing the business. To coordinate the administrative activities of the business units across the company's new structure it had been decided to employ a corporate administration manager rather than rely on support from the administration people employed by Mr Turner within the Launceston business unit. He said he had a discussion with Mr Turner about his unit's administration requirements. Mr Turner indicated that he had three people including Miss Loosmore working for him and that he wanted only two. Of the three, the other two were preferred to Miss Loosmore, Mr Pitt said. Mr Pitt described the new position as "a key position within the company". He expected the salary to be in the area of "40,000-plus" which was substantially more than Miss Loosmore was receiving. He said that when Miss Loosmore was working for him her duties were of a secretarial nature. He said as his role in the company changed it had been decided to create an administrative pool which Miss Loosmore joined. One of the juniors in the pool had been made redundant about 12 months previously. Whilst most people in the company had accepted the positions set out in the draft documents, Miss Loosmore had not. Mr Pitt was not sure why that was so. Mr Cameron drew Mr Pitt's attention to the notes on the bottom of the pages of Exhibit 2 which indicated that, amongst other things, the document was in respect of "Loosmore.awa" and was dated "06/30/98". The letters "awa" are an abbreviation of Australian Workplace Agreement which, Mr Pitt said, was the system of employment now used by his company instead of the "award-based system". Mr Cameron assumed that the last mentioned date 06/30/98, was 6 March 1998, and he asked Mr Pitt what the company's intention had been, at that stage, in putting Miss Loosmore's name on the document. Mr Pitt replied that new position descriptions had been developed for "everybody" and that Miss Loosmore had been nominated in the new position "by default". He said that in the interim period prior to setting up the AWA with Miss Loosmore's name on it he had reconsidered and made a decision to advertise the position. Mr Pitt maintained that the position description (Exhibit 5) was for a new position, and not especially for Miss Loosmore. He said it was a key position within the company, and it recognised that to manage the company appropriately at the new level, a different mix of skills and experience was required. He said he was looking for a person to work on a self-directed basis, within policy guidelines and actually implement work as opposed to being task orientated. He said he had seen the need to create an administration manager for the corporate part of the Launceston office in March 1998, and he had commenced working on the position description for the position of corporate manager sometime in that month. In cross examination Mr Pitt agreed he had not discussed possible employment opportunities in Hobart with Miss Loosmore as he had "floated that idea" with his partners in Hobart and they were not interested. When Miss Loosmore visited him the week before her dismissal she asked him whether the new job was to be hers and he replied that he was still thinking about it, he said. Mr Pitt agreed that he created the new position, allocated Miss Loosmore's name to it, and gave her the documentation with her name on it, but said the document had "draft" on the front cover. Subsequently he had decided he should "test the market more widely" for someone to fill the position. He said:
He agreed he had chosen the first day she came back to tell him she was fit to go to work as the day to tell her that her employment was to be terminated. Mr Pitt said he did not "feel comfortable with simply negotiating an upgrade" by offering the position to Miss Loosmore. Mr Pitt said the new position had not been filled but a temporary employee had been brought in to undertake the corporate administration manager's function before Miss Loosmore's termination; that was in late June or early July. Mr Pitt added that the temporary employee was doing most of the things in the new job description, but some areas of the new job had not been put in place, as yet. He referred in that context to the e-commerce and Internet responsibilities of the position. He said the new employee was not performing in Miss Loosmore's old position. Submissions: Mr McElwaine submitted the employer, in terminating Miss Loosmore's employment in the way it had, was just "getting rid of what it perceived was its problem because no-one, it seemed, wanted her".2 He suggested that somebody was trying to hide or mask the real reason for the termination, which he submitted was a "personal dislike".3 He said that the case was not one of a bona fide redundancy. There was no prior consultation about a redundancy, he submitted. Miss Loosmore had not been involved in any discussions about restructuring the office, nor had she been given any options of alternative employment within the company. There had been no complaints about her capacity, conduct or performance, it was submitted. He submitted that the employer had an obligation to think about how the person could be redeployed within the organisation, and the doubling of the size in the Hobart office had provided the perfect opportunity for redeployment. Mr McElwaine claimed the employer had failed to address "in any fair way" whether Miss Loosmore could be redeployed within the organisation. He claimed there was a substantial case for reinstatement plus compensation for money lost in the period of unemployment, less an amount I estimate to be $2700, being income received by Miss Loosmore for 7½ hours per day for 24 days at $15.00 per hour. Mr Cameron submitted the basis of the redundancy was that there were too many administration staff in Launceston. Only one senior and one junior were required and that decision was made by the manager of that business unit. The company had gone through a major restructure, Mr Cameron said, and, even though they doubled their workforce, the number of people working in the administration area in Launceston was reduced. Although the company had decided that not all the administration staff in Launceston office were needed, a completely new position involving some similar duties was required. Mr Cameron submitted that Miss Loosmore's termination had nothing to do with her performance, nor the fact she was on sick leave at the time the decisions were made. He submitted that although Mr Pitt did not think Miss Loosmore had the skills for the new position, she was invited to make application for that position and an independent person would be used to assess the applications. He submitted there was no prejudice against Miss Loosmore and that procedural fairness had been afforded her, bearing in mind her absence from work over the period in question. He said that what the company had paid Miss Loosmore on termination was in excess of any requirement under the award or under the guidance of previous decisions handed down by the Commission. Furthermore he said Miss Loosmore had been given a glowing reference. He submitted the termination was the result of a bona fide redundancy and he requested the Commission not intervene in the matter. Findings: I will consider first whether the new position created was sufficiently different from the position occupied by Miss Loosmore to justify the company's decision not to award the job to her without requiring that she contest the position against other applicants. Despite Miss Loosmore's original claim, she agreed during cross examination that at the time she went on leave her job was different in some respects to the position described in the job description tendered as Exhibits 2 and 5. Miss Loosmore also maintained that she could do some of the new duties if given the chance and had in fact done some of them. However from the evidence it would seem that only 30% to 40% of the new position was derived from the job Miss Loosmore was doing before she went on leave. I accept that evidence. Although there appears to be an odd mix of secretarial and managerial duties in the new position, I accept that the job which has been created is substantially different from Miss Loosmore's old position. In that respect I also accept that the design of the job is the employer's prerogative and that the employer has the right, so long as the employees likely to be affected are kept informed and appropriate notice is given, to determine that a particular position for operational reasons is no longer needed. In the circumstances I am satisfied that the position created is a new and different position and further that the company was justified in seeking to test the market in order to appoint the best person to the job. I must add at this point that appointments, other than in respect of the qualifications required for advancement, are excluded from the definition of "industrial matter" in the Act and therefore outside the jurisdiction of this Commission. I turn now to consider whether the company was justified in deciding that Miss Loosmore's old position was redundant. Miss Loosmore estimated that 50% of her work was for Mr Pitt. Given the competing claim that 30% to 40% of the temporary employee's work was secretarial work for Mr Pitt, I have concluded, despite the difference in estimates, that the bulk of Miss Loosmore's old job has been transferred to the remaining employees in the administration area and only 30% to 40% of the old job transferred to the new position. That being the case, and having regard to my earlier observations about the right of the employer to organise the way in which duties are to be allocated to its employees, I am satisfied that Miss Loosmore's old position has been made redundant. Mr McElwaine asserted, although no specific details were provided, that there was some reason other than redundancy which had motivated the company to terminate Miss Loosmore's employment. Even though there was evidence that at least Mr Pitt and Mr Turner thought that none of the administration staff was fault-free, at no stage did the company admit that Miss Loosmore's performance or conduct were responsible for the decision to make her position redundant. From the e-mail (Exhibit 7) and from his evidence it is clear that Mr Pitt wanted an assistant capable of working at a "higher level" and he was not very confident that Miss Loosmore could perform at that level. It is also clear from the evidence that Mr Pitt "from time to time" was not happy with the performance and attitude of the administration staff. The e-mail sent by Mr Turner to Mr Pitt on 20 August 1998 was critical of all the administration staff. At the time of the restructuring it appears Mr Turner, quite specifically, did not want Miss Loosmore in his unit. Yet one week after her termination, and about one month before he sent the e-mail to Mr Pitt, he gave a very positive reference in respect of Miss Loosmore's work with the company (Exhibit 6). However having considered the relevant material in respect of Mr Pitt's views about Miss Loosmore, I cannot find that the reason she was dismissed was that Mr Pitt was dissatisfied with her work performance or behaviour or that he had a personal dislike for her. Nor can I make such a finding in relation to Mr Turner's role in the matter. Accordingly I must reject Mr McElwaine's assertion that there was some ulterior motive in making Miss Loosmore's position redundant. In all the circumstances I am satisfied that the company had a valid reason for terminating Miss Loosmore's employment. Having determined that the employer had a valid reason, based on the operational requirements of the business, to terminate the services of Miss Loosmore, I now turn to consider whether Miss Loosmore was treated fairly during the process of termination. There was evidence of a position created in the Hobart office of a lower classification which was to be filled the day after Miss Loosmore's dismissal and another position in Hobart again of a lower classification filled around the time of the hearing, but neither was offered to her even though she requested to be considered for another position in the company. It is perhaps trite to comment that the employer's position in this matter might have been assisted if such an offer had been made. Whilst it is of some concern to me that the employer did not act on Miss Loosmore's request that she be considered for another position with the company, I accept the employer's right not to offer the positions in Hobart to her. During her absence from work, Miss Loosmore had been told her job was safe and she thought, in accordance with what she was told by Mr Turner, that what she was to do when she returned to work would be sorted out when she met with Mr Pitt. At the meeting with Mr Pitt he handed her a position description for the new job with her name on it. It was dated a week or two before the meeting. Her evidence was that she thought she could do the job and I accept that was what she thought. In the circumstances I think it was reasonable, at least at that stage, that Miss Loosmore should have felt that she might get the new position and, although the evidence of Mr Pitt suggests he thought Miss Loosmore should have guessed her position was not safe because he was still thinking about it, I also consider it was reasonable that Miss Loosmore should have felt that at least her old position was not under threat. In the circumstances I reject the suggestion that Miss Loosmore should have known that she might not get the new job and I also reject the suggestion that she should have suspected her old position was to be abolished. Although Mr Pitt alleged that the company did not make up its mind as to what might befall Miss Loosmore until it seems in July some time, he admitted that he realised he needed a new position as early as March 1998, nearly four months prior to the dismissal. No attempt was made during the intervening period to tell Miss Loosmore what was in the mind of the employer and that the end result might be that her position would be made redundant. While there is no good time to tell employees their services are not required, I consider the administration employees, or just Miss Loosmore as it seems she was the candidate for dismissal, should have been given an indication as early as possible that the company restructure which had started in November/December 1997 could mean the loss of a job or jobs in the administration area. No general notice of likely redundancy was given, nor was Miss Loosmore given any specific notice until she was dismissed without warning. A Full Bench of this Commission in Matter T125 of 1985, the Job Protection, Termination and Change case, observed that it was desirable that an employer give an employee as much notice of redundancy as reasonably possible in the circumstances of each particular case. Article 11 of the ILO Convention on Termination of Employment at the Initiative of the Employer states in part that:
In this particular case Miss Loosmore was provided with two weeks' pay in lieu of notice after effectively being summarily dismissed on the basis that her position had become redundant. Having regard to the general statement of the Full Bench in matter T125 concerning notice in redundancy situations and Article 11 of the Convention also dealing with notice, I consider that the notice period, or in this case the compensation in lieu thereof was unreasonable given that Mr Pitt, who perceived the need for a different type of employee from as early as March 1998, should have been aware of the likely consequences that need held for Miss Loosmore. Having regard to Article 11 of the Convention, and in order to remedy the situation, I consider that in these circumstances the shortest reasonable period of notice that should have been given to Miss Loosmore was three months. Since two weeks' pay in lieu of notice has already been paid ($1098.04), there is a shortfall in the payment in lieu of notice of 11 weeks' pay at $549.02 per week. As to the remainder of the termination payment, I consider the amount described as a redundancy package in the letter of termination was a reasonable severance allowance in terms of Article 12 of the ILO Convention, and that the payments made in respect of annual leave entitlements were appropriate. I do not consider that income earned by Miss Loosmore since her dismissal should be deducted from a compensation payment made in lieu of notice. Accordingly, pursuant to section 31(1) of the Industrial Relations Act 1984, in full and final settlement of this industrial dispute I hereby order Pitt & Sherry Holdings Pty Ltd to pay to Miss Leeann Loosmore by 23 April 1999 the sum of $6,039.22.
F D Westwood Appearances: Date and place of hearing: |