T7924
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Tricia Lette and Gateway Tasmania Limited
Industrial dispute - termination of employment - reinstatement or severance pay - extension of time - administrative shortcomings of agent not to prejudice the client - extension of time ordered - employee told her position was to be made redundant - no alternative employment offered by employer - applicant arranged alternative employment and resigned - determined applicant's position redundant - termination at the initiative of the employer - valid reason for termination - application for reinstatement dismissed - period of notice considered - severance pay determined - Articles 4, 11, and 12 of the ILO Convention taken into account - employer ordered under s.31(1) to pay Ms Lette $3100.80 REASONS FOR DECISION This application was lodged by Tricia Lette pursuant to section 29(1A) of the Industrial Relations Act 1984, seeking a hearing in relation to a dispute with Gateway Tasmania Limited re the termination of her employment. The application was lodged in the Commission on 20 August 1998. The matter came before the Commission at Launceston on 16 December 1998. Mr D Durkin appeared for Ms Lette. Mr A Flood of the Tasmanian Chamber of Commerce and Industry Limited represented Gateway Tasmania Limited, with Mr T Frilingos, the General Manager of the company. Before proceeding with the hearing the parties requested and were granted a short adjournment to see if they could advance the matter by way of conciliation. In due course they reported that they had agreed on a number of facts but were not able to resolve the dispute. The agreed facts were:
The letter of 15 July 1998 (Exhibit D2) from the Chairman of the Gateway Board, Mr Forsyth, confirmed that it had been decided to implement a new organisational structure "effective 1 September 1998" and noted that the "effect of the restructure was that (Ms Lette's position) as Industry Liaison Officer will be redundant, most likely by September 1998". The letter advised that position descriptions for the new positions were being prepared and Ms Lette was "encouraged to apply for any of those positions as and when they are advertised". The letter informed Ms Lette that in the event she was not offered a position in the new structure she would "become redundant and appropriate arrangements would be made in accordance with the award". THE CLAIM Mr Durkin submitted that Ms Lette's employment was terminated at the initiative of the employer and that she was entitled to be reinstated, or if that was impractical, she was entitled to a redundancy payment. Mr Flood submitted that there had been no termination at the initiative of the employer. He argued that the employer had indicated to Ms Lette that the position was to be made redundant; she was invited to apply for alternative positions and he submitted that Ms Lette terminated her employment of her own accord. Extension of time Mr Flood also brought to the Commission's attention the fact that the application had been lodged outside the time limit of 14 days prescribed by section 29(1B) of the Act. It appeared that the application had arrived at the Commission 22 days after the date of termination. Mr Durkin explained that the application had been signed well within the time limit required by the Act, but the file had gone astray in his office and that had resulted in a delay in the forwarding of the application to the Commission. He said that on 5 August 1998 he wrote to the Chairman of Gateway, stating that he acted for Ms Lette and requesting that the Chairman or his representative contact his office to discuss the matter further. He said he received a response from Mr Paul Ranson, the finance director on 7 August. Mr Durkin said the applicant was not personally at fault, had signed the application in time and that his office was responsible for the late lodgement of the application. Mr Flood did not contest those assertions but submitted, without identifying them, that there were a number of decisions in industrial jurisdictions throughout Australia which stated that a delay by a representative of an employee was the same as the delay by the employee. He referred to guidelines laid down by the Commission and claimed there would be prejudice to the employer if an extension of time was granted. He submitted that the employer was aware of the 14-day time limit and if it had been known that an application for reinstatement had been made, the employer may not have appointed somebody to Ms Lette's job. Further, Mr Flood said that Ms Lette had been treated no differently to any other employee and the letter provided to her was exactly the same as provided to the other employees. He acknowledged that in determining whether an extension of time should be granted that it was customary for the commission to give consideration to the merits of the case. Evidence of Ms Lette Ms Lette said that the letter had been handed to her by Mr Forsyth and Mr Ranson on 15 July 1998. She said that she had discussed the proposed restructuring of Gateway and what that restructuring meant to her with Mr Forsyth for 20 to 25 minutes as it was the first time she had been told there was to be a restructure. She said she was "a bit shocked" at the time. She had asked where she would fit into the new structure and had been told if it was anywhere it would be the position of PR media coordinator, but that they were looking for somebody with a journalistic background for that job. She had been told a position description for each of the positions would be available on 17 July, but they were not. The short position description of the PR media job which already had been given to her contained only a small percentage of the work she was currently doing, she said, and she felt that she did not have the skills for the remainder. Therefore she did not think she would get the job if she applied for it. Ms Lette said she did not see the full position description until it was advertised in the "Examiner" newspaper about a fortnight or three weeks after she had resigned. She thought it had been advertised as a part-time position but later agreed with Mr Flood that it might have been advertised as a position for a part-time consultant or a full time employee. She said the position at North Forest Products was initially for a three-month contract, but it had since become a permanent position. FINDINGS Extension of time Section 29(1B) of the Act provides that an application for a hearing in respect of an industrial dispute relating to termination of employment must be made within 14 days of termination "or within any further period the Commission considers appropriate in the circumstances". There was no claim for compensation if the Commission determined that Ms Lette had been unfairly dismissed. This application was also for a severance allowance or redundancy payment in the event that Ms Lette did not succeed with her claim for reinstatement. No time limit exists for lodging an application for severance pay in respect of redundancy under s.29(1A)(b) of the Act. In the circumstances of this case, in order to determine Ms Lette's claim for reinstatement, I must first determine the nature of the termination of employment. Accordingly, it will be necessary to consider whether an extension of time should be granted. This application was received in the Commission some eight days after the expiry of the 14-day time limit. In dealing with applications to extend time the Commission has followed the principles conveniently set out in the Hunter Valley Developments Pty Ltd v. Cohen.1 I intend to follow those principles in this matter. Acceptable Explanation for the Delay: It would appear that the only reason the application was not lodged within time was that the applicant's agent failed to complete the necessary administrative tasks. The employer did not contest that claim and I accept Mr Durkin's assurance that his office was responsible for the delay. Having regard to the circumstances outlined by Mr Durkin I believe there is an acceptable explanation for delay in lodging this application. If the delay had been much longer than eight days, because of other factors which might then have begun to intrude, I might have been persuaded to take a different view. Action of the Applicant: I am satisfied there was a clear intention on the part of Ms Lette to contest the termination and that that intention was signalled to and known by the employer within the 14-day time period which commenced on 29 July 1998. Prejudice to the Employer: Mr Flood suggested that because the employer was aware of the 14-day limit and had appointed somebody to Ms Lette's position, his client would be prejudiced if the Commission were to allow the application to proceed. I find that submission somewhat confusing. My understanding of the situation is that Ms Lette's old position was not filled but an appointment was made to the new PR position. The Commission could not "reinstate" Ms Lette to a position which she had not held. If however Mr Flood was referring to an appointment being made to Ms Lette's old position, that could only have been for the period between her termination and 31 August 1998 as, according to the employer, the position was to be redundant by September. That period was well passed by the time the hearing commenced. In the circumstances I am not satisfied that any prejudice to the employer would be created by the delay of 8 days in lodging the application. Fairness to Other Employees: From the material provided to the Commission it would appear that no other employees left Gateway as a result of the restructure advised on 15 July 1998 and that all other staff were retained in positions restructured or otherwise. However since insufficient material was made available to the Commission on this aspect, I am unable to reach any firm conclusion as to the actual impact of the restructuring on other employees or as to any prejudice to those employees that my consideration of this matter might occasion. On the face of it I suspect there would be none. Merit of the Substantive Application: Having heard the substantive arguments in the matter I am satisfied that there is sufficient merit in the applicant's argument to warrant further consideration of the application. In the circumstances, and notwithstanding the lack of adequate material to make a finding in relation to the matter of fairness to other employees, I consider it would be fair and equitable and in the public interest to extend the period for making this application until 20 August 1998, and I so order. Termination at the Initiative of the Employer or Employee? It is a fact that on 15 July 1998 Ms Lette was told in writing that her job was to be redundant, most likely, by September 1998, that is in six weeks' time. That advice in writing was effectively general notice of the company's intention to terminate Ms Lette's employment. Ms Lette said she was told there was no definite date but she "would be redundant when they found someone to fill the new role". That was confirmed at a face to face meeting she had the same day with the Chairman of the Board. My reading of the letter leads me to believe that the redundancy could have been effected at any time between 15 July and 31 August 1998. It was claimed in evidence, which was unchallenged and which I accept, that although Ms Lette was encouraged to apply for the new jobs she was told that only one of them might suit her but that the employer was looking for someone for that job with skills which were different from those she possessed. Although Ms Lette was told her application for the position would be welcome, it is obvious to me that that was a polite way of letting her know that she had little or no prospects of ongoing employment with the company. As a consequence of that advice Ms Lette, in my opinion understandably, felt insecure, particularly as she considered she would not "be able to fill" the other adult positions. In effect that discussion with the Chairman convinced her that her employment with Gateway was about to end. Given the company's position, Ms Lette basically had two options. They were:
Realistically, the first option was not likely to prove successful for her. As a result of the circumstances I have outlined, Ms Lette decided to leave Gateway and the job she thought she was good at and said she loved, and a work environment she said she loved, for a job which involved her in longer travel to and from work and additional running costs for her car, although it paid more. I have no cause to believe she left for any reason other than to ensure she had longer meaningful employment than would have been available to her at Gateway. She left the things she said she loved for what was a temporary job on a three-month contract. At the time she left the new job would have provided her with two months more work than she was likely to have with Gateway. I intend to ignore the fact that the new job with North Forest Products has become "permanent" as it was not permanent at the time Ms Lette decided she had to leave Gateway. In my view Ms Lette was very concerned for her future with Gateway and was entitled to come to the conclusion that her employment was about to be terminated. She was also entitled to think that the termination could happen at any time before 1 September 1998. Mr Flood submitted that Ms Lette's employment with Gateway ended because she wanted it to end. I do not accept that. Ms Lette's employment as the Industry Liaison Officer came to an end because the company decided her position was no longer wanted and, despite encouraging her to apply for the new positions, which I have already determined were unlikely to produce a job for her, the employer made her no genuine offer of alternative employment. Accordingly I consider that her employment was terminated at the initiative of the employer. However I must record that if Ms Lette had not had the discussion with the Chairman of the Board which led her to believe she would not get one of the restructured jobs and she had simply left after she had obtained alternative employment without testing the job prospects at Gateway, it is unlikely that I would have reached such a conclusion. Reason for the Termination Having heard the parties as to the proposed restructure of the Marketing Section, I am satisfied that the employer genuinely considered the position of Industry Liaison Officer, which was in that section, to be redundant. Accordingly in the words of Article 4 of the ILO Convention concerning Termination of Employment at the Initiative of the Employer I consider there was a "valid reason" for the termination of Ms Lette's employment "based on the operational requirements of the undertaking....". That being the case, I do not consider that Ms Lette was unfairly dismissed. Therefore the claim for reinstatement is rejected and that part of this application is dismissed and I so order. Period of Notice Article 11 of the ILO Convention provides:
As the applicant made no claim or submissions as to notice, I simply observe that I consider Ms Lette was given reasonable general notice of the company's intentions to declare her position redundant, even though a precise date was not specified, and that the issue of specific notice as to the date her employment would be terminated is not pertinent in the circumstances of this case. Severance Pay Having determined that Ms Lette's position was redundant, I turn now to consider whether an order for severance pay should be made in respect of the termination of her employment resulting from a redundancy. Section 31(1C) of the Act states:
Article 12 of the ILO Convention 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 ... based inter alia on length of service and the level of wages ....". Mr Flood submitted that if I found that Ms Lette was "made redundant" that because she had found immediate alternative employment and had not suffered any financial loss she should not be entitled to any redundancy payment. If I determined that Ms Lette was entitled to a redundancy payment, he submitted that the payment should be based on two weeks' pay for each completed year of service which would result in a total of four weeks' pay. Mr Durkin submitted there is an obligation on the employer to provide or assist a redundant employee to find alternative employment. He claimed that was not done in this case and he sought a redundancy payment of six weeks' pay based on two weeks' pay for each year of service or part thereof. Mr Flood referred me to a decision of Fisher P of the New South Wales Industrial Commission reported in the Australian Industrial Law Review 387 of 1983. However I do not accept that the reasons for President Fisher's decision are relevant to this particular case. He found that the circumstances he was dealing with were such that the "burden of economic recession ha(d) fallen on employers and employees alike" and were distinct from those circumstances where the "prospect of change is to the company's commercial advantage". I think the case before me is more closely aligned to the latter situation even though no specific reasons were addressed as being responsible for the company's restructuring. Another matter referred to by Mr Flood was dealt with by Madgwick J in the Industrial Relations Court of Australia (NI 1129 of 1994). That matter involved the application of section 170EE of the federal Industrial Relations Act 1988 which does not appear in the Tasmanian legislation, nor do I think the circumstances were such that his findings were relevant to the case before me. Similarly a decision of King DP of this Commission in Matter T7771 of 1998, which is under appeal, is not apposite to this case. Another matter2 was tendered by Mr Flood which involved a case where there was an offer of alternate employment, even though it was after the decision to terminate the applicant's employment; but again the circumstances are different and not relevant to the instant case. The Job Protection, Termination and Change case of this Commission, T125 of 1985, established that cases involving redundancy were to be dealt with having regard to their own peculiar circumstances and their merits, and I intend to follow that general case by case approach in dealing with this matter. I agree with Mr Durkin's view that employers, if they wish to restructure their organisations and dispense with employees' positions for those purposes, have a responsibility to provide the potentially redundant employees with assistance in finding alternative work of a similar nature and rate of pay. I also consider, and the following is not an exhaustive list, that some recognition should be given to the fact that an employee whose position is made redundant suffers a loss of service which impacts on the accrual of award and other statutory requirements, the loss of seniority in an organisation, and the benefits which can flow from that. Those factors are relevant in this case. It is not possible to quantify those items separately but the length of service and level of wages are known. In the circumstances I consider that a severance payment should be made to Ms Lette by Gateway and that it should be based on the following facts. They are that Ms Lette was employed with Gateway from 7 September 1995 until 29 July 1998, 5½ weeks short of three years, Ms Lette's length of service was therefore approximately 2.9 years; that her level of wages at the date of termination was $534.62 per week; that her position was made redundant and her employment was effectively terminated by the employer on 29 July 1998. In these circumstances, I consider that Ms Lette's severance pay should be calculated at the rate of 2 weeks' pay, at her level of wages, for each complete year of service and proportionately for any incomplete year of service. The formula to be used therefore is 2.9 multiplied by 2 multiplied by $534.62; an amount of $3,100.80. Accordingly, pursuant to section 31(1) of the Industrial Relations Act 1984, in order to settle this industrial dispute I hereby order that Gateway Tasmania Limited pay to Ms Tricia Lette the sum of $3,100.80, such payment to be made by 14 May 1999.
F D Westwood Appearances: Date and place of hearing: 1 Hunter Valley Developments Pty Ltd v Cohen 1984 ALD FCofA 315 |