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T8150

 

TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984
s.29 application for hearing of industrial dispute

Peter Fellows
(T8150 of 1998)

and

Lloyds North Pty Ltd

 

DEPUTY PRESIDENT B R JOHNSON

HOBART, 7 June 1999

Termination of employment - severance pay - reasonable notice - order for payment of additional notice

REASONS FOR DECISION

Particulars of the Dispute According to the Applicant

The respondent, Lloyds North Pty Ltd, formerly employed the applicant, Mr P J Fellows, as Transport Coordinator at a salary of $41,000pa plus an annual vehicle allowance of $7,000. Mr Fellows was a permanent employee of Lloyds North, having held a number of positions with the Company since November 1989.

On 26 November 1998, the Company's Managing Director, Mr P Bonney, asked Mr Fellows to come to his office. At the ensuing meeting Mr Bonney told Mr Fellows that, as a consequence of a Company board meeting held the previous day, the position of Transport Coordinator would be made redundant. Mr Bonney also told him the Company would fill the position with existing staff.

Mr Bonney's announcement dumbfounded Mr Fellows because he had no forewarning that a Company restructure was on the cards. He apparently left the workplace straight away, later receiving by direct bank deposit payments equivalent to five weeks' notice and redundancy at the rate of two weeks for each completed year of service.1

Subsequently, Mr Fellows saw a Lloyds North advertisement in "The Examiner" newspaper of Saturday, 5 December 1998. In that advertisement the Company invited interested persons to apply for the vacant position of Administration/Clerk/Fleet Scheduler.2 Mr Fellows believed the vacancy was part of his former position. He formed the view that, because he generally fulfilled the position criteria, he could have done the work with a little bit of computer training.

Mr Fellows did not accept that his termination was a bona fide redundancy. He said Lloyds North simply amalgamated his position with another position. The Company did not invite him to apply for that position, even though it advertised the job within a short time of his termination.

Extension of Time

The applicant lodged his application some 14 days out of time. Mr McElwaine accordingly applied for an extension of time pursuant to Section 21(2)(m)(i) of the Act. There being no objection from the respondent, I extended the period for lodgment of his application up to and including 21 December 1998.

The Issues

S McElwaine by leave for the applicant:

(1) The applicant's termination was not a bona fide redundancy: but, if it was such a redundancy, there was no consultation with the applicant for the purpose of exploring other options for employment within the Company.

(2) The applicant's termination, in all the circumstances, was harsh, unjust or unfair.

(3) The Commission should reinstate the applicant: but, if it should find that reinstatement is impractical, the Commission should award the applicant a minimum redundancy or severance payment of three weeks for each completed year of service.

D Durkin for the respondent:

(1) The applicant's termination was a bona fide redundancy.

(2) The Commission should not reinstate the applicant because reinstatement would be completely unworkable.

(3) The applicant's redundancy payment was fair and reasonable and there were no special or exceptional circumstances present of a kind that would justify the quantum of redundancy payment that the applicant now claims.

Was the Termination a bona fide Redundancy?

S McElwaine by leave for the applicant:

The evidence shows that this is a case where the employer developed policy on the run. As a consequence the Company implemented decisions without proper consultation. The Commission should review the Company's decision to terminate the applicant's employment because, in the circumstances, it was harsh, unjust or unfair.

The Managing Director, Mr Bonney, believed there was a Company redundancy policy. However, a close perusal of the Employee "Bible"3 showed that it contained absolutely nothing concerning a redundancy policy for non-award employees. Mr Bonney, nonetheless, conceded he was aware of the existence of redundancy procedures for award employees that included consultation with the employees concerned. The Company also employs a Human Resource Manager who presumably possessed the same knowledge. Even so, the Company has no policy, known to its employees, that sets out redundancy principles applicable to them. Indeed, Mr Bonney could not even specify the exact criteria the Company took into account in determining that the applicant was not suitable for redeployment.

The Company's fundamental failure in this case is that it did not afford the applicant any prior consultation or warning, even though it first contemplated the possibility of redundancy as early as September 1998. There was no real exploration of the available alternatives that existed either inside or outside the Company and no attempt to place the applicant in other employment while he was still the Company's employee. For example, Mr Bonney admitted that the Company did not consider part-time employment at the time although, in cross-examination, he agreed it was a good idea.

More significantly, Mr Bonney volunteered in re-direct examination that there was an error of judgment on his part in failing to consult the applicant before terminating his employment. He agreed it was open to him at the time to explore other ways of finding a position for the applicant. But even had he done so, he said, he could not envisage a change in the outcome. In the circumstances Mr Bonney approached his task with a predetermined and preconceived point of view, an attitude in itself that was harsh, unjust or unfair.

Furthermore, the Company offered no explanation as to why it did not offer the applicant even more favourable treatment than other management employees. In that regard the Company knew the applicant suffered a disadvantage in the market place because his disability-a residual disability from a back injury-meant that a major portion of his skill levels-driving trucks-was no longer available to him. In fact, the evidence is that the reason he obtained the position of Transport Coordinator was because of his inability to continue driving trucks.

Some time before his termination the applicant asked for computer training, which the Company did not provide. Yet a line manager apparently relied on the absence of such skills to inform Mr Bonney that there was no suitable job available within the Company's operations for the applicant. The simple fact, as Mr Bonney conceded, is that the Company advertised just such a job within about a week of terminating the applicant's employment.

It may be that the particular job was not in Mr Bonney's mind at the time of the termination, but it certainly was shortly afterwards. Mr Bonney conceded that while it would not be reasonable to expect a former employee to apply for a job just because he or she saw it in a newspaper, it would be reasonable to write to the individual inviting an application. Nevertheless, the Company did not write to the applicant and did not consider him for the position.

Mr Bonney's position is that the need for the Company to act quickly justified the lack of consultation and the failure to attempt to find employment elsewhere. Patently, such a need does not justify what is otherwise harsh, unjust or unfair.

It is quite contrary to the decided authorities to assert that redundancy is entirely at the prerogative of management and that an industrial tribunal cannot intervene. Macken, McCarry and Sappideen in Law of Employment cite a large number of authorities in support of the proposition that:4

"When considering termination of employment of an employee due to the position becoming redundant the employer should consult with the employee and explore alternatives to termination of the employment and provide the employee with the opportunity to make submissions as to why he or she should not be selected for redundancy. Failure to comply with an award provision concerning redundancy or a failure to allow the employee to work out the notice period ... can render a termination harsh, unjust and unreasonable."

Then there are the following observations in Workplace Relations: A Guide to the 1996 Changes:5

"Even in the case of a genuine termination on the grounds of operational requirements (eg redundancy) consultation will almost always be required prior to dismissal: Barsby v Great Southern Shelter Inc [and a number of cases are cited] where numerous authorities are gathered. However, exceptionally, failure to give warning of impending termination on account of redundancy may not necessarily be "unjust" in all circumstances ..."

In the present case the Company put absolutely nothing forward in explanation of why it did not consult the applicant. Indeed, Mr Bonney's evidence is that the failure of consultation was an error of judgment. In any event, according to the same authority,6 consultation includes informing the employee as soon as the possibility of redundancy becomes real: Walsh v Wayne Motors.7 In the current matter the evidence is that September 1998 was the time for the Company to begin its consultative processes with the applicant.

The authorities also suggest that:8

"A genuine redundancy which obliges an employer to select the employee whose services are to be terminated by reason of that redundancy may nonetheless result in the termination being harsh, unjust or unreasonable if the selection is not fairly made according to established criteria."

Lloyds North could not identify any criteria by which it selected the applicant for redundancy.

There is clearly ample authority to debunk any suggestion that redundancy is entirely a matter of management prerogative. It is not enough to simply suggest that, if the amount of the redundancy payment is satisfactory, the Commission cannot intervene.

The evidence in this matter shows that, in an objective sense, there was a termination by way of redundancy that was, for the reasons outlined, harsh, unjust or unfair. A conclusion of that nature establishes the Commission's jurisdiction to intervene.

D Durkin for the respondent:

The applicant's redundancy was bona fide based on the Company's assessment of its finances after receiving the advice of senior management over a period of time.

The error of judgment to which Mr Bonney admitted appears to derive from the termination interview that he and the Human Resources Manager conducted with the applicant. However in that regard, while it may be a fine point, it is nevertheless an important point that redundancy discussions occur with employees only after a definite decision is taken to terminate positions. In the present case the Company decided to make the applicant's position redundant. Having done so, Mr Bonney informed him of that fact immediately after the particular board meeting.

Mr Bonney's evidence also disclosed that discussion and consultation did occur regarding alternative employment for the applicant. That process involved the two most senior managers who were directly responsible for and closest to the applicant. The discussions concerned not only internal employment alternatives but also outside employment. But, even had the applicant received the benefit of prior consultation, perhaps including the two managers involved, Mr Bonney's further evidence is that there was no likelihood of a different outcome because there was no position available in the Company for Mr Fellows.

Mr Bonney certainly agreed in cross-examination that, upon reflection, it might have been better had he consulted the applicant before the Company took its decision. That is no doubt a reasonable view, but it is not the law. It is the prerogative of management to take definite decisions regarding redundancy situations before discussing available options with the individuals affected. Any decision that tended to suggest management must engage in prior consultation with employees before taking a definite decision regarding redundancy would be unwieldy and unworkable.

In that context it is relevant to consider the applicant's acknowledgment that Lloyds North is in a parlous state. Mr Fellows agreed that he believed it was necessary for the Company to do something about its management structure in the office area. Mr Bonney quite frankly admitted that he was under pressure from the board to perform-the Company must perform or face an outcome of a different kind. No doubt, as Mr Bonney said, the Company would consider the applicant for any future vacancy, but nobody can know when that event might occur. In the circumstances, the suggestion that, pending such an event, the Company should hold open a job for the applicant or leave him in a job, whether part-time or full-time, is neither practical nor workable.

It is true that a job did become available after the applicant left the Company's employment. Although it is now after the event, the issue at hand in any case would have been the applicant's competency to perform the functions required of the position. The general manager's personal assistant currently performs the fleet management portion of the job in about two hours a day. The remainder-the substantial part of the job-involves competencies that the applicant would have found it necessary to learn. In the circumstances, the Company would not have known whether he could take on the role.

It is still open to the applicant to accept the Company's offer of assessment by a competent external agent for the purpose of positioning him in the market place regarding future employment. His disability relates only to his truck driving capacity. No one questions the applicant's ability to work at a competent level in administrative-type work. The applicant led no evidence to suggest that jobs of that nature are not available.

Remedy

S McElwaine by leave for the applicant:

There is no difficulty in reinstating the applicant to his former position. Mr Fellows said he would be happy to return to work at Lloyds North and Mr Bonney said that, if he had a position available, he would be happy to have him back. Indeed, the evidence is clear that there is a high likelihood Lloyds North will offer the applicant the same job again in the future, when business picks up. There is work for the applicant to do, since the Company merely divided his former duties between three other staff members. The Company can recreate his position. This is not one of those cases where reinstatement would oblige the employer to terminate the employment of another person to accommodate reinstatement.

If, however, the Commission should determine that reinstatement is impractical, the question of severance pay arises. While the Company calculated the applicant's redundancy payment on the basis of two weeks for each completed year of service, there is no generally applicable criterion for such payments in Tasmania. The Commission's approach is to determine each case independently. In the present case the circumstances-the applicant's age, skill levels, disability disadvantage, his treatment by the Company, low likelihood of further employment and good work performance-all warrant a redundancy payment of not less than three weeks for each completed year of service.

In Capital Hill Corporation v O'Connor a Full Bench of the Commission upheld on appeal a compensation assessment by the President that was equivalent to four weeks for each completed year of service.9 It is clear that the facts and circumstances of the case did not concern redundancy. However, there is no reason to assume that such a criterion is not equally applicable to a redundancy situation.

In addition, a comparison of the applicant's pay slip of 3 December 1998 (Exhibit M3) with the calculations reflected in Exhibit D1 shows that the Company assessed the applicant's redundancy pay by reference to his base salary and car allowance of $48,000 instead of his total salary package of $54,599.66. Even if the Commission should otherwise reject all the applicant's contentions, it must nevertheless make an order in his favour adjusting the original calculations.

D Durkin for the respondent:

Reinstatement of the applicant would create difficulties for the Company, particularly since the redundancy program is still under way. The applicant's best option is to work closely with Mr Bonney and an external agent for the purpose of obtaining placement in the market-place as soon as possible.

If the Commission were to reinstate the applicant it would in effect, on the facts and circumstances of this case, be actually creating a job since one does not presently exist. Putting the applicant back into a fleet management role would be impractical because it would raise the same issue of affordability. Reinstatement would also stop Lloyds North from fully implementing its rationalisation program and thereby threaten the future of the Company.

The period of five weeks' notice derives from the federal industrial jurisdiction where it is the standard for notice of redundancy. The basis of the redundancy payment actually made-two weeks for each completed year of service-is only three weeks short of six months and, hence, is reasonable in all the circumstances. Accordingly, in the absence of any exceptional circumstances, there is nothing present in this case that would justify a redundancy payment of three weeks, let alone four weeks, for each completed year of service.

Findings

I begin by considering the evidence regarding (a) the Company's reasons for declaring the applicant's position redundant and (b) the nature of the job that the company subsequently advertised. The following is a brief summary of the relevant aspects of that evidence.

Mr Bonney said he returned to Lloyds North about five and a half months prior to the current proceedings. He found the business had levelled out a few years ago and was now spiralling downwards in terms of revenue and contracts. In particular, he concluded that administration overheads were significantly above the Australian standard for the Company's industry.10 Mr Bonney said he decided the Company needed to make immediate structural changes to ensure its continued existence.11 He added that the Company's budget was on the wrong side of the credit line and that, basically, he had six to twelve months to reposition Lloyds North to make it a stronger market player.12 Mr Bonney said he commenced giving consideration to the restructuring process on 1 September 199813 and, during its course, consulted his senior management team on several occasions. To date three redundancies had arisen from the process, which he confirmed is not yet complete. 14

In terms of the applicant, Mr Bonney said because of the need to restructure the Company's operations, the job function of transport scheduler (Mr Fellow's position) was made redundant.15 The Board made the position redundant so that the Company might absorb the role within the otherwise existing management structure. That is to say, "managing people and maintenance" to the existing transport manager and "scheduling" to his own personal assistant, who would also have the task of "coordinating orders" with the rest of the office staff.16 Mr Bonney said he asked his management team to think of other approaches. The only alternative was truck driving, which was not suitable because of the applicant's disability.17

According to Mr Bonney the Company, having advertised for an Administration Clerk/Fleet Controller responsible for payroll, creditors and chip fleet scheduling, subsequently decided not to go ahead on that basis. The opportunity to combine the payroll and creditors functions only arose after the Company had made the payroll and creditors job redundant, about a week after making a similar decision regarding the applicant's position.18 But, Mr Bonney said, the Company subsequently decided not to proceed in the manner advertised because scheduling transport did not complement the payroll and creditors function. In addition, the Company believed that it should be possible to create a better structure, particularly since the job applications received were strong on the payroll and creditors side, but not on the transport side.19

There was no substantial challenge to Mr Bonney's evidence regarding either the Company's reasons for declaring the applicant's position redundant or the explanations he offered regarding the proposed new job. Indeed, as to restructuring generally, the applicant himself admitted with admirable candour that he believed the Company was top-heavy on the administration side-although he did also believe that the position he filled was safe.20

I accept that the Company's advertisement of 5 December 1998 caused the applicant to believe his job was not truly redundant, but simply amalgamated with another position and advertised on the weekend after his termination.21 However, the evidence satisfies me that the Company's motives were genuine and that the job advertised was not that of the applicant. In any event, it is clear to me from the evidence, which I accept, that the Company did not proceed with the job as advertised. Instead, it created a different position that, while it contains some of the functions that the applicant once performed, it is by no means his former position or even substantially similar to his former position. In my opinion there is nothing in the circumstances surrounding the proposed new position that supports a conclusion that the applicant's redundancy was otherwise than bona fide.

In the circumstances I find that Lloyds North had a valid reason for terminating the applicant's employment on operational grounds, ie redundancy.

Mr McElwaine, however, went further. He contended that because there was no prior warning of redundancy or consultation with the applicant for the purpose of exploring options for employment within the Company, the decision to terminate the applicant's employment was harsh, unjust or unfair.

In T125 of 1985 a Full Bench of the Commission in the Job Protection, Termination and Change Case observed in relation to "unfair, unjustified or unreasonable treatment" in the context of consultation that:22

"An employer would be acting outside our expectation of fairness if he deliberately, unreasonably or avoidably failed to give notice of, or consult about, change. This would be of particular significance if, in failing to give notice or consult, employees were thereby deprived of sufficient time to prepare for the impact of technological or other change expected to either cause job losses or require significant alteration to existing skills, processes or work environment.

Where it can be demonstrated that an employer has acted unfairly in this regard, that might be a factor to be taken into account in dealing with an application for redundancy payments, or some other form of relief arising out of action by an employer."

Did the employer in this case act unfairly in relation to the applicant? The uncontradicted evidence is that Mr Bonney was aware as early as 1 September 1998 that "the Company needed to make immediate structural changes if it were to continue to exist".23 He also knew at that time that he had to act within six to twelve months if he were to turn the Company's fortunes around. While Mr Bonney certainly consulted his management team about the issue, the first occasion on which he raised the issue with the applicant, however, was on 26 November 1998, immediately following the board meeting decision to confirm the latter's redundancy.24 Clearly, therefore, Lloyds North did not give the applicant, as it might have done, the benefit of general notice of possible redundancy. By that omission, in terms of T125, the company arguably deprived him of "sufficient time to prepare for the impact of ... change expected to ... cause job losses".

Mr Durkin argued, however, that the law does not oblige an employer to consult with employees about redundancy matters until such time as a definite decision is taken to actually terminate positions. To require an employer to act otherwise, he contended, would be unwieldy and unworkable.25 While I suspect Mr Durkin's submission reflects the applicable law as it applies in the federal industrial jurisdiction, I am satisfied that it does not reflect the principles established by the Full Bench in T125, which are binding on the Commission as presently constituted. Indeed, it seems to me that the Full Bench in that case rejected just such a submission as that now advanced by Mr Durkin,26 concluding that "each case needs to be judged on its own merits" and that:27

"We believe it is only fair that an employer should give to those employees who will be affected as much forward advice as is, in the circumstances of the particular case, reasonably possible, bearing in mind the nature of his business."

Nothing was put to me in the present case that suggested it was not reasonably possible for Lloyds North to forewarn the applicant at some reasonable time before 26 November 1998 of the Company's intentions regarding restructuring. Mr Bonney's evidence confirms that at that early stage in his thinking there was a firm intention in place to restructure in order to ensure the Company's survival. Indeed, Mr Bonney himself acknowledged, with commendable frankness, that in retrospect it was an error of judgment on his part in not consulting the applicant before terminating his employment.

The applicant also relied on the circumstances surrounding the 5 December job advertisement, as constituting an action on the part of the Company that was harsh, unfair or unjust. In that regard, as I construe the substance of Mr McElwaine's submissions, the Company's failure to afford the applicant prior consultation or to inform him of the job availability constituted the harsh, unfair or unjust act, especially having regard to his back disability.

As to prior consultation, it is clear that Mr Bonney did not have the particular position in his mind when he terminated the applicant's employment. Indeed, Mr McElwaine appeared to accept as much in his submissions.28 In the circumstances, I accept Mr Bonney's evidence.

However, Mr McElwaine also contended, quite correctly, that the position was certainly in Mr Bonney's mind shortly after his termination of Mr Fellows. Mr Bonney, again speaking with candour, freely conceded that it was an error of judgment on his part in not informing the applicant of the particular job opportunity.29

The applicant for his part, in my opinion, also bears some responsibility in relation to this particular issue. At the termination interview the Company offered him five week's specific notice. As I construe the applicant's evidence the Company did not require him to leave employment immediately, but gave him the option of working out the five-weeks' period. The applicant, however, apparently for his own reasons, chose to leave his employment immediately.30 In the circumstances, it is arguable that by doing so, rather than remaining at his job for the duration of the notice period, he contributed to what he evidently regarded as a lost opportunity. It seems to me, after looking at those facts, that the parties are equally responsible for any missed opportunity that may or may not have existed for the applicant in relation to the proposed new position. Accordingly, I do not accept the contention that the circumstances surrounding the 5 December job advertisement constituted a harsh, unfair or unjust act on the Company's part.

For all the reasons discussed above, I reject Mr Durkin's submission that no obligation fell upon the Company to consult the applicant prior to terminating his employment. Furthermore, I find that Lloyds North acted unfairly in terminating the applicant's employment, albeit for a valid reason, in that it did not afford him the benefit of any prior reasonable consultation or warning. However, in my view, the Company's actions concerning the proposed new job did not contribute to that unfairness.

Turning to the question of remedy, I begin with the applicant's claim for reinstatement. In light of my finding that the applicant's redundancy was a bona fide redundancy, I accept Mr Durkin's contention that there is no longer a job at Lloyds North to which I might reinstate the applicant. In the circumstances, I find that reinstatement of the applicant is impractical.

Article 10 of the ILO Convention provides that:

"If the bodies referred to in Article 8 of this Convention find that termination is unjustified and if they are not empowered or do not find it practicable, in accordance with national law and practice, to declare the termination invalid and/or order or propose reinstatement of the worker, they shall be empowered to order payment of adequate compensation or such other relief as may be deemed appropriate."

What is the measure of that compensation? Mr McElwaine pressed for an enhanced redundancy payment of three weeks for each completed year of service although, in the alternative, he did suggest that the Commission might approach the question by increasing the period of notice. Mr Durkin took the view that the specific notice period of five weeks, coupled with a redundancy payment based on two weeks for each completed year of service, was adequate in all the circumstances.

In my view there is nothing so special or exceptional in the facts and circumstances put to me that would justify the Commission's intervention in the quantum of redundancy payment already paid by the Company to the applicant. In that regard I am not helped by Mr McElwaine's reference to the Capital Hill Case because, as he himself acknowledged, it does not go to the question of redundancy. For these reasons I reject the applicant's claim for an enhanced redundancy payment based on three weeks for each completed year of service.

Article 11 of the ILO Convention, however, provides that:

"A worker whose employment is to be terminated shall be entitled to a reasonable period of notice or compensation in lieu thereof, unless he is guilty of serious misconduct, that is, misconduct of such a nature that it would be unreasonable to require the employer to continue his employment during the notice period."

The question of notice appears to be a more fruitful basis upon which to determine remedy. In the circumstances of this case, in which no question of misconduct arose, the company, by not giving the applicant as much forward or general notice of potential redundancy as was reasonably possible in the circumstances, unfairly deprived him of an early opportunity to prepare for the impact of changes that Lloyds North was considering and subsequently decided to introduce.

For those reasons I reject Mr Durkin's contention that the present package is adequate. I take that view because the ILO Convention and the decided cases show that redundancy and notice are separate issues.

What might reasonable notice have been in the circumstances? In the first place the evidence supports the conclusion, which I make, that Mr Bonney and the Company acted at all times in this matter with the best of intentions. It follows that any compensation the Commission might award should not be seen as a windfall for the applicant but only as reasonable compensation for his loss of an earlier opportunity to prepare himself for the impact of redundancy.

It is clear that Mr Bonney held firm views as early as 1 September 1998 about the need for the Company to restructure. However, I do not believe it would be reasonable to assume that he was then in a position to properly inform the Company's employees that some of them might be facing redundancy. He obviously still had decisions to take, as he himself inferred when he said he consulted his management team from time to time during the course of determining what to do.

However, I do believe it is reasonable for me to infer that on or about 1 November 1998 Mr Bonney would have known with some degree of certainty what he needed to do regarding redundancies. I say that because I think it must have been about that time that he would have been preparing, or commencing to prepare, his presentation for the board meeting that occurred on 26 November 1998. That was the time, in my judgment, when the Company should have commenced consultation with the applicant.

It remains for me to mention the alleged "error" in the existing calculations to which Mr McElwaine referred me.31 I am unable to resolve that issue because I cannot satisfy myself that the salary package figure to which he drew my attention (Exhibit M3) is the applicant's actual salary package or merely-as the Exhibit appears to suggest-gross earnings for the year to date. The best evidence, which I draw from Mr Fellows' application and from Exhibit D1, is that the applicant's salary package comprised an annual salary of $41,000 and a car allowance payable at the rate of $7,000 per annum. It may be, as Mr McElwaine also suggested, that the Company's calculations do not take superannuation into account. Whatever the case, I cannot determine the question because there is simply no evidence before me upon which I might properly rely.

When Mr McElwaine put the above matters to Mr Bonney he said he could not explain the differences or say whether or not they related to superannuation. Mr Bonney did say, however, that he would need to find out, from which I infer willingness on his part to have the Company check the details of the applicant's redundancy calculations.32 In any event, regarding superannuation, I believe it is open to me to make the following assumption. That is, during the time it employed the applicant, the Company would have paid superannuation benefits on his behalf to an approved superannuation fund in accordance with the Commonwealth's Superannuation Guarantee (Administration) Act 1992. In the circumstances, I believe it is appropriate to include superannuation in any calculations that concern notice of termination of his employment.

The reasons discussed above satisfy me that, in all the circumstances, the period of five weeks' notice given by the Company to the applicant was unreasonable. In coming to that conclusion I have had regard, in particular, to two factors. First, the properly drawn inference that Mr Bonney most likely knew on or about 1 November 1998, well before he actually informed the applicant on 26 November 1998, that he would need to make Mr Fellows' position redundant. Second, there is the fact that the applicant's position as an employee of the Company was one of managerial status.

A more reasonable notice period, it seems to me after looking at all the facts, would have been eight weeks. Because Mr Fellows has already received payment in lieu of five weeks' notice, I intend to order that the Company pay him a further sum by way of payment in lieu of notice equivalent to three weeks' pay at the applicant's gross weekly wage rate of $923.08 (as set out in Exhibit D1) together with such superannuation entitlements as were, at the time of his dismissal, ordinarily paid by the Company to his benefit in accordance with the Commonwealth's Superannuation Guarantee (Administration) Act 1992.

ORDER

PURSUANT TO the powers conferred on the Commission by Section 31 of the Industrial Relations Act 1984 I HEREBY ORDER that the respondent employer Lloyds North Pty Ltd, Bradford Place, Prospect, Tasmania 7250, in full and final settlement of the industrial dispute referred to in application T No 8150 of 1998, pay to Mr Peter Fellows, PO Box 56, Hadspen, Tasmania 7257 through his agent Shaun McElwaine, Barrister and Solicitor, a sum equivalent to three weeks' pay at the applicant's gross weekly wage rate of $923.08, as depicted in Exhibit D1 tendered in the aforementioned proceedings, together with or by payment into an approved superannuation fund of the applicant's choice, as the law may require, such superannuation entitlements as were ordinarily paid on the applicant's behalf at the time of his termination. The respondent must comply with this Order on or before the close of business on Tuesday 29 June 1999.

 

B R Johnson
DEPUTY PRESIDENT

Appearances:
Mr S McElwaine, a legal practitioner, for Mr P Fellows.
Mr D Durkin with Mr P Bonney for Lloyds North Pty Ltd.

Date and Place of Hearing:
1999
January 19
Launceston

1 Exhibit D1.
2 Exhibit M1.
3 Exhibit M4.
4 Fourth Edition, Law Book Company 1997, p. 327.
5 Law Book Company 1997, p. 109.
6 Supra.
7 65 IR 76.
8 Workplace Relations: A Guide to the 1996 Changes, Law Book Company 1997, p. 111.
9 T6915 and T6918 of 1997.
10 Transcript 19/1/99, p. 21.
11 Supra, p. 35.
12 Supra, p. 28.
13 Transcript 19/1/99, p. 38.
14 Supra, p. 22.
15 Supra, p. 23.
16 Supra, pp. 25-26 and p. 31.
17 Supra, pp. 22-23.
18 Supra, p. 32.
19 Supra, p. 28.
20 Supra, pp. 17-18.
21 Statement in Support of Application.
22 Pages 30-31.
23 Above, p. 8.
24 Transcript 19/1/99, p. 38.
25 Above, p. 5.
26 T125 of 1985, pp. 23-29.
27 Supra, pp. 27-28.
28 Above, p. 3.
29 Transcript 19/1/99, p. 38.
30 Transcript 19/1/99, p. 10.
31 Above, p. 7.
32 Transcript 19/1/99, p. 44.