T9760
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Steven George Brooks and Groundswell Organics Pty Ltd
Industrial dispute - alleged unfair termination of employment - no valid reason for termination - reinstatement impracticable - order for compensation REASONS FOR DECISION (1) On 21 August 2001, Steven George Brooks (the applicant) applied to the President, pursuant to Section 29(1A) of the Industrial Relations Act 1984, for a hearing before a Commissioner in respect of an industrial dispute with Groundswell Organics Pty Ltd arising out of the alleged unfair termination of his employment. (2) The matter was set down for hearing (conciliation conference) at "Lyndhurst", 448 Elizabeth Street, North Hobart at 9.30am Tuesday 11 September 2001. (3) When this matter came on for hearing Mr Brooks represented himself. Mr B Fashom appeared for the Company. (4) Following preliminary submissions, the hearing was adjourned into private conference, with the Commission, in an effort to find a resolution to the dispute. This proved to be unsuccessful and the application was adjourned until 9 October 2001. Upon resumption Mr Brooks advised that the matter remained unresolved and that he wished to proceed to hearing. (5) Mr Brooks commenced with the Company in a sub-contract builder capacity in October 1995 and was engaged on the construction of the factory and plant. In 1996 he became an employee of the Company in the role of Production Manager. He continued in this role for the next 4 or 5 years. (6) The Company experienced a difficult financial history and Mr Brooks ceased employment as a consequence of these difficulties in late 1999 or early 2000. Certain monies by way of unpaid wages were owed to Mr Brooks at the time of his departure. (7) Mr Brooks commenced employment with Cadbury Schweppes as a "temporary permanent" in June 2000. This continued for 10 months until he was laid off as a consequence of reduced production. This was made known to the directors of Groundswell. (8) Some time in May 2001, Mr Greg Cameron, a director of the Company, telephoned Mr Brooks with an offer of employment. It would appear that the offer was a return to Mr Brooks' previous role variously described as Production Supervisor or Production Manager. This approach was followed up by a telephone call from Mr Bruce Fashom, Chairman of the Board of Directors. Mr Fashom described the purpose of his call in the following terms:1
(9) A major issue of contention is whether the offer was one of temporary or permanent employment. I consider this as a separate issue later in the decision. (10) Mr Brooks accepted the offer and undertook a one day compost training course on 29 May. This was at the request of the Company. He commenced working for the Company on 5 June. Mr Brooks was paid at the rate of $673 pw which, according to the evidence, was a similar arrangement to that applying during his earlier period of employment. It was common ground that a formal wage offer would be forthcoming as soon as the new equity investments were finalised. (11) Mr Brooks' son also commenced employment with the Company on the same day. There was no disagreement that this was a temporary engagement. (12) The factory had been idle for some 2 years and during the first few weeks Mr Brooks was engaged largely on cleaning up the plant and organising some initial shipments of product to improve cash flow. Monies owed from the previous period of employment were repaid in full during this initial period. (13) On 23 June Mr Brooks was contacted by Cadbury Schweppes with an offer to recommence work with the Company.2 Mr Brooks declined this offer on the basis that he considered he had an ongoing secure position with Groundswell. (14) On 20 July Mr Brooks was given a letter which unquestionably amounted to an offer of permanent employment.3 The first paragraph of this letter reads as follows:
(15) It is common ground that Mr Brooks was asked to consider the document and come back with any points he wished to raise. Mr Cameron said:4
(16) In relation to this document Mr Brooks said:5
(17) It transpired that the two major stumbling blocks were the salary and the duration of ongoing involvement of Mr David Duggan, a Director, in a supervisory capacity. (18) A further meeting between Mr Brooks, Mr Fashom and Mr Cameron took place on 3 August. Again the same stumbling blocks were in place. Mr Cameron said that Mr Brooks was "quite upset, agitated. He said he was very annoyed".6 (19) In relation to the 3 August meeting, Mr Fashom, in response to a question from the Commission, agreed that negotiations were not at an end and that there was agreement to meet again.7 The issues would however need to be discussed with Collex. (20) On 7 August Mr Brooks met with Messrs Fashom, Cameron and Duggan. Mr Brooks was told that the Company was unable to meet his requests and the position would be advertised. Mr Brooks was "at liberty to apply for the job"8. There are varying recollections of what occurred next but there can be no doubt that Mr Brooks became very angry and abusive towards the directors. (21) Mr Brooks' son then entered the room and without warning punched Mr Duggan. Both were asked to leave, which they did. (22) Mr Brooks returned to the factory on 10 August whereby he was paid up to that day and given a separation certificate. (23) Mr Brooks submits that he was unfairly dismissed. Was Mr Brooks Offered a Permanent or Temporary Position? (24) There is no documentation attaching to the initial offer of employment in May 2001. Mr Brooks maintains that there was nothing to indicate that the position was anything other than a permanent position. In response to a question from the Commission Mr Brooks said:9
(25) Mr Brooks cited his refusal of an offer of employment at Cadbury as evidence of his understanding of the status of the role. He said:10
(26) Mr Brooks submitted that his participation in the compost training, which he understood to be confidential, together with his witnessing of signatures on confidential documents,11 were further indicators of the permanent nature of the position. (27) Both Mr Cameron and Mr Fashom indicated that the initial offer was for a temporary role only. (28) Mr Cameron said:12
(29) And later:13
(30) Mr Fashom also acknowledged that Mr Brooks was well qualified for the position.14 (31) In the absence of any clear supporting evidence I am unable to conclude that the offer was one of temporary employment in the ordinary usage of the term. On the evidence the directors clearly held the view that Mr Brooks was well qualified for the position and there is no evidence that he was on some form of probation or trial period. Nor was there any evidence that the employment contract was likely to come to an end in the foreseeable future. (32) I do however accept that the offer was entirely conditional upon the then potential capital injection from Collex becoming a reality. I also accept that Mr Brooks understood this to be the case.15 It would appear that the directors had sufficient confidence as to the progress of negotiations to make an offer of permanent employment on 20 July, notwithstanding that the Collex investment was not formalised until the end of August. (33) The Collex investment, and what flowed from it, was clearly a prerequisite for the ongoing employment of Mr Brooks. The reality is, however, that Mr Brooks' employment came to an end for reasons unconnected with this investment. For this reason the fairness or otherwise of the termination of Mr Brooks' contract of employment must turn on the circumstances of the termination, and not on the question of whether the contract was temporary or permanent. Findings (34) Based on the evidence I have no doubt that Mr Brooks was initially offered the position on the basis that it would be formalised as a permanent position when the Collex investment became a reality. (35) Mr Brooks was considered by the directors to be well qualified for the role in that he had an extensive track record and an intimate knowledge of the plant. Mr Brooks was not employed on a trial basis and there were no other persons under consideration for the role. The only obvious prerequisite [the Collex investment] was subsequently met. (36) It of course goes without saying that a further implied prerequisite was the necessity to reach an agreement on the terms of the proposed contract of employment. The evidence on this can be summarised as follows. (37) Mr Brooks was provided with a formal offer of employment in a letter dated 20 July. He was invited to consider the offer and come back with any issues for consideration at a subsequent meeting. This meeting took place on 23 July. Apparently some progress was made but two major sticking points were evident. The parties agreed to have a further meeting on 3 August. Little progress was made but there was agreement to meet again and, as Mr Fashom acknowledged, negotiations were not at an end. The meeting concluded on the understanding that Mr Fashom would consult with Collex on the issues in contention. (38) When the meeting resumed on 7 August Mr Brooks was told that the Company could not agree to his proposals and the position would therefore be advertised. An important question is whether Mr Brooks was made aware that the position would be advertised if he did not accept the offer as it had been put forward. On this question Mr Cameron said:16
(39) On the same issue the evidence of Mr Fashom was:17
(40) I conclude that Mr Brooks quite reasonably believed that negotiations were not at an end and that the 7 August meeting was for the purposes of continuing the discussions on the salary package. Mr Brooks' subsequent anger upon being told that the position was to be advertised, whilst regrettable, is to some extent understandable. The actions of his son is quite inexcusable, but Mr Brooks should not be held responsible for this, particularly as he had no prior warning of what was about to happen. (41) In my view it should have been put to Mr Brooks that failure to accept the terms as offered would result in the position being advertised. This was not done and as such Mr Brooks did not have the opportunity to accept or reject the offer in the full knowledge of the consequences that would flow. It is arguable that the termination was a consequence of Mr Brooks' subsequent behaviour and that of his son, about which I have made certain observations. I am however quite satisfied that the root cause of the events which led to his termination was the advice that the position would be advertised in the circumstances described above. (42) No-one can compel two parties to agree. However to proceed to the position of advertising when Mr Brooks reasonably believed that negotiations were continuing and without giving a final opportunity to accept or reject the offer, was in my view unfair. (43) I find that the Company did not have a valid reason to terminate the employment of Mr Brooks. (44) I turn now to the question of remedy. (45) Where there is a finding that a termination is unfair, the primary remedy is re-instatement or re-employment. Whilst nothing was put to me that Mr Brooks was not capable of performing the role in an effective manner, I do accept that the events of 7 August give rise to a situation whereby it would be extremely difficult to re-establish a workable relationship between the directors and Mr Brooks. This is particularly so given that Mr Brooks occupied one of only two production positions at the plant. (46) I therefore conclude that re-instatement is not a practicable option. (47) Turning to the alternative remedy of compensation, I have taken the following factors into account:
(48) I conclude that whilst there is justification for compensation, the level of such compensation should be modest. Order (49) Pursuant to Section 31 of the Industrial Relations Act 1984 I hereby order that Groundswell Organics Pty Ltd, Gemalla Road, Margate, Tasmania 7054 pay to Steven George Brooks, 23 Calder Crescent, Blackmans Bay, Tasmania 7052 an amount of two thousand seven hundred dollars [$2700] by way of compensation, such payment to be made within 21 days of the date of this decision.
Tim Abey Appearances: Date and Place of Hearing: 1 Transcript para 790 |