T11316 and T11391
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Australian Liquor, Hospitality and Miscellaneous Workers Union - and Classic Video Pty Ltd trading as Video City
Industrial dispute - terms and conditions of employment - alleged unfair termination of employment - termination substantively and procedurally unfair - genuine redundancy - reinstatement impracticable - compensation ordered REASONS FOR DECISION [1] On 11 February 2004 and 12 March 2004, the Australian Liquor, Hospitality and Miscellaneous Workers Union - Tasmanian Branch (LHMU) applied to the President, pursuant to Section 29(1) of the Industrial Relations Act 1984, for a hearing before a Commissioner in respect of an industrial dispute with Classic Video Pty Ltd trading as Video City arising out of the terms and conditions of employment and the alleged unfair termination of employment, respectively, of Allison Adkins. [2] The matter was listed for a hearing (conciliation conference) on 25 March 2004. Mr P Tullgren represented the union. Mr T Ewing, with Mr P Llewellyn, represented the employer. The matter was further listed for hearing on 11 May 2004 and 27 May 2004. [3] Ms Adkins commenced employment as a library attendant in November 1998. She worked continuously in the Devonport library on a full-time basis up until 4 March 2004, at which time Mr Ewing advised that she was to be made redundant. The employment came to an end on 2 April 2004. [4] Mr Tullgren submitted that Ms Adkins had a reasonable expectation of ongoing employment and that the employer had failed to demonstrate a valid reason for termination, based on capacity conduct or performance of the employee, or the operational requirements of the employer. Mr Tullgren further submitted that the termination was unlawful and had "been dressed up as a redundancy". [5] Evidence was taken from the applicant. The employer chose not to call any evidence. [6] Mr Ewing did however invite the Commission to make an adverse finding as to witness credit on the part of Ms Adkins. Having examined the transcript I have concluded that the inconsistencies referred to were of a relatively minor nature and did not relate to any issue material to this decision. There is no basis for an adverse finding as suggested by Mr Ewing. Background Roster Arrangements: [7] From the time of commencement until September 2003 Ms Adkins worked on a rotating roster system whereby the weekend work was shared amongst the four full-time staff. [8] Whilst on leave in August 2003 Ms Adkins was told by her regional manager (Mrs Cox) that the roster was to change from rotating to a fixed roster. The impact on Ms Adkins was that she would be working every weekend whilst the other staff had every weekend off. Ms Adkins said she was upset by these changes and felt "pretty crappy". However Mrs Cox had been told by Mr Ewing that the change was not negotiable. [9] Reference was made to the company manual, which relevantly states:1
[10] Ms Adkins said she believed the roster changes to be in conflict with the policy manual. [11] Following consultation with the other library attendants Ms Adkins wrote to Mr Ewing in the following terms.2 The letter was signed by all four full-time library attendants.
[12] Asked whether Mr Ewing responded to the letter, Ms Adkins said:3
[13] Some two weeks later Ms Adkins approached Mr Ewing when he was in the Devonport library. Her account of the meeting was:4
[14] Ms Adkins subsequently contacted her union. [15] On 11 February 2004 the LHMU lodged a s.29 dispute notification concerning the roster changes. The matter was listed for a conciliation conference on 25 March 2004. [16] Shortly after the lodgement of the dispute notification, Ms Adkins was advised that her roster was to be swapped with another employee. The effect of this was that Ms Adkins went from working every weekend to working no weekends at all. This situation applied for the last five weeks of her employment. [17] Ms Adkins said that the change was a direct consequence of the dispute notification.5 [18] Mr Ewing asked the Commission to comment on the apparent delay between the time Ms Adkins consulted the union (September 03) and the date of lodgement of the dispute notification. The union offered no explanation of the delay. However, the substance of that dispute has largely been over-taken by subsequent events. As such it is unnecessary to assess the impact if any of this delay on the outcome of that particular issue. Suffice to say that unnecessary and unexplained delays in respect of any application, may, depending on the circumstances, impact negatively on the resolution of the matter in question. In extreme cases, lack of prosecution may even result in the dismissal of an application. Australian Workplace Agreement [AWA]: [19] Some time in the first half of 2003, Ms Adkins and other staff members were approached to sign AWAs. Ms Adkins evidence on this point was:6
Termination of Employment [20] During the second or third week of February 2004 the regional manager told Ms Adkins that "Terry was coming up to make redundancies up in the coast". Ms Adkins also gave evidence about her knowledge of redundancies in Launceston, and a subsequent advertisement for full-time staff.7 She said that at that stage "everybody was walking around on egg shells concerned that they were losing their jobs". [21] On 4 March Ms Adkins was called to a meeting with Mr Ewing and the regional manager. Her evidence in relation to this meeting was as follows:8
[22] Ms Adkins agreed that she had been offered time off to seek alternative employment. She did not avail herself of this offer because she "didn't consider that [her] redundancy was genuine". [23] Ms Adkins said that she had never received any disciplinary warnings, been advised of any concerns about work performance or ever told that her job was in jeopardy. [24] Ms Adkins said that from her own experience and knowledge of the library diary records, there appeared not to be any decline in business compared with the previous year. She was not aware of any reduction in the number of videos and DVDs being hired. [25] Ms Adkins said that when she was rostered on "open" shifts, she was required to count and balance the previous day's takings. Based on this information, she said there was no indication of a decline in the amount of money actually taken. [26] Ms Adkins said that at the commencement of the promotion in September 2003, eight casual employees had been engaged for approximately eight hours each per week. [27] Ms Adkins acknowledged that a full-time member of staff had not replaced her. However in relation to casual staff, she said:9
Authorities [28] Mr Tullgren referred to a number of judgements and decisions which, he said, established principles relevant to the instant case. Mr Tullgren submitted that these authorities should be read in the context of s.30 of the Act which states that an employee with a reasonable expectation of ongoing employment, must not be terminated unless there is a valid reason connected with the capacity performance or conduct of the employee, or the operational requirements of the employer. Further, the onus for proving the existence of a valid reason for termination rests with the employer. [29] In Selvachandran v Peteron Plastics Pty Ltd, Northrop J said:10
[30] In Kerr v Jaroma Pty Ltd, Marshall J observed in relation to the validity of operational requirements:11
[31] In Crozier v Palazzo a full bench addressed the matter of the evidentiary basis necessary to prove the existence of a valid reason:12
[32] On the question of who bears the onus, a full bench of the IRCA in Kenefick v Australian Submarine Corporation said:13
[33] In Perry and Others v K Mart Australia, Harrison CC dealt with a situation whereby a number of full and part-time employees had been replaced with casuals. The Commissioner said:14
[34] On the question of objective selection criteria, the judgement in Greig v Sir Alfred McAlpine and Son stated:15
[35] The matter of operational requirements was addressed in Nettlefold v Kym Smoker Pty Ltd. The AILR report on this decision notes:16
[36] In Tasmanian Development and Resources v Martin a full bench of the Federal Court adopted the above conclusion in Nettlefold and went on to state:17
[37] Mr Tullgren submitted that whilst the Commission does not have to place itself in the managerial chair, it cannot absolve itself of the responsibility to consider whether such a sound evidentiary base exists. Whilst this does not require the calling of expert economic and financial evidence, it does involve weighing up what evidence is before the Commission and determining whether the onus, which rests on the employer, has been discharged. In support of this Mr Tullgren cited Quality Bakers of Australia Ltd v Goulding18 in which the AILR report notes:
[38] Mr Tullgren submitted that failure to consult with an employee about the issue of redundancy means that the termination may be overturned. As authority for this proposition he relied on Corkery v GMH Limited in which Stanley J said:19
[39] Mr Tullgren also referred to the AIRC full bench decision in Windsor Smith v Lui and Others20 as authority for the obligation falling to the employer to consult with employees affected by possible redundancies. Closing Submissions Mr Tullgren, for the applicant: [40] The employer has failed to demonstrate a valid reason for termination. [41] The work performed by Ms Adkins is still being performed. There has been no change in the opening hours of the Devonport library. There was no attempt by the employer to explain or justify the basis of the redundancy. [42] The only evidence in relation to the level of activity and financial takings of the library was provided by Ms Adkins. Her evidence was that there had not been a decline in either. [43] There were no objective criteria for the selection of Ms Adkins for redundancy. The stated "last on first off" was simply a convenience to suit the circumstances of this case. It was not a policy that applied on a company-wide basis and indeed was specifically repudiated by the redundancy clause in the AWA presented to Ms Adkins. The selection process was "tainted" and as a consequence was procedurally unfair. [44] There was an absence of consultation with both Ms Adkins and the union. There was no consideration of any alternatives. The offer of employment in Hobart was quite unrealistic given Ms Adkins' domestic circumstances. [45] The Commission should draw the inference that the selection of Ms Adkins for "redundancy" was directly linked to her rejection of the AWA and her contest concerning the fixed roster. [46] The redundancy was a "sham" giving rise to substantive unfairness. [47] The applicant seeks reinstatement. Mr Ewing, for the employer: [48] It was unfair on the employer to be burdened with principles enunciated in high level, and in some cases dated, legal judgements on matters for which the award is silent. [49] The business goes through cycles related to the weather and school holidays. This clearly shows there was a need to alter the constitution of the workforce. [50] It is not possible to infer a connection between the redundancy and failure to sign the AWA. Not one library attendant in either Burnie or Devonport signed the AWA. In any event the time delay between the two events would rule out any connection. [51] The six-month time lag between the challenge to the roster and the redundancy would similarly rule out any connection. [52] The authorities state that there is no hard and fast selection criteria in redundancy cases. Therefore it was open to adopt last on first off, particularly as the AWA had been rejected. [53] The relationship between the Company and the union precludes effective consultation. [54] Ms Adkins has not been replaced with a library attendant. The duties of a transaction handler are quite different to that of a library attendant. [55] In this instance one month's notice has been provided and a severance payment in line with the Commission standard was made. The Commission should confirm this position. Findings [56] It is apparent that the employer has in this instance, and in others known to the Commission, demonstrated a marked reluctance to consult or discuss matters that may have a profound effect on employees. [57] Given the practice over previous years, coupled with the "Rotation of Shift" clause in the employer manual, it is hardly surprising that Ms Adkins was upset with Mr Ewing's unilateral decision to change to a fixed roster on a non-negotiable basis. [58] In the circumstances it was perfectly reasonable that she, along with the other library attendants, seek a review of this decision. To be met with a response along the lines of:
is simply unacceptable. [59] On the other hand Mr Ewing may well have a perfectly reasonable and compelling reason to move to fixed rosters. If that was or is the case, then it is incumbent on him to consult with employees affected. [60] Employees are entitled to be treated with respect and dignity and they should be consulted on matters that have a significant impact on their income and/or domestic arrangements. This does not mean that agreement must be reached in every instance before a change may be made. [61] Adherence to these basic tenets of fairness, would I suspect, avoid the necessity for most of the disputes involving this employer, finding their way to the Commission. [62] In this matter the employer concedes that he did not provide any evidence, either to Ms Adkins, or the Commission as to the need to implement a redundancy. The evidentiary onus as outlined in Quality Bakers of Australia, is not particularly onerous. But in this case the employer produced absolutely no evidence whatsoever. [63] The only evidence as to trading activity was produced by the applicant, and that suggested it was business as normal. Mr Ewing asserted that the business goes through cycles related to the weather or school holidays. Whilst this is undoubtedly true, there was no suggestion that this cyclical pattern was any different from previous years. [64] It is well established that a valid reason for termination must be "sound defensible or well founded" [see Selvachandran]. Nothing was put in this particular case which even remotely approaches this criteria. I have no hesitation in concluding that the employer has failed to prove the existence of a valid reason for the termination of Ms Adkins. It follows that the termination was substantively unfair and I find accordingly. [65] It may well be that the employer did have a valid reason for termination but chose not to disclose or justify it. On my assessment it seems more likely than not that Mr Ewing made a conscious business decision to replace one library attendant with increased hours for a number of transaction handlers (casuals), presumably working under the guidance and supervision of the remaining library attendants and the regional manager. I base this conclusion on the evidence of Ms Adkins as to hours worked by transaction handlers, coupled with submission of Mr Ewing as to the need to alter the constitution of the workforce. [66] Consistent with the authority of Perry and Others v K Mart, I daresay that such a decision is within the prerogative of the Company management and not something the Commission would lightly interfere with. It does nonetheless impose an obvious unfairness on the employee displaced, in this case Ms Adkins. [67] I turn now to the selection process that led to Ms Adkins' termination. [68] I am unable to draw any connection between the termination and the rejection by Ms Adkins of the AWA. The evidence is simply not there. [69] The position is less clear insofar as the challenge to the fixed roster is concerned. Ms Adkins was made redundant some three weeks after the s.29 dispute notification. Two weeks before the termination Mr Ewing changed her roster from working every weekend to working Monday to Friday only. This also had the flow on impact of reducing the subsequent redundancy payment, which would have otherwise been calculated on a weekly rate inclusive of significant penalty payments. [70] It is perfectly understandable why Ms Adkins felt that there was not a "genuine redundancy". However whilst this inference is clearly open, there is insufficient evidence for the Commission to positively conclude that this was the case. [71] Mr Ewing submitted that the selection process was based on last on first off. In another matter heard at the same time (T11409 of 2004), the employer relied on the criteria of "spin the bottle". [72] The AWA presented to Ms Adkins reads as follows on redundancy:21
[73] It is clear that this employer has retrospectively announced selection criteria that conveniently embrace the circumstances of a decision he had already made. It is true that there are no hard and fast rules as to which selection criteria should be adopted (see Greig). It is however not open to an employer to selectively change the criteria on an individual basis so as to fit with a decision already made. [74] I conclude that whatever selection criteria the employer adopted, its lack of objectivity and transparency inevitably leads to a conclusion that it was procedurally unfair. [75] Mr Ewing submitted that it was an unreasonable burden to expect an employer to trawl through the law libraries in search of precedent guidance for matters on which the award is silent. Prima facie there is some force in this submission. I would however make the following observations:
[76] I find that the termination of Ms Adkins was both substantively and procedurally unfair. The question to be determined is the appropriate remedy. [77] I have reached the conclusion that this was a genuine redundancy, albeit handled poorly and insensitively. In the circumstances reinstatement is not a practical option, in that the employer has made it clear that there is no longer a role for four full-time library attendants in the Devonport library. I turn now to the matter of compensation. [78] In determining an appropriate level of compensation I have taken the following into account:
[79] Taking into account the totality of the circumstances I have determined that Ms Adkins be paid an additional amount equivalent to six weeks' pay, calculated on her normal weekly earnings at the time of termination. ORDER Pursuant to s.31 of the Industrial Relations Act 1984 I hereby order that Classic Video Pty Ltd trading as Video City, Level 1, 40 Melville Street, Hobart, Tasmania pay to Allison Adkins a further amount equivalent to six weeks' wages, calculated on her normal weekly earnings at the time of termination, such payment to be made not later that 5.00pm on 15 July 2004.
Tim Abey Appearances: Date and Place of Hearing: 1 Exhibit A2 |