TASMANIAN INDUSTRIAL COMMISSION

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

Australian Liquor, Hospitality and Miscellaneous Workers Union -
Tasmanian Branch
(T11409 of 2004)

and

Classic Video Pty Ltd trading as Video City

Industrial dispute - redundancy pay - termination unfair - extended notice - compensation ordered

REASONS FOR DECISION

[1] On 23 March 2004, the Australian Liquor, Hospitality and Miscellaneous Workers Union - Tasmanian Branch 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 alleged entitlement to redundancy pay in respect to the termination of employment of Melesa Parker.

[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.

[3] Ms Parker commenced employment as a full-time library attendant in the Upper Burnie library in November 2001.

[4] On 4 March Ms Parker was made redundant. Her evidence in relation to the meeting with Mr Ewing was as follows:1

"Now, to the best of your recollection can you recall the conversation that you and Ewing had?---Yes, I can. I went in, he asked how I was. I sat down, he then said to me that he was up here to make redundancies and if I were in his shoes how would I like, make that decision, and I said that I wouldn't sort of judge it on say, a personal sort of thing, I would base it on the performance of an employee. I was feeling to myself confident that I knew I'd worked well so - - - 

So after you said that you would - you would make the decision based on performance not personal issues, did Ewing say anything to you at that stage?---Well, he said to me then that, "Well, I have chosen you."

Right. Now, did he then - did he say anything else after he said that to you?---He - after he'd said that he'd like chosen me, he asked if there was something or anything that I wanted to say. I mean, I asked why that it was me and he said,"Well, it was basically between myself and JA."

What then happened?---Well, when he'd said it was between you and JA and I said, "Well, how did you - like, why was it me," he said, "Well, basically I played a game of spin the bottle," and I mean, I was sort of in shock that - like, I sort of - I wasn't sure what I was hearing and I thought well, that wasn't something I would sort of judge a termination on so - - - 

...

You are absolutely sure that he used the term "spin the bottle"?---Absolutely, 100 per cent sure.

And you are absolutely certain that that was in answer to a question from you as to what method he used to select you?---That is correct.

Was there anyone else present in the room when he said that?---No, there wasn't."

[5] Ms Parker said Mr Ewing offered her a further six weeks' work to cover an annual leave absence and the Easter break. Her evidence was:2

"I want you to try to recall to the best of your knowledge the questions and answers in relation to that in telling you you were made redundant and then the issue of work, so if we go back he says that he played spin the bottle what then happened, as precisely as you can recall?---Okay. He said that he'd played the game of spin the bottle to make the decision. I then - I asked like, "Why me and had I done anything wrong?" He said, "No. If you had done something wrong I would pay you one week's wages and walk you out now, I wouldn't offer you six weeks work".

So he offered you - after he told you you were redundant he then made you a separate offer of six weeks work?---Yes."

[6] Ms Parker said that Mr Ewing had offered her a position in Hobart.

[7] She said that Mr Ewing mentioned that the regional manager had advised him that Ms Parker was "having trouble on the weekends". This was denied. Ms Parker said that she had in fact volunteered for the weekend work when the library moved to fixed rosters.

[8] In addition to the six weeks' work, Ms Parker was offered a redundancy payment equivalent to two weeks' pay for each year of service.

[9] Ms Parker gave further evidence as follows:3

"Did he at any stage say he wanted to give to you or the union facts about why you had been selected for redundancy?---No.

Did he at any stage indicate that he wanted to give to you or your union any facts about the operation of the company generally?---No.

Did he at any stage say he wanted to give you or your union the ability to consider alternative solutions to this redundancy?---No.

Did he at any stage say he was prepared to consider alternative arrangements for you, alternative employment?---No.

And you have said that the criteria he used to select you was spin the bottle?---Spin the bottle. Basically, "I played a game of spin the bottle".

Now - and you understood you were redundant from that time?---I did indeed."

[10] Mr Ewing chose not to cross-examine Ms Parker, nor did he call any evidence on behalf of the employer.

Submissions

Mr Tullgren, for the applicant:

[11] The severance payment was manifestly inadequate. The applicant seeks a severance payment based on six weeks' pay for each year of service, plus four weeks' notice.

[12] The termination was unfair in that the employer applied none of the acceptable norms in relation to redundancy.

[13] The employer bears the onus on showing there was a valid reason for the selection of the particular employee and that the selection was objectively defensible (see Kenefick v Australian Submarine Corporation4). In this instance the employer has demonstrably failed to satisfy this onus.

[14] In circumstances where unfairness can be demonstrated it is appropriate for the Commission to award additional compensation (see ALHMWU & Anor v Fosseys (Australia) Pty Ltd5; SDAEA v Fosseys6).

[15] The offer of alternative employment in Hobart was quite unrealistic given that Ms Parker lived in Burnie.

[16] The need for consultation has been recognised as an essential element of fairness. In FCU v Victorian Employers Federation, Wilson J observed:7

"Viewed in this light, the award is within power. Consultation between employers and employees, preceded by the distribution of adequate information is not only sensible but essential if commerce and industry are to meet the challenge of progress in a spirit of harmony and with some regard for human dignity."

[17] In the case of Ms Parker there was no consultation, consideration of alternatives, or assistance with obtaining alternative employment.

[18] "Spin the bottle" meets no test set by any industrial tribunal concerning fairness as it relates to selection of employees for redundancy.

[19] Ms Parker was effectively terminated without notice, and then offered a new six-week contract to get the employer over the busy Easter period.

[20] The ILO Convention concerning the termination of employment states:

"1. When the employer contemplates terminations for reasons of an economic, technological, structural or similar nature, the employer shall:

(a) provide the workers' representatives concerned in good time with relevant information including the reasons for the terminations contemplated, the number and categories of workers likely to be affected and the period over which the terminations are intended to be carried out;

(b) give, in accordance with national law and practice, the workers' representatives concerned, as early as possible, an opportunity for consultation on measures to be taken to avert or to minimise the terminations and measures to mitigate the adverse effects of any terminations on the workers concerned such as finding alternative employment."

[21] This employer should be well aware of these well-established requirements in that the Company has been the subject of proceedings before the Commission in similar circumstances. In Sutherland v Classic Video Pty Ltd8, the union sought a severance payment of three weeks' pay for each year of service, plus four weeks' notice. Imlach C observed:

"The Union submitted that, because of the complete lack of effort by the Company in seeking to alleviate the effect of the redundancy, which was unfair and unjust, the remedy sought by the Union in this case was warranted."

[22] And subsequently ruled:

"In view of the Company's failure to carry out any of the measures specified in previous decisions of the Commission concerning redundancy, based upon the original Full Bench decision, Tasmanian Trades and Labor Council - application to vary the Retail Trades Award,9 I consider the Union's claim should be met in full and I will so order."

[23] The circumstances in both Sutherland and the instant case are very similar.

Mr Ewing, for the employer:

[24] It is wrong to characterise the termination as one without notice, with an offer of a new contract. Ms Parker was given proper notice which was to expire on 2 April. This was later extended until 15 April.

[25] Ms Parker was offered paid time off from work to seek alternative employment.

[26] The nature of the relationship between the company and the union precludes effective consultation.

Findings

[27] The uncontested evidence is that the employer used "spin the bottle" as the criteria for selecting Ms Parker for redundancy. Whilst there are no hard and fast rules as to appropriate selection criteria, I have no hesitation in concluding that "spin the bottle" is anything but objectively defensible.

[28] It is also particularly insensitive, given that an individual's livelihood is at issue. My comments in T11316/T11391 concerning the desirability of treating staff with respect and dignity apply equally in this case.

[29] It is also clear from the evidence that the employer largely ignored most of the accepted norms concerning consultation, consideration of alternatives etc, which should apply in a redundancy situation. This is despite the fact that this same employer was subject to earlier proceedings before Imlach C which dealt with similar issues.

[30] I am of the view that there was a substantial unfairness associated with the manner of Ms Parker's termination and that some additional compensation is warranted.

[31] The timing of this redundancy was entirely within the hands of Mr Ewing. There is no evidence of a sudden trading crisis, which demanded immediate action. Indeed there was no evidence whatsoever going to the justification for the redundancy.

[32] The employer was certainly in a position to provide extended notice, even if no other alternatives were available. Extended notice would not only reduce the financial impact on Ms Parker, but also in all likelihood improve her chances of finding alternative employment. It is generally accepted that it is easier to find an alternative job from a position of employment rather than unemployment.

[33] I conclude that Ms Parker should be paid an additional four weeks' wages by way of extended notice.

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 Melesa Parker an additional four weeks' wages, calculated on the basis of her normal weekly wage at the time of termination. Such payment is to made not later than 5.00pm on 15 July 2004.

Tim Abey
COMMISSIONER

Appearances:
Mr P Tullgren for the Australian Liquor, Hospitality and Miscellaneous Workers Union - Tasmanian Branch
Mr T Ewing, with Mr P Llewellyn (25/3/04), for Classic Video Pty Ltd trading as Video City

Date and Place of Hearing:
2004
March 25
May 11
Ulverstone

1 Transcript PN 20 and following
2 Transcript PN 33, 34
3 Transcript PN 49 and following
4 [1996] 65 IR 366
5 T6674 of 1996
6 T4204 and T4223 of 1994
7 [1984] 154 CLR at 502
8 T9448 of 2001
9 T125 of 1985