T11272
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Alan Ernest Griffiths and Port of Devonport Corporation
Industrial dispute - termination of employment - fixed term contract - reasonable expectation of continuing employment - severance pay - award breach - long service leave - order issued REASONS FOR DECISION [1] On 7 January 2004, Alan Ernest Griffiths, (the applicant), applied, pursuant to s.29(1A) of the Industrial Relations Act 1984, for a hearing before a Commissioner in respect of an industrial dispute with the Port of Devonport Corporation (the respondent) arising out of alleged unfair termination of employment, severance pay in respect of termination of employment as a result of redundancy, the alleged breach of an award or a registered agreement and a dispute over the entitlement to long service leave. [2] This matter has a long and chequered history. The application was first listed for a conciliation conference on 17 February 2004. The matter was not resolved and subsequent negotiations between the parties failed to find a settlement. [3] The application proceeded to formal hearing on 9 June 2004. The applicant proceeded by way of an unsworn statement from the bar table, with certain documentation tendered into evidence. At the conclusion of the applicant's submission, the respondent submitted that the Commission lacked jurisdiction to hear the matter. The basis of this contention was that Mr Griffiths was party to a fixed term contract that had expired and there was no termination at the initiative of the employer. [4] On 30 June 2004 the Commission issued a decision1 rejecting the jurisdictional objection and finding that applicant "has made out a case, albeit with limited evidence, which needs to be answered." The components of the application concerning alleged award breach and long service leave were also dealt with in this decision. [5] The respondent subsequently filed in the Supreme Court a notice to review the decision pursuant to the provisions of the Judicial Review Act 2000. This application was heard on 18 October and 12 November 2004. On 19 January 2005 Underwood CJ issued a judgement dismissing the application and confirming the jurisdiction of the Commission2. [6] The respondent lodged an appeal against this judgement to the Full Court. [7] In a judgement dated 5 October 2005 the Full Court dismissed the appeal.3 [8] As a consequence the matter was re-listed before the Commission on 29 November 2005. Sworn evidence was taken from Mr Steven Foley, Business Manager and Company Secretary for the Port of Devonport Corporation. For the sake of completeness some of the background material contained in the preliminary decision has been incorporated in this decision. [9] Mr Griffiths responded to an advertisement in the Examiner dated 31 July 1998, in which the corporation sought the services of an Assistant Engineer.4 [10] Mr Griffiths successfully applied for this position. He said that he was given no indication that the position was anything but permanent and in fact declined an offer of a position interstate on the assumption that the corporation position was permanent in nature. [11] Mr Griffiths said that when he commenced he was told that there would be a probationary period, and that initially he would be paid as a casual employee, at the rate of $40 per hour. He states that he retrospectively signed an agreement validating this arrangement.5 [12] On 22 December 1998 Mr Griffiths "reluctantly" signed a further contract.6 [13] This contract provided for employment to commence on 22 December 1998, and subject to termination provisions, to continue until 22 December 2003. [14] Clause 6.1 of the contract provides for summary termination of employment by the employer in certain defined circumstances. [15] Clauses 6.3 and 6.4 read:
[16] Clause 7 titled, Renewal of Agreement, reads:
[17] Mr Griffiths continued to perform his duties over the next five years. [18] On 25 January 2001 the corporation wrote to Mr Griffiths advising that his salary had been increased from $62400 to $70000 pa. The letter concluded with the following:
[19] It would seem that Mr Griffiths wrote to the corporation on 11 November 2002 inquiring as to the Board's intention to extend the contract beyond December 2003. That correspondence did not form part of the proceedings. On 18 December 2002 the corporation responded in the following terms:
[20] On 15 May 2003 the corporation again wrote to Mr Griffiths:7
[21] Mr Griffiths said that this letter did not amount to a notice of termination, that the position was not advertised, nor was he given the opportunity to apply. [22] On 12 December 2003 the corporation wrote to Mr Griffiths as follows:8
[23] Mr Griffiths submitted that there was still ample work to be done. Further:
[24] Mr Griffiths asserted that the contracts for two senior managers expired in December 2002. However they were still employed without new contracts being executed. [25] Mr Griffiths submitted that he had every expectation of being re-employed under a new contract. [26] He claims that his termination was unfair and that he seeks reinstatement. In the alternative he should be paid a severance payment for redundancy. Evidence of Mr Foley [27] The rationale behind Mr Griffiths' appointment was to allow the Port Engineer [Mr Witt] to concentrate on engineering projects whilst Mr Griffiths focussed on a planned maintenance program and supervised the workforce. [28] The concept of 5-year contracts was introduced for senior management positions in July 1998. Mr Foley said:9
[29] For the first couple of years the designated roles of the two engineers worked well. However Mr Griffiths was well qualified and an extremely competent engineer, and as a consequence he became increasingly involved in major capital projects. [30] Attempts by senior management to re-focus Mr Griffiths on maintenance tasks proved unsuccessful. There was also a progressive breakdown in communications between Mr Griffiths and the Port Engineer, although it would be wrong to sheet the entire blame for this breakdown onto Mr Griffiths. [31] In 2002 the Board decided to restructure the Engineering Department. This restructure involved abolishing both existing positions and create two new roles. One role would involve special projects and the other would be a "super foreman-type person who could look after the workforce..."Mr Foley agreed that this restructure was, in terms of function, a reversion to the original intent at the time of Mr Griffiths' appointment. [32] It transpired that Mr Witt was appointed to the Special Projects role but the maintenance position was never advertised or filled. It would seem that Mr Witt effectively took over both roles. [33] Senior management at the Port no longer operate under fixed-term contracts and have reverted to "ordinary employment arrangements". The employment of all senior mangers continued without interruption following the expiration of the fixed term. In the case of the Harbourmaster the contract was extended for a short period so as to coincide with the retirement of the incumbent. [34] It would be quite impracticable to reinstate Mr Griffiths. The position no longer exists and the corporation had opted a model whereby key engineering resources were outsourced. Further, the clash in personalties between Mr Griffiths and the managers to whom he would report would inevitably lead to an unworkable situation. [35] From 1 January 2006 the Corporation would be absorbed in the Tasmanian Ports Corporation with management and engineering functions structured on a state-wide rather than single port basis. This would lead to further uncertainty as to staffing requirements. Findings. [36] Section 30[3] of the Act at the relevant time read:
[37] From the Full Court decision it is now clear that the expression "termination of employment" must be accorded its plain and ordinary meaning and is not limited to a termination at the initiative of the employer. [38] The following questions are relevant [1] Did Mr Griffiths have a reasonable expectation of continuing employment? [2] If the answer to [1] above is yes, was the failure to offer Mr Griffiths ongoing employment unfair, or [3] In the alternative, was Mr Griffiths made redundant. [39] I turn to the first question. [40] The original advertisement for the position made no mention of a fixed term contract. From the evidence the issue of a fixed term contract did not arise until some time after he commenced employment. Whilst Mr Griffiths signed the contract, I am satisfied that he did so reluctantly and in an environment whereby he considered he had no other realistic option. [41] From the evidence it would seem that the prime purpose of the five-year contract introduced for senior management in 1998 was to create apprehension as to job security in the latter period of the contract, which the board [perhaps mistakenly], believed would lead to a lift in performance and productivity. The contracts clearly had nothing to do with the term of a project or task. The concept of fixed term contracts was discontinued whilst Mr Griffiths was still employed and all other senior managers [apart from the Harbourmaster, who retired], were offered ongoing employment. [42] It is not clear why the structure of the engineering department, intended at the time of Mr Griffiths' appointment, apparently fell off the rails. Clearly Mr Griffiths was capable of engineering tasks pitched at a higher level than routine maintenance. Perhaps Mr Griffiths was over qualified for the role, although the advertisement did call for tertiary qualifications with postgraduate experience in structural design, construction and planning. For whatever reason, Mr Griffiths was allowed to drift into a role that he was clearly good at, but was not the role intended the corporation. [43] The restructure proposed in 2003 was on Mr Foley's admission, a reversion to the structure intended at the time of Mr Griffiths' appointment. There was no evidence of any diminution of the amount of engineering work required. [44] I have reached the conclusion that the major reason for the failure to continue Mr Griffiths employment [fixed term contracts had been discontinued] was the breakdown in communications between Mr Griffiths and other key personnel, particularly the Port Engineer, Mr Witt. It would seem that the board formed the view that the easiest way to manage this problem was to simply allow Mr Griffiths' contract to run its term, and then appoint some one else to a role essentially the same as intended for Mr Griffiths at the time of appointment. [45] The evidence of Mr Foley was that he tried valiantly to patch the differences between the two engineers. There was however no evidence of any formal counselling or disciplinary processes, or of any ultimatum being issued. Indeed Mr Foley said not all blame attached to Mr Griffiths. [46] Taking into account the totality of the evidence I find that Mr Griffiths did have a reasonable expectation of continuing employment. [47] Was the failure to offer Mr Griffiths ongoing employment unfair? [48] I am satisfied that at the time of the 2003 restructure there was a position available which Mr Griffiths was qualified and capable of performing. Whether Mr Griffiths was suitable for the role is another question. On the evidence Mr Griffiths exhibited personality traits that did not sit comfortably with the management structure. Mr Foley and the board felt the position was irretrievable. [49] My concern is that despite Mr Foley's best efforts in informal mediation, no disciplinary processes were instituted and certainly no ultimatum along the lines of, fix the problem or you are out, was issued. Given Mr Foley's concession that Mr Griffiths was not solely to blame, it would seem that the board opted for the easy solution rather than a fair process, which may or may not have ended up with the same outcome. [50] Had the super foreman position materialised, I would have found that, absent a formal disciplinary process with opportunity to right any shortcomings, the corporation would have acted unfairly in not offering Mr Griffiths the position, or at the very least, allowing Mr Griffiths the opportunity to apply for it. [51] As it happened, the intended restructure was overtaken by events. The position was not advertised or filled. Apparently Mr Witt is fulfilling both roles with an increased reliance on outsourcing engineering expertise. That is a management model which was open to the corporation to adopt, and is not something the Commission would interfere with. [52] Mr Foley made it clear that the position of Assistant port Engineer was made redundant.10 There is no alternative position available and it is certainly not the role of the Commission to require an employer to create a position. [53] I find that Mr Griffiths was made redundant and is entitled to a severance payment. [54] Nothing was put which would persuade me to depart from the default Commission standard of two weeks pay for each completed year of service. On the authority of Hughes v Tasman Group Services Pty Ltd11 I determine that an amount of $15000, representing the value of a fully maintained vehicle [see PDC correspondence dated 25/01/2001], be included in the salary for purpose of calculating the severance entitlement. Hence the salary for calculation purposes will be $89050 pa. [55] I turn now to the question of notice. [56] The letter dated 15 May 2003 is ambiguous and lacks certainty. Whilst it clearly states that the position Assistant Engineer will not be renewed at the conclusion of the current contract, it also states that that the position of Engineer would similarly be abolished. These roles would be replaced by two new positions, at least one of which was to be advertised. The requirement to advertise was indeed a term of the contract. [Clause 7.2]. It transpired that Mr Witt was appointed to Special Projects position. On the face of the letter, Mr Griffiths would reasonably have been expecting the Infrastructure position to be advertised in October 2003, an event which did not occur. [57] I conclude that the letter of 15 May 2003 did not amount to notice. Having found that Mr Griffiths would reasonably have had an expectation of continuing employment, it would have been appropriate, in the event of redundancy, to give adequate notice. Had Mr Griffiths been covered by the Marine Boards [Tasmania] Award 1996, he would have been entitled to five weeks notice. I find that five weeks is an appropriate period of notice in addition to the severance payment. Order Pursuant to Section 31 of the Industrial Relations Act 1984, I hereby order that Port of Devonport Corporation pay to Alan Ernest Griffiths an amount of twenty five thousand, six hundred and eighty eight dollars [$25688] by way of a redundancy payment, such payment to be made not later than 5 pm on 27 April 2006. T J Abey Appearances: Date and place of hearing: 1 T11272 of 2004 Abey C. Alan Ernest Griffiths and Port of Devonport Corporation 30/6/2004.
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