T6678
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Tasmanian Chamber of Commerce and Industry Limited
Appeal - decision and order issued on 6 December by Commissioner Imlach in Application T6496 of 1996 - termination of employment of certain employees of Gloria Marshall Figure Salon - order made by Commissioner revoked - matter referred back to Commissioner for further action REASONS FOR DECISION This matter is an appeal lodged on 30 December 1996 by the Tasmanian Chamber of Commerce and Industry Limited (the TCCI) under section 70 (1)(b) of the Industrial Relations Act 1984 against an order made by Commissioner Imlach dated 6 December 1996 for the payment of certain monies to four former employees of Gloria Marshall Figure Salon of Sydney, New South Wales. Gloria Marshall Figure Salon (the store) had operated premises at Rosny, Tasmania, which were closed as from 30 September 1996. Imlach C. found that the four employees had received harsh treatment as a result of the permanent closure of the store at a time during which "bad employment" conditions prevailed. He found that reinstatement was not an option and he ordered that each of the four employees should receive two weeks' pay for each year, or part thereof, on a proportional basis of their employment with the company. The TCCI's application cited the following grounds of appeal:
Mr Gates, for the TCCI, chose to divide the first ground of appeal into two categories. The first that the Commissioner erred in finding the facts of the case constituted a harsh termination; the second that the Commissioner erred in that he failed to base his finding on the application of each person's circumstances to the facts. He submitted in respect of the first part of Ground 1 that the transcript showed:
As to the second part of Ground 1, Mr Gates said there was "no evidence in (the Commissioner's) decision that he applied the facts that were before the commission, and bear in mind the facts for each of the four employees are different: their length of time with the company is different, some attended interviews, some did not attend interviews, some got a job, others didn't get a job". 1 Mr Gates said the evidence showed that the closure "may have been a surprise but it was not unexpected".2 For all the reasons previously mentioned the company had not acted in a harsh, unjust or unreasonable manner towards the employees and that a termination of employment should not be regarded as harsh simply because an employee's "job's disappeared (and) there's a bad unemployment situation out there...."3. Mr Gates said the interests of the employer must be balanced with the interests of the employee and the Commissioner had not done that. Mr Gates submitted that it had been demonstrated that there had been consultation with the employees; the employees had been given ample time to prepare for the loss of employment; the company had tried to assist the employees find other employment; the employees had been engaged for short periods, and the closure of the salon had been for a valid reason. He said the employer had relied on decisions in T1676 of 1988 by Commissioner King, and T1925 of 1989 by Commissioner Gozzi in which redundancy payments had been refused. More specifically, he submitted there had to be evidence of unfair, unjustified or unreasonable treatment by the employer. On that point before the Commissioner the employer had relied on New Town Timber and Hardware case4 determined by the Full Court of the Supreme Court of Tasmania in July 1995 which it was submitted ruled that the Commissioner could not award compensation to a dismissed employee unless the dismissal was found to be harsh, unjust or unreasonable. Mr Gates asserted that the Commissioner had failed to consider the submission put on behalf of the employer and had decided the terminations were harsh only because of two factors, viz. that the salon closed permanently and the "prevailing bad unemployment situation". That finding he said would mean that every time an employee was made redundant, unless the unemployment situation dramatically improved, and no matter what the employer had done to help the employee, such an employee could claim the termination was harsh and become entitled to compensation. As to the second and third grounds, Mr Gates said it had been submitted that employees with less than twelve months service should not be eligible for compensation. Mr Gates said the Commissioner had been apprised of the federal Termination, Change and Redundancy Test Case which, it was submitted, the Tasmanian Commission had adopted as "indicative" in its decisions, but the Commissioner had "chosen to ignore them". 5 Mr Gates submitted the Commissioner had erred in awarding "each of the persons the same amount, because their circumstances differed between each of them".6 He said that some of the employees had been with Gloria Marshall for less than 12 months and the Commissioner had made the "same order against the company - that they get paid the same amount".7 He said also that the Commissioner should have considered the individual circumstances and characteristics of each employee when formulating his decision. Since there was no discussion of those individual circumstances in the Commissioner's decision and no indication that the Commissioner had given sufficient weight to the submissions put to him on behalf of the employer, it was argued that the Commissioner had erred. Specifically in relation to the third ground, Mr Gates said the Commissioner had erred in awarding compensation to an employee who had found alternative employment as the result of being granted a day's paid time off to attend job training on 23 September 1996. He submitted it was clear before the Commissioner at first instance that one of the employees had resigned her employment before 30 September 1996. He said that in evidence before Commissioner Imlach the employer had said that the employee concerned, Vicki Klein, "called us the following day - actually called Karen (an employee) the following day and said she wasn't coming back ..."8. Ms Shelley, for the Australian Liquor, Hospitality and Miscellaneous Workers Union - Tasmanian Branch (the ALHMWU) disputed the appellant's claim that the employees were formally advised on 14 August 1996 that the salon was to close on 30 September 1996. However she accepted that the Commissioner had rejected the union's concern about notice and had found that the employees had been given adequate notice. It was submitted that the Commissioner had considered all the evidence such as whether the circumstances were "a redundancy situation" or "merely the closure of the store"9 and had come to the conclusion that it was harsh for the employer to decide to close the store permanently and to refuse to regard the closure as a redundancy situation and not offer a redundancy payment. She said that the Commissioner had noted the union's submissions in relation to the lack of consultation about the closure although it was not referred to specifically in his decision. Ms Shelley said no authorities were put to Commissioner Imlach to support Mr Gates' assertion that each of the employee's circumstances should be considered separately. She said that was not a requirement of the federal Termination Change and Redundancy decision, nor this Commission's Termination, Change and Redundancy decision10. She said there were numerous cases where employees have been dealt with collectively, both in dismissal matters and in redundancy matters in this jurisdiction and in others. In the absence of authorities being put to the Commissioner he was not in error in choosing to deal with the employees collectively, Ms Shelley said. In respect of Ground 2, Ms Shelley disputed the appellant's claim that the Commissioner had determined the same amounts for each employee, as what the Commissioner had done, she said, was to apply a formula which would result in different amounts which would depend on each employee's length of service. Ms Shelley said that in the matter at first instance the employer, through Mr Gates, had suggested, at page 41 of transcript, that the employee with "13 months service would, on the face of it - provided there was a finding of harsh, unjust, unreasonable - be eligible, I'd suggest for some form of severance payment", and later, "that the quantum should be no more than two weeks' pay". Ms Shelley said that the employer had argued before Commissioner Imlach that a formula for severance and notice entitlements should apply but that it should be half the federal TCR formula. Therefore she said it was open to the Commissioner to choose not to adopt any or all aspects of the formula and that in arriving at his decision as to quantum the Commissioner would have taken into account:
Ms Shelley said that since the Commission in T125 of 1985 had established no criteria in relation to eligibility for compensation based on length of service, it was open to the Commissioner to consider all of the circumstances in determining which employees should receive severance pay. That the Commissioner decided that all employees should receive a payment was open to him and he did not err, she said. In respect of Ground 3, Ms Shelley said the issue of whether or not the Commissioner should have awarded compensation to employees who had found alternative employment was not put to Commissioner Imlach at first instance and it was therefore new material. She said in any case the federal TCR decision provided that an employee who has been notified that he or she is redundant and who takes up another position during the notice period should be paid the severance payments but not payment in lieu of notice. Primarily the appellant has asked this Appeal Bench to rule that the Commissioner erred by finding that the employer's action constituted a harsh termination and that the action of closing a store when there is a bad unemployment situation should be regarded as harsh. Grounds 2 and 3 were regarded by the appellant as secondary issues. Before we deal with those specific matters we consider it necessary to address the need or otherwise for the Commission to make a finding of harsh, unjust or unreasonable termination when dealing with a dispute about redundancy payments following termination of employment. In submissions to the Commissioner at first instance the employer's representative argued that in relation to termination of employment:
and that the two earlier-mentioned decisions by Commissioners King and Gozzi issued in 1988 and 1989 respectively, which were tendered at that time, showed that a termination of employment resulting from redundancy did not constitute a dismissal that was harsh, unfair, unjust or unreasonable. The New Town Timber and Hardware decision related to an alleged industrial dispute involving a former employee who had been dismissed from his employment in May 1993 and in May 1994 had applied to the President of the Commission pursuant to section 30 of the Industrial Relations Act seeking "various sums of money" amounting to approximately $141,000 as compensation for his dismissal. No demand was made by the former employee for reinstatement to his former position. In that case, so far as it concerns the current proceedings, the Court held that the Industrial Relations Act 1984, as it was then worded, did not confer upon the Commission a general jurisdiction to order that an employer pay compensation to an employee who has been dismissed. At its highest, the Court said, the power which section 70(1)(b) confers or recognises is only exercisable when a Commissioner has found that reinstatement is not possible or practicable. In other words, the power to order that money be paid to an employee is only available as a remedy in the alternative to an order that an employee be reinstated, not as a remedy per se. On 16 December 1994 Royal Assent was given to the Industrial Relations Amendment Act 1994 which, amongst other things, specifically allows a former employee to apply to the President pursuant to section 29 of the Act about a dispute in relation to termination of employment. The application has to be made within 14 days of termination, although section 21(2)(m) confers upon the Commission a discretion as to whether it will extend that time. The amending Act also inserted for the first time the following provision at section 31:
Part II of the ILO Convention deals with matters such as the Justification for Termination; Procedure Prior to or at the Time of Termination; Procedure of Appeal against Termination; Period of Notice; and Severance Allowance and other Income Protection. The latter segment provides, at Article 12:
These particular amendments were not the subject of consideration by the Supreme Court in the New Town Timber and Hardware decision. Nor were they addressed by the parties in the appeal proceedings that flowed from the decision of Commissioner Imlach in the Chubb Australia Limited case.12 In that case the parties declined to put submissions to the appeal Full Bench on the issue of jurisdiction, saying that the question was a matter for the Commission. It is important to note that, in Chubb, in addition to there being no submissions to either Commissioner Imlach or the appeal bench on the question of jurisdiction, there was, in respect of the former employees, "no demand for their reinstatement or re-employment to re-establish the employer/employee relationship".13 In the present case, however, there is such a claim for each of the persons involved, together with an assertion by the employer that before "compensation in whatever form" can be ordered by the Commission there must be a "finding of harsh, unjust or unreasonable" termination. In these particular circumstances, having regard to the amendments referred to above , we believe that the employer's assertion concerning jurisdiction may be in error. That assertion may have led the Commissioner to overlook the requirements of section 31(1A) of the Act. It appears from the transcript and from the Commissioner's decision that neither of the parties addressed section 31(1A) or the Convention or the impact of that amendment upon the decision in the New Town Timber and Hardware matter, nor did the Commissioner address those matters in his decision. In the circumstances, without making a ruling on any of the grounds of appeal, we consider it appropriate, pursuant to section 71(13) of the Industrial Relations Act 1984, (1) to revoke the order made by Commissioner Imlach on 6 December 1996 in Application T6496 of 1996, and (2) to direct the Commissioner to take such action as is necessary to convene a further hearing of application T6496 of 1996 for the purpose of considering the submissions of the parties concerning -
F D Westwood Appearances: Date and place of hearing: 1 Transcript, p.12 |