DECISION NO:272/97
C A T C H W O R D S
INDUSTRIAL LAW - Termination of employment - unlawful termination - REDUNDANCY
WORKPLACE RELATIONS ACT 1988, ss.170 DE, 170 DC
Kenefick & Ors v Australian Submarine Corporation, Full Court 8 July 1997
South Australian Termination Change and Redundancy Case 54 SAIR 258
NO SA 97/1021
KAY ARNOL v ALMONDCO AUSTRALIA LTD
NO. SA 97/1022
IVY WILSON v ALMONDCO AUSTRALIA LTD
NO SA 97/1023
JOHN CAULFIELD v ALMONDCO AUSTRALIA LTD
NO SA 97/1024
GLEN HANSFORD v ALMONDCO AUSTRALIA LTD
NO SA 97/1025
COLIN SCUTTER v ALMONDCO AUSTRALIA LTD
JUDICIAL REGISTRAR : LJ FARRELL
PLACE : ADELAIDE
DATE : 30 JULY 1997
IN THE INDUSTRIAL RELATIONS COURT )
OF AUSTRALIA )
SOUTH AUSTRALIA DISTRICT REGISTRY )
No.SA 97/1021 BE T W E E N
KAY ARNOL
Applicant
AND
ALMONDCO AUSTRALIA LTD
Respondent
No.SA 97/1022 B E T W E E N
IVY WILSON
Applicant
AND
ALMONDCO AUSTRALIA LTD Respondent
No.SA 97/1023 B E T W E E N
JOHN CAULFIELD
Applicant
AND
ALMONDCO AUSTRALIA LTD
Respondent
No.SA 97/1024 B E T W E E N
GLEN HANSFORD
Applicant
AND
ALMONDCO AUSTRALIA LTD
Respondent
No.SA 97/1025 B E T W E E N
COLIN SCUTTER
Applicant
AND
ALMONDCO AUSTRALIA LTD
Respondent
BEFORE : JUDICIAL REGISTRAR LJ FARRELL
PLACE : ADELAIDE
DATE : 30 JULY 1997
REASONS FOR JUDGMENT
These are Applications for relief in respect of termination of employment. The Applications come before the Court pursuant to the provisions of the Workplace Relations Act. The applicants claim that their employment was terminated unlawfully. All applicants seek compensation.
The respondent is an almond processing plant located in Renmark, South Australia. In early 1996 the company investigated the purchase of machinery that would enable it to process a greater volume of almonds more quickly. The aim of the respondent was to produce fresh almonds for export during the season from March to June when fresh almonds are not otherwise available to overseas markets. In June 1996 the respondent arranged a meeting with Mr O’Neil a union organiser for the union that covered its production work force. Mr Rogerson, Operations Manager of the Respondent requested that no union delegates employed by the respondent be present at the meeting. Mr O’Neil was informed that if the company went ahead and purchased the machinery then a number of sorting jobs would be made redundant. Another issue was discussed relating to the early ending of the seasonal afternoon shift and the consequential laying off of casual workers. Mr O’Neil decided not to advise his members because there was no certainty that the purchase of the machinery would go ahead and it may cause needless heartache.
On 16 October 1996 the Board of the Respondent decided to go ahead with the purchase of machinery and to terminate the employment of a number of employees.
On 17 October 1996 Mr O’Neil was contacted and asked to attend a meeting that day. A union delegate also attended the meeting. Mr O’Neil was told that certain positions were to be made redundant. He was offered the names of the people but he declined to be told the names. There is a dispute on the evidence as to what he was told about the selection process. His notes were tendered in evidence by consent. The Applicants representative argued that the notes confirm that Mr O’Neil was told that performance would be taken into account. The Respondent argued that the notes demonstrated that Mr O’Neil had added the details about whether performance would be taken into account at some later stage. In my view of themselves the notes give no indication of whether they have or have not been added to at some later stage. Mr O’Neil gave cogent evidence of what occurred at the meeting, and where his evidence and the evidence of Mr Rogerson conflicts I have preferred the evidence of Mr O’Neil.
The Applicants’ employment was governed by the Almondco Australia Limited and AWU Enterprise Bargaining Agreement No 2, 1996. The agreement set out a process which the company is required to adhere to when introducing change and prior to redundancy.
Clause 18 INTRODUCTION OF CHANGE
(a) Where the company has made a definite decision to introduce major changes in production, programme organisation structure or technology that are likely to have significant effects on employees, the Company shall notify the employees who may be affected by the proposed changes and the Union.
(b) The company shall discuss with the employees affected through the site Consultative Committee, the introduction of the changes referred to in sub-clauses (a) the effects the changes are likely to have on employees and shall give prompt consideration to matters raised by the employees and Site Consultative in relation to the changes.
Clause 19 REDUNDANCY
(a) Obligation to consult
(i) Where the Company has made a definite decision that it no longer wishes the job an employee has been doing done by anyone and this is not due to the ordinary and customary turnover of labour and that decision may lead to termination of employment, management shall hold discussions through the Site Consultative Committee and with the Union of the employees directly affected.
(ii) The discussions shall take place as soon as is practicable after the company has made a definite decision which will invoke the provisions of sub-clause (i) hereof and shall cover, inter alia any reasons for the proposed termination, measures to avoid or minimise the terminations and measures to mitigate any adverse effects of any termination of the employees concerned.
(iii) For the purpose of the discussion the Company shall, as soon as practicable provide in writing through the Site Consultative Committee to the employees concerned and the Union all the relevant information about the proposed terminations including the reasons for the proposed termination the number of workers normally employed and the period over which the terminations are likely to be required to be carried out. Provided that the company shall not be required to disclose confidential information, the disclosure of which would be inimical to the Company’s interests.
(iv) Positions to be made redundant will be sourced voluntarily from the employees employed by the Company, provided that employees who are identified as key personnel will not be accepted for redundancy. Failing to achieve the required numbers through voluntary redundancy, the Company will then implement the reduction of the workforce based on performance.
The enterprise Agreement is underpinned by the Dried Fruits Etc., Industry (AWU) Award 1993.
Kay Arnol
Ms Arnol is aged 37. She was employed as a sorter/packer. She commenced employment in January 1995 She was present at a meeting on Wednesday 18 September 1996. The meeting was told by Mr David Rogerson that the intake was down 15% and that new sorting machines would be purchased, that 4 or 5 sorting positions would be made redundant, that volunteers would be sought otherwise they would be chosen on the next Monday.
She has observed a neighbour who was a casual employee at the time she was employed by the respondent going off in the morning dressed in the uniform provided by the respondent to its employees.
She has received unemployment benefits and has earned $3944 up until the time of trial performing spasmodic night shift work at Kangara Farms. She performed casual work for Simarloo in February earning $990 gross in total.
Ivy Wilson
Mrs Wilson is aged 55. She was employed from December 1994. At the time of termination of her employment she was engaged as a quality control officer. She was moved from sorting to quality control because she was a good sorter.
She attended a meeting on Wednesday 18 September 1996. At the meeting David Rogerson sought volunteers from the sorting room. She could recall discussion that there would be a selection process involving performance, attendance, supervisors' reports and sick days.
She was given no reason why she was selected. She has obtained some casual employment since the termination of her employment. She earned $252 working at Riverland fruit Co-op. She worked for ACI Pentalite earning approximately $2090. She had casual employment with Berrivale Orchards since that time earning approximately $2873.
John Caulfield
Mr Caulfield is aged 42, he commenced employment in December 1994. He was employed as a cleaning supervisor at the time of the termination of his employment. He was earning $545.00 per week. He supervised a contract cleaner and a casual cleaner.
He was never told the reason why his employment was terminated. He gave evidence that he believed that his employment was terminated because of disputes he had with Mr Halliday.
Since the termination of his employment he has obtained some casual employment as a labourer earing $10.72 per hour on average for 10 - 12 hours per week supplemented by unemployment benefits.
Glen Hansford
Mr Hansford is aged 32. He commenced work in December 1994 as a general hand. At the time of termination of his employment he was a machine operator earning $435.30 per week.
He received the sole parent benefit during two periods of unemployment. He has done some casual work for ACI Pentalite earning a total gross amount of $5677 up to the date of trial. He has been employed by Berrivale earning a total gross amount of $2406.
Colin Scutter
Mr Scutter is aged 26, he commenced work in January 1995 as a general hand. He was warned about his performance on two occasions. He received no notification that his employment was to be terminated. He was aware that something was about to happen through word of mouth.
On the day he was dismissed he was told to go to the boardroom. He was handed an envelope. He was not told that his position was redundant. He was given no reason for the termination of his employment.
His rate of pay was $389.60. Since the termination of his employment he has been employed as a block hand earning $344.25 per week
The applicants and all other employees who lost their jobs at the same time were summoned to the Boardroom on Monday 23 September where they were told as a group that their employment was being terminated.
Did the Respondent have a valid reason for the termination of the applicants’ employment?
In my view the Respondent did not have a valid reason for the termination of the applicant’s employment
The respondent failed to have a proper regard to the Enterprise Bargaining Agreement in making its decision to terminate each of the applicants.
The Respondent has failed in its obligations to consult with the employees directly and the respondent has failed to meet it’s obligations under the award in relation to the selection process.
If the applicants’ performance or conduct was part of the reason for the termination of their employment were they given an opportunity to respond?
It flows from my findings of fact in relation to what was said to Mr O’Neil at the meeting on 17 September 1996 that the respondent did take into account matters related to performance or conduct in determining which employees would be selected for retrenchment.
In my view the evidence before me supports a finding that the applicants’ performance or conduct was part of the reason for the termination of their employment. I therefore find that the respondent has breached Section 170 DC of the Act.
Remedy
In determining the amount of compensation to be awarded to the applicants I have had regard to the Full Court decisionKenefick & Ors v Australian Submarine Corporation, handed down on 8 July 1997. I have had regard to the chance that the applicants’ employment would be lawfully terminated in any event. In relation to the breach of Section 170 DC, I have had regard to the lack of opportunity to successfully argue that their name should be deleted from the list of those selected from retrenchment (which I think necessarily increases the chances of each of the other applicants having been made redundant based on mathematical probabilities) and I have had regard to the circumstances of each applicant to assess the value of that chance
I have taken into account the possibility that had proper consultation taken place the applicants’ employment may not have been terminated at all.
I have taken into account the subsequent earnings of each of the applicants.
I think it is also important to bear in mind that many workers covered by South Australian Awards whose employment is terminated because of the introduction of automation or similar new technology are entitled to 3 months f notice see South Australian Termination Change and Redundancy Case 54 SAIR 258 at page 280.
I have not taken into account any monies that the applicants received on termination of their employment because they would have been entitled to those amounts in any event.
It seems to me having regard to the above factors that each of the applicants had reasonable prospects that their employment would not be terminated for another three months. In assessing the amount of compensation to be awarded to each of the applicants I have deducted the amount that, on the evidence before me, they appeared to earn during the initial three months following the termination of their employment.
Kay Arnol
The evidence of Kay Arnol was that she did not obtain employment until 1997. She would have earned $5064 had she continued to be employed by the respondent for another three months.
Ivy Wilson
I have deducted the sum of $2036 from the amount that Mrs Wilson would have earned based on her evidence of employment she obtained from September to December 1996. I have awarded compensation to her in the sum of $3938.
John Caulfield
I have calculated Mr Caulfield’s loss in the sum of $5412
Glen Hansford
Mr Hansford did not specify in his evidence the amount that he earned in December 1996. I have assumed a rate of $380 per week between 3 November 1996 and 18 December 1996 based on the evidence of Ivy Wilson who also worked casually for Pentalite at this time. I will award compensation to Mr Hansford in the sum of $3378
Colin Scutter
Mr Scutter was able to find employment as a blockhand quickly. I have awarded compensation to him in the sum of $600
I certify that this and the preceding 7 pages are a true copy of my Reasons for Judgment.
DATES OF HEARING : 12 &13 MAY 1997
FOR THE APPLICANT : MR MAHONEY
FOR THE RESPONDENT : MR YOUNG
IN THE INDUSTRIAL RELATIONS COURT )
OF AUSTRALIA )
SOUTH AUSTRALIA DISTRICT REGISTRY )
No.SA 97/1021 BE T W E E N
KAY ARNOL
Applicant
AND
ALMONDCO AUSTRALIA LTD
Respondent
No.SA 97/1022 B E T W E E N
IVY WILSON
Applicant
AND
ALMONDCO AUSTRALIA LTD
Respondent
No.SA 97/1023 B E T W E E N
JOHN CAULFIELD
Applicant
AND
ALMONDCO AUSTRALIA LTD
Respondent
No.SA 97/1024 B E T W E E N
GLEN HANSFORD
Applicant
AND
ALMONDCO AUSTRALIA LTD
Respondent
No.SA 97/1025 B E T W E E N
COLIN SCUTTER
Applicant
AND
ALMONDCO AUSTRALIA LTD
Respondent
BEFORE : JUDICIAL REGISTRAR LJ FARRELL
PLACE : ADELAIDE
DATE : 30 JULY 1997
MINUTES OF ORDER
THE COURT ORDERS THAT:
1. The respondent pay to Kay Arnol the sum of $5064 within 21 days
2. The respondent pay to Ivy Wilson the sum of $3938 within 21 days
3. The respondent pay to John Caulfield the sum of $5412 within 21 days.
4. The respondent pay to Colin Scutter the sum of $600 within 21 days.
5. The respondent pay to Glen Hansford the sum of $3378 within 21 days.
Note; Entry of orders is dealt with by Order 36 of the Industrial Court Rules.
