Dec 494/98 M Print Q0498
AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
Workplace Relations Act 1996
s.45 appeal against a decision [Print P7777]
issued by Commissioner Wilks on 2 January 1998
A Kehagias and J Woodier and V Pham and D Baglava and A Topsahalidis
(C No. 30272 of 1998)
s.170CE application for relief re termination of employment
V Pham
(U No. 32811 of 1997)
A Kehagias
(U No. 32812 of 1997)
A Topsahalidis
(U No. 32813 of 1997
D Baglava
(U No. 32814 of 1997)
J Woodier
(U No. 32852 of 1997)
and
Unilever Australia Limited (trading as Unifoods)
SENIOR DEPUTY PRESIDENT WATSON |
|
SENIOR DEPUTY PRESIDENT WILLIAMS |
|
COMMISSIONER LARKIN |
MELBOURNE, 29 APRIL 1998 |
Appeal re arbitration
DECISION
These are appeals by Mr D Baglava, Mr A Topsahalidis, Mr A Kehagias, Mr V Pham and Mr J Woodier (the appellants) against a decision of Wilks C on 2 January 1998 in Print P7777. Wilks C decided applications for relief pursuant to s.170CE of the Workplace Relations Act 1996 (the Act) by the appellants in relation to the alleged harsh, unjust or unreasonable termination of the appellants' employment by Unilever Australia Limited trading as Unifoods (the respondent).
Wilks C dismissed the applications, deciding:
In determining, for the purposes of the arbitration, whether a termination was harsh, unjust or unreasonable, the Commission must have regard to:
I have carefully considered all that has been put to me in this case. It is noteworthy that for an extensive period the union and the respondent had been negotiating the implementation of a structured and orderly program of the redundancies, which had become necessary. It is also relevant in that context that the reason that none of the proposed agreements had been signed was because of the potential for forced redundancies.
The respondent had on several occasions sought discussion with the union about selection criteria for redundancies, however, the union refused to discuss those criteria because it refused to acknowledge that forced redundancies were a possibility.
On balance I accept the evidence of the respondent regarding its intention to consult with individual employees. The fact that the outplacement services and financial counselling were made available, exhibits an intention on the part of the respondent to do whatever it could to minimize the impact of the redundancies.
The action taken by the union on the day that the consultation process was to have taken place had the effect of disturbing the planned process, to the extent that the consultation, which did occur, was much less than adequate.
Had the requested discussions about selection criteria occurred, the union would have been far better placed to deal with the question of consultation. It refused such invitation on every occasion, preferring instead to ignore the possibility of forced redundancy, based on the assertion (wrongly in my view) that forced redundancies could not occur.
Having examined all of the material before me I have formed the view that there was never any agreement that forced redundancies were specifically prohibited. An agreement about how volunteers would be dealt with does not in my view exclude the possibility of forced redundancies unless-:
(a) such forced redundancies are explicitly prohibited by agreement
(b) the number of volunteers who possess the same level of skill and who have been objectively assessed as being equal to those selected for forced redundancy, exceeds the number of redundancies to be effected.
Such was not the case here.
Accordingly, I find as follows:
1. In relation to s.170CG(3)(a) I find that there was, in each case, a valid reason for the termination based on the operational requirements of the employer's undertaking establishment or service.
2. In relation to s.170CG(3)(b) I find that the employees were notified of the reason. Clearly all of the respondents employees were aware of the redundancies and why they were necessary.
3. In relation to s.170CG(3)(c) I find that to the limited extent to which the termination of each of the applicants was related to their capacity or conduct, they were given an opportunity to respond. The fact that such opportunity was not taken up by the applicants cannot be held against the respondent in my view.
4. In relation to s.170CG(3)(d) I find that the subsection had no application in this case. The termination related to the operational requirements of the employer's undertaking, establishment or service. The reason only related to the capacity or conduct of the employees in relation to an objective assessment of their skills relative to other employees. The reason does not relate to unsatisfactory performance.
5. In relation to s.170CG(3)(e) there are other matters, which I have considered to be relevant. These include:
· The generous redundancy payments. (4 weeks in lieu of notice, 4 weeks severance pay and 4 weeks pay per year of service). This formula results in payments, which exceed standard redundancy provisions by a very large margin, the payments made must, in my view be taken into account.
· The provisions of s.170CA(2) of the Act which state-:
In my view it would be contrary to the intention of the Act, that is-: `to ensure that a "fair go all round" is accorded to both the employer and the employees' in these matters if findings were made in favor of the applicants.
For the above reasons these applications are dismissed."
In the appeal Mr L Johns solicitor of Holding Redlich represented the appellants. Mr I Dixon solicitor of Baker & McKenzie represented the respondent.
The appellants submitted that Wilks C erred:
(a) in misapplying established principles in respect of :
(i) the meaning of "valid reason" in s.170CG(3)(a) (Austal Ships Pty Ltd and Schreier [Print P3975] and A. Rus and Girotto Precast Pty Ltd [Print N7300]);
(ii) the approach to consultation in relation to individual employees (Kenefick v Australian Submarine Corporation Pty Ltd (1996) 65 IR 366 and Quality Bakers of Australia Ltd v Goulding and another (1995) 60 IR 327); and
(iii) having regard to the level of redundancy payments made, pursuant to s.170CG(3)(g);
(b) failure to consider relevant matters, specifically the discriminatory nature of the selection criteria applied by the respondent; and
(c) In reaching each of his findings in points 1 to 4 inclusive (reproduced above) and his findings as to the intention of the respondent to consult with individual employees and that there was never any agreement that involuntary redundancies were prohibited.
In relation to the public interest, the appellants relied upon:
(a) legal error said to arise from the misapplication of established principle;
(b) failure to consider issues of discrimination;
(c) the desirability of guidance by a Full Bench in relation to the use of selection criteria for redundancies in the context of s.170CE applications;
(d) the general importance of job security and redundancy matters;
(e) the principle raised in relation to the relevance of the level of redundancy payments, pursuant to s.170CG(3)(e); and
(f) the importance of the issue of valid reason in the context of s.170CG(3)(a).
The respondent argued that no grounds had been made out to support leave to appeal. The appellants had not established any basis for concluding that it was arguable that Wilks C had erred in law. Each of the Commissioner's findings was reasonably open to him on the evidence and was supported by the evidence.
The respondent further submitted that:
(a) Wilks C had properly applied the requirement of s.170CG(3) of the Act and
(b) each of the findings made by him was properly founded in the evidence before him.
The relevant background is set out in the decision of Wilks C. It is common to each of the appellants, other than Mr Kehagias in respect of the application of the processes applied by the respondent to give effect to the terminations. Mr Kehagias was absent from the workplace, for medical reasons, from 12 May 1997. As a result he was not subject to the processes applied in respect of the other appellants, at the workplace, leading up to the terminations commencing with the announcement to employees of the need for further redundancies on 8 August 1997, through to the advice to the appellants of their termination on 21 August 1997.
Did Wilks C misapply principle?
We have considered the appellants' submissions in relation to each of the areas in which it was argued that Wilks C erred. We are not satisfied that the appellants have established an arguable case that Wilks C erred in relation to any of them.
We are satisfied that the Commissioner applied his findings of fact in a manner consistent with the authorities relied upon by the appellant in respect of the issues of "valid reason" and consultation with individual employees. It appears to us that the appellants' case in respect of these issues rests on the proposition that the findings of fact so applied were not reasonably open to him. We deal with the attack on the Commissioner's findings of fact below.
We are also satisfied that it was open to Wilks C to have regard to the level of redundancy payments, pursuant to s.170CG(3)(e). Matters arising under s.170CG(3)(e) are at large, subject to relevance in the context of the circumstances of a particular matter. We think that the level of redundancy payments maybe a relevant consideration, particularly in relation to the harshness of a termination. Wilks C was entitled to have regard to them in the circumstances of the matters before him.
The appellants submitted that Wilks C erred in failing to take into account what it said was the discriminatory nature of the selection criteria used by the respondent to choose employees to be made redundant. It was submitted that they were discriminatory in respect of both the non-English speaking backgrounds and/or medical condition of the appellants. Whilst Wilks C did not specifically address this argument in his decision, it is not reasonable to infer that he did not consider it. Such an inference is not available in the circumstances in which none of the applicants specified s.170CK grounds in their applications, the limited submissions on the point put to him and there was no reasonable basis on the material before him on which he could have found the criteria to be discriminatory.
For the purpose of determining whether leave to appeal should be granted it is necessary to consider whether an arguable case has been established that findings of Wilks C were not reasonably open to him on the material before him. We deal with each of the findings raised by the appellants in turn:
"Having examined all of the material before me I have formed the view that there was never any agreement that forced redundancies were specifically prohibited."
In our view this finding was reasonably open to the Commissioner on the material before him. On that material we think it reasonable to conclude that whilst the appellants' union opposed involuntary redundancies, no agreement reflecting its preferred position was entered into by the respondent and the respondent continued to assert its right to utilize involuntary redundancies. There was no error as to the finding or the failure to give weight to an agreement of the type asserted by the appellants in deciding the applications.
"In relation to s.170CG(3)(a) I find that there was, in each case, a valid reason for the termination based on the operational requirements of the employer's undertaking establishment or service."
Given the agreement before him as to the necessity for redundancies and his finding that the selection of the appellants resulted from the application of objective criteria, this finding by Wilks C was reasonably open to the Commissioner on the material before him.
"In relation to s.170CG(3)(b) I find that the employees were notified of the reason. Clearly all of the respondents employees were aware of the redundancies and why they were necessary."
Given the evidence of extensive discussions with the union and with employees over a long period preceding the terminations, the information that redundancies would occur and his finding that an opportunity for consultation in relation to the selection of the individuals for termination had been provided, but curtailed by union action, we are satisfied that this finding was reasonably open to Wilks C, except to the extent that Mr Kehagias was not subject to the same processes as the other applicants due to his absence from the workplace leading up to and on the day of the terminations. We will deal with his specific circumstances later in this decision.
"In relation to s.170CG(3)(c) I find that to the limited extent to which the termination of each of the applicants was related to their capacity or conduct, they were given an opportunity to respond. The fact that such opportunity was not taken up by the applicants cannot be held against the respondent in my view."
and
"On balance I accept the evidence of the respondent regarding its intention to consult with individual employees. The fact that the outplacement services and financial counselling were made available, exhibits an intention on the part of the respondent to do whatever it could to minimise the impact of the redundancies.
The action taken by the union on the day that the consultation process was to have taken place had the effect of disturbing the planned process, to the extent that the consultation which did occur was much less than adequate."
With the exception of the circumstances of Mr Kehagias, this finding was reasonably open to the Commissioner on the material before him. Notwithstanding the evidence of the appellants, we think there was a sufficient basis for this finding, given the evidence of the process proposed by the company, the interruption to it by the union action and the circumstances in which two employees took the opportunity provided to discuss their selection and alternatives, resulting in one of the intended redundant employees accepting transfer to the night shift.
"In relation to s.170CG(3)(d) I find that the subsection had no application in this case. The termination related to the operational requirements of the employees undertaking, establishment or service. The reason only related to the capacity or conduct of the employees in relation to an objective assessment of their skills relative to other employees. The reason does not relate to unsatisfactory performance."
CONCLUSION AS TO FINDINGS OF FACT
Other than in respect of the findings in relation to consultation with Mr Kehagias and notification of the reason for his being selected for redundancy, we are not satisfied that the appellants have established an arguable case that Wilks C erred in reaching his findings.
In respect of Mr Kehagias, the only evidence in relation to consultation and advice of the reasons for his selection is that of Mr Kehagias. We are satisfied that on the evidence before him, the findings of Wilks C that Mr Kehagias had been notified of the reason for termination, insofar as it related to his being chosen for redundancy and the availability of the opportunity to discuss and challenge his selection was not reasonably open to the Commissioner.
CONCLUSION AS TO THE APPEAL
In relation to Mr D Baglava, Mr A Topsahalidis, Mr V Pham and Mr J Woodier, we are not satisfied that an arguable case has been made out that Wilks C erred in a relevant sense in his decision. Leave to appeal is refused in relation to these appellants.
In respect of Mr A Kehagias, we are satisfied that an arguable case has been made out that Wilks. C erred in respect of those findings discussed in our conclusion as to findings of fact. We are also satisfied that the Commissioner did err in reaching those findings in respect of Mr Kehagias. Accordingly, in respect of his application we grant leave to appeal.
We now consider the application of Mr Kehagias on the basis of the material before Wilks C That material was not added to on the appeal.
We find that there was a valid reason for the termination of Mr Kehagias. It is found in the need for redundancies arising out of the Brambles project, together with the application of objective selection criteria applied by the respondent in selecting Mr Kehagias.
We are satisfied that Mr Kehagias was aware of the substantive reason for the redundancy - the Brambles project, but find on the evidence that due to his absence from work he was not advised of the reason for his selection. On the evidence he received a telephone call in relation to his termination on 21 August (with the identity of the caller and content of the conversation not apparent from the evidence) and received his letter of termination shortly thereafter. It is clear, on the evidence before Wilks C, that he did not have the opportunity to discuss or challenge his selection for redundancy. To the extent that his capacity was subject to assessment through the application of the selection criteria, he did not have an opportunity to respond.
We find that Mr Kehagias' union was given, but declined an opportunity to have input into the selection criteria used by the respondent. We also find that the respondent had planned a process in which the union was to be advised of the employees selected for redundancy and an opportunity to discuss the selections prior to the redundancies being announced. This process was unable to be given effect due to the action taken by the union.
In the circumstances of the matter, but for the need for redundancies arising from the Brambles project, Mr Kehagias would have remained in employment, with there being no suggestion that his performance was in an absolute sense unsatisfactory and no basis for them to have been advised that his performance was unsatisfactory prior to the termination.
We think the level of redundancy payments made to Mr Kehagias is a relevant consideration, which acted to reduce the harshness of his termination.
Having regard to those findings, it is necessary to consider, in all of the circumstances, whether the termination of Mr Kehagias was harsh, unjust or unreasonable. We do so in the context of the objects in s.170CA of the Act, including the "fair go all round" in s.170CA(2). There are considerations, reflected in our findings above, some of which support and others, which act against a finding that the termination of Mr Kehagias was harsh, unjust or unreasonable.
Unlike the Industrial Relations Act 1988, which provided for discrete requirements in relation to valid reason, an opportunity to respond to allegations concerning performance and other matters which if not met by a respondent would lead to a finding against them. The current Act provides in s.170CG (3) a broad approach requiring that the Commission have regard to a range of matters in determining whether a termination is harsh, unjust or unreasonable. A finding in respect of any one of those factors is not, in itself determinative. Where the considerations conflict, it is necessary to reach a conclusion, in all the circumstances, as to whether the termination is harsh, unjust or unreasonable.
In all the circumstances of this matter, we are not satisfied that the termination of Mr Kehagias was harsh, unjust or unreasonable. Having regard to the necessity for redundancies, and the selection of Mr Kehagias through the application of objective selection criteria, the opportunity for Mr Kehagias' union to have some input into those criteria and to be advised of and to discuss the outcome of their application prior to the termination of the employees and the level of redundancy payments made by the respondent, we do not think the absence of an opportunity for Mr Kehagias to discuss and challenge the application of the criteria to his circumstances, in itself, justifies a finding that the termination was harsh, unjust or unreasonable.
In respect of Mr Kehagias, therefore, we dismiss the appeal.
BY THE COMMISSION:
SENIOR DEPUTY PRESIDENT
Appearances:
L Jones, solicitor for the appellants.
I. Dixon, solicitor for the respondent.
Hearing details:
1998.
Melbourne:
April 2, 22.
Decision Summary
Termination of employment - unfair dismissal - appeal - union claimed Commission at first instance misapplied `valid reason' test - held no error of principle - held level of redundancy payment a relevant consideration pursuant to s170CG(3)(e) - union claimed Commission failed to take into account discriminatory nature of selection criteria - held no applicant specified s170CK as a ground for application , no reasonable basis on evidence before Commission at first instance on which to have found selection criteria was discriminatory - held with exception of one applicant (Kehagias) who was on sick leave, all other findings reasonably open - Commission erred in relation findings relating to Kehagias - whether termination of Kehagias harsh, unjust or unreasonable - Bench noted unlike IR Act which provided discrete requirements in relation to valid reason, opportunity to respond to allegations and other matters which if not met would lead to a finding against respondent , current s170CE(3) provides a broad approach requiring Commission to consider a range of things - a finding in respect of any one of those factors is not in itself determinative - where considerations conflict it is necessary to reach a conclusion in all the circumstances - held termination of Kehagias not harsh, unjust or unreasonable . | ||||
Appeal by Kehagias and Others against a decision of Wilks C [Print P7777] on 2 January 1998. | ||||
C No 30272 of 1998 |
Print Q0498 | |||
Watson SDP Williams SDP Larkin C |
Melbourne |
29 April 1998 | ||
Printed by authority of the Commonwealth Government Printer
<Price code D>
** end of text **