Gary Bernard Scott v Royal Victorian Institute for the Blind [1995] IRCA 165

INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 2193 of 1994 B E T W E E N : GARY BERNARD SCOTT Applicant AND ROYAL VICTORIAN INSTITUTE FOR THE BLIND Respondent Before: Judicial Registrar Staindl Place: Melbourne Date: 11 April 1995 REASONS FOR JUDGMENT EX-TEMPORE (REVISED FROM TRANSCRIPT) Gary Scott, ("the applicant"), was employed by the Royal Victorian Institute for the Blind, ("the respondent"), in January 1985. He was employed as a supervisor and, at least in later years, his employment was governed by an award of the Australian Industrial Relations Commission, known as the Disability Services Award (Victoria) 1993 ("the Award"). The respondent is a well known organisation which provides assistance and services to people with visual impairment. In this way it aims to assist such people to participate as fully as possible in the community. It is organised into departments, one of which is known as employment services. This department runs a number of programs, one of them being employment for people with visual impairment. Commercially oriented activities are conducted, including the packaging and/or assembly of toys, auto parts and other products. A relatively new area of operation involves food packaging and more specifically, the assembly and packaging of ready-made pizzas. Further activities carried out by the department include the manufacture of various wooden products and domestic items. The applicant was employed initially to supervise in the assembly and packaging areas. He would oversee employees with visual impairment and would ensure that they had sufficient supplies and that their output was being dispatched correctly. However, in 1990 his duties changed somewhat. The respondent purchased a van in order to assist in deliveries and pick-ups of materials, and the applicant spent about two hours per day on these duties. Then in 1991 a three-tonne truck was purchased which would carry six pallets. From this time the majority of the applicant's duties involved driving this truck and he was only available for short periods to assist in one of the assembly/packaging areas. In 1994 consideration was given by the respondent to purchasing a larger truck. The reason for this was that some of the respondent's customers did not want a particular order being delivered in more than one consignment. The applicant was told of these plans and undertook further driver training in order for him to obtain an endorsed licence so that he could drive a large truck. He obtained this licence on 14 June 1994. In the second half of 1994 the applicant's driving duties decreased somewhat. The three-tonne truck was also off the road for some weeks with engine trouble. During this time the applicant worked in a packaging area which was concerned with "shrink wrapping" various goods. This involved wrapping goods in plastic and then applying heat so that the plastic shrinks and tightly encloses the goods. This procedure was not complicated although certain customers had specific requirements but I am satisfied that the applicant was able to perform such tasks. Some time in September or October of 1994 the respondent obtained costings for a larger truck. It came to the view that it was uneconomic to purchase a truck and employ someone to drive it. Such a service could be obtained more cheaply by using an outside contractor. Accordingly, it decided to make the applicant's position redundant and it advised the applicant on 24 October 1994 that it would terminate his employment. The applicant was not consulted about this decision prior to 24 October, nor was he given any warning about it. On 24 October the applicant attended a meeting and was handed a letter of that date. It stated that his position was redundant and that accordingly his employment was to terminate on 29 November 1994 (i.e. a five-week notice period). The applicant stated that he preferred to work out this five-week period, but the respondent said that it preferred that he not attend work during this time. At the end of this five-week period the applicant was paid a severance payment of eight weeks (totalling $3,644.80) and his other statutory entitlements. The severance payment was in accordance with the Award. It was conceded by the applicant, and correctly so in my view, that there was a valid reason for the termination of employment within the meaning of section 170 DE(1) of the act. However, the applicant argued that the termination was harsh, unjust or unreasonable pursuant to section 170DE(2). Ms Young, Counsel for the applicant, referred me to a number of decisions of this court where it has been held that there must be procedural fairness applied in relation to a situation of redundancy. I agree with the submission that it is not enough for an employer simply to establish that a case is one of redundancy (or, in the terms of the act, due to the employer's operational requirements). As was said by Judicial Registrar Parkinson in Mallen v Beasam (Unreported VI 544, 26 October 1994):- "There is no basis for drawing a distinction between cases in which termination occurs by reason of redundancy, and cases in which termination occurs for reasons other than redundancy in respect of the obligation to accord procedural fairness which arises out of the use of the words "harsh, unjust or unreasonable" in section 170DE(2) of the Act." I have previously decided to like effect in the case of Carydias v Greek Orthodox Community of Melbourne and Victoria (Unreported VI 1786 of 1984, 31 March 1995). However in addition to decisions of this court applying the Act, there is also in this case the provisions of the Award. Clause 52 of the Award provides that where an employer has made a definite decision to introduce a major change, then it shall notify the employees who may be affected. It must then discuss the change with such employees. Clause 53 of the Award provides that where an employer has made a definite decision that a position is to be made redundant, then discussions are to be held with the affected employees. Paragraphs (ii) and (iii) of clause 53(a) then provide that discussions are to take place in relation to the proposed terminations. It seems to me that such discussions should occur prior to the terminations taking place: such discussions are not simply a mechanism to provide a review for a decision which has already been made. It seems to be that discussions which occur prior to a termination taking place are far more likely to be fruitful for an employee than discussions which occur following such termination. In the case of Gibbs v City of Altona at 42 IR 255 Gray J considered an almost identical clause to clause 53 in the context of a prosecution for a breach of an award. His Honour said at page 260: "It is possible that, had the requisite discussions taken place, with the union in possession of the required information, some way might have been found of avoiding the termination of Mr Clarke's employment. It is not enough to say that the council of the respondent was unable to see any way in which Mr Clarke might have been retained in another position. It is possible that the union might have been able to suggest a way in which this could have been done. The respondent should have taken the trouble to ascertain precisely what its award obligations were". It seems to me that in the present case discussions should have been held with either the applicant or his union prior to his employment being terminated. The respondent in the present case argued that the applicant's employment was not terminated on 24 October. I do not accept this argument. In my view the giving of notice on 24 October constituted the termination of employment. Gray J in APESMA v Skilled Engineering Pty Limited at 122 ALR 471 at 484 refers to the time limit to found in section 170EA of the act and states: "That time limit is conditioned on receipt by the employee of written notice of termination. The time allowed is 14 days, although provision exists for the court to allow a further period. Written notice might be for a long period. It would be strange if an employee who had received written notice was expected to make an application within 14 days, when the notice had not expired, and could not be given a remedy at the time of commencement of the proceeding, (or even at the time when the court tries the proceeding), because the "employment had not been terminated". s 170EE (1). If the giving of notice is regarded as the termination, and as giving rights immediately it occurs, the difficulty vanishes. The giving of notice is the unilateral exercise of a right by a party to a contract. A notice is not capable of being withdrawn by the party giving it without the consent of the other party. Such consent may create new contractual rights. If notice is not withdrawn by consent it operates inexorably to bring the contract to an end, as long as it is notice in accordance with the contract and is not in any contravention of any external provision with legislative force: see Birrell v Australian National Airlines Commission (1984) 5 FCR 447 at 457-9 and the authorities there cited. Thus, in general, notice given by an employer will inevitably bring the contract of employment to an end at the expiry of the notice. There is nothing more the employer can or needs to do to produce this result. It is therefore appropriate to view the giving of notice as the termination "for the purposes of section 170EA and section 170EE of the IR Act." Accordingly, in my view the failure by the respondent to consult with or warn the applicant, leads to me finding that the termination was harsh, unjust and unreasonable in the context of section 170DE(2). I then turn to the question of remedy. Remedy The applicant initially sought reinstatement although through the running of the case changed his mind and ultimately supported the respondent's submission that reinstatement would be impracticable. Mr Wheelahan, Counsel for the respondent, argued that the applicant's position had been made redundant and there was no longer a position available for him. I accept that the applicant's duties involving truck driving are no longer available. However, the applicant was employed as a supervisor and continued to perform at least some non-driving duties throughout the course of his employment. Consideration should have been given to his placement in one of the other areas in the enterprise services department. There were other employees with significantly less service and experience than the applicant in this department and I am not satisfied that fair selection criteria were adopted in relation to the applicant's employment being terminated. I am convinced that his employment was terminated because he had been the person driving the truck and it was this position that had been abolished. Accordingly, it does seem to me that reinstatement to another position would not be impracticable. The applicant should receive the pay he would have received but for the termination. Thus from 29 November 1994 (the date to which he has already been paid) the applicant should receive his normal pay: to be deducted from this amount should be the severance payment he received of $3,644.80 and the amount of $1,380.00 which the applicant has received as income since his termination. I therefore order: MINUTES OF ORDERS 1. That the respondent reinstate the applicant by reappointing him to another position on terms and conditions no less favourable than those on which he was employed immediately before the termination; 2. The respondent pay to the applicant the remuneration he would have received but for the terminations (less the severance payment of $3,844.80 and the sum of $1,380.00); 3. The applicant's employment with the respondent be treated as being continuous for all purposes. 4. That there be a stay of 21 days in respect to the above orders. NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules. I certify that this and the preceding six (6) pages are a true copy of the reasons for judgment of Judicial Registrar Staindl. Associate: Dated: 24 April 1995 Solicitors for the Applicant: Maurice Blackburn & Co. Counsel for the Applicant: Ms M Young Solicitors for the Respondent: Arthur Robinson & Hedderwicks Counsel for the Respondent: Mr M F Wheelahan Date of hearing: 10 & 11 April 1995 Date of judgment: 11 April 1995