Jennifer Lawrence v Mining World Limited [1995] IRCA 583

C A T C H W O R D S INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - UNLAWFUL TERMINATION CONCEDED - REDUNDANCY - ASSESSMENT OF COMPENSATION INDUSTRIAL RELATIONS ACT 1988 Ss 170DE, 170EA, 170EE Allia v Plumbing World Limited (IRCA No. 453 of 1995, Boon JR, unreported) Bean v Milstern Retirement Services Pty Ltd (IRCA No. 248 of 1995, Moore J, unreported) Aitken v CMETS&WU (IRCA No. 352 of 1995, Lee J, unreported) JENNIFER LAWRENCE -v- MINING WORLD LIMITED - WI 95/1859 BEFORE: R D FARRELL JR PLACE: PERTH DATE: 26 OCTOBER 1995

IN THE INDUSTRIAL RELATIONS ) COURT OF AUSTRALIA ) WESTERN AUSTRALIA ) DISTRICT REGISTRY ) No. WI 1859 BETWEEN: JENNIFER LAWRENCE - Applicant AND: MINING WORLD LIMITED - Respondent MINUTE OF ORDERS BEFORE: R D FARRELL JR PLACE: PERTH DATE: 26 OCTOBER 1995 THE COURT DECLARES THAT: 1. The termination of the employment of the applicant contravened Section 170DE of the Industrial Relations Act 1988. AND THE COURT ORDERS THAT: 2. The respondent shall pay compensation to the applicant in the sum of $1,350.00 within 14 days of the date of this order. NOTE: Settlement and entry of Orders is dealt with by Order 36 of the Industrial Relations Court Rules

IN THE INDUSTRIAL RELATIONS ) COURT OF AUSTRALIA ) WESTERN AUSTRALIA ) DISTRICT REGISTRY ) No. WI 95/1859 BETWEEN: JENNIFER LAWRENCE - Applicant AND: MINING WORLD LIMITED - Respondent BEFORE: R D FARRELL JR PLACE: PERTH DATE 26 OCTOBER 1995 REASONS FOR JUDGMENT This is an application under Section 170EA of the Industrial Relations Act 1988 for compensation arising from the termination of the employment of the applicant, Jennifer Lawrence ("Mrs Lawrence"), from her position as a credit control clerk by the respondent, Mining World Limited ("Mining World"). Reinstatement is not sought and it was common cause between the parties that it was not practicable in any event. There was a good deal of common ground in this case. It was agreed between the parties that the reason for the termination of Mrs Lawrence's employment was a genuine restructuring of the company which resulted in her job being amalgamated with an existing position in an associated company, Plumbing World Limited. It was agreed that this was a valid reason for termination for the purposes of Section 170DE of the Act. It was common ground that Mrs Lawrence was not terminated for any reason connected with her capacity or her performance. It was conceded by Mining World, however, that there was a failure to consult with Mrs Lawrence in relation to the restructuring, and that due to procedural shortcomings in the manner in which the termination was effected, the termination was, for the purposes of Section 170DE (2), harsh, unjust or unreasonable. In making this concession, Mining World was guided by the decision of Boon JR in Allia v Plumbing World Limited (IRCA No. 453 of 1995, unreported). That case arose out of a termination which formed part of the related restructuring of an associated company. The task falling to me in this case, therefore, is the determination of the appropriate amount of compensation to be paid by Mining World to Mrs Lawrence for the purposes of Section 170EE(2) of the Act. Evidence and Submissions as to Appropriate Compensation. Mining World accepted the reasoning of Boon JR in Allia v Plumbing World Limited with respect to the calculation of compensation, contending that that case was similar to the present case. They did raise for my consideration, however, the fact that Mrs Lawrence had only 4 month's employment with the company, whereas the applicant in the former case was an employee of thirteen years' standing. Mrs Lawrence said in evidence that she believed Mining World was already aware at the time she was initially employed that the job would be of a short duration. She pointed to the fact that a private consultant who had been supervising the transfer of debtors to head office operations in Perth was dismissed after her engagement. She presumed that the consultant was paid more than her by Mining World, and that her engagement therefore saved them money. Her contention was that she was taken on as a less expensive means of getting the debtors under control before the intended restructuring after which it was known she would no longer be required. As she put it, she felt that she had been used. Mining World denies this, and Mrs Lawrence did not offer any other evidence in support of this contention. Mr Park, the Managing Director of Mining World at the relevant time, gave evidence that when Mrs Lawrence was engaged, her role was expected to be an ongoing requirement of the company and there was no awareness of the possible need for redundancies within Mining World. He says it was not until a final stock-take result was known at the end of June 1995 - three months after Mrs Lawrence was engaged - that management became aware of Mining World's significant losses and a general review of the operation was conducted, resulting in the redundancies. He also gave evidence that the private consultant who left soon after Mrs Lawrence was employed was in fact performing the work on a voluntary basis, for non-commercial reasons, which he detailed in his evidence. I am of the view that this issue is not relevant to the determination of compensation, for reasons I will outline below. In any event, I find based on the evidence before me that those making the decision to employ Mrs Lawrence did so in the belief that her role within the company would be an ongoing role, and not in the expectation that her employment would be of a limited duration. Mrs Lawrence also contends that the following factors should be taken into account in assessing compensation - matters the truth of which were not contested by Mining World. Mrs Lawrence's previous work history includes 5 years as an office clerk with Craft Wholesalers before spending 9 months performing debtor control and data entry duties for a business called Cadillac Plastics. Her salary there was $24,000 per annum. She says she had a guaranteed permanent position there with regular advancement to retirement age. Mrs Lawrence left Cadillac Plastics to start work as a credit control clerk with Mining World on 13 March 1995, on a starting salary of $26,000 per annum, with a pre-negotiated salary increase to $27,500 at the conclusion of her 3 month probationary period. Mrs Lawrence took on more financial burdens based on her increased salary - specifically, credit card debts - so that her later termination caused her "financial strain". On 6 July 1995, Mrs Lawrence was advised by Mining World's Financial Controller that she had been made redundant. She was given a letter formally advising her of her redundancy and, soon after, a reference. Mrs Lawrence was paid two weeks' pay in lieu of notice and accrued annual leave entitlements on termination. Mrs Lawrence succeeded in obtaining new employment, beginning work with Boeing Plumbing as a clerk on 7 August 1995. Her salary there is $25,000 per annum. Because of the structure of this business, Mrs Lawrence says there is little or no prospect of promotion in her new job, but she couldn't rule out the possibility of an increase in pay at some future time. Mrs Lawrence complains that, because of the stress she faced on termination due to her loss of income, she had to take the first job that came along, and had no time to look for another position of equal salary. Mrs Lawrence says generally that she was "building a very good track record" which has now been spoiled. She says it will take her considerable years to acquire the same status, and that her age is running against her; Mrs Lawrence is 42 years of age. Determination of Compensation Moore J observed in Bean v Milstern Retirement Services Pty Ltd (IRCA No. 248 of 1995, unreported at page 24) that: "The provisions of s170EE which enable compensation to be ordered are not intended to punish an employer for contravening the Act on the basis that a less serious contravention should attract a small amount of compensation while a more flagrant contravention should attract a greater amount of compensation. The purpose of s170EE(3) is to compensate an employee for the unlawful termination though plainly the subject matter of the statutory provision that is found to be contravened may be relevant." Given that Mining World concede that they have breached Section 170DE of the Act, whether that contravention was intentional or accidental is not relevant to the proper calculation of compensation. Similarly, the award of compensation will be unaffected by any finding as to whether the company was aware at the time it employed Mrs Lawrence that the job would be of limited duration. In assessing the compensation that is appropriate, the Court will have regard to what is reasonable in the circumstances and will look at what would have been likely to occur had the Act not been contravened. (Aitken v CMETS&WU IRCA No. 352 of 1995, Lee J, unreported, at 19) In this case, it seems likely on the evidence that, had the employer complied with the necessary procedural requirements, the employee may well have been reasonably made redundant in any event. This is more clearly the case with respect to Mrs Lawrence than, for example, with respect to Mr Allia in the earlier case decided by Boon JR. The company in this case appears to have given consideration to Mrs Lawrence's suitability for the remaining merged position. It is likely, however, that the employer would have given Mrs Lawrence a longer period of notice, so that she could seek alternative employment while still employed. In assessing compensation, the Court will also consider the detriment occasioned to the employee by the employer's contravention of the Act, and the extent to which it is reasonable to compensate the employee for such consequences. (Aitken v CMETSWU per Lee J at 20) Mrs Lawrence was out of work for four weeks and two days. She received pay in lieu of notice for two weeks of that period. The amount of lost wages for the remaining two weeks and two days is $1,269.23 gross. She continues to suffer a comparative loss in wages of $48.08 each week. The other consequences of the contravention, including the disruption of Mrs Lawrence's career path and the "financial strain" she has experienced, are not matters for which I believe it is reasonable to award compensation in this case. The financial strain suffered by Mrs Lawrence has fortunately been quickly relieved by her success in finding a new job, at a comparable wage. I find that, having regard to what would have been likely to occur to Mrs Lawrence's employment with Mining World had the Act not been contravened, and having regard to her potential to find more advantageous employment opportunities in future, given the uncontested competence of her performance of credit control duties with Mining World and her previous employer, it is not appropriate to compensate the applicant for disruption to her career path in this case. In so finding, I am not ruling that it would never be appropriate to compensate an applicant for the disruption to her or his career path directly resulting from their employer's contravention of the Act. Given the wages lost by Mrs Lawrence, and making some allowance for the continuing loss of wages, I consider that an appropriate amount of compensation in this matter is $1,350.