Graeme Simpson v Systems Services Pty Ltd Neville Fryar v Systems Services Pty Ltd [1995] IRCA 602

C A T C H W O R D S

INDUSTRIAL LAW - whether the employer had a valid reason for termination of the Applicants employment - redundancy - severance payment. INDUSTRIAL RELATIONS ACT 1988, ss.170DE, 170EE No. SI 116 of 1994 GRAEME SIMPSON -V- SYSTEMS SERVICES PTY LTD No. SI 117 of 1994 NEVILLE FRYAR -V- SYSTEMS SERVICES PTY LTD JUDICIAL REGISTRAR: L FARRELL PLACE: ADELAIDE DATE: 17 OCTOBER 1995

INDUSTRIAL RELATIONS COURT ) OF AUSTRALIA ) SOUTH AUSTRALIA REGISTRY ) No. SI 116 of 1995 B E T W E E N: GRAEME SIMPSON Applicant AND: SYSTEMS SERVICES PTY LTD Respondent MINUTES OF ORDER BEFORE: JUDICIAL REGISTRAR L FARRELL PLACE: ADELAIDE DATE: 17 OCTOBER 1995 THE COURT ORDERS THAT: 1. The Respondent pay to the Applicant the sum of $8,547.69. NOTE: Settlement and entry of Orders is dealt with by Order 36 of the Industrial Relations Court Rules

INDUSTRIAL RELATIONS COURT ) OF AUSTRALIA ) SOUTH AUSTRALIA REGISTRY ) No. SI 117 of 1995 B E T W E E N: NEVILLE FRYAR Applicant AND: SYSTEMS SERVICES PTY LTD Respondent . MINUTES OF ORDER BEFORE: JUDICIAL REGISTRAR L FARRELL PLACE: ADELAIDE DATE: 17 OCTOBER 1995 THE COURT ORDERS THAT: 1. The Respondent pay to the Applicant the sum of $6,361.45. NOTE: Settlement and entry of Orders is dealt with by Order 36 of the Industrial Relations Court Rules ]

INDUSTRIAL RELATIONS COURT ) OF AUSTRALIA ) SOUTH AUSTRALIA REGISTRY ) No. SI 116 of 1994 B E T W E E N: GRAEME SIMPSON Applicant AND: SYSTEMS SERVICES PTY LTD Respondent No. SI 117 of 1994 B E T W E E N: NEVILLE FRYAR Applicant AND: SYSTEMS SERVICES PTY LTD Respondent BEFORE: JUDICIAL REGISTRAR L FARRELL PLACE: ADELAIDE DATE: 17 OCTOBER 1995 REASONS FOR JUDGMENT These two Applications pursuant to Section 170EA were heard together with the consent of all parties. Both Applicants claimed compensation. Neither sought reinstatement. The Respondent is an Information Technology Services Company. Both Applicants were engaged in mainframe technical support, one of three divisions of the Company. The Respondent Company came into existence in 1985. It was created by a consortium of mainframe computer users to provide mainframe technical support. Since that time a number of changes have taken place. They are not relevant here, except to say the Company was in serious financial difficulty and that there has been a significant decline in the market for mainframe technical support, particularly in Adelaide. Ultimately, the employees of the Respondent except Simpson, Fryar and another employee Farnick formed another company and bought the Respondent. In January 1994 all other employees signed contracts of employment that involved a 20% reduction in their salaries. Mr Simpson is 34 years old. He commenced employment with the Respondent on 16 September 1985 as a Systems Programmer. He had transferred to the Respondent from SGIC when SGIC outsourced the Department that he worked in. Between late 1993 and April 1994 the Respondent negotiated with Mr Simpson to commence a new contract of employment. The most significant part of the negotiations was a 20% pay cut. Mr Simpson refused to accept the new contract of employment. On 5 April 1994 Mr Simpson was given a letter terminating his employment. He was given nine months notice of the termination of his employment. By letter dated 22 November 1994 Mr Simpson was offered an extension of his notice of a further five weeks. He accepted that offer. He was advised that his position would be redundant as from 17 February 1995 but there was some possibility for further employment initially in Singapore. Mr Simpson's employment with the Respondent ceased on 17 February 1995. He commenced employment with ISSC on 20 February 1995. He was required to relocate to Melbourne on 28 May 1995. At the time of the termination his wage was $55,560 per annum. His salary package was $60,960.00. Mr Fryar commenced employment with the Respondent in February 1991, as a systems programmer. Prior to the commence of his employment he was employed by Santos from 1984. Between November 1993 and April 1994 the Respondent sought to alter Mr Fryar's contract of employment reducing his pay by 20%. He refused to accept the new contract of employment. On 6 April 1994 Mr Fryar received a letter giving him seven and a half months notice of the termination of his employment. An offer was made by the Respondent to extent the notice period until 17 February 1994, however Mr Fryar did not accept the offer. At the time of the termination of his employment his salary package was $47,560.00 per annum. His wage was $41,350.00. In late 1994 Mr Fryar and his wife formed a computer consulting company, in contract with another company, ISSC, which provides services to Santos. Mr Fryar's company is paid $66,000.00 per annum. He receives a salary of $27,658.00 per annum and his wife receives $18,000.00.