Whyte v Cyan Press Pty Limited [1996] IRCA 113

DECISION NO: 113/96 C A T C H W O R D S INDUSTRIAL LAW - Industrial Law - Tendency Employment - Operational requirements - Reinstatement Industrial Relations Act 1988 ss.170DE, 170EA, 170EE CASES: Jones v The Department of Energy and Minerals (1995) 60 IR 304 Nicholson v Heaven and Earth Gallery Pty Limited (1994) 126 ALR 233 Johns v Gunns Limited (1995) 60 IR 258 WHYTE -v- CYAN PRESS PTY LIMITED No. VI-5121 of 1995 Before: Judicial Registrar Ryan Place: Melbourne Date: 19 February 1996

INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI-5121 of 1995 B E T W E E N : WHYTE Applicant AND CYAN PRESS PTY LIMITED Respondent MINUTES OF ORDERS Judicial Registrar Ryan 19 February 1996 THE COURT ORDERS: 1. The matter will be adjourned to enable the parties to see if any amount can be agreed upon and I would invite the parties to consider in particular pages 272 and 273 of Johns v Gunns and I repeat that is in 60 IR at 258. 2. If agreement is reached, a further consent order can be made pursuant to order 35 rule 10. 3. If no agreement can be reached, the parties are directed to file submissions setting out calculations by which the disputed amounts are reached and the court will then determine the amount to be paid. 4. The other orders of the court and the substantive orders of the court are that the applicant is to be reappointed to the position in which he was employed immediately before the termination and his employment is deemed to have been continued since the date of his termination. NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.

INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI-5121 of 1995 B E T W E E N : WHYTE Applicant AND CYAN PRESS PTY LIMITED Respondent Before: Judicial Registrar Ryan Place: Melbourne Date: 19 February 1996 EX TEMPORE - REVISED FROM TRANSCRIPT The applicant claims unlawful termination of employment and seeks reinstatement. I accept the evidence of the respondent's managing director, Mr Sparke, that the business has continued to experience a down-turn and that just prior to the termination of the applicant, the respondent lost a contract of reasonable size, that is a contract of $70,000 to $80,000 per annum in a business with a turnover in financial year 1994-95 of approximately $900,000 and $1.1 million in financial year 1993-94. In the brief time available to me at this stage, I have not been able to be satisfied that the termination of the applicant was for a sound defensible reason, that is for a valid reason in terms in which such is described by Northrop J in Salvachandran v Peteron Plastics, as yet unreported. Applying the criteria set out by Ryan J in Jones v The Department of Energy and Minerals (1995) 60 IR 304 at 308 and cited with approval in a number of later decisions, I have considerable doubt that the termination was for a valid reason within the terms of section 170DE(1). However, even if after further consideration I was to conclude that the termination was for a valid reason in the sense that it was justified by the employer's operational requirements, I would have, nevertheless, found the termination harsh, unjust and unreasonable within the terms of section 170DE(2) and I so find. There is no evidence that the respondents gave any real thought to criteria by which the applicant and one other employee were selected for termination on what was stated to be the operational requirements of the business. I repeat that I accept that the employer was experiencing some down-turn in business and that the managing director, Mr Sparke, genuinely sees the two terminations as for valid reason, even if the validity of that reason is questionable and perhaps not sustainable. However, the only evidence of consideration of criteria for selection of the applicant seems to be a discussion between the managing director, Mr Sparke, and the printing plant manager, Mr Love. Mr Sparke gave evidence, Mr Love did not. The only evidence given of criteria today was that work on the applicant's offset machine was declining and in the future, be it long or short-term, that work was to be undertaken by the managing director's son, an apprentice in training then and still under supervision now. That is not very satisfactory evidence of any real criteria considered or applied before the applicant was selected for redundancy and I say that without for one moment suggesting that this court should interfere in who should be selected for termination on the basis of operational requirements. Furthermore, the evidence of Mr Sparke is that in reality no other options were considered. Specifically, the option of employing the managing director's son elsewhere as planned, and conceded in evidence as planned, was not considered. Mr Sparke was quite open in this concession. Counsel for the applicant has submitted that the fact that the applicant was given no notice or warning of the proposed termination until it occurred adds to the unfairness. I agree, although in my view there are circumstances in which it is not unreasonable for an employer to advise employees that a decision has been made that terminations are to occur because of operational requirements and advance notice is not always required to protect such terminations from a finding of unfairness. However, in this case the applicant was given no time before or after the decision to consider and perhaps negotiate another option with the manager, Mr Love, or with the managing director, Mr Sparke. Despite that, it is the uncontested evidence of the applicant that he raised his understanding and awareness of future plans for the managing director's son with Mr Love and received no reply. Mr Sparke himself and the applicant confirm that the future plans for the managing director's son were known to the applicant. There is also the uncontested evidence of the applicant that he accepted the position not just because it offered more money than the position he had just taken up with McBird's, but also because he received from Mr Love an assurance of employment likely to see him out to retirement. Now, the applicant is an experienced printing machinist of some 40 years. He knows and in effect conceded that such an assurance is not binding, but it was a legitimate expectation on his part of employment, certainly of two or three or even four years duration. The respondent did not call Mr Love and as he was the crucial actor in both the recruitment of the applicant and his termination, the court could justifiably conclude that his evidence might not have been of assistance to the respondent. The court stops short of making such a conclusion, but simply notes that the evidence of the applicant is uncontested in terms of the meeting in which the employment was confirmed and the meeting at which the employment was terminated. Prolonged the consultation, detailed documented selection criteria or an elaborate investigation of options are not required to justify a termination stated to be on the basis of operational requirements. However, there is ample authority that in circumstances such as these here, some modest consultation, some evidence of some application of selection criteria and some consideration of other options is necessary if such a termination is going to avoid a finding of unfairness. Given the circumstances of the recruitment of the applicant, his age, his previous work for an earlier company of which Mr Sparke was also managing director, his performance and conduct about which no complaint has ever been made, I find the termination harsh, unjust and unreasonable. In terms of remedy, I have concluded that reinstatement is practicable within the sense in which practicability has been outlined by the Chief Justice in Nicholson v Heaven and Earth Gallery Pty Limited (1994) 126 ALR 233 at 244. I do not consider reinstatement will impose unacceptable problems or embarrassments or seriously affect productivity or harmony. In this respect, the court particularly notes the evidence from the respondent that an offer of re-employment on 19 January 1996, exhibit R1, was genuine. The court does not accept that reinstatement, practicable in January, is impracticable in February and is guided, too, in respect of reinstatement by what Northrop J said in Johns v Gunns Limited (1995) 60 IR 258 at 271 and 272. In respect of an order for reimbursement of wages lost, I again refer to Johns v Gunns and again at 272, where Northrop J said: "Where reinstatement is practical - as here - the employee should be reimbursed any wages lost. In Boling the full court ordered that Mr Boling be reinstated in his old position or in a similar position within seven days after publication of these reasons. Northrop J continued at 273 and sets out what he considers the correct approach to determining wages lost between the date of termination and the date of reinstatement. Like Northrop J, I am unable to make the appropriate calculations today. The orders of the court will be as follows: 1. The matter will be adjourned to enable the parties to see if any amount can be agreed upon and I would invite the parties to consider in particular pages 272 and 273 of Johns v Gunns and I repeat that is in 60 IR at 258. 2. If agreement is reached, a further consent order can be made pursuant to order 35 rule 10. 3. If no agreement can be reached, the parties are directed to file submissions setting out calculations by which the disputed amounts are reached and the court will then determine the amount to be paid. 4. The other orders of the court and the substantive orders of the court are that the applicant is to be reappointed to the position in which he was employed immediately before the termination and his employment is deemed to have been continued since the date of his termination.