DECISION NO:620/96 C A T C H W O R D S INDUSTRIAL LAW - termination of employment - operational requirements - valid reason - no underpayment of wages Workplace Relations Act 1996 ss.170DE, 170EA, 179 CASES: Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 Kenefick and Others v Australian Submarine Corporation Pty Ltd (No 1) (1995) 62 IR 107 State of Victoria v the Commonwealth of Australia (1996) 138 ALR 129 Byrne v Australian Airlines Pty Ltd (1995) 131 ALR 422 Jones v Minister for Minerals and Energy (1995) 60 IR 304 Quality Bakers v Goulding (1995) (60 IR 327). AMOR & ALHMWU -v- NARELLE AND DAVID COOK trading as RIVERSIDE GARDENS MOTOR INN No. VI-1362 of 1996 Before: Ryan JR Place: Melbourne Date: 23 December 1996 INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI-1362 of 1996 B E T W E E N : VIRGINIA AMOR & ALHMWU Applicant AND NARELLE AND DAVID COOK trading as RIVERSIDE GARDENS MOTOR INN Respondent MINUTES OF ORDERS Judicial Registrar Ryan 23 December 1996 THE COURT ORDERS: 1. The Application under section 170EA is dismissed. 2. The Application under section 179 is dismissed. 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-1362 and VI-2201 of 1996 B E T W E E N : VIRGINIA AMOR & ALHMWU Applicant AND NARELLE AND DAVID COOK trading as RIVERSIDE GARDENS MOTOR INN Respondent Before: Ryan JR Place: Melbourne Date: 23 December 1996 REASONS FOR JUDGMENT CLAIMS OF UNLAWFUL TERMINATION OF EMPLOYMENT AND UNDERPAYMENT OF WAGES Any statutory references in this judgment are to the Workplace Relations Act 1996. On 17 January 1996 an officer of ALHMWU (the Union) filed a claim of unlawful termination of employment on behalf of Virginia Amor (s170EA). The application indicated that Ms Amor had been employed by the Respondents in the Riverside Gardens Motor Inn from 17 May 1995 to 8 January 1996 and that she had been provided with a written notice of termination and did not seek reinstatement. On 22 January the Respondents filed a Notice of Appearance. Paragraph 15 of the notice described the reason for termination as : "a downturn in business has meant we cannot afford to pay a receptionist. Our occupied room numbers compared with 1994 have decreased by 9% approximately." On 2 April the Australian Industrial Relations Commission referred the matter to the Court as it had not been settled by conciliation and the parties had not elected to have the matter dealt with by consent arbitration. At a Directions Hearing on 30 April the matter was listed for a one day trial on 10 September with the parties directed to provide mutual discovery of all relevant documents not less than 14 days prior to the hearing of the matter. On 29 August the Union filed an application made by Ms Amor in which she claimed: 1. $212.56 being underpayment of annual leave under the Motels, Accommodation, Resorts Award 1992 (s179) 2. $2,908.11 being underpayment of wages under the Award (s179) 3. interest up to judgment (s179A) The application was supported by a statement of claim and an affidavit and the District Registrar, or an officer on his behalf, appears to have set the claims under S179 and s179A for hearing at 10:00 am on 10 September with the application under s170EA. This was a reasonable course to adopt and Counsel (Mr Tee for the Applicant and Mr Fleming for the Respondents) agreed to that course when the application under s170EA came on for hearing. THE CLAIM OF UNLAWFUL TERMINATION OF EMPLOYMENT Having heard the evidence of Mrs and Mr Cook and Ms Amor I am satisfied that: (i) the employment of Ms Amor was terminated by the Respondents Narelle and David Cook as employers on 8 January 1996 (ii) the termination was for a sound, defensible and well founded reason as outlined by Northrop J in Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373, and was for a valid reason under s170DE(1), being a reason connected with the operational requirements of the Respondents business (iii) the Respondents business was that of a motel faced with additional competitive pressures from another three star 60 bed motel coming back into the open market after operating in Warrnambool as a provider of student accommodation (iv) the occupancy at the Respondents motel had declined in the period July to December 1995 when compared with July to December 1994 and projections made by Mr and Mrs Cook on 7 January 1996 for the period 1 January 1996 to 30 June 1996 suggested, and reasonably suggested, the likelihood that the occupancy for that period in 1996 would be below the occupancy in the January to June period of 1995. The Court notes and accepts the evidence of Mrs Cook that a decline in occupancy did in fact occur in the period January to June 1996 (v) the Respondents chose and reasonably chose redundancy of the Applicant's position as a front office receptionist, the only full-time position at the motel, (other than that of the Respondents), as a most appropriate way of reducing operating expenses and the Court will not and should not interfere with that decision and will not put itself in the managerial chair: Kenefick and Others v Australian Submarine Corporation Pty Ltd (No 1) (1995) 62 IR 107 at 116 (vi) the Applicant Amor was not consulted until 8:00 am on 8 January 1996 when her position was made redundant and she was provided with a letter of termination, Exhibit R1, which reads: "In undertaking our 6 monthly business review a decision has been made that we will no longer employ anyone in the position of motel receptionist. As such your employment is terminated effective from 8th January 1996. Your position on termination is Grade 1 Administration/Front Office - 1st Year. Your period of continuous service being from 17th May 1995 to 8th January 1996. As per the requirements of the Motels Accommodation & Resorts (Federal Award under which you were employed and the relevant industrial relations laws your termination pay has been calculated as follows: - $364.20 - 1 weeks pay in lieu of notice - $994.21 - pro-rata leave at the rate of 1/12 ordinary earnings Your pay includes payment for the week ending the 14th January, and payment of all holiday pay, loadings and entitlements due. If you have any queries or wish to question any of the above information please contact me at the above address. Yours sincerely Narelle Cook 8.1.96" I have concluded that a delay in the termination to provide the Applicant with a short time to consider her position, in other words a period of some consultation prior to the decision to terminate, and prior to termination, would have changed nothing. The uncontradicted evidence is that: · the Applicant was selected for termination because the Respondents wished to reduce operating costs · wage costs were the largest component of business costs · the Applicant was the only permanent full-time employee of the business · her tasks could be mostly performed by the employers personally · termination of any other casual employees (or the sole permanent part-time gardener/maintenance worker) was not warranted on operational and financial grounds" I have concluded that the termination did not breach s170DE(1) and I have reached that decision in the light of the State of Victoria v the Commonwealth of Australia (1996) 138 ALR 129; Byrne v Australian Airlines Pty Ltd (1995) 131 ALR 422; Jones v Minister for Minerals and Energy (1995) 60 IR 304 and Quality Bakers v Goulding (1995) (60 IR 327). In particular I note in Quality Bakers at 333 that there is no requirement imposed by s170DE(1) and s170EDA(1)(a) on an employer to prove that a redundancy is necessitated on economic or financial grounds or that a redundancy is necessary to preserve the viability of a business. A redundancy might be justified to make more profitable an already profitable business. The evidence did not suggest that the motel was particularly profitable but suggested that it was well run and that Mrs Cook, a person with substantial managerial experience, and her husband took a step designed to ensure that their business remained commercially viable. I have concluded that there was a valid reason for termination on the grounds set out earlier in this judgment. In the circumstances the application, the claim of unlawful termination of employment, must be dismissed. THE CLAIM OF UNDERPAYMENT OF WAGES The union, through Mr Tee, has argued that, in essence, the Applicant was underclassified throughout her employment with the Respondents. The Applicant was employed at the introductory level, that is Level 1. The union claims that the appropriate classification for the Applicant was that of Level 3. Clause 7(b) of the Motels, Accommodation and Resorts Award 1992 defines Level 1 under the heading of "Hospitality Administration in Front Office" as an employee who has not received the appropriate level of training and who is primarily engaged in one or more of the following: (i) front office duties such as receptionist, telephonist, cashier or reservation (ii) performs basic clerical and routine office duties such as collating, filing, photocopying and delivering messages (iii) general clerical duties such as typing, basic data entry and calculation functions (iv) accounts (v) any other - in addition to any of the above duties such employee may also be required to perform any of the duties of Hospitality Services Grade 2 or below (vi) desk relations officer Grade 3 is defined as an employee appointed as (hospitality, administration and front office) Grade 3 who has the appropriate level of training and who carries out general, secretarial or stenographic duties, clerical duties of an advanced nature and who has recognised experience in complex duties, and may be responsible for guidance of other office personnel including juniors and may check and allocate their work, who is responsible for sales and marketing and/or is in front office engaged in duties including assisting and training and supervision of front office employees of the lower grade (grades). It is clear from exhibits R1, R2 and R3 that the Applicant was paid at the introductory level provided for in the award for the first three months of her employment and that she was then paid as a hospitality administration and front office Grade 1. On termination, she was paid one week's pay in lieu of notice and was paid pro rata holiday pay. These payments were in conformity with the award. Grades 2 and 3 require an employee "who has the appropriate level of training". The Applicant conceded that she had not completed the training course as outlined in Clause 7(d)(i) of the Award and had not been skill assessed as provided for in Clause 7(d)(ii). The Applicant also conceded in evidence that she had no training or supervisory duties with the Respondents. Furthermore, Mrs Cook, an expert and experienced manager did not regard the Applicant's secretarial or clerical duties, such as they were, as "advanced" or "complex". There is no evidence that the Applicant had ever been employed in the industry in the sense in which it is defined in Clause 7 of the Award. It was asserted on behalf of the Applicant that she had at least 3 months experience in another industry where she performed work similar to that which she was required to perform under the Award. Mrs Cook testified that she did not regard the Applicant's experience as being similar to that which she would be required to perform with the Respondents. I must say that, having closely observed the Applicant giving her evidence, I agree. It appears that some 5 or 6 years earlier the Applicant had worked as the secretary of the managing director of a research division at Deakin University. As part of her duties the Applicant had apparently been responsible in part for holiday letting of student accommodation. The Applicant has conceded that she had no front office reception function in connection with the student accommodation but that she took phone reservations and received by mail payments of rent. Even if the Court were to accept the Applicant's description of that component of her duties at Deakin University, and the Court is inclined to the view that the Applicant exaggerated the nature and degree of such duties, those duties were not in any real sense similar to the work that the Applicant was expected to perform as a front office receptionist at the motel. This is the situation whether one takes the motel duties to be as described by Mrs Cook or as described by the Applicant, and the Court records that it accepts that the duties were as described by Mrs Cook. In any event, whatever might have been the actual state of the Applicant's previous experience, there is no evidence either from the Applicant or from Mrs Cook which would suggest that the latter was given any, or any sufficient, reason to justify a belief that the Applicant was entitled to be paid in the first 3 months of her employment without reference to introductory Level 1. The Applicant and the union have failed to satisfy the Court that there has been any underpayment of wages and the application under s179 must also be dismissed. MINUTES OF ORDERS THE COURT ORDERS: 1. The Application under section 170EA is dismissed. 2. The Application under section 179 is dismissed. 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 6 pages are a true copy of the reasons for judgment of Judicial Registrar Ryan. Associate: Dated: 23 December 1996 For the Applicant: Australian Liquor, Hospitality & Miscellaneous Workers Union Counsel for the Applicant: Mr B L Tee Solicitors for the Respondent: McKay Taylor Counsel for the Respondent: Mr M Fleming Date of hearing: 10 September 1996 and Date of judgment: 23 December 1996