YANG v A D MANCE AUSTRALIA Pty Ltd [1997] IRCA 28

DECISION NO:28/97 CATCHWORDS

INDUSTRIAL LAW - UNLAWFUL TERMINATION - VALID REASON - OPERATIONAL REQUIREMENTS - REDUNDANCY - INJURY - AGE

Workplace Relations Act 1996 (Cth) ss170DE, 170DF, 170EDA.

YANG v A D MANCE AUSTRALIA PTY LTD VI96/2169

Before: MURPHY JR Place: MELBOURNE Date of Hearing: 3 FEBRUARY 1997 Date of judgment: 3 FEBRUARY 1997

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY

VI96/2169

BETWEEN:

ZI YU YANG Applicant

AND

A D MANCE AUSTRALIA PTY LTD Respondent

BEFORE: MURPHY JR PLACE: MELBOURNE DATE: 3 FEBRUARY 1997 MINUTES OF ORDERS THE COURT ORDERS THAT: 1. The application is dismissed.

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 VICTORIA DISTRICT REGISTRY

VI96/2169

BETWEEN:

ZI YU YANG Applicant

AND

A D MANCE AUSTRALIA PTY LTD Respondent

BEFORE: MURPHY JR PLACE: MELBOURNE DATE: 3 FEBRUARY 1997 REASONS FOR DECISION Delivered ex tempore - revised from the transcript In these proceedings under Division 3 of Part VIA of the Workplace Relations Act 1996 (Cth) ("the Act") the applicant alleges that his employment was terminated in breach of ss170DE and 170DF of the Act. The respondent operates in the footwear industry as a shoe manufacturer. The respondent asserts that the applicant was terminated from his position in the clicking department in June 1996 for reasons related to its operational requirements, namely redundancy. The applicant alleges that he was unlawfully terminated because he had longer service than a number of other employees and that his age and the fact that he was suffering a work related injury were factors in his termination. The respondent's case. The respondent led evidence, not the subject of any real dispute by the applicant, that commencing in early 1996 it suffered a 40-50 percent downturn in its business. In response to this downturn it was forced to reduce its labour requirements. As it was obliged to do so, it consulted with the Textile Clothing and Footwear Union about the matter. The applicant is apparently a member of that union. As a result of that consultation the parties came to an agreement to move to a shorter working week. The move to a shorter working week was not well received by the employees but in evidence was an agreement to reduce the working week for a period from 18 to 24 April. Commencing in April the respondent was forced to move to retrenchments at both its Preston and Thomastown sites as a response to the pressures forced on it by the downturn in business. The arrangement with the union in relation to redundancies was that the union was advised of the names of those involved a few days prior to each round of redundancies, and was asked to be present on the day that the nominated employees were to leave the employment. The consultation in relation to the redundancies, which over a period from April to July 1996 involved seventy-four employees, was through a union official, Mr Gherkle. Mr Gherkle did not give evidence in the proceeding. In the early rounds of the redundancies, the respondent attempted to select only those employees with shorter periods of service. But as it was required to reduce its workforce further, it chose to do so by reference to the skill levels of the remaining employees in the particular sections. The actual selection process was that supervisors selected, on the basis of skill levels, the employees to be retained after they were told the number of employees whose services had to be dispensed with. The actual decision to terminate the applicant was made when it was decided to dispense with one of three people in the clicking department. The clicking department at that stage consisted of twenty to twenty-two employees and overall three were retrenched. Those retrenched were not in fact clickers but were cutters. It was the evidence of Mr Mance that clicking is a higher skill than cutting. Those retrenched were those who were involved in cutting lining, as distinct from clickers who cut actual leather, which was seen as a higher skill level. Of the people who were working on cutting in the clicking department at the time, each had about the same period of service in that section as the applicant. One had six months more than him and another a few months less. Mr Mance denied that either the applicant's age or any medical condition was a factor in the decision to terminate him. Mr Mance gave evidence that the applicant had not been replaced in that section, rather his former duties were now employed by other employees, including the cutters. At no stage had the union raised any objection to the applicant's selection for redundancy. The applicant's case. The applicant's case was that he had suffered an injury to his arm in March 1996 and had a few days off work. He had been transferred from his position for a week but had then been returned to it. He had not made a WorkCover claim at the time. Subsequently, on the day before he was dismissed, Mr Lindsay Mance had asked him to move some drums and because of his arm the applicant had been forced to seek assistance. He thought that when he had been dismissed the next day, this indicated that his injury had contributed to the reason he had been selected. Further, he noted that many of the employees that had been selected for redundancy had less experience and service than him. The respondent's response to the issue that the applicant's injury had contributed to his selection was to point to the lack of any suggestion by anyone that it had in fact contributed to his selection. The respondent also maintained that the seniority within the particular section of the three employees was roughly comparable and that it was a defensible choice to select the applicant as less skilled than the other two. The respondent's evidence was that it had not replaced the applicant. On the contrary, shortly after the applicant was retrenched, the employer had stood down employees on each Friday for a period of four weeks and further retrenchments occurred in June and July 1996. In addition, the respondent had not employed any new employees except a couple of employees this year. In relation to the issue of the age of the applicant as a factor, the respondent asserted that it had retrenched persons older than the applicant as well as a number of younger employees. It had also retrenched employees with comparable or greater seniority than the applicant in retrenchments made in July. Application of the Act. In these proceedings the employer is required to satisfy the Court that it had a sound or defensible reason to terminate the applicant's services. Here I accept the evidence of Mr Mance as to the downturn of business of the respondent causing a need to reduce the labour force. I accept that the respondent had consulted with the union as to the process, including the prior notification of the individuals involved. I am satisfied that in this workplace the union accepted, on behalf of the employees, that the respondent was to be responsible for the selection of those to be made redundant and further, that the process did not operate solely on the grounds of length of service. I accept that the decision to select the applicant was on the basis of a choice by the respondent to retain those of its employees with higher skill levels. I am satisfied that clicking is a higher skill level than lining cutting that the applicant was involved in. It follows that the decision to select on this basis satisfies the requirement that the respondent act reasonably in its decision to terminate the applicant on the grounds of its operational requirements. I accept the evidence of Mr Mance that the applicant was selected on the basis of retaining skills and that the selection process had applied in previous redundancies without any objection from the union. The evidence satisfies me that the respondent had a valid reason to terminate the applicant's services. He was chosen on the basis of skill levels. The method of choice was one that, given its consultation with the union, was open to the respondent and could not be said to be capricious. I accept that the termination of the applicant's employment was a logical response to the sales downturn of the respondent. The choice of the applicant for redundancy over those with greater skill levels was a logical response by the respondent and defensible. The respondent has discharged its onus of proof under ss170DE(1) and 170EDA(1) of the Act. Proscribed reason. The applicant also alleges that his age and his work related injury were factors in his termination of employment. I accept Mr Mance's evidence that the applicant's age was not a consideration. He was selected because of a choice as to his relative skills over the other employees in the cutting section. The applicant also alleged that his absence from work and/or his shoulder injury were factors. This was denied by Mr Mance. The main matter raised by the applicant was an incident the day before his termination where he had to request assistance to move some drums. It is significant that on the material before the Court, the decision to terminate his employment had been made a couple of days prior to this and communicated to the union. The applicant could not point to any statement by any representative of the respondent that his absence from work or his shoulder injury were a factor in the respondent's decision to terminate his employment. It is significant that at that stage he had also not made a WorkCover claim in relation to his shoulder. In the face of the evidence as to the reason for the selection of the applicant, the evidence as to the downturn in business, and the lack of any evidence that would suggest that the respondent in fact took the applicant's injury into account, I am satisfied that the respondent has discharged its onus of proof under s170EDA(2) that it did not take into account either the applicant's age, his temporary absence from work, or any physical disability that the applicant may have been suffering in its decision making process. The applicant has not satisfied me that the respondent has breached any provision of the Workplace Relations Act and I therefore must dismiss his application. I certify that this and the preceding six (6) pages are a true copy of the reasons for decision of Judicial Registrar Murphy as recorded in the transcript and revised by the Judicial Registrar.