Industrial Relations Commission of New South Wales CITATION : McDonagh v Palgrow Pty Ltd T/as Tool Repair Centre [2002] NSWIRComm 202 APPLICANT PARTIES : Raymond John McDonagh RESPONDENT Palgrow Pty Limited Trading As Tool Repair Centre FILE NUMBER: IRC 2207 of 2002 CORAM: Harrison DP CATCHWORDS : Unfair dismissal - alleged redundancy on economic grounds Held - genuine redundancy - termination not harsh unreasonable or unjust LEGISLATION CITED : Industrial Relations Act 1996 HEARING DATES: 07/29/2002 EXTEMPORE JUDGMENT DATE : 08/23/2002 APPLICANT Mr R McDonagh LEGAL REPRESENTATIVES: RESPONDENT Ms A Engel, Solicitor of Braye Cragg Solicitors JUDGMENT: - 2 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: HARRISON DP Friday, 23 August 2002 Matter No IRC 2207 of 2002 RAYMOND JOHN MCDONAGH AND PALGROW PTY LTD TRADING AS TOOL REPAIR CENTRE Application re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION [2002] NSWIRComm 202 1 This matter was subject to arbitration on 29 July 2002 following unsuccessful attempts at conciliation. 2 On hearing Mr Raymond McDonagh, the applicant, appeared on his own behalf. Ms A Engel, Solicitor of Braye Cragg, appeared on behalf of Palgrow Pty Ltd, trading as Tool Repair Centre, the respondent employer, with Mr W Brown and Mr G Wills. 3 The applicant gave sworn evidence and was subject to cross examination. 4 Ms Engel brought evidence from Mr William Brown, a Director of the respondent; and Mr Gary Wills, a former Director and employee of the respondent. 5 The applicant was employed by the respondent from 3 August 1998 to 28 March 2002, primarily undertaking repair of electrical, portable tools and catering equipment. The applicant had been employed by the business, acquired by the respondent in 1998, for a total of 16 years when service with previous owners is included. During the course of his employment he filled many roles, including Manager. 6 The applicant was given five week's notice of termination of his employment in correspondence dated 27 March 2002, in the following terms: "I have the unpleasant task of giving you five (5) weeks notice of dismissal. The reason for dismissal is one of economic necessity, due to the dramatic changes in the Portable Tool Industry. I am sure you are aware of our situation, we have tried many types of fixes. Your contribution to this has been appreciated. Finally we can no longer afford to run the business in its current format." 7 The applicant did not work out the notice and was paid in lieu thereof. 8 The applicant contends that the termination of his employment was harsh, unreasonable and unjust, having regard to his 16 years of satisfactory service, the retention of other employees with less service, and, in his opinion, inferior skills base. 9 The applicant refutes the assertion that he was made redundant on the basis that there are no redundancy provisions in the Electrical, Electronic and Communications Contracting Industry (State) Award [2000] 318 IG 645 ('the award'). 10 The award does contain redundancy provisions which are limited to employers who employ 15 or more employees, and accordingly is not applicable in the present matter. 11 Both Mr Brown and Mr Wills were at pains to emphasise in their evidence that there was no issue of conduct, ability, application to duty, or behaviour associated with the termination of the applicant's employment. Both regarded the applicant highly in terms of his contribution to the business, however, maintained that financial considerations forced the applicant's retrenchment. 12 In addition to five week's pay in lieu of notice, the applicant was paid all accrued annual leave and long service leave entitlements. 13 The evidence of Messrs Brown and Wills is that they purchased the business in early 1998 and discovered serious financial difficulties shortly thereafter. A number of measures were undertaken, including the injection of additional capital into the business by both Mr Brown and Mr Wills as a means of improving the business position. - 14 The evidence is that Messrs Brown and Wills discussed these difficulties with the applicant on a number of occasions. The applicant could not recall all of the discussions asserted to have taken place, however, in cross examination did concede that at one point Messrs Brown and Wills had offered the business to him, which he declined. 15 Mr Brown's evidence is that prior to the applicant's retrenchment the business employed five people, and subsequent to the departure of the applicant, the workforce was reduced by two further employees. Mr Wills ceased to be a director and employee of the respondent from 5 July 2002 as a further means of maintaining financial viability. 16 The Commission is afforded further financial detail in respect to both Messrs Brown and Wills and the business. In my view, it is unnecessary and inappropriate to further detail here the respondent's financial difficulties, however, the evidence is overwhelming that termination of the applicant's employment arose from bona fide business circumstances and financial imperatives to survival of the organisation. 17 As such, the applicant's termination cannot be regarded as harsh, unreasonable or unjust as that term is used in s84 of the Industrial Relations Act of 1996. 18 Accordingly, there is no basis upon which the Commission may intervene. The application is dismissed. 19 Matter No IRC 2207 of 2002 is concluded. oo0oo DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.