Industrial Relations Commission of New South Wales CITATION : Mallah v Prestige Property Services Pty Limited [2002] NSWIRComm 147 PARTIES : Wassef Mallah Prestige Property Services Pty Limited FILE NUMBER: 8442 & 8443 of 2001 CORAM: Grayson DP CATCHWORDS : Concurrent proceedings, unfair dismissal, dismissal as a result of injury, altered employment environment following absence overseas, corporate takeover, work related injury and ongoing or recurrent effects, restructuring leading to abolition of certain positions, redundancy, standing offer of alternative employment, evidence of good faith, applicant a valued employee - held, no unfair dismissal, no dismissal in consequence of work-related injury- applications dismissed LEGISLATION CITED : Industrial Relations Act 1996 s84 s92 Workplace Injury Management and Workers Compensation Act 1998 s105 CASES CITED : Easton v Bourke Air Charter Pty Limited & Ors [2000] NSWIRComm 155 Outboard World Pty Limited t/as Budget Waste Control (Sydney) v Muir (1993) 51 IR 167 HEARING DATES: 06/11/2002; 06/20/2002 DATE OF JUDGMENT: 07/05/2002 Mr J Meltzer of counsel LEGAL REPRESENTATIVES: Mr M Diamond, solicitor Ausgroup Consulting JUDGMENT: - 8 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES Coram: Grayson DP Friday, 5th July 2002 Matter No IRC 8442 of 2001 WASSEF MALLAH V PRESTIGE PROPERTY SERVICES Application by Wassef Mallah re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 Matter No IRC 8443 of 2001 WASSEF MALLAH V PRESTIGE PROPERTY SERVICES Application by Wassef Mallah for reinstatement of injured employee pursuant to section 93 of the Industrial Relations Act 1996 DECISION [2002] NSWIRComm 147 1 By agreement between the parties and failing successful conciliation on an earlier date, these two matters proceeded to hearing concurrently on 11 June 2002. Final written submissions were filed on 20 June 2002. 2 Mr J Meltzer of counsel appeared for the applicant and Mr M Diamond, solicitor of Ausgroup Consulting appeared for the respondent. 3 The applicant was called and cross-examined on two affidavits which were tendered and admitted into evidence without objection. Mr David Ian Butcher, group general manager with the respondent, was called and cross-examined on his affidavit which was tendered and admitted into evidence without objection. It was further agreed that evidence in one matter would be taken as evidence in the other. 4 A letter of offer of employment to the applicant bearing date 28 May 2002 was also admitted without objection and in addition to being relied upon by the respondent in defence of the allegations brought by the applicant, is also maintained as a standing offer to the applicant, which for reasons which I will explain, should in my opinion be accepted without delay. 5 In that regard, it might also be noted that the respondent confirmed at the conclusion of the hearing that it stands ready, subject to the outcome of these proceedings, to compensate the applicant on a basis to be agreed or rather, to be fair to the respondent, to mitigate the applicant's loss of earnings between or about September 2001 and now. 6 The essential facts of these matters may be briefly summarised in the following way. 7 The applicant commenced employment as a cleaner with Kennedy Cleaning Services in 1988 soon after arriving in Australia from his home country, Lebanon. He was a good worker and a valued employee. 8 In about 1991 he was promoted to an area manager position, which by 1997 was renumerated at a gross yearly rate of $49,029. As an area manager the applicant was given a motor vehicle and a mobile phone essentially for business use but also for private use to a reasonable extent. 9 In 1996 Kennedy Cleaning Services was taken over by Prestige Property Services, the respondent in these proceedings. In 2001, Prestige Property Services was taken over by Tempo Services Ltd although continuing to trade as a subsidiary thereof under the 'Prestige' name. 10 In the course of his employment, the applicant injured his back on 7 March 1994. He injured his right hand on 13 September 1998 and he injured his back and right hand again on 11 September 2001, the latter said to be a recurrence of the earlier two injuries. There is a dispute about liability in respect of incapacity resulting from the event of September 2001. 11 At the time of the 1994 injury, GIO was the insurer on risk and remains relevantly liable to pay compensation. At the time of the 1998 injury, MMI was the insurer on risk and remains relevantly liable to pay compensation. At the time of the 2001 injury the respondent was and had been since 1 July 2000, a self-insurer for workers compensation purposes. 12 The respondent wrote to the applicant on 4 December 2001 and informed him that liability to pay compensation was denied on the basis that his condition was related to injuries suffered in 1994 and 1998 prior to it coming on risk as a self-insurer. 13 There is no suggestion that the applicant is falsely claiming to be injured and the WorkCover certificates of his treating doctor make it clear that he has been partially incapacitated thereby or to put it another way, fit for suitable duties in the period 18 September 2001 to 19 April 2002. 14 The applicant asserts and was not challenged as to this, that he has at all relevant times been fit for his old job as an area manager but not for the more physically demanding 'hands on' cleaning work which was required of him in September 2001 and which was said to have caused his most recent injuries. 15 To understand how the applicant came to be doing "hands on" cleaning work in September 2001, it is necessary to refer to the events of late 1999 which led to his temporary absence from Australia and from his work in the respondent's employ. 16 Although there are some differences in the recollections of the applicant and Mr Butcher in this regard, such differences as I am disposed, being of little or no consequence to these proceedings, it is clear that the applicant took leave without pay from his job with the respondent in late 1999 and took up a position in the United Arab Emirates. Leave without pay was approved by the respondent for up to three years and it is fair to say that the applicant was expected, and in turn expected to be, absent from his employment with the respondent for that period of time. 17 The position in the United Arab Emirates, variously referred to in the evidence as division manager, executive director and branch manager, was in the employ of a company known as Abu Dhabi Berkeley Services L.L.C. Although owned or controlled by the Berkeley family who were at the time the owners of the respondent in these proceedings, Abu Dhabi Berkeley Services was said to be a separate entity which according to Mr Butcher's unchallenged evidence, negotiated the arrangement directly with the applicant. 18 Mr Butcher said he approved leave without pay for the applicant for a period of 3 years from September 1999 as a preferred alternative to accepting his resignation and that he told the applicant he would have his old job back upon his return. 19 The applicant said he was surprised to receive a letter on 26 June 2001 from Mr J Harley, CEO and managing director of Abu Dhabi Berkeley Services L.L.C. relieving him of his position and paying his costs of returning to Australia. 20 The applicant said he was told by Mr Harley that he was needed by the respondent back in Australia. Mr Butcher, it seems, knew nothing of this and was equally surprised to receive a phone call from the applicant in July 2001 indicating that he was headed back to Australia and would be there in two or three weeks. 21 Much had changed in the time the applicant had been away and according to Mr Butcher's evidence which I accept, the combined effect of the takeover by Tempo Cleaning Services and the consequent rationalisation of or reduction in the number of area manager positions, together with a downtown in business fortunes (as well as the applicant's unexpectedly early return to Australia), made it difficult to find a place for the applicant. Efforts in that regard were nonetheless made. 22 Certainly, a number of persons in the respondent's employ had been moved from redundant area manager positions into other positions and Mr Butcher himself, who was the respondent's eastern region managing director at the time of the Tempo takeover, was one of those who was required to take on a lesser role in the aftermath of the takeover. 23 Having said that, there is little doubt that the applicant was assured of an area manager position or something comparable in terms of a remuneration package upon his return to Australia and I am content to assume in the absence of any suggestion to the contrary, that the respondent viewed its duties and obligations to the applicant and his fellow employees as duties and obligations which were assigned to Tempo Services as part of the takeover. 24 For all of that, the respondent maintains that it did the best it could in a changing employment environment to find a place for the applicant. It contends further that it cannot be held liable to reinstate the applicant to a vacant area manager position it does not have. 25 In fact, as Mr Butcher's unchallenged evidence reveals, there was a discussion with the applicant soon after his return to Australia during which Mr Butcher indicated to the applicant that a supervisor's job would be available to him in October 2001 - the start-up date for a new contract at the AMP Centre in Sydney CBD. 26 It was agreed that the applicant's salary would be paid in the meantime by Carl Berkeley. The evidence suggests that this occurred only until the end of August 2001. 27 Shortly thereafter and before the October 2001 start-up date for the AMP job, the applicant and Mr Butcher had a further conversation whereby the applicant was asked to report for duty at Westfields Hornsby. The applicant understood he was being asked by Mr Butcher to go to Hornsby to train the nightshift supervisor to an appropriate level of proficiency before moving on to his (the applicant's) new position at the AMP Centre. 28 Upon presenting himself for work at Hornsby on 11 September 2001, the applicant was handed a mop and bucket and asked to lay down sealer on the floor. He complained that the ongoing effects of his earlier injuries incapacitated him for such work but was nonetheless directed to do it in the interests of helping out. 29 In the course of that work between 6.30pm and 2.30am he was required to carry 15kg drums of chemical sealer and 15kg drums of stripper from the basement into a lift and then onto the floor. He was unable to continue, ceased work early and after being requested to do the same physical work the next day, did not return. 30 There is some dispute on the evidence as to the timing and content of subsequent conversations between the applicant and Mr Butcher but clearly, there was an expectation on Mr Butcher's part that the applicant would do 'hands on' work at Hornsby as well as training the nightshift supervisor. 31 Mr Butcher claimed to have been unaware of the applicant's incapacity for physical work and clearly thought at the time that the applicant's refusal to carry out such work was unreasonable. 32 The applicant subsequently submitted a claim for workers compensation to which earlier reference has been made. The dispute as to liability in that regard is a matter which will of necessity fall to be decided elsewhere (see s105 of the Workplace Injury Management Act and Workers Compensation Act 1998, as amended). 33 At all events, there was limited contact between the applicant and Mr Butcher in the next month or so save for a conversation in which the applicant renewed his request for a manager's job and Mr Butcher restated the position that no such job was available. The conversation turned to the question whether a redundancy package would be a more appropriate way of resolving the issues between them. 34 On 26 October 2001, Mr Butcher caused a letter to be prepared for the applicant offering him a redundancy package. In the absence of any response, Mr Butcher telephoned the applicant in about mid-December 2001 and arranged to meet him for the purpose of finalising matters. I have no doubt on the evidence as it stands that Mr Diamond is correct in submitting that the redundancy proposal, properly viewed, was an option or an alternative for the applicant to consider in conjunction with the supervisor's job which had been offered. 35 The applicant declined the redundancy offer and soon afterwards, initiated these proceedings. 36 Turning then to the question whether the applicant has been unfairly dismissed, I am unable to find in the applicant's favour although I quickly add that the circumstances in which he found himself upon returning to Australia were, from an employment perspective, far from ideal. 37 I have also considered the submissions of the opposing advocates as to the guiding principles to be found in cases such as Easton v Bourke Air Charter Pty Limited & Ors [2000] NSWIRComm 155 (Kavanagh, J.) and Outboard World Pty Limited t/as Budget Waste Control (Sydney) v Muir (1993) 51 IR 167. 38 In that regard, it is well settled by those and many other cases that a so-called constructive dismissal or a redundancy may in the circumstances of a particular case, be held to be an unfair dismissal. Such circumstances however, do not arise in this case firstly, because the evidence does not disclose conduct on the respondent's part suggestive of an intention to improperly bring about a termination of the employment relationship (Easton) or in other words to constructively dismiss the applicant and secondly, because the evidence does not disclose substantive or procedural irregularities necessary to ground a finding of unfairness in respect of redundancy (Muir). 39 The unassailable fact, and one which creates an insuperable hurdle for the applicant, is that the position he occupied when he went to the United Arab Emirates in September 1999 was made redundant and simply did not exist in July 2001 when he returned. 40 There is little doubt in my mind that if such a position did exist in 2001 or for that matter at the present time, then the applicant would be richly entitled to it either by the voluntary act of appointment by the respondent or by order of this Commission. As Mr Diamond for the respondent contends with some persuasive force however, the Commission ought not make any order that would effect a futility. In this case, to find wrongful dismissal and in consequence thereof, to make an order reinstating the applicant to an area manager position would be a clear futility given the uncontroverted evidence of Mr Butcher that the diminishing number of such positions are all presently filled and under ongoing review. 41 It may well be however, that if the applicant accepts the respondent's open offer of employment as a site supervisor, as I think he should, he will be well-placed within an organisation that clearly values his services, to advance his claims in the future for promotion to any vacancy which may occur. 42 In that regard, and with every respect to the earnest contentions of Mr Meltzer of counsel for the applicant, it is not open to the Commission without relevant evidence and argument to order the respondent to create a position of 'relief area manager' to which the applicant can be appointed pending the possible occurrence of substantive vacancy at some future time. The matter must, it seems to me, be decided on the evidence as it now stands and not as it may be in the future, and I know of no authority in support of a proposition to the contrary. 43 As to the applicant's second allegation that he was dismissed because of unfitness resulting from compensable injury and again with every respect to the earnest contentions of Mr Meltzer of counsel, I am not persuaded that the allegation has been made out. 44 The evidentiary focus again must turn firstly to the fact that the applicant's substantive position no longer exists, secondly, to the fact that he has been and continues to be offered alternative employment with the respondent and thirdly, that the offer of alternative employment is made by the respondent in full knowledge of the applicant's unfitness for certain types of work. 45 The compelling conclusion must therefore be that the applicant is being accommodated in spite of his physical difficulties rather than having been dismissed because of them. 46 Before leaving the matter, it is appropriate to again observe that the applicant's services are and have been since 1988 valued by the respondent and that the respondent by its open offer of employment plus its offer to mitigate the applicant's loss throughout the relevant period, has demonstrated its willingness to do the best it can by the applicant in a continuing employment relationship. 47 The applicant would do well, in my opinion, to accept the respondent's offer and take the site supervisor position, which I note again, carries the same annual salary as the area manager position and also provides the applicant with a mobile phone, as did the area manager position he previously occupied. 48 The evidence reveals that the net detriment to the applicant would be the value to him of the private use of a motor vehicle which was not quantified in the course of these proceedings and which to my mind, is to be appropriately categorised as a consequence of redundancy and re-employment. 49 Having carefully considered the evidence and the arguments on either side of the record, I see no warrant for the Commission's intervention. The applications are dismissed accordingly. 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.