Industrial Relations Commission of New South Wales CITATION : Lynch Manufacturing Pty Ltd and National Union of Workers, NSW Branch on behalf of its member Chi Thi True Ho [2002] NSWIRComm 120 APPELLANT: PARTIES : Lynch Manufacturing Pty Ltd RESPONDENT: National Union of Workers, NSW Branch on behalf of its member Chi Thi True Ho FILE NUMBER: IRC2715 of 2002 CORAM: Kavanagh J LEGISLATION CITED : Industrial Relations Act 1996 CASES CITED : Campbells Cash and Carry Pty Limited v National Union of Workers, NSW Branch (2001) 104 IR 400 Bankstown City Council v Paris (unreported decision of Peterson J, No IRC262 of 1999, 29 January 1999 HEARING DATES: 05/16/2002; 05/21/2002; 05/22/2002 EXTEMPORE JUDGMENT DATE : 05/16/2002 APPELLANT: Mr P. Coleman of counsel SOLICITORS: John F. Law LEGAL REPRESENTATIVES: RESPONDENT: Ms K. Parker, Solicitor Mr S. Cain, National Union of Workers JUDGMENT: - 9 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: KAVANAGH J Date: Thursday 16 May 2002 Matter No. IRC2715 of 2002 LYNCH MANUFACTURING PTY LTD AND NATIONAL UNION OF WORKERS, NEW SOUTH WALES BRANCH ON BEHALF OF ITS MEMBER CHI THI TRUE HO Application by Lynch Manufacturing Pty Ltd for leave to appeal and appeal against a decision of Commissioner Patterson given on 6 May 2002 in matter IRC2089 of 2001 EX TEMPORE DECISION RE STAY [2002] NSWIRComm 120 1 HER HONOUR: This is an application by Lynch Manufacturing Pty Ltd who seeks a stay of the Decision and Orders of Commissioner Patterson issued on 6 May 2002, to take effect from 14 May 2002. 2 Lynch Manufacturing, the appellant, by way of an application for leave to appeal and appeal filed in the Commission on 10 May 2002, seeks leave to appeal and appeal the decision and orders of Commissioner Patterson pursuant to s188 of the Industrial Relations Act 1996. Before me is the request for the Stay of the Decision and Orders of Commissioner Patterson. BACKGROUND 3 Ms Ho, the Respondent to the Appeal, was terminated on 27 February 2001. The hearing before the learned Commissioner concluded on 15 August 2001. The decision of the learned Commissioner was handed down on 6 May 2002. By way of affidavit from Phillip Dean of Moorebank (not otherwise identified) in support of the application for the Stay, it was submitted: Should the stay not be granted the return of Ms Ho to the workforce would send a clear message to the workers that they are immune from sanction during a Bench mark Analysis, thereby destroying the Bench mark system. With no system to ensure minimum production rates are achieved the viability of the business and the ongoing future employment of all employees would be seriously threatened. 4 The appellant, in the decision of the learned Commissioner, was referred to as Lynch Flowers. The appellant employed the respondent, on a full time basis, for a period shortly in excess of two years. She was one of 85 or so persons employed by the company to assemble and pack, for distribution, a variety of 25 or more flower bunch arrangements. Within the warehouse environment, production comprised five running lines or belts. The staffing varied, from one belt to another, between six and twelve persons on each production line. THE COMMISSIONER'S DECISION 5 The Commission found the respondent was the first assembler to have been dismissed for an alleged failure to meet a "bench mark". The bench mark was a pre-determined quota minimum - unit production rate expected per individual assembler. The quota minimum - unit varied depending on the variety of the wide range of bunches being produced. The Commissioner found that the Induction and Employment Handbook contained no reference to an individual production quota, namely, the "bench mark". Nor, he found, could it be demonstrated by the appellant they had published any supplementary documentation related to production rates generally, or the effect of counselling warnings leading to dismissal as an inevitable consequence. 6 The respondent received three alleged warnings. The circumstances of those warnings were examined by the Commissioner. The Commission found it was not until the filing of evidence in the proceedings before him that the respondent became privy to the contents of the warnings. He found as to the contents of the warnings it was not stated consistently on the documents they were to be perceived as written warnings. He commented: - The applicant, Ms Ho, has consistently stated throughout these proceedings that she did not understand the benchmark concept and states that until the series of interviews (counselling/warnings?) were in train she did not understand its full implication for her continuing employment. 7 He noted the respondent denied ever being present when the employer claimed to have announced the introduction of the bench mark system in 1998. The learned Commissioner then went on to assess other workers' evidence related to its introduction and its effect. In his consideration, the learned Commissioner found the employees did not support there had been any collective presentation or meeting leading to the bench mark introduction and its full implications. He noted the bench mark or quota system had been one which had evolved and any "countings" that had been observed by the employees up until the respondent's performance came under notice, had not caused any employee to feel insecure. 8 He accepted the introduction of the quota system was not intended as an act of oppression but rather to increase production performance with the aid of visible targets. He accepted the bench mark standards were generally met and sometimes exceeded. He went on, however, to find: . . . when an employee's measured failure – or alleged measured failure during one production run, over a period of one or two hours (or less) may then give rise to the level of scrutiny experienced by Ms Ho then this does introduce a form of oppression which, in my view, is unacceptable. 9 He noted such failure or alleged failure did not take into account other successful runs during the day, or any successes of bench mark achievements over a series of days or weeks or longer. He found: - In this matter the evidence is clear enough that the Respondent's approach lacks balance and, therefore, remains open to claims of unfairness discrimination victimisation. 10 He found in relation to the employees as to the benchmark system: - . . . there has been no proper consultation with them as to its full implications for job security. He went on to find: - That such an arrangement can now be stepped up, or reinforced, by the dismissal of Ms Ho I find totally inconsistent with reasonable standards expected by employers in the modern day. 11 He then found the dismissal was harsh, unjust and unreasonable, both in respect to the merits and the serious lack of procedural fairness. 12 The learned Commissioner went on to order the respondent's reinstatement within seven days; that she be paid a sum equal to that which she would have ordinarily earned save for her dismissal, save for any income derived from other employment during that period; her continuity of service since her dismissal be deemed unbroken for all purposes, including superannuation. RELEVANT GENERAL PRINCIPLES 13 The general principles applicable to the determination of an application for a Stay were outlined by Walton J, Vice-President, in Campbells Cash and Carry Pty Limited v National Union of Workers, New South Wales Branch (2001) 104 IR 400 [at 49-69]. Walton J, Vice-President, then went on to discuss some aspects of the principles to be applied in relation to stay applications which are particularly relevant in this matter. Those aspects are set out conveniently in his judgment [at 63-65]: 63 The filing of an appeal per se does not provide a sufficient basis for the grant of a stay. The determination of whether a stay will be granted involves an exercise of the discretion of the Commission. Having regard to the discussion of the foregoing principles, the question is whether the appellant has demonstrated a proper basis for the grant of an application for a stay. In other words, the question is whether the applicant for a stay has demonstrated an adequate reason for, or an appropriate case to warrant, the exercise of the Commission's discretion to grant a stay of the decision at first instance. 64 In the exercise of that discretion, the Commission will have regard to a variety of considerations, including the balance of convenience and the competing rights of the parties. In this matter, it is also appropriate to have regard, in a preliminary way, to the appellant's prospects of success. . . . . It would also appear necessary to consider the prospects of success in order to properly assess the balance of convenience. 65 The assessment of the Commission as to the prospects for success of the appeal must be necessarily preliminary. The Commission has not heard the appellant upon the question of leave to appeal and some grounds of the appeal were not fully developed. In these circumstances, I do not propose to come to any view as to the question of leave and make a purely preliminary assessment as to the strength of the appellant's case on the appeal. 14 Since the Commission's Orders encompass a reinstatement, payment of monies and an adjustment of rights, this Commission has also considered the views expressed by Walton J, Vice-President, in Bellambi Bowling, Recreation and Sports Club Ltd v Grammel (2001) 107 IR 104 [at 113]; Hungerford J in re Transport Industry (Courier and Taxi Truck) Contract Determination (unreported, Matter No IRC2533 of 1992, 21 December 1992) and Peterson J in Bankstown City Council v Paris (unreported, Matter No IRC262 of 1999, 29 January 1999). As a guide to the way a court goes about its consideration, Peterson J referred to the application of the principles saying: . . . that the appellant is required to demonstrate a reason or an appropriate case to warrant the exercise of discretion in his favour on the stay application. 15 The balance of convenience between the parties must also be considered. Also for consideration is the question of any terms of a Stay if so granted. It is also appropriate to have regard to the applicant's prospects of success in this matter in order to consider the specific terms of any stay "that will be appropriate fairly to adjudge the interests of the parties" (see Alexander v Cambridge Credit Corporation Pty Limited (Receivers Appointed) (1985) 2 NSWLR 685 at 695). CONSIDERATION 16 Therefore it is proper for the Commission to assess the appellant's prospects for success in this matter. Any such assessment must be preliminary in nature as neither party has been fully versed of either the application for leave to appeal or the merits for appeal. 17 The appellant submits 24 grounds of appeal. The appellant was represented by Mr Coleman of counsel. Many of those grounds of appeal are challenges to certain findings of fact made by the Commissioner. They are couched in terms of: "the Commissioner erred in finding . . ." or "the Commissioner erred in failing to find . . ." A number of the grounds suggest the Commissioner "failed to find reasonableness in relation to the targets". 18 Ground of Appeal No. 12 sits separately and suggests the learned Commissioner erred in being overly interventionist, particularly insofar as the evidence of a Ms Janelle Ward, the appellant's Personnel Officer, was concerned. 19 Another ground of appeal claims the Commissioner erred in taking into account evidence of the respondent which was in the form of a denial. A further ground of appeal claims the learned Commissioner erred in referring to allegations of sexual harassment in giving his decision when, during the hearing, he stated the issue of sexual harassment was not relevant. 20 The appellant also submits because the Commissioner did not quantify the sum he ordered in accordance with the provisions of s89(3), there is an error of law in the orders of the learned Commissioner and the Order cannot be implemented. The grounds for appeal do not mention this attack on the Orders of the Commission. Oral submissions by the appellant employer in support of the Stay application were to the effect that s89(3) requires the Commission to quantify the amount of the Order. 21 The submissions of the appellant, however, as to reasons for the Stay appear to the court to be dissociated from the attack by the appellant on the Commissioner's Decision as outlined in the Grounds of Appeal. 22 The reasons for stay were outlined in paragraph "J" of the application and endorsed in the affidavit of a person called Phillip Dean (unidentified) but whose affidavit was filed on behalf of Lynch Manufacturing Pty Ltd. 23 The respondent to the application, the applicant in the proceedings before the Commission, was represented by Ms K. Parker, solicitor, with Mr S. Cain from the NUW. The respondent submits all 24 grounds of appeal were findings of fact supported by the evidence and open to the learned Commissioner. In her submissions, Ms Parker particularised a number of significant examples where she took this Commission to the evidence considered by the Commissioner in his Decision which supported the findings of fact by the learned Commissioner. I found many of her submissions, on a very preliminary basis, suggest the learned Commissioner's findings were supported by evidence so his findings could be upheld. 24 I am not persuaded that the appellant has made out at this stage of the hearing in the stay application an arguable case on Appeal necessary for the exercise of the discretion of the Commission in its favour. I consider, in the circumstances, as a preliminary assessment, there would appear to be some real difficulties with the grounds of the appeal thus far argued by the appellant employer. 25 I now turn to the question of the balance of convenience. 26 This consideration must be made with an overview of the nature of the industry in which the appellant conducts its business. The respondent was an employee of nearly two years standing. This was a significant business operation. As to the stay of the money orders given by the learned Commissioner, the principle advanced in support of the application by the appellant was that the company had a high turnover of product and a low margin of profit and payment of such monies would be an impost on the appellant. Further the Appellant submitted, as the orders of the learned Commissioner did not quantify the respondent employee's entitlement, the appellant employer faces difficulties with determining what amount is to be paid. This latter submission was developed in oral submissions and seems to be now a ground relied upon by the appellant. It was further submitted if the appellant, having paid monies under the Orders, was successful on the appeal, the respondent would have to repay the monies and perhaps could not do so. 27 No evidence was led to support the proposition of the appellant if the appeal was successful the respondent would not repay. I have further not sighted any significant evidence to persuade the Commission that because the company has a high turnover of product and a low margin of profit, it is in financial difficulties and would suffer financial detriment if required to comply with the Orders. 28 I find the balance of convenience favours no granting of the stay when regard is paid to the nature of the applicant's business. In all the circumstances, taking into account the respective interests of the parties, I do not accept the balance of convenience favours the appellant. 29 As to the submission of the appellant employer that the employee's return to work would destroy the bench mark system, I reject this submission. The learned Commissioner accepted the bench mark system at this place of work. He rejected the conduct of the employer in the circumstances only of the respondent's termination as it related to the implementation of the bench mark system and any use by the appellant of the respondent's termination to reinforce the bench mark system as unfair and totally inconsistent with reasonable standards expected from employer. 30 In all the circumstances, taking into account the prospects of success of the Appeal and the balance of convenience, the application for a Stay of the Orders of Commissioner Patterson of 6 May 2002 in the use of the Commission's discretion is rejected. 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