Industrial Relations Commission of New South Wales CITATION: Transport Workers' Union of New South Wales (on behalf of Anthony Mitchell) and Compass Group (Australia) Pty Ltd [2007] NSWIRComm 1030 APPLICANT Antony Mitchell PARTIES: RESPONDENT Compass Group (Australia) Pty Ltd FILE NUMBER(S): 1720 of 2006 CORAM: Macdonald C CATCHWORDS: Unfair dismissal application - Respondent established new business operation - twelve employees (including Applicant) applied for re-engagement in new business operation - interview panel - Applicant unsuccessful - Applicant claimed selection process unfair - lack of evidence to support Applicant's claim - Commission declines to intervene in Applicant's retrenchment. LEGISLATION CITED: Industrial Relations Act 1996 CASES CITED: Jones v Dunkel (1959) 101 CLR 298 Outboard World v Muir (1993) 51 IR 167 HEARING DATES: 07/09/06, 08/09/06 DATE OF JUDGMENT: 5 July 2007 APPLICANT Mr P Cooke, Union Official LEGAL REPRESENTATIVES: Mr A Longland Solicitor DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: MACDONALD C 5 July 2007 Matter No IRC 1720 of 2006 Transport Workers' Union of New South Wales (on behalf of Anthony Mitchell) and Compass Group (Australia) Pty Ltd Application by Transport Workers' Union of New South Wales on behalf of its member Anthony Mitchell re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION [2007] NSWIRComm 1030 1 This is an application by Anthony Mitchell ("the Applicant") for unfair dismissal against Compass Group (Australia) Pty Ltd ("the Respondent") pursuant to section 84 of the Industrial Relations Act 1996 ("the Act"). The Applicant was represented by the Transport Workers' Union of New South Wales ("the Union"). 2 The matter was set down for Conciliation and Directions on 13 April 2006 in Wollongong. 3 Failing conciliation, the matter was set down for a Hearing in Wollongong on 7 and 8 September 2006. 4 At the Hearing, the Applicant was represented by Mr P Cooke, union official, who called the Applicant as a witness. The Respondent was represented by Mr A Longland, solicitor, who called the following witnesses: Andrew Sutherland - Area Manager Troy Williams - Compliance Manager BACKGROUND 5 The Applicant was employed by the Respondent as a transport worker from 1989 to 2006. 6 In January 2006, the Respondent indicated its intention to restructure its business of supplying catering services to the Port Kembla steelworks of BlueScope Steel. The restructure involved introducing a new cooking/delivery service. The Respondent was eliminating its category of "Driver" (12 employees so classified) and replacing with a new category of worker called Food Service Operator. Employees were interviewed as to their suitability for the intended restructured business. 7 The Applicant was unsuccessful in being selected to continue his employment. 8 The Union claimed that the retrenchment of its member was unfair. FINAL SUBMISSIONS For the Applicant 9 Mr Cooke for the Applicant, put the following submissions: a) The Applicant was a reliable and honest employee who often worked six and a half days per week. b) The Applicant and the Union were not adequately consulted on the impact of the proposed restructuring of the business. c) The Respondent had not provided ancillary services such as time off to seek alternative work, retraining opportunities, out-placement services or financial planning. d) The Applicant sought reinstatement to his former position or to be trained up into the new services position. e) The retrenchment of the Applicant was unfair because he had longer service than someone else. For the Respondent 10 Mr Longland for the Respondent put the following submissions: a) The onus is on the Applicant to prove that his dismissal was harsh, unjust or unreasonable. b) The Applicant did not contest during the proceedings, the business case of the Respondent to restructure its business. That is, firstly, the Respondent found that its food operations were exposed to breaches of food safety legislation; secondly, the cost of maintaining its food operation had increased at a rate in excess of inflation and the Respondent's client (BlueScope Steel) required that food supply costs be reduced. c) The Respondent addressed those two factors (see above) by restructuring its business and the result was a need for less drivers and hence the retrenchment of the Applicant. d) The Applicant only gave evidence himself. He did not call other truck drivers as witnesses, to say that they are still employed as truck drivers performing the same work, post and pre restructuring. These truck drivers were not called because their evidence would not have helped the Applicant's case because the work now being performed was different to pre-restructuring. Therefore, a Jones v Dunkel inference can be drawn by the Commission. Thus, the work of these truck drivers has changed. e) If this retrenchment of the Applicant was a sham, then the Respondent only need have waited another thirteen (13) days (before retrenching the Applicant), in order to take advantage of the federal government's introduction of its Work Choices legislation and argue under that legislation that the Applicant was retrenched on the basis of operational requirements. f) All twelve (12) drivers were retrenched and were required to apply for ten (10) new positions. The Applicant was unsuccessful. g) The restructured business required different jobs to be performed. Four criteria were set down for the employee candidate selection process. The Applicant had a poor rating against those criteria and against the other employee candidates. h) The selection process for the successful employee candidates was a fair and transparent process. Applicant in Reply 11 Mr Cooke for the Applicant said of the selection process that there was a questionnaire filled in by the candidates and the Applicant did not answer the questionnaire in a way and fashion acceptable to management. The Union did not want to see any other employee lose their position with the Respondent because of this unfair dismissal application. The Union requested that the Respondent (or the Commission) consider another alternative driving position for the Applicant. CONSIDERATION 12 The Applicant deposed of two major issues with his not being selected by the Respondent to be re-engaged as an employee of the Respondent. Firstly, he was an employee of some 18 years standing and yet, employees of lesser service had been re-engaged by the Respondent. Secondly, of the employees who had been re-engaged, one or more previously only had the status of casual employee with the Respondent, prior to being re-engaged by the Respondent. That is, the Applicant's prior permanent status and his claim that he had previously trained one or more of these casuals, showed an unfairness in the re-engagement selection process. 13 The Commission then, will initially set out the circumstances surrounding the restructuring of the Respondent's business - the selection process of the Respondent for the retrenched employees to seek re-engagement with the Respondent - and the retrenchment of the Respondent's employees. Having done so, the Commission will then review those circumstances, having regard to the two major issues raised by the Applicant. The Commission will rely upon the affidavit of Andrew Sutherland, Area Manager of the Respondent's operations at BlueScope Steel, Port Kembla, for the circumstances (cited above) leading up to the Applicant's retrenchment. Restructuring of the Respondent's Business a) The Respondent has contracted with BlueScope Steel for the last 8 years to supply catering services to the Port Kembla steelworks. That worksite is very large: many hectares comprising in excess of fifty buildings. Under the contract, the Respondent (through its employees), prepare and deliver food and beverages at the worksite. Those services are provided to some 4,500 employees over 7 days a week, 365 days per year. b) The Respondent employs about 70 employees at that worksite to provide those services. The break-up of those employees falls into four categories: Canteen Operator (55), Mobile Food Van Operators (4), Drivers (12 - including 3 casuals), Management and Administrative Staff (6). c) The Respondent was required to re-tender for the Port Kembla contract. As part of that re-tender process, BlueScope Steel required an audit to be conducted at the site to measure food hygiene, food safety and hazard compliance. The audit indicated a danger to some exposure by the Respondent to non-compliance with say, food hygiene/safety standards - if changes were not made to work processes. d) Apart from that audit finding, BlueScope Steel advised that the Respondent's increasing manning costs were not acceptable. e) The above issues needed to be addressed by the Respondent for the re-tendering process. f) The Respondent addressed those issues through the introduction of a new cooking method: "Cook-Chill". This involves food being cooked and then blast-chilled before being packed. Upon delivery to the various locations around the worksite, these packages are then placed in purpose built heating units that re-thermalise the food and deliver the packages "as fresh" food to workers. g) This new method of working allows deliveries to be made in larger quantities, with fewer deliveries. This would also mean that less Drivers would be required. The Applicant was a Driver. (Under the prior system of cooking and delivery, the Drivers would deliver food orders to some 260 drop-off points. In order to keep food within a certain temperature range - for say, hygiene/safety standards - the Drivers would need to make immediate deliveries. This, in turn, meant only a small quantity of food being delivered per trip - and requiring a significant number of trips to fill all the orders). Selection of Employees h) The Respondent restructured its business, as described above, and as part of the consequence of the new cooking method and delivery, the Respondent decided to abolish the "Driver" positions. In lieu of the "Driver" only position, would be the new positions (Food Service Operator) which combined both the driving and food handling/preparation functions. (i) The Respondent gave notification early in 2006 to the twelve Drivers of the decision to restructure its business. Four (4) Driver positions only would be maintained. The new position of Food Service Operator was being created. All Drivers would be required to apply for both positions. Any employees not successful in being selected for those two positions would be made redundant. (j) All twelve (12) Drivers applied for these two positions and were interviewed individually. All employees were rated against criteria contained in an interview assessment form. (k) The Applicant obtained the second lowest rating. He rated "poor" on 6 of 13 key areas and "fair" on 4 of the 13 key areas. (l) The Applicant's union lodged a dispute notification about the proposed restructuring. The dispute notification was listed before Grayson DP. Retrenchment of the Applicant (m) The Applicant was notified by letter of 14 March 2006 that his application for continuing employment was unsuccessful and he was being retrenched. One other employee was also retrenched. (n) The Applicant lodged an internal appeal process against his retrenchment. (o) The Union relisted the restructuring issue before Grayson DP. (p) The Applicant's appeal process was unsuccessful. 14 In reviewing the circumstances surrounding the Applicant's retrenchment (and the two major issues he raised about that retrenchment), the Commission will so review, having regard to leading case law on the proposition that a redundancy could be considered as a harsh, unjust or unreasonable dismissal: Outboard World v Muir (1993) 51 IR 167 at 182. Thus: "While in the ordinary case it may be that a redundancy genuinely occurring would not come within the parameters of Part 8, Unfair Dismissals, it takes little imagination to apprehend a situation which is both a redundancy and a harsh, unreasonable or unjust dismissal. For example, it may be that in selecting employees for redundancy an employer unilaterally decides to terminate an employee of long and exemplary service over another employee. The facts of the case may demonstrate both redundancy of one position but unfairness as against the employee selected. Once that position is accepted then it follows that an employee is not necessarily incapable of suffering an "unfair" dismissal in the context of a position becoming redundant. Other examples come readily to mind." 15 The foregoing extract demonstrates that a redundancy may be considered an unfair dismissal because of the selection process whereby an employee was made redundant. 16 In the circumstances before the Commission, the Applicant argued that his selection was unfair (harsh, unjust or unreasonable) because of two factors: (a) his lengthy service (18 years); and casual employees, he had trained, had been selected ahead of him for re-engagement. 17 The Commission will deal with an aspect of the issue of the casual employees firstly. This goes to whether the casual employees should have been considered for the re-engagement selection process at all. The Applicant gave evidence, under cross-examination, that the casual employees were also entitled to apply for re-engagement. (Tr p 31, line 46 to p 32, line 13) 18 The Commission then turns to address the two issues raised by the Applicant about the fairness of the selection process. 19 His first issue was his 18 years service and that this service was longer than others who underwent the selection process. Prima facie, the Applicant's lengthy service does raise for consideration why the Applicant was not selected - as opposed to other employees of lesser service. But unfortunately, the Commission was not provided with any other evidence by the Applicant in support of this lengthy service factor. 20 The Applicant needed to take the Commission to the selection process and highlight one or more unfairness criterion in that process. For example, the Applicant did not provide a breakdown of the interview form to show that it was say, inherently biased against him or had been applied in a biased way against him. The Commission understands that the Applicant believed he could have answered the interview better but may have been nervous. This, of course, could be true of all other employee candidates seeking re-engagement. For example, the Applicant did not call any of the successful employee candidates (under summons) as witnesses and cross-examine them so as to demonstrate to the Commission that at least one of those successful employees, was less merited than the Applicant for re-engagement. 21 Similar reasoning, as above, applies to the Applicant's evidence that one or more casuals (trained by him) were successful in being re-engaged, but he was not. 22 Despite not having brought any successful employee(s) to court in order to address this issue of comparing the merits/skills of the Applicant against that successful employee(s), the Union sought to address that issue by its cross-examination of the two respondent witnesses: Andrew Sutherland (Area Manager) and Troy Williams (Compliance Manager). The cross-examination of Mr Sutherland elicited the following: (a) Mr Sutherland had had meetings with the two union delegates and explained the procedures required for the new cook/chill process. There then followed meetings with the Applicant and other drivers. The meetings took place between November 2005 and March 2006. (Tr p 43, line 45 to p 44, line 16) The Commission notes that the Applicant gave evidence that he attended a presentation session on this new procedure (Tr p 30, line 17 to 36) Further to that, Mr Sutherland explained in examination-in-chief, that the presentation went to advising the drivers as to what changes in process were going to be required to meet the needs of the business. (Tr p 38, line 36 to 53) The Commission forms the view then that the Applicant (and other drivers) were aware of the forthcoming work process changes. (b) Mr Sutherland was questioned about the rating of "fair" and "poor" given to the Applicant during the interview selection process. This line of questioning did not assist the Commission because the Commission did not have before it, the interview responses of one or more successful employee candidates, in order to make a comparison and analysis/assessment of their responses against that of the Applicant. (c) The issue of casuals (trained by the Applicant) being re-engaged and the Applicant not, was raised. Mr Sutherland stated that the casual employees were judged on their merits, just like the Applicant. (Tr p 61, line 21 to line 56) The Commission notes on this issue that the Applicant had trained the casuals and yet he was not re-engaged, that Mr Williams gave evidence on this training by the Applicant under further cross-examination. He said that the Applicant was not involved in the full training of casuals - and the training was not provided by one particular person. Thus a mixture of individuals would provide a mixture of training for such areas as: delivery of milk, delivery of tea and coffee beverage, and delivery of box orders which were broken down into several different runs. (Tr p 78, line 4 to 53) (d) Mr Sutherland was asked why the Applicant had been unsuccessful in being re-engaged (March 2006) but had recently been given an Employee of the Month award in August 2005. Mr Sutherland confirmed he had chosen the Applicant for this award for some particularly helpful occasions at work. However, Mr Sutherland was not part of the interview panel and was not therefore involved in the marking of the interview forms. He kept himself independent of that process and could not respond to the apparent conflict in the Applicant being awarded Employee of the Month but being unsuccessful in his re-engagement application. (Tr p 53, line 38 to p 54, line 17) (e) Mr Sutherland clarified his affidavit ( see para 13(i) above) where he deposed that in the new restructured business operation, there would still be four Driver positions retained. (Ex 3 - para 34(f)). That was the original intention but it did not translate into reality. (Ex 3 - para 63) This clarification was given in evidence-in-chief. (Tr p 36, line 47 to p 37, line 29) This clarified a query in the Commission's mind as to why the Applicant had not at least been retained as a Driver. 23 The cross-examination of Mr Williams elicited the following: (a) He, and Vicky Papadolias (a NSW Recruitment Specialist/employee of the Respondent) interviewed the employees seeking re-engagement (contra retrenchment) in the new business operation. (b) He was not aware why the Applicant had been awarded Employee of the Month. The Applicant had a "poor" rating for the "Communication" skills criterion, because the Applicant gave answers during the interview, in riddles. (Tr p 69, line 3 to 56) CONCLUSION 24 The Commission has before it an unfair dismissal application by the Union on behalf of Mr Anthony Mitchell who was retrenched on 14 March 2006 by the Respondent, after some 18 years service. 25 Mr Mitchell was one of twelve (12) Drivers who applied to be re-engaged as employees (contra being retrenched) in the Respondent's restructured business operation. Mr Mitchell, along with one other employee, was unsuccessful and was notified of his retrenchment. He appealed against his unsuccessful attempt to be re-engaged but this was not successful. 26 Mr Mitchell sought reinstatement. His Union, in final submissions, said it did not want to see any other employee lose their position with the Respondent because of this unfair dismissal application. The Union requested the Respondent (or the Commission) to consider another alternative driving position for the Applicant. The Commission was not given evidence of other driving positions being available as employment with the Respondent, and so the Commission cannot consider this particular submission. 27 Despite that Union submission made in final submissions, the Commission considered Mr Mitchell's failure to be selected by the interview panel for re-engagement. Mr Mitchell raised two issues going to the unfairness, he said, in not being selected: a) his lengthy (18 year) service and (b) casuals trained by him had been successful in being re-engaged but not him. 28 The Commission was provided with insufficient evidence to support these two grounds for claiming unfairness in the selection process. The Commission was not provided with the interview responses of the twelve (12) employees in order for Mr Mitchell to show for example that his rating performance was better than one or more other employees who applied for re-engagement. The Commission was not provided with witnesses (say under summons) being one or more of the successful employees to show that one or more of them did not merit selection ahead of the Applicant. The Commission was also conscious that as the work of the twelve Drivers had been changed, then the fact that the Applicant had 18 year service was not sufficient, in itself, to establish unfairness in his being unsuccessful for being selected for a changed job criteria. As for the casual employees who were selected, there was evidence from Mr Williams that the Applicant was not the only employee who helped in the training of the casuals. This evidence defused the Applicant's claim of unfairness. 29 Apart from the two grounds advanced by Mr Mitchell, the Commission still considered the evidence as a whole to assess if there was a matter or matters of substance to show an unfairness in the selection process and which might then cause the Commission to intervene in the Respondent's decision to retrench Mr Mitchell. The Commission found no matter of substance. 30 Accordingly, the Commission declines to intervene in the decision of the Respondent to retrench the Applicant, Mr Mitchell. A Macdonald Commissioner 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.