Industrial Relations Commission of New South Wales CITATION: Coveny v Davis & Spence Pty Ltd [2006] NSWIRComm 51 PARTIES: Darryl Christopher Wayne Coveny Davis & Spence Pty Ltd FILE NUMBER(S): IRC 4999 of 2005 CORAM: Harrison DP CATCHWORDS: Application re unfair dismissal - redundancy due to closure of branch office - alternative position offered and refused. Held - alternative position not suitable - additional four hours of travel per day and reduction in earnings of 50 percent - constructuve dismissal - harsh, unreasonable and unjust - compensation awarded. LEGISLATION CITED: Industrial Relations Act 1996 CASES CITED: Clark v Pittwater RSL Club Limited (1998) 84 IR 309 HEARING DATES: 20/02/2006 DATE OF JUDGMENT: 02/20/2006 EXTEMPORE JUDGMENT DATE: 02/20/2006 APPLICANT Counsel Mr J Wormington LEGAL REPRESENTATIVES: RESPONDENT Mr D Kemp JUDGMENT: - 6 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: HARRISON DP Monday, 20 February 2006 Matter No IRC 4999 of 2005 DARRYL CHRISTOPHER WAYNE COVENY AND DAVIS & SPENCE PTY LTD Application re unfair dismissal pursuant to s84 of Industrial Relations Act 1996 DECISION [2006] NSWIRComm 51 1 The application in this matter was filed on 26 September 2005 and subject to proceedings for the purpose of conciliation and directions before Commissioner Stanton on 17 October 2005 and 25 October 2005. It was established that the matter was not capable of settlement and directions issued to bring the matter to hearing. The matter was reallocated to the Commission as presently constituted on 13 December 2005 and proceeded to hearing on 20 February 2006. 2 Mr Wormington of Counsel appeared on behalf of and brought evidence from Mr D Coveny ("the Applicant"). 3 Mr Darren Kemp, a Director of Davis & Spence Pty Ltd ("the Respondent") appeared on behalf of the Respondent with Mr Michael Barnett., Managing Director the Respondent. Both Mr Kemp and Mr Barnett gave evidence and were subject to cross examination. THE EVIDENCE 4 The Applicant commenced employment with the Respondent on 25 February 1992. His employment ended on 12 September 2005, giving rise to these proceedings. 5 The Applicant resides in Muswellbrook in the upper Hunter Valley. The Applicant first sought employment with the Respondent at its Singleton branch. There is a dispute between the parties as to whether the Applicant was employed at the Newcastle branch and transferred to Singleton in late 1992, as asserted by the Respondent; or in the Applicant's evidence was employed at the Singleton branch on the basis that he undertake training in Newcastle, taking up duties in Singleton in April/May 1992. 6 The Applicant supported his assertion with a record card detailing the employment enquiries he undertook as part of a then Government program entitled "Job Club". The Job Club record card shows a number of contacts from October 1991 to November 1991, including an approach to the manager of the Respondent's Singleton branch, and subsequently to Mr Barnett in Newcastle. 7 Mr Wormington relied on a pay slip and commission statement directed to the Applicant congratulating him on his first Singleton commission, dated September 1992. 8 The Respondent defended its position on the basis that all employment contracts required employees to be transferred to any branch at management's discretion. 9 There was no dispute that the Applicant was employed at the Singleton branch from the end of 1992 and that on closure of that branch he was in receipt of a salary package of $53,659.03. The salary package was confirmed by the evidence of Mr Barnett and the contents of exhibit 6, a detailed salary review of the Applicant at 28 June 2005. The total annual package is calculated at Gross salary $35,467.00; superannuation contributions $3,192.03; and motor vehicle depreciation and running costs $15,000.00, a total of $53,659.03. 10 It was not disputed that the Respondent resolved to close the Singleton Branch. The other employee at Singleton was retrenched and afforded a redundancy payment. The Applicant was offered an alternative position in trade sales at the Newcastle Head Office on a salary of $27,000 per annum. Detail of the salary make up was not provided, however, it was confirmed that the Applicant would not have had the use of a company motor vehicle. 11 The Applicant declined this alternative position as it involved almost four additional hours of travel each day, approximately two hours each way from Muswellbrook to Newcastle; and carried a reduction in salary and entitlements. 12 The salary of $27,000 offered in the alternative position in Newcastle was not seriously challenged by the Respondent. Mr Barnett's evidence was that the position would be better but that the Applicant did not come to Newcastle to find out. 13 This leaves the Respondent in the position of having failed to clearly and specifically set out the terms of the alternative position which constitutes further grounds supporting the Applicant's refusal of that position. 14 The Respondent contended that is was not obliged to pay redundancy to the Applicant as it then offered him suitable alternative employment, which he refused. 15 The Respondent asserted that the position offered was reasonable as it was a return to the position he initially sought and had been employed in at the commencement of his career with the Respondent. 16 Mr Wormington submitted that the offer of employment was so unreasonable, having regard to additional travel time and reduction in earnings, that it amounted to a separate offer of employment in a different position, as held in Clark v Pittwater RSL Club Limited (1998) 84 IR 309, which he put could not be relied upon as suitable alternative employment. CONSIDERATION 17 The offer of alternative employment involved significant additional travel per day, a reduction of base salary of 23 percent, and a reduction in total earnings of approximately 50 percent. 18 I accept the submissions of Mr Wormington that the alternative position offered was different position, effectively terminating the Singleton position and offering a fresh contract of employment. 19 It is not material to this matter whether the Applicant had been originally employed in Newcastle or Singleton. The indisputable fact is that from the end of 1992 to September 2005 he had been employed at the Singleton branch and was adversely affected by the Respondent's decision to close that branch. 20 The Respondent is not able to rely upon the original position some 13 years earlier to constitute reasonable alternative employment. 21 I find the termination of employment to be harsh, unreasonable and unjust. 22 I find neither reinstatement or re-employment to be practical. 23 I award compensation at $25,000 to be paid within 21 days of the date of this Decision. 24 Orders issue accordingly. Matter No IRC 4999 of 2005 is so concluded. ooo0oo INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: HARRISON DP Monday, 20 February 2006 Matter No IRC 4999 of 2005 DARRYL CHRISTOPHER WAYNE COVENY AND DAVIS & SPENCE PTY LTD Application re unfair dismissal pursuant to s84 of Industrial Relations Act 1996 ORDER Pursuant to section 89(5) of the Industrial Relations Act 1996 Davis & Spence Pty Ltd is ordered to pay to Mr Darryl Christopher Wayne Coveny the amount of $25,000 (twenty five thousand dollars) within 21 days of the date of this Decision. I so order. The Hon. R W Harrison Deputy President 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.