Industrial Relations Commission of New South Wales CITATION: Hill v. Instant Access Australia Pty Limited [2006] NSWIRComm 1031 APPLICANT Roshan Hill PARTIES: RESPONDENT Instant Access Australia Pty Limited FILE NUMBER(S): IRC 5263 of 2005 CORAM: Connor C CATCHWORDS: termination of employment - retrenchment - claim that retrenchment not genuine - claim of constructive dismissal - unfairness in the retrenchment - claim for monetary compensation - impact of Practice Direction No.17 - undertaking not to pursue other remedies not provided prior to hearing - assessment of the level of monetary compensation LEGISLATION CITED: Anti-Discrimination Act 1977 Industrial Relations Act 1996 Allison v. Bega Valley Council (1995) 63 IR 68 Blackman v. Brieth Pty Limited - unreported Broken Hill Proprietary Company Case (No.2) (1943) AR 146 Busways v. Johnson (1994) 55 IR 255 Clarke v. Godwin [2005] NSWIR Comm 1210 Crocker's Case (1983) AR 485 D and R Commercial Pty Limited v. Flood (2002) 113 IR 344 Re Fitzpatrick and the Council of the Municipality of Bankstown (1954) AR 573 CASES CITED: Green v. Mini Quip Earthmoving - unreported Little v. Commissioner of Police (No.2) (2002) 112 IR 212 Loty's Case (1971) AR 95 Neal v. Shaw McDonald Pty Limited [2003] NSWIR Comm 298 Nowra Bomaderry Leagues Club Case (1986) 15 IR 463 Outboard World Pty Limited v. Muir (1993) 51 IR 167 Parker v. Capital Painters Pty Limited (1996) 68 IR 100 Quality Bakers of Australia v. Goulding (1995) 60 IR 327 Redundancy Award Case (1994) 36 AILR Rep.301 Tasovac v. New South Wales Police Service (1998) 83 IR 410 HEARING DATES: 17/02/2006 DATE OF JUDGMENT: 03/03/2006 APPLICANT applicant appeared in person LEGAL REPRESENTATIVES: RESPONDENT Karolina Kondovski KMB Resources Pty Limited DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: CONNOR C Friday, 3 March, 2006 Matter No IRC 5263 of 2005 Roshan Shanthi Hill and Instant Access Australia Pty Limited Application under S.84 of the Industrial Relations Act, 1996 DECISION [2006] NSWIRComm 1031 Introduction 1 Pursuant to the provisions of Part 6, Unfair Dismissals, of Chapter 2, Employment [Ss.83 to 90] of the 1996 Industrial Relations Act, Ms Roshan Hill lodged an application concerning the termination of her services as a marketing assistant with Instant Access Australia Pty Limited. Ms Hill commenced employment with Instant Access on Monday, 5 July, 2004 and her services were terminated on Friday, 2 September, 2005 when her position was outsourced, ie she was retrenched. Ms Hill has asserted that the termination of her services was not the bona fide redundancy that is claimed by Instant Access. 2 Ms Hill lodged her Part 6 application on Wednesday, 12 October, 2005, 40 days after the termination of her services and therefore outside the 21 day time limit imposed in S.85(1) for the lodgement of such claims. However, initially Ms Hill pursued her claim in the Federal unfair dismissal jurisdiction, believing incorrectly that her position was covered by the Federal Graphic Arts Award. Instant Access challenged her claim on jurisdictional grounds and she subsequently lodged her Part 6 application. By virtue of S.85(2) the clock does not run against the dismissed employee for any time unproductively pursuing an unfair dismissal claim in the wrong jurisdiction, viz: "The Commission is required to accept an application that is made out of time if the applicant has previously made a similar application under Commonwealth law relating to the same dismissal and: (a) the similar application was made within the time required by that Commonwealth law, and (b) the similar application has not been settled or determined, and (c) the application under this Part is made not later than 21 days after the similar application is withdrawn, or is declined because of the existence of an alternative remedy under this Part." Consequently, Ms Hill's delay in filing her Part 6 application does not present any barriers for it. 3 Ms Hill's Part 6 application was allocated initially to McKenna C by Registry staff who set the matter down for a conciliation and directions hearing on Tuesday, 1 November, 2005. The file records that the matter was, in fact, settled by conciliation at that time, subject to the completion of a deed of release in the customary manner. But the purported agreement of the parties did not eventuate and no deed of release was actually completed. Ms Hill explained her reasons for her refusal to sign the deed of release in a letter she wrote on Friday, 23 November, 2005 to McKenna C, viz: "...I am unable to find agreement regarding the deed of release as drafted by Instant Access for the following reasons: 1. I retain the right to query it as a bona fide redundancy; (a) because, contrary to Instant Access' assertion that no alter ( sic ) positions were available, in fact, there were two ; and (b) my previous disputes in regard to both a pay review and a work related injury. 2. Providing a portfolio. This is necessary for me to find another position and it would be reasonably expected and normal to provide professionally printed copies or digital copies on the understanding that Instant Access retains copyright and licences me to use copies of artwork for my professional portfolio. 3. The terms of confidentiality, I find unreasonable given that I was summarily removed and I need to clear my name both professionally and personally. I regret to inform you of the above and am sorry for the inconvenience caused in re-listing the matter..." 4 The matter came again before McKenna C on Tuesday, 5 December, 2005 and subsequently programmed by her for arbitration. Directions were made for the filing of the necessary documentation to proceed to arbitration and, in accordance with the new practice of the Commission for unfair dismissal claims, which were subsequently confirmed in Practice Direction No. 17, the file was returned to the Registry. In accordance with Practice Direction No.17, the matter has been allocated to me by Registry staff for arbitration in a hearing on Friday, 17 February, 2006. In the hearing Ms Hill was unrepresented and Ms Kondovski represented Instant Access. 5 It is, of course, customary that settlements of Part 6 claims are expressed as confidential to the parties. But Ms Hill is entitled to reject any such condition and her Part 6 application has not been concluded with her apparent agreement before McKenna C. The settlement of the matter was at all times conditional upon completion of a deed of release and that did not occur. Hence there is no agreement. In my unreported decision of Tuesday, 8 December, 1998 in Green v. Mini Quip Earthmoving [Matter No.IRC 4307 of 1998] I commented (at p.2) that: "…if the agreement which I thought existed has broken down, the matter has not been settled at all. It must proceed to arbitration…" 6 But Ms Hill must appreciate that once she proceeds into arbitration the Commission is confined to provide to her only the range of remedies available to her through Part 6, ie essentially reinstatement to her former position [S.89(1)], re-employment to some other suitable position [S.89(2)] or monetary compensation in lieu thereof [S.89(5)]. Any issues beyond that - specifically, her claim to be provided with a portfolio for her work - is a matter she would need to pursue independently. 7 In her Part 6 application Ms Hill has primarily sought her reinstatement which remains the preferred remedy for an unfairly dismissed employee. The position was explained by the Full Bench of the Commission (Wright J - President, Walton J - Vice President and Boland J) in Little v. Commissioner of Police (No.2) (2002) 112 IR 212 at p.243, viz: "…Where the Commission finds that the removal of an officer or employee was harsh, unreasonable or unjust, the primary remedy available is reinstatement or re-employment. It is only in circumstances where reinstatement or re-employment are found to be impracticable that the Commission will give consideration to the remedy of compensation… This conclusion is, in any event, clear on the plain words, structure and evident purpose of the terms of S.89…" 8 But, of course, the remedy of reinstatement will not be available for a retrenched employee whose position has been abolished from the former employer's establishment - which is the claim by Instant Access. It is trite to say that a dismissed employee may not be reinstated to a position that no longer exists. Moreover, in my opinion, as far as Ms Hill is concerned, the friction in the workplace, to which I will refer in more detail later in this decision, would clearly militate against her resuming work for Instant Access. Ms Hill is no longer seeking to return to work for it. Her claim is therefore confined to monetary compensation under S.89(5). 9 Ms Hill called Mr Andrew (Hamish) Chand, a customer services officer for Instant Access, to give evidence in the hearing. Ms Kondovski had required Ms Hill for cross-examination and had filed and served a notice to that effect on Tuesday, 7 February, 2006. Ms Hill therefore gave evidence under oath in support of her claim and Ms Kondovski was permitted to cross-examine her at some length, challenging the nature of much of her evidence in the process. 10 The comparable right to cross-examine members of Instant Access management who had provided witness statements for it was not available to Ms Hill, however. Ms Mona Albina, the human resources officer, Ms Sarah Baxter, the financial controller, Mr Brian Konkoly, the production manager, Mr Tom Raptis, the products manager, and Mr Bill Vella, the general manager, had all provided witness statements. In the hearing Ms Hill had initially announced her intention to cross-examine those members of Instant Access but she had provided no prior notice of her intention to do so and Ms Kondovski opposed the authors of those written statements being available for Ms Hill to cross-examine. Ms Kondovski's position in that respect is in conformity with the standard directions flowing from Practice Direction No.17 [see also Rule 122 with respect to affidavit evidence]. I consequently determined that the witness statements of Ms Albina, Ms Baxter, Mr Konkoly and Mr Raptis would be admitted into evidence without providing Ms Hill with the right to cross-examine them. In any event, ultimately Ms Hill expressed no real concern that she was not permitted to cross-examine witnesses, being content to rely on her own evidence in that respect. 11 One other jurisdictional issue had arisen with Ms Hill's Part 6 application. S.90 provides as follows: "The Commission must not determine an applicant's claim by making an order under S.89 if: (i) another Act or a statutory instrument provides for redress to the person in relation to the dismissal, and (ii) the person has commenced proceedings under the other Act or instrument or has not lodged a written undertaking not to proceed under the other Act or instrument." 12 Ms Hill has not completed the S.90 undertaking prior to the hearing commencing. She has raised in issue in her written statements and in her subsequent evidence a claim that she believes that she was being discriminated in her employment. Such a claim may presumably also be ventilated, for instance, under the 1977 Anti-Discrimination Act. Consequently, the failure of Ms Hill to complete the S.90 undertaking emerges as significant. Nevertheless, Ms Hill has indicated in her evidence in the hearing that she understood the impact of S.90 and was prepared to give the undertaking that she would not pursue redress over the termination of her employment outside Part 6. That is as far as S.90 extends, in my opinion. The words that govern S.90 are "…in relation to the dismissal…" - not concerning any other part of the employment itself [Tasovac v. New South Wales Police Service (1998) 83 IR 410 at p.413]. I am satisfied that there is no barrier to me proceeding to arbitrate this claim. The Dismissal 13 When Ms Hill commenced employment with Instant Access on Monday, 5 July, 2004 she occupied a newly created position. Instant Access examined the work being performed by Ms Hill in the position and came to the conclusion that the position was not necessary on their establishment. It claimed that there appeared to be down time in her work load and that much of the work performed by Ms Hill was actually performed by the printer engaged by it. According to Instant Access the work performed by the printer was only rarely refined, reviewed or changed from what the printer had provided and there was therefore much double handling, inefficiency and unnecessary costs in having Ms Hill initiate work that was actually performed by the printer. 14 The position with Ms Hill's employment was reviewed over a two month period in the middle of 2004 and the decision taken to make Ms Hill's position redundant. Instant Access did not believe that there were any alternative redeployment options for Ms Hill: there were no other positions available to it to offer Ms Hill. The upshot was that no such offers were made to Ms Hill. A salary review of the position, which Ms Hill was seeking at the time, was not pursued in view of the uncertainty concerning her position. 15 It is Ms Hill's assertion that, in effect, she was "constructively" dismissed. The gist of her evidence is that there was considerable friction in the workplace concerning her. Her relationship with Ms Baxter, in particular, appears to have been strained. She had been pressing for a salary review but nothing had eventuated in that respect and she had, in fact, tendered her resignation in the light of the difficulties she believed she was experiencing. Nevertheless, she was still in employment at the time that her services were terminated. She had also sustained a workplace injury. She also asserts that her requests for leave both formally and informally had been ignored by Instant Access despite informing members of its management team that she needed that time to assist her mother-in-law who had been diagnosed with spinal cancer and suspected undiagnosed primary cancer. It is the assertion of Instant Access that Ms Hill simply did not follow proper procedure and that the supervisory staff whom she approached over leave were not authorised to provide her with it. Moreover, some of those members of supervisory staff have no recollection that Ms Hill actually raised the unfortunate circumstances concerning the health of Ms Hill's mother-in-law. Conclusion 16 The concept of "constructive" dismissal to which Ms Hill refers in her Part 6 application and her evidentiary material - incorrectly in my view - does not really apply in this hearing. The concept is confined to cases where an employee actually resigned but that resignation is tainted in some manner to suggest that it was forced on the resigning employee [Allison v. Bega Valley Council (1995) 63 IR 68]. Although Ms Hill had, in fact, tendered her resignation - under pressure she claimed - that had been put into effect at the time she was purportedly retrenched, there is really no dispute that her services were terminated unilaterally by Instant Access. By that fact alone, it falls under jurisdiction under Part 6 and there is no need for Ms Hill to regard what happened to her as "constructive" in any way. 17 For my intervention in support of Ms Hill in this hearing I must be satisfied that the conduct of Instant Access when it terminated her services was, to use the language of S.84(1), either "harsh", "unreasonable" or "unjust" [Busways v. Johnson (1994) 55 IR 255 at p.261]. In Parker v. Capital Painters Pty Limited (1996) 68 IR 100 I described the words "harsh", "unreasonable" and "unjust" (at p.104) in the following manner: "...The words 'harsh', 'unreasonable' or 'unjust' contemplate that long established principle of industrial fairness in the State unfair dismissal jurisdiction... which, to my mind, flows naturally out of the ordinary meaning of the words 'harsh' (meaning too severe, having regard to all the circumstances), 'unreasonable' (meaning immoderate, excessive or extravagant) and 'unjust' (meaning unfair, inequitable, undeserved or biased)..." The historic and traditional approach to claims that a dismissal was unfair, flowing from the phrase adopted by Sheldon J in Loty's Case (1971) AR 95 at p.99, has been to determine whether in the dismissal there was a "...fair go all round...". In my opinion, that remains the best guide to the determination of whether or not intervention by the Commission in a Part 6 application is appropriate. 18 For retrenched workers in this State there have been two standards for redundancy pay, viz: (i) the scale advanced initially by Fisher J - the President of the former State Industrial Commission in Crocker's Case (1983) AR 485 - the so-called Fisher formula - which was adopted and incorporated in Reg 5(b) to the 1982 Employment Protection Act; and (ii) the scale prescribed by the Full Bench of the Commission (Fisher J - President, Glynn and Peterson JJ and Buckley CC) in the Redundancy Award Case (1994) 36 AILR Rep.301 which, upon application, has been inserted in State awards. Ms Hill was provided with four weeks salary in lieu of notice of her retrenchment and four weeks of severance pay. For an employee with employment of over one year but less than two years - as was the case with Ms Hill - the standard of severance payments, flowing from either Reg 5(b) of the EP Act or the Redundancy Award Case is from four to five weeks, depending upon the age of the retrenched worker. 19 That is not to suggest that a genuine retrenchment may, not in fact, still be unfair: it may still fall properly under Part 6 for a remedy notwithstanding some argument to the contrary in the current debate over industrial relations. As I pointed out in my unreported decision of Thursday, 22 December, 2005 in Clarke v. Godwin [Matter No.IRC 2080 of 2005 at p.8]: "...There is some suggestion current that to provide a retrenched worker who is in receipt of severance payment also with a remedy under Part 6 is a case of double counting. I disagree. A retrenched worker, even one who receives severance payment, may still have been unfairly dismissed and an employer should act fairly when retrenching any staff member [ Outboard World Pty Limited v. Muir (1993) 51 IR 167 at p.182]..." 20 In an unreported decision of Sams DP has on Friday, 12 September, 2003 in Neal v. Shaw McDonald Pty Limited [Matter No.IRC 607 of 2003] helpful guidelines were set out (at p.17) concerning the obligations on an employer retrenching employees, viz: (i) to give reasonable notice to employees and/or their unions; (ii) to adequately consult with employees and/or their unions on the impact of the proposed changes; (iii) to explore genuine alternative options for redundancy, such as redeployment or relocation; (iv) to ensure such options are fairly offered to the affected employees; (v) to provide reasonable standards of redundancy benefits; (vi) to provide appropriate ancillary services, such as time off to seek alternative work, retraining opportunities, outplacement services or financial planning; and (vii) to ensure employees nominated for redundancy are fairly selected on an objective and unbiased basis. 21 Also Beazley J of the Federal Industrial Court in Quality Bakers of Australia v. Goulding (1995) 60 IR 327 commented relevantly (at p.334) that: "...a failure to consult with an employee or union about the issue of redundancy may mean a termination on that ground is harsh, unjust or unreasonable... A termination may also be harsh, unjust or unreasonable because the employee may have been, but was not, offered suitable alternative employment with the employer..." 22 In any event, it is Ms Hill's assertion that her retrenchment was simply a devise to remove her from employment, ie that Instant Access acted in bad faith when it terminated her services [the Broken Hill Proprietary Company Case (No.2) (1943) AR 146 at p.147]. I accept that when an employee is retrenched an employer may simply be acting to dress up an attempt to remove her from its establishment. For instance, in my unreported decision of Friday, 21 July, 2000 in Blackman v. Brieth Pty Limited [Matter No.IRC 7070 of 1999] I commented (at pp.14 and 15) that: "...I believe from the evidence before me in this hearing that the whole process of restructuring that...was put in place...was for one thing and one thing only: to remove (the retrenched employee) from employment for some unspecified reason... That is not to suggest that an employer needs an excuse to restructure his operations. He may do so at any time and for any reason. But in doing so he should act fairly to his employees..." But for Ms Hill to succeed with her Part 6 application in that respect there would need to be stronger evidence than she has provided to me in this hearing. The onus of proof rests with her in that respect [the Nowra Bomaderry Leagues Club Case (1986) 15 IR 463 at p.464]. 23 I am satisfied that the termination of Ms Hill's services was nothing more than an inevitable, albeit unfortunate, outcome of the decision of Instant Access management to delete the position she occupied from its establishment. If Instant Access was simply seeking to get rid of her, why would it not simply let her resignation stand and thereby bring her employment to an end? I certainly have sympathy for Ms Hill in losing employment which she was no doubt entitled to expect may have some level of permanency about it but, except on very limited grounds, I am not at liberty in Part 6 proceedings to intrude too far into how an employer may conduct his business, eg restructuring its operations [Re Fitzpatrick and the Council of the Municipality of Bankstown (1954) AR 573 at p.579]. 24 Nevertheless, whilst I have concluded that the termination of Ms Hill's services was a bona fide retrenchment, I believe that it was still procedurally unfair. She was given no real prior notice of her retrenchment and no opportunity to explore with Instant Access management some alternative proposals which would preserve her employment, albeit possibly only temporarily. Her services came to an end very abruptly indeed. Ms Hill is correct in her assertion in her evidence that the manner in which her services were terminated was unfair to that extent. 25 The upper limit for monetary compensation is set by S.89(5) as: "…an amount of compensation not exceeding six months' remuneration of the applicant at the average rate received over the period of six months immediately before being dismissed…" And Ms Hill's claim in this hearing must also be considered bearing in mind the provisions of S.89(6), viz: "When assessing any compensation payable, the Commission is to take into account whether the applicant made a reasonable attempt to find alternative employment and the remuneration that would have been payable if the applicant had succeeded in obtaining alternative employment." 26 In D and R Commercial Pty Limited v. Flood (2002) 113 IR 344 the Full Bench of the Commission (Wright J - President, Walton J - Vice President and Tabbaa C) commented (at p.363) that: "…the power in the Commission to make a money order, subject to the limitation on the quantum of compensation and the matters required to be taken into account by S.89(6), is nevertheless within the Commission's discretion. Whilst the Commission is required to take into consideration the matters identified in S.89(6), those matters are not necessarily to be reflected in any particular, arithmetic or definitive way in the money order for compensation made…" Therefore S.89(6) does not provide a simple mathematical formula - a sum representing the amount of income over the period of six months immediately prior to dismissal minus a sum representing the earnings after that date equals the amount of compensation available. The direction in S.89(6) is to "…take into account…" those factors: what is actually to be done with that information is still a matter for my discretion, provided always that I do not exceed the six month ceiling in S.89(5). 27 Ms Hill remains presently unemployed. In the circumstances, based on the gross figure of $913.45 which Ms Hill recorded in her Part 6 application as her average weekly remuneration when she worked for Instant Access, I propose to order that it pay to her the sum of $3,750.00. O R D E R 1. Instant Access Australia Limited shall pay the sum of $3,750.00 to Ms Roshan Hill within 28 days. 2. This order shall take effect on and from Friday, 3 March, 2006. P J CONNOR 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.