Cains v Wadepack Limited [2003] QIRC 1 (2003) 172 QGIG 240

240 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 17 January, 2003 ########################################################################################################################## # QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 74 – application for reinstatement Patrick Bernard Cains AND Wadepack Limited (No. B1150 of 2002) VICE PRESIDENT LINNANE 2 January 2003 Termination of employment – Dismissal – Dismissal for operational reasons – Procedural fairness includes a right to be consulted so that options other than dismissal could be explored with employee – Overall impact of procedural unfairness where dismissal is not otherwise unfair – Dismissal considered harsh, unjust or unreasonable – Matter referred back to parties to consider option of re-employment – Industrial Relations Act 1999 – s. 73, s. 77. DECISION [1] This is an application by Patrick Bernard Cains (Applicant) seeking reinstatement to his former position of Sales Account Executive with Wadepack Limited (Respondent). [2] The Applicant commenced employment with Framepack Australia Pty. Ltd. (Framepack) on 14 December 1998. On or about 1 September 1999 Framepack was taken over by the Respondent. On 10 July 2002 the Applicant was informed by Ashod Nassibian, the Respondent Managing Director, that his employment was being terminated. The Applicant was advised, at that time, that he was being dismissed for “cost cutting” reasons. At the time of dismissal the Applicant was in receipt of a salary of $40,186.00 per annum. The Applicant was paid four (4) weeks’ pay in lieu of notice and a further seven (7) weeks’ pay as severance pay. [3] According to Mr Nassibian he advised the Applicant on 10 July 2002 that there was no longer any need for a sales representative in Brisbane. Mr Nassibian said that the decision to no longer have a sales representative in Brisbane was based on the volume of work handled out of the Brisbane plant and the fact that there was limited scope for a sales representative in the Brisbane market place. According to Mr Nassibian it was decided that in order to make Brisbane a more viable plant costs had to be reduced. This was to be done by making the Applicant redundant and directing production work from the Sydney and Melbourne plants to the Brisbane plant so that there would be an increased level of production type work carried out in Brisbane. [4] The Applicant says that on 10 July 2002 he was asked by the Operations Manager to go and see Mr Nassibian. He went to the office in which Mr Nassibian was located and Mr Nassibian handed him an envelope with his name on it. That letter apparently contained the letter of dismissal together with a cheque. The letter of termination was not in evidence. Mr Nassibian handed him the envelope and said “I’m sorry”. The Applicant recalls Mr Nassibian saying that it was for “cost cutting” reasons. [5] According to the Applicant he had submitted a budget for 2002 which had been revised and approved and at the time of his dismissal he was exceeding budget. It was the evidence of the Applicant that at this meeting on 10 July 2002 there was no discussion or reference made to his performance or to his sales figures. [6] Whilst the Applicant was employed by Framepack he had been provided with a fully maintained motor vehicle. After the Respondent had taken over the operations of Framepack, the Respondent decided to move away from supplying employees with motor vehicles and instead introduced the concept of employees entering into car leases. The Applicant says that he was given no choice but to enter into such a lease arrangement. At the time of his dismissal the residual value of the car was $15,000.00. The evidence of Mr Nassibian suggests that the market value of such a vehicle would have been at least $15,000.00 as at the date of termination. [7] During the course of the employment the Respondent paid the Applicant an allowance to cover the cost of running the vehicle. In fact the allowance that was paid to the Applicant exceeded the cost of running the actual vehicle that the Applicant had purchased. In that regard the Applicant received on or about 31 December 2000 an amount of $1,485.00, on or about 30 June 2002 an amount of $8,000.00 and on or about 9 August 2002 an amount of $3,274.98 in addition to his salary i.e. an excess cash payout of $12,759.98. [8] The Applicant was given no indication, prior to 10 July 2002, that his position was to be made redundant. I am satisfied on the evidence that some of the work performed by the Applicant whilst employed by the Respondent is no longer being performed by any Brisbane employee of the Respondent. [9] I do, however, have concerns about the failure of Mr Nassibian to explore options, other than redundancy, with the Applicant prior to the termination of his employment. The evidence is that the Applicant is a printer by trade. According to the evidence of Mr Nassibian he was unaware of that fact until cross-examined at the hearing of this application. Mr Nassibian conceded that he did not explore any options with the Applicant other than dismissal. -- 1 of 2 -- 17 January, 2003 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 241 [10] The Respondent has, since the termination of the Applicant’s employment, engaged a printer in the Brisbane plant. That person’s salary was, at the time of hearing of the application, $42,484.00 i.e. an amount in excess of what the Applicant was in receipt of at the time of his termination. The Respondent has also substantially increased the salaries of at least two of its employees since the termination of the Applicant’s employment i.e. one salary increasing by $20,000 per annum and one increasing from $42,484 to $55,000. [11] Section 73(1) of the Industrial Relations Act 1999 (Act) provides that a dismissal is unfair if it is harsh, unjust or unreasonable. In deciding whether a dismissal is harsh, unjust or unreasonable s. 77 of the Act provides that I must consider: a) whether the Applicant was notified of the reason for dismissal; and b) whether the dismissal related to either the operational requirements of the Respondent’s undertaking establishment or service or to the Applicant’s conduct, capacity or performance. [12] The Respondent contends that it decided that it no longer required a sales representative in Brisbane. The Respondent had excess printing work in both Sydney and Melbourne and it intended moving that excess printing work to Brisbane. It no longer required a Sales Account Executive in Brisbane. It was the evidence of Mr Nassibian that a substantial proportion of that sales work was to be performed by employees in Sydney and Melbourne. [13] In my view the Respondent terminated the employment of the Applicant for operational reasons. That, however, is not the end of the matter. Even where there is a genuine need for redundancy, the dismissal may be properly characterised as harsh, unjust or unreasonable. The dismissal may be properly characterised as harsh, unjust or unreasonable because the Applicant could perhaps have been offered a suitable alternative position in the employ of the Respondent: see Wynn’s Winegrowers Pty Ltd v Foster (1986) 16 IR 381 at 384 and Quality Bakers of Australia Ltd v Goulding (1995) 60 IR 327 at 334. [14] In Scott v Westmeats Pty Ltd (unreported, Ryan JR, Industrial Relations Court of Australia, 12 September 1994) it was observed that the failure to consult had meant that there was no exploration of other options with the employee and no inquiries were made as to alternative work which might have been found for that employee. In Quality Bakers of Australia Ltd v Goulding, Beazley J. held that the failure to consult with the employee about the redundancy, the failure to consider alternative employment options with the employee and the failure to provide the employee with any counselling or assistance in relation to the redundancy or in obtaining other employment, made the termination of his employment harsh, unjust or unreasonable. [15] In deciding to make the Applicant’s position redundant, the Respondent at all times hoped to send printing work to Brisbane from Sydney and Melbourne. There was always the potential that more printers would be needed in Brisbane. At no time did the Respondent consult with the Applicant about alternative options to his retrenchment. As it turns out an additional printer has been employed by the Respondent since the termination of the Applicant’s employment. The person responsible for the decision to terminate the Applicant’s employment, Mr Nassibian, did not even know that the Applicant was a printer by trade until the hearing of this application. [16] On consideration of all the evidence I am of the view that the termination of the Applicant was harsh, unjust and unreasonable. [17] The Applicant was however paid four (4) weeks’ pay in lieu of notice and a further seven (7) weeks’ redundancy pay on termination. In my view this payment is not sufficient to make what is otherwise a harsh, unjust or unreasonable termination a fair termination. [18] Reinstatement to the position of Sales Account Executive is obviously not a remedy that is open to me. [19] There is however the potential for re-employment of the Applicant as a printer. In circumstances where Mr Nassibian was only recently made aware of the Applicant’s printing qualification I am prepared to give the parties a fourteen (14) day period to see whether they are able to resolve the issue of relief. A Member of the Commission will be available to the parties to convene a Conference in relation to the matter should the parties so desire. [20] If the parties are unable to resolve the issue of relief by 12 noon on 16 January 2003 then I will issue a further decision on the matter. Order Accordingly. D.M. LINNANE, Vice President. Appearances: Mr R.G. Walters of Walters & Co Solicitors, for the Applicant. Ms V. Lincoln of Printing Industries Association of Australia, for the Respondent. -- 2 of 2 --