Erhardt v Goodman Fielder Food Services Limited [1999] QIRC 2 (2000) 163 QGIG 20

20 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 14 January, 2000 ########################################################################################################################### QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 74(2) extension of time Geoffrey John Erhardt AND Goodman Fielder Food Services Limited (No. B1076 of 1999) VICE PRESIDENT LINNANE 22 December 1999 Application for reinstatement out of time – Key factors in considering an extension of time – Reasonable explanation for relatively short delay – Prejudice to both Applicant and Respondent considered – Applicant’s prospects of success at substantive hearing definitive of failure on leave application DECISION This is an application by Geoffrey John Erhardt (the ‘Applicant’) pursuant to s. 74(2)(b) of the Industrial Relations Act 1999 for leave to extend the time for making application for relief in respect to the termination of his employment with Goodman Fielder Food Services Limited (the ‘Respondent’). The Respondent opposes the application. The Applicant’s employment with the Respondent was terminated with effect as and from 2 July, 1999. The Applicant filed his Dismissal Application on 4 August, 1999. The Dismissal Application was filed some twelve (12) days out of time. The Respondent concedes that the delay in filing was short. In ordinary circumstances the key factors to be considered in the construction and operation of provisions such as s. 74(2)(b) are to be found in the decision of Chief Industrial Commissioner Hall (as he then was) in Breust v Qantas Airways Limited (1995) 149 QGIG 777. These factors will be:– (i) the length of the delay; (ii) the explanation for the delay; (iii) the prejudice to the Applicant if the extension of time is not granted; (iv) the prejudice to the Respondent if the extension of time is granted; and (v) any relevant conduct of the Respondent. Length of Delay In this instance the length of the delay is relatively short i.e. twelve days. Explanation for Delay The explanation for the delay is acceptable. The Applicant had been a long-term employee of the Respondent having commenced employment with the Respondent on or about 28 January, 1975. On or about 21 May, 1999 the Applicant was advised that his position as a Group Manager was to be made redundant as and from 2 July, 1999. The Applicant apparently understood this advice to mean that whilst his position as Group Manager would be made redundant that did not necessarily mean that his employment with the Respondent would be terminated on that date. It was the Applicant’s evidence that this realisation only occurred towards the end of June, 1999. It is also relevant that the Applicant had been absent from work on sick leave from 18 May, 1999 until the date of his termination. Immediately upon the termination of his employment the Applicant suffered a depressive illness and sought medical assistance for this condition. The Applicant’s medical practitioner diagnosed him as suffering an aggravation of a Post Traumatic Stress Disorder suffered as a result of his war service. It was not until 28 July, 1999 that the Applicant commenced to seek advice as to whether he had any avenue of redress in respect of the termination of his employment with the Respondent. The Applicant made contact with Mr Loane’s office on 30 July, 1999 and an appointment was scheduled for 2 August, 1999. The Dismissal Application was filed shortly thereafter i.e. 4 August, 1999. -- 1 of 5 -- 14 January, 2000 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 21 Prejudice The prejudice that the Applicant will suffer if the extension of time is refused is that he will lose the right to argue that his dismissal was unfair. The prospects of success should the matter proceed to trial will have a bearing on the extent of the prejudice likely to be suffered by the Applicant. I will deal with the prospects of success on the substantive application later. The Respondent did not place any material before the Commission going to the issue of the prejudice that it may suffer if the matter was allowed to proceed to hearing notwithstanding the delay. I am thus unable to identify any particular prejudice to the Respondent resulting from the delay in the Applicant filing his Dismissal Application. Respondent’s Conduct I am also unable to identify anything in the Respondent’s conduct in defending the Applicant’s Dismissal Application that would induce me to grant the extension of time. Prospects of Success Whilst the factors identified in Breust v. Qantas Airways Limited are the key factors to be considered in any extension of time application, three caveats have also been identified to that approach:–see Patterson v Medical Benefits Fund of Australia Limited (1998) 159 QGIG 232. These are:– (i) that s. 74(2)(b) vests an unlimited statutory discretion which must always be exercised; (ii) that the time limit of twenty-one (21) days provided for in s. 74(2)(a) must be respected; and, (iii) that the Applicant’s prospects of success at the substantive hearing are always a relevant matter i.e. that where it appears an Applicant has no, or very limited, prospects of success the Commission should not grant an extension of time. As to the latter of those caveats this Commission has been prepared to dismiss an application for an extension of time where it is clear that the substantive application could not succeed: see Marston v Ocean Sky Pty. Ltd. & Ors (1995) 150 QGIG 1131. However the occasions for rejecting an application for an extension of time on the ground that the applicant has poor prospects of success will be few:– see Herwin v Flexihire Pty. Ltd. (1995) 149 QGIG 709 at p. 710 where Mackenzie P observed:– “It is not the function of an Industrial Commissioner to examine minutely the merits of the case upon an application for extension of time in which to apply under s. 175. However, where it is patently clear that the basic facts are essentially uncontested, and that on those facts the prospects of success are minimal, it is not an error of principal for the Industrial Commissioner to take that into account in refusing leave to appeal… I should reinforce that descent into detail and fine distinctions in relation to the evidence is not appropriate upon the hearing of an application for leave to apply out of time but if it is clear that the case must fail as a matter of principle on the best view of the facts from the applicant’s point of view, the futility of the proceedings is a fact which may be taken into account. In my view the Commissioner did not exercise his discretion on erroneous principles and the appeal must be dismissed.”. Further in Petruch v. Davy Kinhill Fluor Daniel Joint Venture (1996) 153 QGIG 543 President de Jersey (as he then was) stated:– “For example, if it appeared that the proposed reinstatement application had no, or very limited, prospects of success, then that might legitimately influence a Commissioner, taken with other relevant considerations, in the determination whether or not to extend time. Such an applicant should in my opinion ordinarily provide at least prima facie evidence that his application has some merit.”. Chief Industrial Commissioner Hall (as he then was) in Ray Johnson v Discovery Bay Developments Pty. Ltd (Receivers and Managers appointed) (1996) 151 QGIG 1010 at p. 1011 stated:– “The matter as to which there is disagreement is the weight to be given to an applicant’s prospects of success on the substantive application. It is contended by Mr Martin of counsel who appears for the applicant that in light of the decision in Hunter Valley Developments Pty Ltd v Minister for Home Affairs and Environment (1984) 58 ALR 305 rather more weight should be given to the circumstance that the Applicant has excellent prospects of success than has hitherto been the case… Further, I continue to adhere to my observation in Breust (at 779) that the strengths and weaknesses of the applicant’s substantive case will not always emerge, and add that in my view it would be inappropriate to permit the hearing of an application for an extension of time to develop into a preview of the trial in order that a view might be formed of the applicant’s prospects of success. In my view, in the ordinary case, an application for extension of time should be a short matter dealt with expeditiously. A conclusion that an applicant could not in any event succeed will usually flow from formation of a view that there is an obstacle which no amount of evidence will overcome, eg. a conclusion that the respondent was not the employer or that the applicant was not an employee.”. President Hall in Savage v Woolworths (Queensland) Pty. Ltd.(1999) 162 QGIG 353 further stressed that in assessing the prospects of success in an application to extend time the merits or lack thereof must be clear cut. From both the Statement of Material Facts and the evidence before me it would appear that the Applicant’s substantive case that the dismissal was unfair can be summarised as follows:– (i) the termination of the Applicant’s employment was not the result of a genuine redundancy; (ii) the Respondent provided no criteria as the basis for terminating the Applicant; (iii) the Respondent provided no advice to the Applicant about the criteria that was to be used by the Respondent in terminating his employment; (iv) the Respondent never investigated the possibility of or the offer of alternate employment with the Respondent; (v) the Respondent never entered into discussions with the Applicant concerning the impending redundancy and failed to provide him with any information concerning the decision making process; and (vi) there was no explanation or investigation of possible alternatives to the termination of the Applicant’s employment. Whether there was a genuine redundancy? The Respondent relied upon the evidence of Leonie Jane Kerley, the Human Resources Manager of the Respondent, to show that the termination of the Applicant was as a result of a genuine redundancy. It appears that the Applicant was provided with Ms Kerley’s Affidavit and Annexures at least one and a half weeks prior to the hearing. This gave Mr Loane a reasonable opportunity to consider the material contained therein and to obtain evidence, if any, to refute the Respondent’s evidence showing that the redundancy was in fact genuine. -- 2 of 5 -- 22 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 14 January, 2000 The evidence of Ms Kerley on the issue of whether or not there was a genuine redundancy is as follows:– • the redundancy and termination of the Applicant’s employment arose out of restructuring following an amalgamation of the business of Goodman Fielder Food Services Limited and Bungy Defiance; • as a result of the restructuring the numbers of persons employed by the Respondent reduced from 251 to 206; • at the time of termination, the Applicant held the position of Group Manager Food Services; • the Applicant had been employed by the Respondent for a period of 25 years in a variety of positions; • prior to the restructuring there were about 20 employees nationally at the Applicant’s Level (i.e. Level 3) and this was reduced to 15 following the restructuring; • all employees at Level 3 were considered as part of the selection process for the 15 positions; • the selection committee for the Group Manager Food Services and Account Manager Food Services consisted of – Ms Kerley; John O’Brien, National Sales Manager for the Food Services Division; National Manager for the area in which the Applicant was then employed; Steven Hood, National Sales Manager; Bruce Young, Managing Director of GF Food Services; Julian Inke, Human Resources Director for GF Food Services and Meadowlea; John Skelly and Andrew Ross, National Sales Managers from Bungy Defiance; and Brian Esplin, a National Sales Manager from the milling side of the business; • those employees not successful in the selection process were made redundant or redeployed; • persons seeking to be redeployed were advised of the need to complete certain documentation and forward that documentation to management; • there was no offer of voluntary redundancies; • as part of the selection process the Respondent determined the critical competencies for each position and ranked those competencies in order of importance. Applicants were rated against each competency and then given an overall rating; • the Applicant was one of two Queensland applicants for the position of Group Manager Food Services, Queensland. Whilst there were interstate applicants for the position the Respondent had already indicated that it’s preference was to employ a Queensland resident in the role. The other Queensland applicant was Mr Cranston. Mr Cranston was ultimately selected for the position of Group Manager Food Services, Queensland; • as a result of the selection process Mr Cranston achieved an overall rating of 270 compared to the Applicant’s rating of 229; • the following documents used in the course of the selection process were tendered:– - Level 3 Selection Process relevant to the selection of the Group Manager Food Services; - the Human Resources Selection Principles used by the Respondent in the selection of persons to fill positions remaining following the restructure; - the self-assessment completed by the Applicant on 12 April, 1999; - the Competency Ranking of the Applicant dated 13 April, 1999; - the Human Resources Selection Principles and Three Phase Assessment process relevant to the selection of the person for the Group Manager Food Services position; - the Interview Guidelines and Competency Interview Guide completed in respect of the Applicant dated 16 April, 1999; and - material from the selection committee, including the rankings of Mr Cranston and the Applicant. The Applicant had the opportunity to adduce evidence that would contradict the abovementioned evidence of Ms Kerley that the termination of the Applicant was as a result of a genuine redundancy. The Applicant did not do so. The Applicant admitted that there were three positions in Queensland at the Level 3 classification following the restructure with four existing Level 3 employees applying for those positions. The evidence is clear that there was a genuine restructure as a result of the amalgamation of Goodman Fielder Food Services Limited and Bungy Defiance and that as a result of that restructure the Applicant’s position was made redundant. Whether the Respondent provided relevant criteria? In paragraph 2(e)(i) of the Statement of Material Facts the Applicant states that “the Respondent provided no criteria upon which the Company relied as a basis for terminating the services of Geoffrey John Erhardt”. The evidence before me indicates that the Applicant was provided with the criteria upon which the Respondent relied as a basis for assessing the applicants for the position of Group Manager Food Services. In this regard I refer to Annexures LJK1(items 1 to 5), LJK6, LJK10, LJK 11 and LJK 18 to the Affidavit of Ms Kerley. In paragraph 2(e)(ii) of the Statement of Material Facts the Applicant contends that the Respondent “provided no advice to Geoffrey John Erhardt about the criteria that was used by the Company in terminating his services”. The Applicant admitted that the selection principles used to decide which employee should be given the position of Group Manager Food Services were the same selection principles which he had used when deciding upon which of his subordinates should be successful in obtaining positions as a result of the restructure. The Applicant admitted that he had gone through the same process with staff who reported to him some two to three weeks prior to his interview with the selection committee. As to the critical competencies used in the selection process, the Applicant had used those same competencies to complete his own self assessment for the position of Group Manager Food Services: see Annexure LTK4 to Ms Kerley’s Affidavit. They were also the same competencies used by Mr Edwards when he completed his supervisor’s assessment of the Applicant: see Annexure LTK5 to Ms Kerley’s Affidavit. -- 3 of 5 -- 14 January, 2000 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 23 In making its assessment of each of the applicants for the position of Group Manager Food Services the selection panel took account of the following:– • the performance of each of the applicants at the interview when assessed against the critical competencies; • the self assessment by each of the applicants; and • the assessment undertaken by each of the applicant’s supervisors. It is clear from the evidence before me that the Applicant was aware of the criteria that was used by the Respondent in determining which of the applicants for the position of Group Manager Food Services would be successful. Investigation of Alternate Employment In paragraph 2(e)(iii) of the Statement of Material Facts the Applicant states that the Respondent “[n]ever investigated the possibility of or the offer of alternate employment with the Company”. Further in paragraph 2(e)(v) the Applicant contended that there “was no explanation or investigation of any possible alternatives prior to Mr Erhardt’s termination of employment”. The chronology of events which was not disputed (Item 10 of Annexure LJK1 to Ms Kerley’s Affidavit) indicated that on 21 May, 1999 the Applicant was advised in correspondence of the re-deployment process. In that correspondence the Applicant was further advised that he was required to complete a two page summary sheet on his preferences and experiences and return that completed documentation to Ms Kerley should he wish to be considered for redeployment: see also Annexures LJK2, LJK3, LJK6, LJK10, LJK11 and LJK18 to Ms Kerley’s Affidavit. Annexure LJK12 contains the letter dated 21 May, 1999 forwarded to the Applicant that stated, inter alia:– “Please also remember that you are eligible for redeployment within Goodman Fielder right up to and including your finishing date as started (sic) above. The process is quite simple and there are many opportunities throughout the Goodman Fielder Group which may be of interest to you. If you would like to be eligible for redeployment, please complete the Personal Information Questionnaire (PIQ) and return to me by fax on (02) 9700 6420.”. The Applicant did not dispute that he received that correspondence. Nor did he dispute the fact that he had not completed the required documentation. The evidence is clear that whilst the Applicant was aware that he was required to complete the necessary documentation and provide it to management he did not give management any indication that he would consider redeployment. Once again it is clear that the Respondent offered to investigate alternate employment for the Applicant but the Applicant did not avail himself of the opportunity. Consultation with Applicant In paragraph 2(e)(iv) of the Statement of Material Facts the Applicant contends that the Respondent “[n]ever entered into discussions with Mr Erhardt about the impending redundancy and failed to provide him with any information concerning the decision making process”. It is abundantly clear from the material which was attached to Ms Kerley’s Affidavit that the Respondent did enter into discussions with the Applicant about the impending redundancy and it did provide him with information concerning the decision making process. In particular I refer to Annexures LJK1, LJK6, LJK10, LJK11 and LJK18 to Ms Kerley’s Affidavit. The Applicant did not dispute that the Respondent conveyed the information contained in those Annexures to him. Relief Sought In his Application the Applicant seeks reinstatement to his former position as Group Manager with Goodman Fielder Food Services Limited. As indicated previously, the Applicant conceded that following the restructure there were only three positions at the Level 3 classification rather than the four that existed prior to the restructure. It is not contested that the four previous occupants of the Level 3 classified position sought to be appointed to the three remaining Level 3 classified positions. The position of General Manager Goodman Fielder Food Services Limited is no longer in existence. As a result of the restructure, Mr Snowden was the successful applicant for the position of Group Manager Bakery, Mr Cranston for Group Manager Food Services and Mr McGuire for Accounts Manager Food Services. Each went through the selection process before being appointed to the respective positions. In such circumstances, I am of the view that the Applicant has very poor prospects, should the matter proceed to hearing, of being successful in obtaining the primary relief sought of reinstatement to the position he once held. As to the remedy of re-employment I again refer to the fact that the Applicant did not avail himself of the opportunity for redeployment. It is thus difficult to see that the Applicant would have any prospects of re-employment should the matter proceed to hearing. When asked why he considered that his termination was unfair the Applicant responded by saying that he thought that the Level of retrenchment pay that he received was unfair. It is not contested that the Applicant received fifty-three (53) weeks’ pay on termination in addition to his leave entitlements. The Applicant contends that the payment of fifty-two (52) weeks’ severance pay was unfair because it was capped at fifty-two (52) weeks and it was assessed on the basis of his base salary. It seems that the Applicant believed that he should have received four (4) weeks’ pay for every year of service because some people who were made redundant as a result of the restructure received uncapped amounts. Ms Kerley explained that Goodman Fielder Food Services Limited and the Meadow Lea food factory operated from the same site. Whilst the two organisations were part of the Goodman Fielder Group they operated quite separately and that different industrial instruments covered employees of the respective organisations. The enterprise bargain, which applied to the workers at the Meadow Lea factory, gave them entitlement to four (4) weeks’ severance pay for each year of service uncapped. Employees made redundant as a result of the restructure who were covered by this industrial instrument were paid out in accordance with the terms of that industrial agreement. It is clear that the Applicant was not employed by Meadow Lea but was in fact employed by Goodman Fielder Food Services Limited. Ms Kerley’s evidence was that all salaried staff members of the Respondent who were made redundant as a result of the recent restructure were all paid in accordance with the Goodman Fielder Food Services policy i.e. the payment was capped at fifty-two (52) weeks and on the base salary. On the issue of the base salary it appears that those who were made redundant from Defiance Milling (i.e. the merging company) were paid their redundancy entitlements on their car allowances as well as their base salary. This apparently was as a result of the policy that existed at Defiance Milling. Such a policy did not exist in so far as Goodman Fielder Food Services employees were concerned. -- 4 of 5 -- 24 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 14 January, 2000 Given that the Commission’s jurisdiction to award compensation in unfair dismissal cases is limited to an amount equivalent to twenty-six (26) weeks’ pay the Applicant’s prospects of obtaining any further compensation from the Commission should his application be allowed to proceed are poor. In all of the circumstances I find that the Applicant has exceedingly poor prosects of success in obtaining any relief from this Commission under Part 2 of Chapter 3 of the Industrial Relations Act 1999. Conclusion The legislature has imposed a twenty-one day time limit for the filing of Unfair Dismissal applications. That decision must be respected. In this case the delay is short, there is an acceptable explanation for the delay and there is no prejudice to the Respondent flowing from the late filing of the application. These factors go to support the granting of leave to extend time. The fact that the Applicant will lose the right to argue that his dismissal was unfair if the extension of time is not granted is also a matter favouring the granting of the application. In circumstances where the Applicant has little or no prospects of success in the Unfair Dismissal application should it proceed to hearing there would appear to be no, or very little, prejudice to be suffered by the Applicant. I am of the view that the matters raised by the Applicant in his Unfair Dismissal Application and in evidence before me suggestive of the fact that the dismissal was unfair are unable to be sustained. It is clear that there was a genuine restructure of the organisation following the amalgamation of Goodman Fielder Food Services Limited and Bungy Defiance and that as a result of that restructure the Applicant’s position was made redundant. I am further of the view that it is clear that the Applicant was given an opportunity to apply for the remaining three Level 3 positions. He applied and he went through a fair selection process. He was unsuccessful in obtaining one of those positions. The evidence is again clear that he was asked if he wanted to be considered for other positions within the organisation but the Applicant failed to respond and made no attempt whatsoever to appraise management that he wished to be considered for alternate positions. At no time during the course of the hearing did the Applicant indicate anything other than he sought a greater redundancy payment having failed to be selected for the position of Group Manager Food Services. In addition, the Applicant has little, if any, prospects of obtaining reinstatement, re-employment or compensation given the matters referred to earlier in this decision. The lack of merit in the substantive application is clear cut in this instance. It cannot be an appropriate exercise of the statutory discretion given in s. 74(2)(b) to revive a statute barred action in order that it may fail. In these circumstances, I am persuaded that I should not grant leave to extend the time. I dismiss the application. Dated this twenty-second day of December, 1999. D. M. LINNANE, Vice President. Appearances:– Mr M. Loane of Michael Loane and Associates for the Applicant. Mr J. Murdoch of Counsel, instructed by Blake Dawson Waldron, for the Respondent. Released: 22 December 1999 ########################################################################################################################## -- 5 of 5 --