[Extract from Queensland Government Industrial Gazette,
dated 6 May, 2005, Vol. 179, No.1, pages 4-6]
QUEENSLAND INDUSTRIAL RELATIONS COMMISSION
Industrial Relations Act 1999 – s. 74 – application for reinstatement
John Mohan AND Express Hydraulics Pty Ltd (No. B34 of 2005)
VICE PRESIDENT LINNANE 21 April 2005
DECISION
Application for reinstatement – Extension of time granted – Dismissal based on operational reasons – Dismissal found
to be unfair as alternatives to dismissal were not considered – Element of harshness or unjustness in the timing of
decision to dismiss – Remedy or reinstatement or re-employment found to be impracticable – Compensation ordered –
Industrial Relations Act 1999 ss. 74 and 78.
[1] This is an application by John Mohan (Applicant) seeking reinstatement to his former position of Foreman of the
Machine Shop with Express Hydraulics Pty Ltd (Respondent) pursuant to s. 74 of the Industrial Relations Act
1999.
Extension of Time
[2] The Applicant was dismissed from his employment on 17 December 2004. His application for reinstatement
was filed on 10 January 2004 i.e. twenty-four days after the date of dismissal. Section 74(2)(a) requires that any
such application be filed within twenty-one days after the dismissal takes effect unless a further period is allowed
on application.
[3] The Applicant seeks the time for filing his application to be extended. The Applicant has a reasonable reason for
the delay. He went to visit his son on 22 December 2004 – a visit which had been planned for some time. He
was not aware of the time period until 7 January 2004. Further the delay is small i.e. three days. There appears
to be no particular prejudice to the Respondent whilst the prejudice to the Applicant is that he would be unable to
pursue his application.
[4] In all the circumstances I extend the time for filing the application to 10 January 2004.
Merits
[5] As for the merits of the case, the Applicant commenced employment with the Respondent on 16 September 2002
having been provided with a written document setting out the terms of his employment (terms of employment):
see Attachment 1 to Exhibit 3 in the proceedings. The Applicant was originally employed as the Respondent’s
Workshop Foreman. He was later transferred to a new position i.e. the Foreman of the Machine Shop. This
transfer had nothing to do with any conduct, capacity, or performance issues. In fact it was to the contrary.
[6] The Applicant’s terms of employment stated that the remuneration was based on a seven day week. The
Applicant questioned this and was told it would only be in an unusual circumstance that the Applicant would
have to work seven days in a week. The Applicant never signed the terms of employment having advised Kevin
Collins, the Respondent’s General Manager, that he would not sign the document until the terms were varied and
he was not required to work seven days in a week.
[7] Nevertheless the employment continued and the terms and conditions, other than hours of work, appear to be
those contained in the terms of employment document. According to the Applicant he worked fifty-two hours
per week for the so-called base rate of $67,600.00. Remuneration however became an issue for the Applicant.
The entitlement to remuneration is provided for in clause 4 of the terms of employment document:
“REMUNERATION
Your remuneration consists of a base salary and Superannuation component as shown below:
Base Salary $67,000.00…”.
[8] Within a month of employment the Applicant stated that he became aware that the Respondent was only
deducting $50.00 per week in superannuation contributions instead of the 9% that he believed he was entitled to.
The Applicant queried this with Melody Jacklin, the Respondent’s Managing Director. The Applicant was then
referred to Mr Collins who said he would enquire about the matter. It was the Applicant’s evidence that no
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person responded to his inquiry in this regard. The Applicant was advised that the matter of any unpaid
superannuation contributions was not a matter that could be addressed in this proceeding.
[9] According to the Applicant, on 17 December 2004, he was approached by Mr Collins who said “John, there is no
easier way to put this, due to economic circumstances we have to let you go”. The Applicant asked whether
there was any other way and Mr Collins responded “no”. The Applicant asked when the termination was
effective from and Mr Collins said “now”. Mr Collins then provided the Applicant with a pay explanation slip
and a cheque saying that he had checked the amount with “Industrial Relations” to make sure that the
Applicant’s termination pay was correct. The Applicant collected his tools and belongings and immediately left
the Respondent’s work site.
[10] The Applicant is of the belief that the termination of his employment was as a result of him querying the
superannuation contribution paid by the Respondent.
[11] The Respondent raised no issue whatsoever concerning the Applicant’s ability to perform the duties of the
position.
[12] Evidence for the Respondent was given by Mr Collins. It was Mr Collins’ evidence that the Applicant was
terminated for operational reasons. Mr Collins says that the Applicant was originally employed as Workshop
Foreman and was later appointed to the position of Foreman of the Machine Shop – a newly created position.
There are three distinct operational areas – the Workshop, the Warehouse and the Machine Shop.
[13] Mr Collins’ evidence on operational grounds for the dismissal consists of the following:
when the Applicant became the Foreman of the Machine Shop he was not replaced as Workshop Foreman
although at the time of dismissal a person was performing the duties of Workshop Foreman;
an internal Accountant left and was not replaced;
a general hand in the store left and was not replaced; and
two fitters left and only one was replaced.
[14] Mr Collins said that he and the directors of the Respondent had been considering the company’s viability for
some six weeks prior to the termination of the Applicant. His evidence is that the Machine Shop did not have
sufficient work to justify the Applicant’s full time employment. No financial or production data was relied upon
by Mr Collins to support his contentions that there were operational grounds for the termination of the Applicant.
[15] The Applicant on termination was paid his entitlement to 3 weeks’ notice as he was over 45 years of age, annual
leave and expenses. He was paid no severance pay. Mr Collins’s evidence was that as the Respondent was an
employer who employed employees who worked a total of fewer than 550 hours on average per week over the
previous twelve months: see clause 18(a) of the Termination, Change and Redundancy Statement of Policy.
Once again no data was provided to the Commission establishing that the Respondent was such a “small
business” and therefore exempt from the Termination, Change and Redundancy provision. In all of the
circumstances I am prepared to accept that the Respondent was such a “small business” as it was not contested
by the Applicant however I would think that further evidence of this fact should have been provided i.e. evidence
other than an assertion of fact.
Was the dismissal unfair?
[16] The Respondent did not discuss any alternative to dismissal with the Applicant prior to dismissal. The Applicant
was originally employed as the Workshop Foreman. He was later transferred to the position of Foreman of the
Machine Shop on the same terms and conditions as he was originally employed. The position of Workshop
Foreman was not made redundant – only the position of Foreman of the Machine Shop. Yet no consideration
was given to returning the Applicant to the position of Workshop Foreman when it was decided that the position
of Foreman of the Machine Shop was to be made redundant. Mr Collins’ evidence was that had he and the
directors considered returning the Applicant to the Workshop Foreman position he would have had to “move
someone else to do that”.
[17] Nor was any alternative arrangement discussed with the Applicant e.g. a position at a lower level than Foreman
or a casual position as Foreman of the Machine Shop. The Applicant was not offered any casual work in the
Machine Shop on termination even though such work has been available on an ongoing basis since 17 December
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2004 and has been performed by casual staff. Had the Applicant been given the opportunity of performing this
work over the Christmas and January period it would have alleviated the difficulties faced by the Applicant in
not receiving income during this period and enabled him to find alternative work whilst receiving some level of
income.
[18] In the circumstances I find that the dismissal of the Applicant was not because he questioned the occupational
superannuation contributions made by the Respondent on his behalf. There was no evidence to support the
Applicant’s contention in this regard. Nor was the termination of the Applicant’s employment a result of any
conduct, capacity or performance issues. That leaves the only reason for the termination as operational reasons.
I find this even though there was a paucity of evidence before me to warrant such a finding.
[19] I do however find that the dismissal was harsh, unjust and unreasonable and therefore unfair. The Respondent
did not explore alternatives to dismissal with the Applicant and it did not further consider that the Applicant had
competently performed the role of Workshop Foreman prior to being transferred to the position that was
ultimately made redundant. Even though the evidence is that Mr Collins and the directors had been discussing
the Respondent’s viability for some six weeks prior to the termination of the Applicant no one informed the
Applicant of these concerns and/or the potential that he might lose his job. I am also of the view that the timing
of the dismissal i.e. 17 December 2005, added to the harshness and unjustness of the dismissal. As such the
Applicant was deprived of payment for public holidays over this time. Further, obtaining alternative
employment at this time is known to be exceedingly difficult and the Respondent ought to have considered this
before dismissing the Applicant one week prior to Christmas Day.
Remedy
[20] Primary remedy for unfair dismissal is reinstatement/re-employment: see s. 78 of the Industrial Relations Act
1999. It is only when reinstatement/re-employment is found to be impracticable that compensation can be
considered. I have accepted that the termination of the Applicant was for operational reasons. In those
circumstances I find that reinstatement/re-employment of the Applicant is impracticable. Further the Applicant
has relocated to Mount Isa and is currently employed.
[21] I therefore find that compensation is a more appropriate remedy. Following dismissal the Applicant commenced
to receive unemployment benefits on 11 January 2005. He received approximately $1,030.00 in unemployment
benefits. He then commenced employment with Cava Hydraulics and Auto Electrics Pty Ltd at Mount Isa on 22
February 2005 having relocated to Mount Isa to get employment. In this position the Applicant receives
$3,935.00 gross per fortnight i.e. $102,310.00 per annum. He is thus in receipt of an income greater than the
income received whilst employed by the Respondent.
[22] The Applicant only seeks an amount of compensation that would reimburse him for the loss he has suffered.
The Applicant has obtained alternative employment and did so at an early stage after termination. That he has
had to relocate to Mount Isa in order to obtain an income in the range that he was receiving whilst employed by
the Respondent is evidence that he has gone to extreme lengths to mitigate his loss.
[23] It was submitted that I should deduct from any loss suffered by the Applicant the amount the Applicant was paid
in annual leave entitlements on termination. In my view employees who are dismissed from employment should
not have any entitlements paid on termination deducted from any amount of compensation. Entitlements have
been earned by the dismissed employee as a result of the employment with the former employer. The former
employer should not be benefited because the former employee had entitlements owing on termination.
[24] The Applicant was terminated on 17 December 2004. He received three weeks’ pay in lieu of notice. He
commenced work with his new employer on 22 February 2005 having received an amount of $1,030.00 in
unemployment benefits in the intervening period. I estimate that the loss to the Applicant is the income he
would have received over a six week period @ $1,300.00 per week i.e. $8,060.00 less $1,030.00 received in
unemployment benefits. But for the Applicant’s preparedness to go to Mount Isa the Respondent may have been
liable for a much greater sum of compensation.
[25] The Termination, Change and Redundancy Statement of Policy, had it been applicable to the employment of the
Applicant, would have been entitled to the payment of six weeks’ pay as he had completed two years continuous
service with the Respondent.
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[26] In the circumstances I consider an amount, the equivalent of six weeks’ pay, to be an appropriate amount of
compensation. From that there will be a deduction of the $1,300.00 received by the Applicant in unemployment
benefits. I therefore order that the Respondent, Express Hydraulics Pty Ltd, pay to the Applicant, John Mohan,
an amount of $6,500.00 within twenty-two days of the release of this decision.
Order accordingly.
Appearances:
D.M. LINNANE, Vice President.
Mr J. Mohan, Applicant.
Mr G. Muir of Employer Services on behalf of Express
Hearing Details:
Hydraulics Pty Ltd.
2005 29 March
Released: 21 April 2005
Government Printer, Queensland
The State of Queensland 2005.