Quality Bakers of Australia Ltd v. John Goulding Transport Workers Union of Australia

(1995) 60 IR 327

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(Decision by: Beazley J)

Quality Bakers of Australia Ltd
v. John Goulding Transport Workers Union of Australia

Court:

Judge:
Beazley J

Judgment date: 23 June 1995

Sydney

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Decision by:
Beazley J

The Proceedings

These are two applications under s 377(1) of the Industrial Relations Act 1988 (the Act) to review decisions of Judicial

Registrars sitting in Perth given on 18 January 1995 and 10 November 1994 respectively. An application for review pursuant to s 377 is by way of a hearing de novo : Gibson v Bosmac Pty Ltd; APESMA v Deniliquin Council . Pursuant to subs 377(2), the Court may make any order it considers appropriate in relation to the matter in respect of which the delegated power was exercised.

The applications before the Judicial Registrars were each brought pursuant to s 170EA of the Act, which provides:

"A person ("the employee") may apply to the Court for a remedy in respect of termination of his or her employment."

Mr Goulding and Mr Wickham each allege that the termination of his employment with Quality Bakers Australia Limited (Quality Bakers) was harsh, unjust or unreasonable within the meaning of s 170DE of the Act. Quality Bakers denies that the terminations contravened s 170DE, alleging that each had been made redundant and had been paid reasonable termination pay.

Mr Goulding and Mr Wickham were each bread carters employed by Quality Bakers, a subsidiary of Goodman Fielders Limited, at its Malaga bakery in Perth. Each was dismissed allegedly because his position had become redundant due to a restructuring directed at eliminating unprofitable customers. Farrell JR declared that the termination of the employment of John Goulding (Mr Goulding) by Quality Bakers was unfair and ordered that Mr Goulding be reinstated as from 23 January 1995. Linkenbagh JR dismissed Mr Wickham's application.

There was the same legal representation in each matter both before the Judicial Registrars and before me. On the applications for review, the Goulding matter proceeded first. However, both legal representatives stated that the same submissions should be taken as being made in the Wickham matter as in the Goulding matter. No separate submissions were addressed in the Wickham matter. It is convenient therefore that I deal with the Goulding matter first.

THE GOULDING MATTER

The application was heard by the Judicial Registrar pursuant to delegated authority conferred by s 376 of the Act. The evidence before the Judicial Registrar consisted of the affidavit evidence filed in the Goulding matter and the cross-examination of the deponents to the affidavits. In addition, by consent, the affidavit and oral evidence in the Wickham matter, which had been heard sometime earlier, was admitted as evidence in the Goulding matter.

On the application for review, the parties relied upon the same evidence as was before the Judicial Registrar. Directions were made for the filing of additional affidavit evidence. However, as no evidence was filed in accordance with those directions, no other affidavit evidence was adduced on the application for review. Nor were any witnesses cross-examined.

Background facts

The appellant had been employed as a bread carter by Quality Bakers at its Malaga bakery in Perth since 10 March 1978. On 15 April 1994, Mr Goulding was advised by Mr Milligan, Quality Bakers' sales manager, that a decision had been made to reduce the number of bread trucks on the road and that Mr Goulding was being made redundant. He was advised that a redundancy package would be available to him under an agreement with the Transport Workers' Union (TWU) and that he would receive a redundancy payment of 26 weeks pay. Mr Milligan gave evidence that he told Mr Goulding that he could finish work that day and take a week's pay in lieu of notice or finish the following week.

Mr Goulding was shocked by the advice that he was to be made redundant. In his evidence, he disputed that Mr Milligan told him he could take a week's pay in lieu of notice or work out the week. He said that, upon being told that he was to be made redundant, he told Mr Milligan that he wanted to go home and discuss the matter with his wife and would prefer another meeting. He also said that prior to his meeting with Mr Milligan, he had heard rumours that his employment was to be terminated on 22 April, but that he had no formal indication from his supervisor or by management that that was the case. There is no dispute that Mr Goulding was not advised of his termination until the first meeting with Mr Milligan.

Mr Goulding said that he made an appointment to see Mr Milligan at 11.30 am on 18 April 1994, but that Mr Milligan was not available to see him at that time. Mr Milligan had no recollection of that meeting being arranged. As Mr Goulding still sought a meeting with Mr Milligan, an appointment was made for 21 April 1994. At the meeting on that day, Mr Milligan told Mr Goulding that he would be finishing his employment the following day, 22 April 1994. He was shown details of his redundancy pay out, which specified he was entitled to the "maximum entitlement" of 26 weeks. The reference to the "maximum entitlement" was a reference to the period of termination pay which Quality Bakers alleges it had agreed with the TWU would be paid in respect of redundancies at the bakery. There is a dispute as to whether there was any such agreement. A week after the meeting with Mr Milligan, Mr Goulding received a statement of his "Termination Pay Calculation", including the calculation of a redundancy payout of 26 weeks.

Redundancies at Malaga bakery

It appears that sometime in 1993, Goodman Fielders decided to restructure Quality Bakers and that it appointed consultants to advise it in relation to the restructuring. Part of a draft report dated 4 November 1993 entitled "Cost Reconstruction" set out the following approach to the restructuring:

"Sales, Marketing and Distribution Rationalising the customer base, eliminating small unprofitable customers and re-blocking the distribution of product could generate annual savings of approximately $3,910,000.

•

Rationalisation of the customer base is occurring at a limited number of bakeries.

-

The level of rationalisation varies significantly between these bakeries.

-

The decision to rationalise is bakery based.

-

The break-even point to service customers is approximately 50 units per week.

-

Servicing customers with weekly sales of less than 50 units results is unprofitable."

There was no evidence as to the status of this draft report and its relevance is therefore questionable. However, there was evidence that monthly management meetings were held at the Malaga bakery from late October 1993, during which customers and customer round viability were reviewed. Customers who purchased less than 50 units (loaves) per week were targeted as unprofitable. An original list of 900 such customers was prepared. Eventually it was proposed that about 400 customers be eliminated and that the number of bread runs would be consequentially reduced. A complete assessment of all runs was undertaken. By 29 April 1994, two bread runs had been eliminated and at a management meeting held that day it was decided that two more runs were to be eliminated by June, 1994. As events turned out, one of those runs was Mr Goulding's. The other was Mr Wickham's.

Negotiations with the TWU

There was no dispute that there had been negotiations between Quality Bakers and the TWU in relation to the proposed redundancies. The evidence indicates there were three or perhaps four meetings at which the matter was discussed. The negotiations had commenced in March 1994 between Mr Scott, Quality Baker's State General Manager, and Mr Burton, an organiser employed by the TWU, whose duties included "look[ing] after the bread industry". The matter of redundancies at the Malaga bakery was first raised by Mr Scott, in passing, at a breakfast meeting with Mr Burton on 15 March 1994. Mr Scott informed Mr Burton that there was to be a reduction in the number of drivers at the bakery and that it was desired that a redundancy agreement be developed. At a subsequent meeting, Mr Scott said that he discussed with Mr Burton the employees who were to be made redundant. He also said that, during the course of one of the meetings, he agreed to increase the period of the redundancy payout from 13 weeks to 26 weeks "in recognition that [Quality Bakers] had the right to choose the employees to be made redundant".

Quality Bakers arranged for the Chamber of Commerce and Industry (the CCI) to draft a redundancy agreement between it and the TWU which, Mr Scott said, reflected the terms of his agreement with Mr Burton. Clause 9 of the draft agreement provided that Quality Bakers had the right to choose which employees were to be made redundant. Mr Scott alleged that he gave a copy of the draft agreement to Mr Burton in early April. He also said that he asked Mr Burton what he should do if any of the drivers objected to being made redundant. He said that Mr Burton replied "that I should call him and he would sort it out". He also said that Mr Burton told him that the agreement was acceptable to the union.

Mr Scott gave evidence that shortly after giving Mr Burton the draft agreement, he indicated to Mr Burton that there needed to be amendments to one of the clauses because of changes in Federal legislation. He said that Mr Burton responded that that was "fine" and that he should send the agreement to Mr Waddell, an industrial officer employed by the TWU. Mr Burton, at that time, was due to go into hospital. Mr Scott said that he forwarded the agreement to Mr Waddell and that in a telephone conversation, Mr Waddell informed him that the agreement was acceptable to the union.

Mr Scott said that so far as he was aware, Mr Burton had authority to negotiate on behalf of the union and that he considered that once he had reached agreement with Mr Burton, Quality Bakers had an agreement with the union. He said that, save in one case of an enterprise bargaining agreement (about which he was uncertain whether the union had signed but which had been implemented) he had reached agreement with Mr Burton in respect of other industrial matters, which had been settled on the basis of the verbal arrangement arrived at between them and that a written agreement had not been involved. He saw this matter as being no different. It should be noted however, that those verbal agreements related to "problems on the floor", such as overtime, which I consider to be of a very different nature from the present matter.

Mr Burton's evidence was substantially at odds with that of Mr Scott's. Mr Burton denied that there was ever any understanding that Quality Bakers could choose which employees were to be made redundant. He also denied that there was any discussion of the persons who would be made redundant. Rather, he said that Mr Scott told him in early April that three drivers had agreed to accept the redundancy package. He said that he was never provided with a list of those drivers, nor was he told their names. Mr Burton said that it was indicated to him, during the course of the three to four discussions he had in relation to the redundancies, that the persons who were being considered were in the 59 to 60 age group and who could not cope with their rounds. He said that he told Mr Scott that should those drivers not accept the redundancy, Quality Bakers would have to call for volunteers. He said that he never indicated to management that he would talk to the employees "to accept termination". However, he said:

"I did indicate to Murray Scott that should the drivers not accept, I would organise a meeting with them to discuss the possibility that the company might take alternative action of disciplinary proceedings against them, if they could not perform their job".

Mr Burton denied that Mr Scott gave him a copy of the draft agreement, but recalls that he was told that an agreement was going to be sent to "our office". He said that as he was going into hospital, he asked Mr Waddell to "have a look" at it. He recollected having seen a document that Mr Scott told him had been provided or drafted by the CCI but he was not given a copy of the document, nor had he read any draft agreement until after these proceedings had commenced. Mr Waddell gave affidavit evidence in these proceedings in support of Mr Goulding's application for an extension of time but he gave no evidence as to whether he had told Mr Scott that the agreement was acceptable to the union. He was available at the hearing before the Judicial Registrar to be cross examined but was not called for cross examination. Mr Burton denied that he had authority to finalise any agreement with Mr Scott and said that the state secretary was the person with the authority to finalise and execute agreements on behalf of the union. The state secretary of the union gave unchallenged evidence to the same effect.

Save for Mr Scott's evidence that Mr Waddell told him that the draft agreement was acceptable, there is no evidence as to whether the draft agreement was ever considered by the TWU or whether the TWU consulted with the local representatives at the Malaga bakery about the negotiations with Quality Bakers. It is clear, however, that the TWU did not consult with the bread carters at the Malaga bakery nor was there any consultation by management. Mr Goulding and Mr Wickham had only heard rumours about redundancies.

Issues

It was submitted on behalf of Mr Goulding that this was not a case of a genuine redundancy and that, therefore, there was no valid reason for the termination of employment relating to the operational requirements of the business. Alternatively, it was submitted that even if there was a genuine redundancy, the dismissal was harsh, unjust or unreasonable as Quality Bakers failed to consult Mr Goulding in relation to the redundancy. It was submitted that the employer bore the onus both of proving that the termination arose out of the operational requirements of the business and that the dismissal was not harsh, unjust or unreasonable and that Quality Bakers had not discharged the onus in either respect.

Counsel for Quality Bakers accepted that pursuant to s 170EDA(1)(a), the employer bore the onus of proving that the termination arose out of the operational requirements of the business, but submitted that, pursuant to s 170EDA(1)(b) the employee bore the onus of proving that the termination was harsh, unjust or unreasonable. He submitted, however, that the only basis upon which a redundancy could be found to be harsh, unjust or unreasonable was on the basis that the employer had employed unfair selection criteria in relation to the termination. No question of consultation thus arose. Thirdly, even if fairness required consultation, the negotiations with the union were sufficient to discharge its obligation to consult. Fourthly, even if the termination was otherwise harsh, unjust or unreasonable, the 26 weeks redundancy payment overcame the effect of any unfair treatment.

Onus

It is convenient to deal first with the question of onus.

Section 170EDA provides:

"(1) If an application under section 170EA alleges that a termination of employment of an employee contravened subsection 170DE(1):

(a)

the termination is taken to have contravened subsection 170DE(1) unless the employer proves that, apart from subsection 170DE(2), there was a valid reason, or valid reasons, of a kind referred to in subsection 170DE(1); and

(b)

if the employer so proves, the termination is nevertheless taken to have contravened subsection 170DE(1) if the applicant proves that, because of subsection 170DE(2), the reason or reasons proved by the employer were not valid."

The meaning of this section is clear. The onus is on the employer to establish that there was a valid reason for the termination of employment in the terms of s 170DE. Once it is established that there was a valid reason or reasons for the termination, the onus is upon the employee to prove that the termination was harsh, unjust or unreasonable.

Termination of employment

Section 170DE provides:

(1)" An employer must not terminate an employee's employment unless there is a valid reason, or valid reasons,...based on the operational requirements of the undertaking, establishment or service."

(2) A reason is not valid if, having regard to...those operational requirements, the termination is harsh, unjust or unreasonable. This subsection does not limit the cases where a reason may be taken not to be valid."

In the present case, the respondent relied upon the redundancy of Mr Goulding's position as constituting a valid reason for the termination of his employment.

Was there a genuine redundancy?

Mr Goulding's solicitor submitted that Quality Bakers had not proved that there was a need to restructure the business on economic grounds, which, she submitted, was a necessary ingredient of a genuine redundancy. She further submitted that the redundancy was based upon the terms of the alleged agreement with the union, and not upon any reason relating to the operational requirements of the business. Finally, she submitted that Quality Bakers had not established that there was no other job available in which Mr Goulding could be employed and, for that reason also, had not established that there was a genuine redundancy.

There was no dispute that "the operational requirements" of a business may include redundancy. A redundancy will arise where an employer has labour in excess of the requirements of the business; where the employer no longer wishes to have a particular job performed; or where the employer wishes to amalgamate jobs: R v The Industrial Commission of South Australia; Ex Parte Adelaide Milk Supply Co-Operative Ltd (1977) 44 SAIR 1202 per Bray CJ at 1205; Gromark Packaging v FMWU (1992) 46 IR 98, per Franklyn J at 105. It is not necessary for the work to have disappeared altogether. As was said in Bunnetts' Case (1989) AILR 356:

"Organisational restructuring may result in a position being abolished and the functions or some of them being given to another or split amongst others."

In the present case, there is evidence that Quality Bakers was engaged in a cost-effectiveness appraisal of its bread carting operations and that it had decided not to service customers it identified as unprofitable. It made a consequential decision that the number of bread runs had to be reduced. Mr Goulding's solicitor submitted that Quality Bakers had to prove that its approach to this restructuring was justified on economic or financial grounds and that it had not done so. I do not agree. Part VIA provides, relevantly, that there must be a valid reason for any termination of employment based upon the operational requirements of the business. An employer might decide to make certain positions redundant with the sole intention of increasing the profitability of an already profitable business. Such a decision would relate as much to the operational requirements of the business as would a decision as to redundancies taken in the case of a business which was in a parlous financial condition or when a certain type of work was no longer undertaken by the business. If the submission was correct, it would be necessary in every case of termination because of a redundancy for an employer to call expert economic or financial evidence to support an operational decision to make jobs redundant and the court would become the arbiter of whether the employer's operational decision was justified. There is nothing in the Act to justify such an approach.

In my opinion, there was sufficient evidence to establish that the redundancy in this case was based upon the operational requirements of the business, namely, the elimination of unprofitable customers which had the consequential effect of a reduction in the number of bread runs.

It follows from this finding that I do not accept the submission that the only reason for Mr Goulding's termination was that Quality Bakers believed it had the right to terminate because of the alleged existence of an agreement with the union. It is true that Quality Bakers alleges that it believed it had an agreement with the union, which included a term that it had the right to choose which employees would be terminated and that it acted on that basis. Those factors, if accepted, might explain the way the termination was effected. They do not negate the existence of a valid reason for the termination arising from the restructuring.

It was next submitted that, as Quality Bakers had not called any evidence to prove there was no job which Mr Goulding could perform, it could not be established that this was a genuine redundancy. This submission invokes a meaning of redundancy which is far too wide. Redundancy relates to the work performed by the employee, in this case, that of bread carter. If the employer no longer requires certain work to be performed, the position or job becomes redundant to the employer's requirements. In this case, Quality Bakers made a decision in relation to unprofitable customers and the reduction of the number of bread runs, one of which was Mr Goulding's. Mr Goulding's position thereby became redundant. However, the availability of other types of jobs may be relevant to whether the termination was harsh, unjust or unreasonable.

It follows that subject to s 170DE(2), Quality Bakers has established there was a valid reason for the termination of Mr Goulding's employment as a bread carter based upon the operational requirements of the business.

Whether the termination was harsh, unjust or unreasonable Even in the case of a genuine redundancy, the termination of employment of a particular employee may be harsh, unjust or unreasonable: Needham v Shepparton Preserving Company Limited (1991) AILR 395; Cheesman v Kinhill Engineers Pty Ltd 59 SAIR 168; Corkrey v General Motors Holden Limited (1986) AILR 429; Hemmings v CPS Credit Union (1991) 58 SAIR 421.

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: Corkrey v General Motors Holden Limited. 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: Wynn's Wine Growers Pty Ltd v Foster (Print I.42/1986); Corporation of the Town of Gawler v Day 55 SAIR 369 at 383.

The need for consultation with employees and, if applicable, the employees' union, in the case of workplace change or restructuring, has consistently been recognised as an essential element of fairness in the relationship between employee and employer. As long ago as 1968, the Full Bench of the Commonwealth Conciliation and Arbitration Commission (1968) 122 CAR 339 at 344-5 said, in respect of the introduction of technological change:

"When employers are contemplating the introduction of computers and other automatic devices which may have serious effects on employees such as termination of employment or transfer interstate it is essential that both the employees and the union concerned should be informed of and involved in the planning as soon as possible. Many real human problems may be involved which may not be known to company executives and they, with the best will in the world, may take steps which do not help to solve them. It is our view that employees and their welfare are as important in the planning of a change of the kind we have had to consider as any other aspect of the change and that they, both individually and through their union, should be brought in at the planning stage. When brought into the planning both employees and the union should in their turn attempt to understand the problems which the employer faces and co-operate with him to try to find a reasonable solution.""

This passage was approved by Wilson J in Federated Clerks' Union v Victorian Employer's Federation (1985) 54 ALR 489 , a case which also involved technological change. In that case, Wilson J further said at 511:

"Consultation between employers and employees, preceded by the distribution of adequate information is not only sensible but essential if commerce and industry are to meet the challenge of progress in a spirit of harmony and with some regard for human dignity."

The principle of fairness propounded in these cases applies to all aspects of the employer/employee relationship. In White v Douglass Diagnostic (1993) 60 SAIR 142, which involved a termination on the basis of redundancy, the Industrial Commission of South Australia held that a failure to consult in that case resulted in a harsh, unjust or unreasonable termination of employment. The Commission stated at 148:

"Given [the employees'] relatively senior status, fairly narrow specialisation of work activity and her age (46 years) one might have expected that some offer of out replacement counselling or even some transitional employment for a brief period might have been proffered."

The Commission also adopted the statement of Shiels CC in Sobdinow v Quality Bakers Australia Limited (Industrial Relations Commission of NSW, 11.2.93), that:

"as a matter of industrial fairness it behoves a responsible employer to properly discuss with the employee concerned the grounds and reasons for such redundancy and to put into effect appropriate counselling and/or advisory services to assist the employee at such a traumatic time".

In Corkery v General Motors-Holden's Limited (1986) 53 SAIR 531 at 538, Stanley J stated that:

"[i]n the current climate of industrial relations any reasonable employer who is seeking to retrench or make redundant part of his workforce should endeavour to follow certain basic principles, particularly where the employees are represented by a recognised union".

His Honour stated that, in the case of a redundancy:

"(a) The employer [should] give as much warning as possible of impending redundancies so as to enable the union and the employees who may be affected to take early steps to inform themselves of the facts, to consider possible alternative solutions and if necessary to find alternative employment either with the employer or elsewhere.

(b) The employer [should] consult with the union to seek to establish the criteria to be applied in selecting the employees to be made redundant.

(c) In attempting to decide the criteria to be applied attention should be paid to such matters as length of service, efficiency, experience and attendance records where such matters can be objectively checked, and do not depend solely on the opinion of the person making the selection.

(d) The employer [should] then seek to see that the selection is made fairly in accordance with the established criteria and will consider any representations that may be made in respect of the selection.

(e) the employer [should] seek to see whether instead of dismissal the employee can be offered alternative employment."

His Honour continued:

"The intent is that where redundancies or retrenchments must unfortunately occur, the impact should, as far as is humanly possible, be minimised, so that the employees directly concerned can see that the selection process has been carried out fairly. A departure from those principles without good and just reasons may well lead to the conclusion that the dismissal should be regarded as harsh, unjust or unreasonable, even if economic or other valid considerations make the redundancies necessary."

To similar effect is the statement of the Full Commission of the S.A Commission in Wynn's Winegrowers Pty Ltd v Foster (1986) 16 IR 381 at 384 that:

"...even where there is a genuine need for redundancy, the dismissal may be properly characterised as harsh, unjust or unreasonable for many reasons...because the employee should not have been the person selected for redundancy, or because the employee could perhaps have been offered a suitable alternative position in the company's employment, or because the method of dismissal might conceivably be considered harsh, or unreasonable or because the length of notice given might be totally inadequate, or because the redundancy payment was, in all the circumstances, totally inadequate."

In Cheesman v Kinhill Engineers Pty Ltd, 59 SAIR 168 Perry C stated that the Corkery guidelines were:

"equally appropriate to redundancy arising in circumstances of economic stringency or restructuring".

See also Corporation of the Town of Gawler v Day (1988) 55 SAIR 369 at 383.

In Shearer v Action Mercantile Pty Ltd (1993) 35 AILR 344, the Employee Relations Commission of Victoria stated:

"An absence of substantive fairness will invariably lead to a finding that the dismissal was harsh, unjust or unreasonable. An absence of procedural fairness, although not inevitably leading to such a finding may lead to a finding that a dismissal was harsh unjust or unreasonable"

There have been a number of recent cases in this court where the requirement of consultation in the case of redundancy has been emphasised: see Scott v Westmeats Pty Ltd (Ryan JR 12/9/94) and Carydias v The Greek Orthodox Community of Melbourne and Victoria (Staindl JR 31/3/95). In Scott's case, 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 the applicant.

In the present case, it was submitted on behalf of Quality Bakers that the negotiations with the union were sufficient to satisfy any obligation it had to consult with the employee in relation to the proposed termination. It was contended that this was so, regardless of whether agreement had been reached with the union or whether the implementation of any agreement was dependant upon the formal execution of a written agreement by the union.

I do not agree. The negotiations with the union were not extensive. Even on Mr Scott's evidence, the negotiations only dealt with the period to be allowed in the calculation of the redundancy payment and the question whether Quality Bakers was to have the right to choose which employees were to be made redundant. There was no discussion with the union as to whether there were alternative jobs for the employees proposed to be made redundant. In my opinion, that omission, of itself, is fatal to the respondent's submission that there was sufficient consultation. However, it is compounded by other factors. Mr Goulding was never consulted personally about the termination of his employment save for being given one week's notice alternatively to being offered a week's pay in lieu of notice.

There is no suggestion in the evidence that Mr Scott relied on Mr Burton to consult with the employees. Rather he said it was Mr Milligan's job to do so. He further said in cross-examination:

"---did you give any instructions to Mr Milligan to inform the specific - or to get a group of workers together and inform them that these redundancies were about to happen? Were there any instructions given by you?--Well, I was aware of it and knew who it was happening to, yes.

Yes, we know you were but what I'm trying to find out here is: did those workers know this was going to happen - did you inform them this was going to happen?---No, we didn't.

Thank you?--And Mr Burton told us not to, and Mr Burton ---

That's fine?-- --- told us not. He said: Not until it's all cleared up.

That's fine?---and he said: If there was any problems he would go and sort it out."

Although Mr Goulding had heard rumours of redundancies, the failure to consult with him meant that he had no warning that his position was to be made redundant. There were no discussions with him personally or with the union about the possibility of other employment with Quality Bakers, nor was he given any counselling or assistance in obtaining outside employment. Quality Bakers provided no explanation for these omissions. In my opinion, notwithstanding that there were negotiations with the union, the failure to consult Mr Goulding about the redundancy, the failure to consider alternate employment options, either with him directly or with the union, and the failure to provide him 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.

Counsel for Quality Bakers submitted that in the case of a genuine redundancy, not only was there no requirement to consult - a submission which I have rejected - but that, one person's job would always be sacrificed at the expense of another or others. He submitted that, for the dismissal to be unlawful, the redundant employee bore the onus of proving that the selection criteria was unfair. Although this latter submission is correct: see Gromark Packaging v FMWU; AMWSU v Australian v Shipbuilding Industries (WA) Pty Ltd (1987) 67 WIAG 733; it is immaterial to my determination having regard to my finding in relation to the failure to consult.

Reinstatement

Section 170EE provides:

"(1) In respect of a contravention of a provision of this Division (other than section 170DB or 170DD) constituted by the termination of employment of an employee the Court may make the following orders:

(a)

an order requiring the employer to reinstate the employee by:

(i)

reappointing the employee to the position in which the employee was employed immediately before the termination; or

(ii)

appointing the employee to another position on terms and conditions no less favourable than those on which the employee was employed immediately before the termination; and

(b)

if the Court makes an order under paragraph (a):

(i)

any order that it thinks necessary to maintain the continuity of the employee's employment; and

(ii)

an order requiring the employer to pay to the employee the remuneration lost by the employee because of the termination.

(2) If the court thinks, in respect of a contravention of a provision of this Division (other than section 170DB or 170DD) constituted by the termination of employment of an employee, that the reinstatement of the employee is impracticable, the Court may make an order requiring the employer to pay to the employee compensation of such amount as the Court thinks appropriate."

In Liddell v Lembke (1994) 127 ALR 342 , the Full Court of this court was concerned with the question whether the Industrial Relations Act 1991 (NSW) provided an adequate alternative remedy to the Act. The extent of the remedies provided under each Act was relevant to that issue. In their joint judgment Wilcox CJ and Keely J stated at 360:

"Plainly, it was Parliament's intention that the primary remedy for unlawful termination should be reinstatement and that compensation should be available only where this was impracticable.

The precise meaning of "impracticable" in this context should be left to another day; the question is one of general importance and it was not fully argued in this case. But, although "impracticable" does not mean "impossible", it means more than "inconvenient" or "difficult". The imposition of such a stringent limitation on the court's power to award compensation, rather than order reinstatement, is inconsistent with the notion that Parliament intended the court to have an open discretion whether to intervene at all."

Gray J, in his separate judgment, stated at 367-8:

"...when this court finds that a contravention of a provision of [the Act] has occurred in relation to a termination of employment, it will ordinarily grant the remedy of reinstatement...

INSERT AS MARKED AT 367-8

The only circumstance in which it can refuse to grant the remedy is if both forms of reinstatement specified are "impracticable". The word "impracticable" means "that cannot be carried out, effected, accomplished, or done; practically impossible" (Oxford English Dictionary) or "that cannot be put into practice with the available means": Macquarie Dictionary. Attention is directed to the practicability of the remedy, not to its practicality.

...

Pursuant to s 170EE(2), the remedy of compensation is available only "If the Court thinks...that the reinstatement of the employee is impracticable...".

...

Reinstatement is therefore required if it can be done. If the employer is still employing or able to employ someone to perform the same or similar tasks, then reinstatement will be practicable.

...

If it grants the remedy of reinstatement, the court is required also to grant the remedy of requiring the employer to reimburse the employee for lost remuneration. Only if reinstatement is "impracticable" is the court to turn its attention to the remedy of compensation. In such a case, the court will not have an unfettered discretion to refuse compensation. Nor will it be able to adjust the measure of compensation according to its opinion of the conduct of the employee. It is required to order the employer to compensate the employee as far as possible, up to the limit specified, in respect of any loss which the employee has suffered by reason of the termination."

There was no evidence as to whether reinstatement was impracticable, and, in my opinion, Quality Bakers bore the onus to establish that that was the case.

Counsel for Quality Bakers further submitted that even if the termination of Mr Goulding's employment might otherwise be considered to have been harsh, unjust or unreasonable, the 26 week redundancy payment overcame any unfair effect of the dismissal. This submission was not directed to the appropriate remedy if the dismissal was held to contravene s 170DE. Rather, the contention was that the amount of the payout was such that there was no contravention of the section. I do not agree. If the submission was correct, it would mean that an employer could escape the consequences of unlawful conduct constituted by a contravention of s 170EA by the payment of money. This would have the effect of undermining, if not rendering nugatory, the intention of the Act that reinstatement is to be the primary remedy for unlawful conduct. Of course, if the court was of the opinion that reinstatement was impracticable, the amount of payment made to a dismissed employee would be relevant to the order which the court might make. However, that is not the position in this case. In the circumstances, I propose to order Mr Goulding's reinstatement.

Credibility issues

It is apparent from my reasons that I have determined this matter without reaching any conclusion as to the credibility of witnesses. It is fortuitous that I have been able to do so. However, there will undoubtedly be many cases where the credit of witnesses is in issue and the matter can only be determined by the acceptance of the evidence of one witness as opposed to another. In such cases, it will not be possible for the parties to conduct a review on the basis of the evidence before the Registrar, as was done here. It will be necessary for witnesses to be called so as to allow the court to determine matters of credit and hence to determine the matters of fact upon which its decision is to be made. This may be unfortunate, especially where there has been a hearing of several days before a judicial registrar. However, the structure of the legislation makes that course inevitable.

THE WICKHAM MATTER

As I stated earlier the submissions in the Goulding matter were taken to have been made in the Wickham matter. There was no separate reference to any evidence in respect of this matter, presumably because there was no essential difference in the circumstances of the two dismissals. I should however, briefly recount the facts as they relate solely to Mr Wickham. Mr Wickham had also been employed as a bread carter with Quality Bakers since March 1978. His employment was terminated on 20 May 1994 and he was also offered a redundancy payout of 26 weeks, allegedly based upon the agreement with the TWU. Although Mr Wickham rejected the redundancy offer, an amount calculated on the basis of 26 weeks wages was paid directly into Mr Wickham's bank account.

When Mr Wickham was first advised of his redundancy, on about 13 May 1994, he advised Mr Milligan and a Mr Willmott, who was present with Mr Milligan, that he wished to speak to his union. However, the following Monday, when he reported to work, Mr Wickham's "van was taken off [him]" and he was required to work in the yard. On Friday 20 May 1994, Mr Wickham was directed to see Mr Milligan. He said that he was not given any opportunity of taking a union representative with him. At the meeting with Mr Milligan, Mr Wickham "was told that I was finished". Mr Wickham also seeks reinstatement of his employment with Quality Bakers.

For the same reasons that I have found the termination of Mr Goulding's employment to have been unlawful and that he should be reinstated, I am of the opinion that the termination of Mr Wickham's employment was unlawful and that he should be reinstated.