QUEENSLAND INDUSTRIAL RELATIONS COMMISSION

Industrial Relations Act 1999 – s.138 – application for amendment

Queensland Chamber of Commerce and Industry Limited, Industrial Organisation of Employers

AND Charles Bradford (No. B1931 of 2000)

COMMISSIONER BROWN 26 February, 2001

Arbitration – Severance Pay – Exemption – Transmission of Business – Alternative Employment – Application granted.

DECISION

This matter related to an application for exemption from the general severance pay requirements prescribed in the Queensland Industrial Relations Commission Statement of Policy for Termination of Employment, Introduction of Changes and Redundancy (TCR) in relation to the termination of the employment relationship between Charles Bradford and Aere Services Pty Ltd (the Company). The application was made under the provisions of Clause C (9) of the said Statement of Policy.

Leave was granted to amend the application to include clause 2.4(I) of the Engineering Award – State. Such provisions read:–

“An Employer, in a particular case, may make application to the Commission to have the general severance pay prescription varied if the Employer obtains acceptable alternative employment for an employee.”.

Charles Bradford (CB) commenced employment with the Company on 15 August 1994 on a permanent full-time basis as a Trades Assistant. The terms and conditions of his employment were governed by the Engineering Award – State. The Company sold its business to Haden Engineering Pty Ltd (Haden) by way of a contract of sale signed by the Company on the evening of 19 October, 2000. The sale was effective as of 25 October, 2000.

On the morning of Friday, 20 October, 2000 all staff including CB attended a meeting and were advised of the pending sale and further that their employment would continue on the same terms and conditions that existed with the Company. They were also advised of the effective date of the sale being 25 October, 2000.

CB worked up to and including 24 October, 2000 and did not report for work on 25 October, 2000.

On the morning of 26 October, the Company received a fax from CB advising that the offer of alternative employment was unacceptable. In this fax he cited lack of consultation as a concern.

Following a telephone conversation of 26 October, CB attended a meeting later that day with M. Oulton from the Company and P. Walsh of Haden, the successor to the Company as owners of the business.

During the meeting CB raised concerns regarding certain aspects lacking in his proposed employment agreement including items which he claimed were part of his previous conditions such as tool allowance, vehicle allowance, flexible RDO’s and personal days off.

Walsh agreed to re-draft the offer of employment document to include the items that were omitted.

This was done (see Ex 2, attachment C). Following the meeting CB made no attempt to review the revised employment proposal. In fact, the next contact between CB and the Company was on 31 October, 2000 when the Company received a letter form CB’s solicitor.

The evidence of Oulton and Walsh supported the above history.

CB stated that there were a number of reasons that he found the alternative employment unacceptable.

He cited inadequate notice of the change; lack of consultation regarding the change; and the position description for the alternative employment was “Service Technician” and not “Trades Assistant” as he was with the Company.

CB was not happy with the proposed terms and conditions of employment.

CB had previous experience with Haden and Haden Facilities management and found their workplaces to be “hostile” and had a “high turnover of staff”.

In cross-examination CB conceded that whilst he did not recall, he could have received a letter from the Company some 3 years earlier that altered his position title from trades assistant to service technician.

CB acknowledged that he had met with Oulton and Walsh on 26 October and had raised his concerns regarding the offer of employment and that Walsh had agreed to re-draft the offer of employment.

CB felt that Walsh did not like the idea of personal days or RDO format. He felt he had been dismissed because no one was paying him.

In submissions for the applicant, Mr Smith stated that the terms of the agreement negotiated by the Company during the sale to Haden was that employees, including CB, would be continued in employment on terms equivalent to or better than the conditions enjoyed at the Company.

He contended that CB’s concerns in this area were in the process of being accommodated by Haden and that subsequent attempts to contact CB failed and consequently the revised employment document was forwarded to his only known agent – his solicitor.

The applicant submitted that CB did not raise his reservations about Haden as an employer nor was there evidence of his expressing concerns about the type of workplace prior to or during the meeting on 26 October. However, during that meeting CB did voice his opposition to globalisation and expressed a fundamental belief about working for a locally owned company (Ex 2 Walsh).

Conclusions

Whilst CB had not raised the issue, it could be argued that an Employer seeking relief from the payment of severance payments via the TCR provisions should do so prior to the date of termination. Severance payments are normally paid upon termination and the failure of an Employer to make the payment, if in fact it is due, could be seen as harsh.

In this case however, the timing of the application can be justified in that the applicant was not aware of CB’s decision not to accept the alternative employment offered until after CB had ceased employment with the Company.

An examination of the reasons advanced by CB as to why he felt the employment offered was unacceptable is required.

With respect to CB’s concerns over lack of appropriate notice and consultation, adequate notice and consultation are factors which can be and are normally be dealt with in the hearing of a claim for wrongful dismissal, however, in the context of this application, to vary the amount of severance pay, I am of the view that circumstances leading to the offer of acceptable alternative employment could include the most bitter differences and problems on both sides. However, if this rocky path leads to the offer of alternative employment, then it is the acceptability of the alternative employment that has to be examined, not the actions of the parties in the lead up to the offer.

In any event, with respect to notice, CB received the same notice as all other employees on 20 October.

The evidence of Walsh was that agreement on the sale was reached and a letter of intention to purchase was signed by the Directors of Haden on the evening of 19 October.

As CB was advised on 20 October I find that the Company gave CB reasonable notice in the circumstances.

In addition to the staff meeting where arrangements were explained, employees, including CB, were given a personally addressed letter dated 23 October regarding transfer of employment; a further document dated 23 October giving confirmation of employment arrangements; a form for CB to complete and return acknowledging his acceptance of employment; and a position description.

CB did not respond to the above and failed to attend for work on 25 October at Haden.

On the evidence, other employees attended for work on 25 October and had their concerns regarding omissions from their offers of employment addressed and new offers correcting the oversights were issued by Haden.

CB faxed Haden with his concerns on 25 October. His fax was received on 26 October and a meeting was arranged with him for that afternoon.

CB raised employment condition issues that concerned him at that meeting.

CB acknowledged that Walsh had agreed at that meeting to re-draft the employment arrangement document to accommodate CB’s concerns.

CB stated in evidence that he did not accept an offer to participate in the re-drafting of the document as he believed that he had been dismissed. Although how he reached this conclusion is difficult to understand given the statement by CB in his fax of 25 October in which he states that he felt that he was still an employee of the Company. He failed to return to view the revised document which was subsequently mailed to his solicitor on 31 October. Oulton and Walsh could not contact CB by telephone to discuss the document as he did not have a telephone.

CB did not mention during the meeting on 26 October that he felt that he was dismissed.

I find that the Company conducted appropriate consultation with CB.

CB failed to follow up on his discussion with Oulton and Walsh regarding the conditions of employment in the revised employment document and there is no evidence to suggest that the revised offer would have been inferior to the terms and conditions previously enjoyed by CB.

In this light I find that it is not reasonable for CB to claim that employment conditions caused him to see the alternative employment as unacceptable.

With respect to CB’s reservation about the workplace, namely the perceived “hostile” environment and high turnover of staff, CB failed to raise these issues in the meeting with Oulton and Walsh, therefore they were unable to address or respond to his concerns. Further, CB did not in submissions or his evidence refer to his opposition to globalisation or his preference for locally owned companies. However, this is alluded to in Walsh’s statement (Ex 2 para 15).

Regarding acceptable alternative employment, the applicant submitted that an objective test should be applied and that the terms and conditions of employment are the issues to be tested and not an individual’s ideology or their likes and dislikes of various corporate entities as suggested by CB.

I am of the view that the test applied by the Full Bench of the Australian Industrial Relations Commission regarding the meaning of the term “acceptable alternative employment” in an appeal by Derole Nominees (Print J4414) is the appropriate test. This appeal examined the “meaning and intention” of the exemption provision contained in the Award in question. This clause is essentially the same as contained in the Statement of Policy and the Engineering Award – State which are in question here.

The decision also examined the term “obtained”, however, in this instance, there was no suggestion that the alternative employment was not obtained by the Company.

I agree with the comments of the Full Bench at page 4:–

“What constitutes ‘acceptable alternative employment’ is a matter to be determined, as we have said, on an objective basis. Alternative employment accepted by the employee (and its corollary, alternative employment acceptable to the employee) cannot be an appropriate application of the words because that meaning would give an employee an unreasonable and uncontrollable opportunity to reject the new employment in order to receive redundancy pay; the exemption provision would be without practical effect.”.

Issues referred to by the Full Bench as assisting in determining the acceptability of alternative employment include –

“The work being of a like nature. The location not being unreasonably distant and the pay arrangements complying with Award requirements.”.

The work offered to CB was identical to the work he had performed previously.

The location of his employment was unchanged.

The rates of pay and conditions offered complied with the Award and moreover were, or would have been, the equivalent or in the case of vehicle allowance, possibly slightly better than CB previously enjoyed. Any room for doubt or conjecture in this area had in my estimation been caused by CB’s failure to finalise the working arrangements matter through discussions with Haden.

I find that the employment offered to CB by Heden was acceptable alternative employment.

Having considered all the evidence and submissions, the application that the TCR provision to pay severance pay be varied by exempting the Company from such requirement is granted.

The Commission so orders.

D. K. BROWN, Commissioner.
Released: 26 February 2001 / Appearances:
Mr M. Smith for the Queensland Chamber of Commerce and Industry Limited, Industrial Organisation of Employers.
Mr C. Bradford on his own behalf.