THE INDUSTRIAL MAGISTRATE'S

COURT OF WESTERN AUSTRALIA

HELD AT PERTH

       Claim No. M 42 of 2001

Date Heard: 17 October 2001

Date Delivered: 25 October 2001

BEFORE:  G. Cicchini I.M.

B E T W E E N :

Paul Smith

Claimant

and

Rockingham Bowling Club (Inc.)

Respondent

Appearances:

Mr TC Crossley of TC Crossley & Associates appeared as agent for Mr Smith.

Mr DM Jones of The Chamber of Commerce and Industry of Western Australia appeared as agent for the Respondent.

REASONS FOR DECISION

The Claim

On 28 February 2001 Paul Smith filed a claim alleging that the Rockingham Bowling Club (Inc) (the Respondent) on 24 February 2001 harshly, oppressively or unfairly dismissed him.  In that regard and in the alternative he alleges that the Respondent has failed to pay him an adequate redundancy payment.  Additionally Mr Smith alleges that the Respondent has, contrary to the provisions of his workplace agreement, failed to pay a 17 ½ % loading upon the annual leave payments made to him upon termination.

Mr Smith therefore seeks the payment of $11,170.60 being the equivalent of 14 week’s pay.  He also seeks the payment of a loading on annual leave payment made.  Pre-judgment interest is also claimed with respect to both heads of claim.  The imposition of a penalty is also sought.

Findings

The Respondent is a non-profit organisation, which provides bowling facilities to its members.  The facilities include a clubhouse and four bowling greens.  In late 2000 the bowling greens consisted of two grass greens and two synthetic greens.  The synthetic bowling greens, by their nature, require very little maintenance.  Mr Smith was the Respondent’s Greenkeeper.  His primary duty was to maintain the grass bowling greens.  He also maintained the club’s surrounds.  His responsibilities included the procurement of fertilisers, chemicals and spare parts for the machinery used in the upkeep of the grass greens and surrounds.  He reported to the Chairman of the Greens and worked in closely with him.  The Respondent also employed a general manager and some bar staff.  The club’s other labour requirements were augmented by volunteer members who performed a number of duties including assisting in the upkeep of the grass greens and club surrounds.

Mr Smith’s employment commenced on or about 11 December of 1989.  A state award originally governed the terms of his employment until 24 February 1998.  On 25 February 1998 he entered into a workplace agreement which took effect immediately upon execution.  The agreement was registered as number 98/3338.001.  Mr Smith was paid a gross weekly wage of $797.90.  His hours of work were irregular.  He generally worked longer hours during the busy summer period.  In winter his hours reduced.  On average he worked about 38 hours per week.

Leading up to 2001 the club had, for successive years, suffered operating losses.  It accordingly was looking at ways to reduce its operating costs.  One way of achieving that end was to replace the grass greens with synthetic greens.  In the months leading up to November 2000 there had been widespread talk about the issue and a strategic planning committee had been set up to report on the same.  The proposal to replace the grass greens was clearly aimed at eliminating the costs of maintaining the grass greens.  It was designed to do away with the Greenkeeper’s position.  It would also have the added effect of eliminating expenditure on fertilisers, chemicals and machinery.  Mr Smith was well aware of the proposals.  Indeed the Respondent’s President, Mr Colin Taylor, specifically informed Mr Smith some time prior to October 2000 that the club was considering the installation of further synthetic greens.  It must have been obvious to Mr Smith that any move in that direction would necessarily result in his position becoming redundant.  Indeed Mr Smith in his own testimony conceded that Mr Taylor had told him that the club was looking at the installation of synthetic greens as a means of eliminating the need for a Greenkeeper.  The resultant annual savings to the club from such a move would be in excess of $50,000.00 per annum.

Notwithstanding the committee’s desire to move to the installation of additional synthetic greens the club did not have the necessary savings to construct the same.  Its strategic planning committee was accordingly set up to consider amongst other things the feasibility of obtaining a loan for the purpose.  In that regard it entered into talks with the Rockingham City Council with a view to the provision of a self-supporting loan.  Those talks were successful.  Indeed Mr Brandsma, the Respondent’s Secretary, testified that the club had received “in principal” approval for the loan from the Rockingham City Council prior to the respondent’s half-yearly meeting held on Sunday 5 November 2000.

At the half-yearly meeting on 5 November 2000 the strategic planning committee’s report was tabled and discussed.  The recommendation of the committee with respect to the installation of additional synthetic greens was carried.  In effect it was agreed that the two existing synthetic greens be upgraded and a new one be installed.  The fourth green was to be left as a grass green that would be maintained on an ad hoc basis by the volunteer labour provided by members.  In consequence of the decision made by the meeting with respect to the installation of synthetic greens the members agreed that the Greenkeeper’s position be made redundant at a date left to the discretion of the executive committee.

Mr Brandsma testified that Mr Smith was not at work on 6 November 2000.  On 7 November 2000 Mr Brandsma went to see Mr Smith in order to advise him on the outcome of the meeting on 5 November.  He did so prior to the minutes being posted on the notice board.  He wanted, as a matter of courtesy, to advise Mr Smith of the outcome particularly given its implications for him.  For his part Mr Smith denies that the meeting ever took place.  However I am satisfied on the balance of probabilities that the meeting did take place.  I accept Mr Brandsma’s evidence in that regard.  I accept that he spoke to Mr Smith in the Greenkeeper’s shed and made him aware of the fact that the meeting had decided to install synthetic greens.  I further accept that Mr Brandsma accurately recalled the meeting.  One of the triggers for his recollection of the meeting is Mr Smith’s rebuke of him for having discussed the matter with him.  Mr Smith made it clear to him that club policy required that the club President make such approach to him on the issue.  Having viewed Mr Smith in the witness box I have no doubt that Mr Smith would have rebuked Mr Brandsma as alleged.  I also accept Mr Brandsma’s evidence that Mr Smith, during that meeting, questioned the club’s ability to finance what had been proposed.  Indeed his stance in that regard is reflected in his pleadings.  In my view Mr Brandsma’s approach was entirely appropriate in the circumstances.  He felt that any bad news should be given personally before it was read from minutes posted on the club’s notice board.

On the following day, 8 November 2000, Mr Smith was called into a meeting with the executive committee of the club comprised of the President, Secretary and Treasurer namely Mr Kite.  He was told at the meeting that his position was made redundant and that his workplace agreement would not be renewed at the end of February 2001.  Indeed the workplace agreement was to expire on 24 February 2001.  Mr Smith was asked whether he was prepared to continue to work for the respondent for an extra couple of months beyond 24 February 2001 so that match fixtures could be completed.  Mr Smith responded by telling the executive committee that he wanted his employment to carry on through to 31 May 2001 in order to coincide with the taking of planned annual leave for an overseas trip.

There is conflict in the evidence as to whether there was a concluded position at the meeting as to when Mr Smith would finish up.  Mr Smith says that there was a concluded agreement that he would work through to 30 April 2001 and that the club would get back to him as to whether he could work through to 31 May 2001.  The Respondent, through the evidence of Mr Brandsma and Mr Kite, maintains that there was no concluded agreement at that time.  Mr Brandsma said that Mr Smith’s counter-offer to work to 31 May 2001 was rejected and that no concluded position was ever reached.

On 9 November 2000 a letter was prepared formally detailing the decisions of the club.  It outlined inter alia that Mr Smith’s job had become redundant and that his workplace agreement would not be renewed.  The letter also confirmed the Respondent’s request that Mr Smith continue to work for a couple of months.  Interestingly the letter does not refer to any concluded position that Mr Smith was to work to 30 April 2001.  Had that agreement been reached it no doubt would have been reflected in the letter.  It clearly was not.  The letter reflects that the decision remained with Mr Smith.  I am confident that the letter accurately reflects the terms of the discussions.  Mr Brandsma impressed as a person with a professional outlook.  The way in which he gave his evidence is demonstrative of a careful and considered approach.  He impressed as being concerned with the need for accuracy.  Where there is conflict between the evidence of Mr Smith and Mr Brandsma I prefer the evidence of Mr Brandsma.  I find therefore that there was no concluded agreement that Mr Smith work to 30 April 2001.

Mr Brandsma’s evidence, which I accept, is that the Respondent had anticipated that work on the new synthetic greens would commence in or about mid-March 2001.  The club’s main carnival was scheduled for the long weekend in early March 2001.  Given Mr Smith’s lack of commitment the club was looking at volunteers to maintain the greens during the anticipated relatively short period between Mr Smith’s workplace agreement coming to an end and the commencement of construction. There was accordingly no further discussion on the issue of the date of termination.

On 20 December 2000 Mr Smith was called into the clubhouse by the President of the club and was handed a letter (exhibit 4).  The letter confirmed the previous discussions and correspondence.  It notified Mr Smith that he was being given two month’s notice of termination and that his last working day would be Saturday 24 February 2001.  Mr Smith challenged him about the termination date and asked him about the 30 April 2001 finishing date.  Mr Taylor responded by saying that: “Its just something we have to do.”  In my view nothing turns on that.  The response is equivocal and does not confirm any agreement that Mr Smith would remain working until 30 April 2001.

Mr Smith continued to work for the Respondent until and including 24 February 2001.  Upon termination Mr Smith was paid the following gross payments:

• Wages – 3 days                                              $319.16
• Annual leave – 35 days                               $5,585.30
• Long service leave                                      $7,606.65
• Severance pay – 8 weeks                            $6,382.30

By letter dated 22 February 2001 (exhibit 5) that accompanied his termination pay the Respondent made it clear that severance pay was still under negotiation and subject to adjustment.  In that regard Mr Brandsma, on behalf of the Respondent, during the course of his evidence conceded that the Respondent is prepared to pay a further three week’s pay so that the total redundancy payment reflects payment of one week’s pay for each year of service.

Mr Smith was unhappy with his final payment.  He claims that he should have received a greater redundancy payment.  Furthermore he complains that annual leave loading was not paid on untaken annual leave paid out upon termination.  However the mainstay of his claim centres on the fact that he did not earn an income for the period 25 February to 30 April 2001 which he says was agreed between the parties to be worked by him.

Subsequent to termination Mr Smith has remained unemployed notwithstanding his attempts to find employment in the same field of work.

Following the termination of Mr Smith’s employment the Respondent’s Chairman of the Greens together with a group of volunteers continued to maintain the greens until such time as work commenced on the synthetic greens.  No one was paid for those services.  The services were rendered gratuitously for the benefit of the club.

Conclusion

Mr Smith says that the termination of his employment by the Respondent was in all the circumstances harsh, oppressive or unfair.  In determining whether the termination was harsh, oppressive or unfair I apply the dicta enunciated in Miles and others trading as The Undercliffe Nursing Home v. FMWU (1985) 65 WAIG 385.  In that case Kennedy J. stated, at p. 387, that the question to be investigated:

“…is not a question as to the parties’ respective legal rights, but a question as to whether the legal right of the employer has been exercised so harshly or oppressively against the employee as to amount to an abuse of that right.”

In that regard I am to assess the industrial fairness of the decision of the employer based on the quality of the conduct involved and an assessment of what is just and equitable upon the substantive merits of the matter.  Clearly there must not only be substantive fairness displayed to Mr Smith but also procedural fairness.

Given that the ground for dismissal is one based on redundancy then the burden of establishing that ground lies upon the Respondent.  Having discharged that burden it is up to Mr Smith to discharge the burden of proving that the exercise of the employer’s right of dismissal has been exercised harshly or repressively against him as to amount to an abuse of that right.

The evidence overwhelmingly dictates that Mr Smith was terminated on account of redundancy.  The club had made a loss for the two years preceding the decision made to change to synthetic greens.  It is clear that the major cost faced by the club at that time was the upkeep of the greens of which Mr Smith’s wage comprised the most significant component.  If that cost were removed then the club’s financial position would improve permitting the club to trade profitably.  There was no secret about all of that.  Mr Smith knew about such moves, which would necessarily, and inevitably result in redundancy. He was kept informed at all times as to what was happening in that regard.  The Respondent’s conduct through its officers was in my view nothing short of exemplary.  There was no secrecy or subterfuge. Everything was out in the open.  It is clear that    Mr Smith, for obvious reasons, disagreed with the approach taken by the club.  It is also apparent that Mr Smith believed that the club did not have the financial resources to convert to synthetic greens.  However that was a matter for the club.  As it turned out the club was able to achieve what it set out to do.  Regrettably for Mr Smith he was caught up in modern day economic pragmatism which resulted in his position becoming redundant.  There was a genuine redundancy situation in his case.  He simply had to go.  Furthermore, given the club’s circumstances, there was no real prospect of redeployment.

Once the decision had been made that Mr Smith had to go he was advised almost immediately, initially by Mr Brandsma, and thereafter, formally by the executive committee.  That was confirmed by letter dated 9 November 2000.  There was, in that regard, compliance with sections 40 and 41 of the Minimum Conditions of Employment Act 1993.  Indeed it is difficult to imagine what else the Respondent could have done in all the circumstances to keep Mr Smith informed of the redundancy and its effect upon him.

In view of the fact that Mr Smith’s “job” would come to an end and given that the parties could not agree on the date of actual termination it was reasonable for the Respondent, in all the circumstances, to terminate Mr Smith’s employment with effect on 24 February 2001.  It was reasonable because it was anticipated that work on the new greens would commence in mid-March.  It was also reasonable because there was a need to save money in order to minimise the projected loss for the financial year.  Any savings in that regard would also assist in accumulating funds to ameliorate the shortfall for the synthetic greens project.

Mr Smith maintains that the situation that faced him at the time of termination did not amount to a genuine redundancy situation.  It is submitted that his purported redundancy was premature in that other “persons” ended up carrying out the work that he did.  In that regard I am referred to the definition of “redundant” in section 40(1) of the Minimum Conditions of Employment Act 1993 which provides:

“redundant” means being no longer required by an employer to continue doing a job because, for a reason that is not a usual reason for change in the employer’s work force, the employer has decided that the job will not be done by any person.

Mr Smith argues that, given that following his termination volunteers carried out the work that he formerly did, his job had not in fact become redundant within the meaning of section 40(1).  I respectfully disagree.  In my view “person” referred to in the definition must mean a person who is paid for carrying out that job.  No one who carried out the job after Mr Smith’s termination was ever paid for that work.  The work carried out by the volunteers was only a stopgap measure aimed at tiding the Respondent over and assisting it with its difficult financial situation.  Indeed the job was not “on-going”.  The paid job carried out by Mr Smith ceased to exist upon his termination and indeed all the tasks that he formerly carried out ended completely upon construction of the synthetic greens.

For the reasons previously stated I find that the redundancy was genuine as at the date of termination.  The Respondent displayed both procedural and substantive fairness throughout.  The Respondent did not in the entire circumstance act in any way, which on an objective analysis could be considered to be harsh, oppressive or unfair.

A termination for redundancy which is not accompanied by a reasonable redundancy payment is harsh, unjust and unfair (see Rogers v Leighton Contractors Pty Ltd 79 WAIG 3551).  In so far as this claim relates to the failure to pay an adequate redundancy payment it is similarly without merit.  I say that because the redundancy payment made in the light of the Respondent’s circumstances was reasonable.  In any event the Respondent was always willing to further negotiate in that regard (see exhibit 5).  It was only Mr Smith’s actions and further demands that left that issue unresolved.  In any event the Respondent now concedes a further payment of three week’s wages.  Accordingly the total redundancy payment made to Mr Smith equates to one week’s wages for each year of service.  That is clearly adequate having regard to the Respondent’s financial position and its ability to pay.  In my view the authorities support that such a payment is adequate.  I do not propose to say anything further in relation to this issue.

It follows from what I have said that Mr Smith is not therefore entitled to damages for unfair dismissal.  Further he is not entitled to any payment for the period 25 February to 30 April 2001 given that there was no agreement that he would be retained working during that period.

I now move to deal with the issue of annual leave loading.  The workplace agreement provides in clause 7 (12) - Annual Leave:

“(12) For each completed year of service you are entitled to a loading of 17 ½ % on your annual leave to be paid at the time when annual leave is taken.” (my emphasis added)

It is axiomatic that Mr Smith did not take annual leave upon termination.  There is no legislative provision of which I am aware which deems him to have taken his leave upon termination.  Given that he did not take his leave upon termination it is obvious upon the plain reading of clause 7(12) that he is not entitled to annual leave loading.  This very issue was considered by Fielding C (as he then was) in Bryant v Hamersley Iron Pty Ltd 71 WAIG 1917 in which he said at p 1918:

“The concept of leave loading is, as Cort C. (as he then was) stated in West Australian Branch, Australasian Meat Industry Employees’ Union, Industrial Union of Workers, Perth v. W.A. Meat Export Works (1975) 55 WAIG 1951 at 1952, referring to the West Australian Branch, Australasian Meat Industry Employees’ Union, Industrial Union of Workers, Perth v. The Meat and Allied Trades Federation of Australia (Western Australian Division), Union of Employers, Woolworths (W.A.) Ltd, G.J. Coles and Coy. Ltd and Others (1980) (supra), to ensure that an employee would not be paid a lesser amount whilst on leave than he would have earned had he remained at work.  The loading is not to be considered as a bonus for an employee when going on leave and thus “is not applied to the situation of pro rata payments upon termination, that situation not being one of being on leave as such” (see: Amalgamated Metal Workers and Shipwrights Union of Western Australia v A.C. Electrical Engineering Pty Limited (1977) 57 WAIG 881 at 883).”

It is apparent that the aforementioned authority is on all fours with this matter on this issue.  Mr Smith’s claim in this regard cannot succeed particularly in the light of the decision in Bryant.

Result

It follows for the reasons given that Mr Smith is entitled, given the concession made, to three week’s pay by way of additional redundancy payment to that already made.  Mr Smith is therefore entitled to $2393.70.  In view of the circumstances the claim for interest thereon is not maintainable.

Finally the claim for the imposition of penalties cannot succeed.  I am not empowered by the Workplace Agreement Act 1993 to impose penalties other than for offences committed under that Act.  It is not contended that the Respondent has committed an offence under the Act.  Such claim is misconceived and inappropriate.

G Cicchini

Industrial Magistrate.