| Other Parties |
Baker, Brydon, Calder, Candy, Carter, Dix, Dunn, Griffith, Hyde, Miller, Newman, Nuth, Patterson, Sale |
| Abstract |
This was a successful claim for unjustified dismissal.;The applicants were employed in the pre-press production department of the respondent. They had various roles including creating advertisements for the newspaper, platemaking, photolithography, scanning, and associated administrative duties. The applicants were employed under a collective agreement which supported the need for flexibility and interchangeability between individuals and within departments and provided that the respondent could allocate, and arrange for the performance of, work in the manner which was most productive and best suited the respondent’s requirements. The collective agreement defined redundancy as “a situation where an employee’s employment is terminated by the employer, the termination being attributable, wholly or mainly, to the fact that the employer has staff surplus to requirements because of the closing down of the whole or any part of the employer’s operations due to a change in plant, methods, materials or products or reorganisation, or like cause requiring a permanent reduction in the number of permanent employees who have not reached the employer’s age of retirement” (“the redundancy definition”). It also provided a procedure to be followed in the event of a proposed redundancy, and criteria for the selection of redundant employees.;After discussions with staff concerning issues such as high wage costs and the declining volume of work, the respondent decided to undertake a review of the department. Management met with department staff, informed them of the terms of reference for the review, and invited submissions. Two weeks later the respondent presented a draft report of the review to employees. The draft report contained proposals to disestablish all 43 existing positions in the department, outsource work, and create 15 new positions. After two meetings with employees to discuss the draft report, and various communications from the union representative to the respondent concerning the possibility of alternative solutions, the proposals were confirmed in a final report. Employees were invited to apply for the 15 new positions with individual terms and conditions of employment and on a lower rate of pay. The new roles were to be multi skilled and included additional functions, accountabilities and competencies. Eleven of the positions were filled by job applicants from within the department and the remaining four by external applicants. Existing employees who had not been appointed to one of the new positions were made redundant at various times by agreement or according to operational requirements.;The applicants claimed that they had been unjustifiably dismissed. They argued that the respondent failed to comply with the consultation and redundancy provisions of the collective agreement and that the decision to outsource and disestablish positions was predetermined. They also argued that the 15 new positions were very similar to the old positions and that with some training they could all have filled the new positions.;The respondent argued that there were genuine commercial reasons for the redundancies, that it complied with its obligations under the collective agreement, and that there was no predetermination. The respondent also argued that the redundancies were carried out in a procedurally fair manner and that the new roles were significantly different to the roles previously performed by the applicants.;HELD: (1) The review of the design centre was based on genuine commercial reasons as outlined by the respondent. Those reasons related to the changing volume and nature of business, high wage costs, the possibility of outsourcing as an economic alternative, changes to the culture of the department, and the quality of work that the department was producing.;(2) The redundancy definition did not prevent the disestablishment of all positions in a department if there was a decision to outsource work resulting in 28 surplus positions and then a decision to reorganise the remaining positions on the basis that the work being done by the holders of those positions was no longer needed or required. Those circumstances were capable of falling within reorganisation.;(3) The issue then became whether or not the 15 new positions were significantly different to the positions previously held by the applicants so as to conclude that the employees were genuinely superfluous to requirements. The work done by the holders of those 15 positions must no longer have been needed or required to break the continuity of employment.;(4) If the applicants had had management or leadership roles then the tier of reporting and managing staff added by the restructure may well have made a significant difference to the new positions. In the applicants’ situation the introduction of team leaders was not sufficient to break the essential continuity of their employment. Likewise, the change in staff reporting lines, meaning closer supervision and control of work practices, would not have been sufficient to break the continuity of employment.;(5) It was difficult in the circumstances to put a percentage on the changes to the positions with any degree of accuracy. Taking into account differences and similarities between the old and new positions including remuneration, location, and job size and content, as well as the fact that all of the applicants had acquired new skills over the time they were with the respondent, and the flexibility and interchangeability contemplated by the collective agreement, the degree of change was probably somewhere in between the percentages alleged by the applicants (0%) and the respondent (in excess of 30%).;(6) The new positions would have required the applicants to perform some additional functions but the work that the applicants were previously performing was still there. Most of the applicants would have required training in some areas but that was contemplated by the collective agreement. There was, as in McCulloch v NZ Fire Service Commission (cited below), no basis for the respondent to conclude that the applicants were not willing or were incapable of acquiring the new job skills and accountabilities. There was no suggestion that there was any resistance to the flexibility contemplated by the collective agreement from the applicants or in the correspondence from the union during the review and restructuring process.;(7) Considering the matter generally from the perspective of a reasonable person, and the personal characteristics of each of the applicants, the new roles did not constitute a sufficient difference to the previous roles of any of the applicants to break the essential continuity of employment. The new functions required could under the collective agreement have fallen within work that the respondent could have required each of the applicants to perform with training and upskilling as required.;(8) Regarding the respondent’s argument that broad changes in accountability and culture necessitated the disestablishment of all the positions, the Authority was not satisfied that what the additional competencies and performance accountabilities translated to in reality was sufficient to break the continuity of employment.;(9) The Authority was not satisfied that all 43 positions in the department were genuinely surplus to requirements within the redundancy definition. It followed that the respondent was not entitled to disestablish all of the roles in the department. To the extent that there was a reduction required in the numbers of staff in the department as a result of the decision to outsource, the respondent should have followed the process in the collective agreement for the selection of redundant employees. The respondent did not do so. If it had, the applicants may not have been selected for redundancy and they may have been amongst the 15 employees who remained. Accordingly, each of the applicants had a personal grievance that they were unjustifiably dismissed as a result of the restructuring and the resulting redundancies.;(10) There was insufficient evidence to suggest that prior to the announcement of the review the concept of outsourcing had shifted from discussion to a planning stage. Nor was evidence of alleged comments by a manager to an employee about impending redundancies sufficient to support a conclusion that there was a plan to restructure which the union should have been consulted about and/or that there should have been an earlier announcement of a restructuring. An employer was to be truthful with its staff and advise them when their positions may have been in jeopardy. However, the Authority was not satisfied, given the nature of the conversation between the manager and the employee, that the conversation was capable of amounting to deceptive or misleading conduct.;(11) Prior to the announcement of the review, the respondent did not breach its obligations of good faith or its obligations to consult under the collective agreement. The evidence did not satisfy the Authority that prior to that time there was predetermination of the decision to outsource or disestablish.;(12) In the circumstances, and particularly given the proposal to disestablish all positions in the department, the respondent's two attempts to contact the union representative to advise him that he could attend the two meetings to discuss the draft report were inadequate. It meant that the union members were required to attend meetings without the benefit of a representative. The failure to forward the union representative a copy of the draft report was also unfair. Consideration should have been given to delaying the meeting with staff by a day or so to enable discussion with the union about the draft report.;(13) The Authority was not satisfied that, from the time the union first raised concerns about the draft report until the time the final report was released, the respondent retained an open mind about whether there could be flexibility around the internal operating costs such as hours of work and work functions. In addition, the respondent did not disclose adequately to the union the nature of their concerns regarding levels of remuneration so as to enable the union representative to put forward solutions if they existed. The failure to afford the union representative the opportunity to present some information about proposed alternative solutions was not fair or reasonable. The evidence indicated a fixed and closed approach to the issue of disestablishment of all the positions within the department which was not in accordance with the consultation requirements in a restructuring or in accordance with good faith behaviour. That approach existed at least from the time the draft report was presented to the employees. The respondent also failed to comply with its obligations under the collective agreement with respect to selection of employees for redundancies. Therefore, in addition to the previous finding that the redundancies were not genuine, the redundancies were also procedurally unjustified.;(14) Loss of remuneration for each of the applicants was to be assessed on the basis of the loss of a chance that they may not have been selected for compulsory redundancy and may have remained in employment with the respondent. As there were originally 43 positions in the department and 15 positions remained, that lost chance was assessed at 28.66%. The respondent was not to bear the consequences of the applicants delay in lodging their statement of problem. If the matter had been lodged without delay an award of five months remuneration to each of the applicants would have been reasonable and fair. The applicants were therefore entitled to 28.66% of their lost remuneration for five months, exact amounts owing to each applicant to be calculated by the parties.;(15) The amount of compensation for humiliation claimed by the applicants was appropriate in the circumstances, except for one of the applicants who felt that the process followed by the respondent was probably correct. His view of the process meant he would not have experienced quite the same degree of hurt and humiliation as the other applicants and he was accordingly awarded $1,000 less than them. |