C2006/151, Transcript of Proceedings [2006] AIRCTrans 1121 (4 October 2006)

TRANSCRIPT OF PROCEEDINGS

---

Workplace Relations Act 1996 15802-1

SENIOR DEPUTY PRESIDENT RICHARDS

C2006/151

APPLICATION BY Q AUTOMOTIVE GROUP PTY LTD
cl.40 Sch. 8 - Appl’n to vary prese’d State award to remove ambiguity or uncert.
(C2006/151)

BRISBANE

2.10PM, THURSDAY, 21 SEPTEMBER 2006

PN1

MR T KOWALSKI: Thank you, your Honour. I am with the Motor Trades Association of Queensland. I am here representing Q Automotive, with me, MR B COUCH from Q Automotive.

PN2

MR P MILLS: My name is Peter Mills.

PN3

THE SENIOR DEPUTY PRESIDENT: Mr Mills, you are the employee who is affected by this application, are you?

PN4

MR MILLS: Yes.

PN5

THE SENIOR DEPUTY PRESIDENT: Okay. Good, thank you. Mr Kowalski?

PN6

MR KOWALSKI: Thank you, your Honour. Your Honour, I have a written submission which contains most of what I intend to say today. Your associate has a copy. It may help you to follow my submission. What I was hoping to do was to make a few preliminary remarks, then ask Mrs Ruth McCracken to appear as a witness. Barry Couch would then be the second witness, and then I would make some formal submissions, if that's in order, your Honour?

PN7

THE SENIOR DEPUTY PRESIDENT: Yes. That's appropriate. So do you want to make these submissions at the end, or would you prefer to lead your evidence first of all?

PN8

MR KOWALSKI: I'll make the submissions, your Honour, following the evidence of both Mrs McCracken and Mr Couch.

PN9

THE SENIOR DEPUTY PRESIDENT: Good. Does Mr Couch want to take the stand, then, does he?

PN10

MR KOWALSKI: Yes. If we could have Mrs McCracken in just a moment? I just have a couple of preliminary remarks to make, and then we can call her. If it please the Commission, Q Automotive Group is a proprietary limited company and its ABN is 470 104 894 60. Prior to 27 March 2006, the company was covered by various state awards, but is now in the federal system under the Work Choices legislation. The matter before you today, Q Automotive seeks to avail itself of a provision in a notional agreement preserving state award, a NAPSA, which allows for the possible variation and severance payments in a redundancy situation, where the employer has obtained acceptable alternative for a former employee.

PN11

We say this Commission has the power to hear and determine the application before it by virtue of clause 40 of Division 3, headed Varying a Notional Agreement Preserving State Awards of schedule 8 of the Workplace Relations Act, which states:

PN12

The Commission may, on application by any person bound by a notional agreement preserving state awards, or whose employment is subject to such an agreement by order, vary a notional for the purpose of removing ambiguity or uncertainty.

PN13

The element of uncertainty in the case before you, your Honour, is whether on the facts of this matter, Q Automotive is entitled to have the general severance payment prescription varied.

PN14

THE SENIOR DEPUTY PRESIDENT: I think we had some preliminary discussions about this matter in a directions conference and I may well have emailed you subsequently about that.

PN15

MR KOWALSKI: Yes.

PN16

THE SENIOR DEPUTY PRESIDENT: I must admit, the submission is not one that I find - I'm not being critical at all, but I'm not quite persuaded that that's how the power is exercised. I am of the view that there is a power, it is provided for in the legislation and it can be exercised for the purposes that you are seeking, but as I referred to on other occasions, I am not persuaded that's not necessarily the power that's derived from Division 3 of schedule 8. On my own view that I prefer, that is, in effect a power that's derived from Division 1 of schedule 8 in respect of the powers of a state industrial authority and how they're referred to the Federal Commission, and then subsequently it is exercised through Regulation 3.5, if my recollection serves me, of the Act.

PN17

Regulation 3.5 of the Act, chapter 5, Part III, Division 5 and Regulation 3.5 of the Act. These are matters I'll go to in the reasons for decision, but I am not of the view that the source of the authority for the purposes of the object of this exercise is found in that Division 3 of schedule 8 as you referred to. But that said, let's move on.

PN18

MR KOWALSKI: Thank you, your Honour. I'm obviously perfectly happy to accept those comments and proceed with - - -

PN19

THE SENIOR DEPUTY PRESIDENT: I didn't necessarily find it an easy exercise putting it together. I'm never entirely confident I have it right, but I think so and I'll explain it in the reasons for the decision.

PN20

MR KOWALSKI: Yes. Your Honour, the specific NAPSA concerned in this matter is the Engineering Award State, which covers the work done by, amongst others, tradesmen, panel beaters and spray painters. The specific clause we direct your attention to is clause 4.9.9 and here, your Honour, I would seek leave to tender an exhibit being an extract from the Engineering Award of clause 4.9, dealing with redundancy.

PN21

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN22

MR KOWALSKI: Your Honour, if I might take you to the second page of that extract? I simply highlighted clause 4.9.9, Alternative Employment, which is of standard wording:

PN23

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

PN24

The other thing I've highlighted is clause 4.9.6, Severance Pay, which lists the table of severance payments. In the case of the employee concerned today, having had 12 or more years' service with Q Ford, the payment otherwise would be 16 weeks of severance pay. I have no other reference to that particular exhibit, your Honour. Your Honour, at this point, I might now call Mrs Ruth McCracken.

PN25

THE SENIOR DEPUTY PRESIDENT: Thank you.

<RUTH MARGARET MCCRACKEN, SWORN [2.19PM]
<EXAMINATION-IN-CHIEF BY MR KOWALSKI

PN26

MR KOWALSKI: Could you again please state your full name and address?
--- Ruth Margaret McCracken (address supplied).

PN27

Could you please describe the nature of the business that you own?---Yes. I have two smash repair shops, motor vehicle repairs, one at Slacks Creek, Southside Body Works, one at Mt Gravatt, Mt Gravatt Smash Repairs.

PN28

Could you tell us, please, when you had first contact with Mr Barry Couch of Q Automotive?---Would have been early April of this year.

PN29

What was the nature of that contact?---Mr Couch approached me to see if we'd be interested in having Southside Body Works do their Q Ford work in smash repairs, in vehicle repair.

PN30

What was your response to that approach?---I said we'd be happy to do it and we had a - subsequently had a meeting to discuss some details about it.

PN31

Do you know of Mr Peter Mills?---Yes, I know Mr Mills.

PN32

THE SENIOR DEPUTY PRESIDENT: Sorry, just before we go on, is that Mr Couch with you?

PN33

MR KOWALSKI: Yes.

PN34

THE SENIOR DEPUTY PRESIDENT: Sorry, I didn't know. We might just have Mr Couch wait outside whilst the evidence is being given, thank you, Mr Couch.

PN35

MR KOWALSKI: I should explain, your Honour, Mr Couch is dressed rather casually because he's on annual leave at the moment.

PN36

THE SENIOR DEPUTY PRESIDENT: That's all right.

PN37

MR KOWALSKI: Now, Mrs McCracken, have you ever spoken with Mr Mills?
---I have, yes.

PN38

What caused you to have a discussion with Mr Mills?---Mr Mills came to my office after he had first been to Southside Body Works and spoken to my manager there, Paul Griffin, and he came to discuss the position that was offered.

**** RUTH MARGARET MCCRACKEN XN MR KOWALSKI
PN39

So could you tell us the nature of the discussion?---Yes. He discussed what - we discussed what the work would be and the pay, basically, what the conditions would be.

PN40

Had you given any undertaking to Q Automotive about the remuneration you would offer any of its employees?---Yes, definitely. I said to them that I would be very happy to take anyone that they had, and that they would be paid what they're getting paid now.

PN41

So in effect, you would match - - - ?---I would match it, yes. I wouldn't expect them to go backwards. Yes.

PN42

What hours would Mr Mills have worked, had he taken up the position?---Well, we work on a 38-hour a week basis, plus any overtime that's done during then.

PN43

Would he have been employed under award conditions?---Yes.

PN44

Overtime for any hours in excess of 38?---That's correct.

PN45

Would he have been paid the standard 9 per cent superannuation - - - ?
---Absolutely, yes.

PN46

- - - on his gross earnings?---Yes.

PN47

Would you have supplied Mr Mills with a company vehicle if he had accepted the position?---We discussed that and yes, I said that we could do that, except that I didn't think it would be as good a vehicle probably as Q Ford would have offered, that's all.

PN48

So what would have been the, I guess, quality of the vehicle you would have offered him?---Well, it would have been older. I just assumed that Q Ford probably would have given a fairly new vehicle. Most of our vehicles are, like, 10 years old. In that vicinity.

PN49

But it would have been - - - ?---Still working right, yes.

PN50

On what basis could he have used that vehicle?---Well, most of the vehicles that my staff have, they take them home, they can use them during the week and for work as well as taking them home and bringing them back Weekends and stuff.

**** RUTH MARGARET MCCRACKEN XN MR KOWALSKI
PN51

Would Mr Mills have been secure, would he have had secure employment with your company?---Yes, he would have.

PN52

Can you give us some idea of, I guess, the position of your company in the industry here in Brisbane? Are you a successful company? Are you struggling?
---We've been in the industry in Brisbane 20-odd years at Mt Gravatt and much the same at Slacks Creek, yes. Well-established, yes.

PN53

No reason to suppose that that situation will change in the near future?---I hope not.

PN54

Now, what was the result of your discussion with Mr Mills?---He said he would have a think about that and he would go away and have a think about it and come back, which he did.

PN55

What was his response?---He came back, I'm not quite sure how long it was later, a week or two, and he declined the offer.

PN56

Could you just give us an idea of where Southside Body Works is located in relation to Q Automotive or Q Ford?---It's over the other side of the main road there, Logan Road, and it's probably only about 2 kilometres away from Slacks Creek where - - -

PN57

Your Honour, I have no further questions of the witness. Mr Mills may care to ask some questions of Mrs McCracken.

PN58

THE SENIOR DEPUTY PRESIDENT: Mr Mills, you're free to cross-examine Ms McCracken. That is, ask her any questions about the evidence that she has given in order to demonstrate whether or not it's honestly given and truthful and accurate. So you can ask any questions you wish.

PN59

MR MILLS: Thank you, your Honour.

<CROSS-EXAMINATION BY MR MILLS [2.26PM]

PN60

MR MILLS: There was only one question. When you said about the car, you said there wasn't - there wouldn't be one available for a while, that was the only thing you said?---I don't recall that.

PN61

That was the only thing that I'd noticed that was not right, but - - - ?---Okay. I don't recall saying that.

**** RUTH MARGARET MCCRACKEN XXN MR MILLS
PN62

THE SENIOR DEPUTY PRESIDENT: Ms McCracken, your evidence is that a vehicle was to be made available?---Yes.

PN63

But you don't recall that there was going to be any delay?---No, because I have quite a number of vehicles, I don't know why I would have said one wouldn't be available.

<RE-EXAMINATION BY MR KOWALSKI [2.26PM]

PN64

MR KOWALSKI: Just one further question, Mrs McCracken; is it true to say you were anxious to ensure that Mr Mills wasn't disadvantaged in any way if he took up employment with yourself?---Absolutely. In fact, I looked forward to having him work for us because tradesmen are very hard to get.

PN65

I have no further questions, your Honour.

PN66

THE SENIOR DEPUTY PRESIDENT: Mr Mills, do you have any other questions of Ms McCracken at all?

PN67

MR MILLS: No, thank you, your Honour.

PN68

THE SENIOR DEPUTY PRESIDENT: Good. Thank you, Ms McCracken, you can stand down.

<THE WITNESS WITHDREW [2.27PM]

PN69

MR KOWALSKI: I wonder, your Honour, if Mrs McCracken can now absent herself?

PN70

THE SENIOR DEPUTY PRESIDENT: Yes, if she wishes. Thank you.

PN71

MR KOWALSKI: And if we might call Mr Barry Couch. Your Honour, I'm a little hard of hearing. I'm having a little bit of trouble hearing yourself. Would you mind just speaking up a little? Otherwise I'm going to miss some important things you might have to say.

PN72

THE SENIOR DEPUTY PRESIDENT: Okay.

PN73

MR KOWALSKI: Thank you.

<BARRY NOEL COUCH, SWORN [2.28PM]
<EXAMINATION-IN-CHIEF BY MR KOWALSKI

PN74

MR KOWALSKI: Mr Couch, would you mind giving us again your full name and address?---Thank you, Ted. Barry Noel Couch (address supplied).

PN75

What is your position with Q Automotive?---I'm the finance director and company secretary of Q Automotive Group.

PN76

Could you tell us what Peter Mills' position was with Q Automotive?---Peter Mills was the general panel and paint manager.

PN77

How long had he been employed with Q Automotive?---My recollection recalls that he was employed in approximately April '92 and he left of his own accord in November 2002 and was reemployed in January 2003 and then subsequently transferred business to Southside Body Works in May 2006.

PN78

THE SENIOR DEPUTY PRESIDENT: Sorry, are you saying there was a break in employment in 2002?---Yes, there was, your Honour.

PN79

Such that the employment was terminated and then subsequently - - - ?---He left of his own accord, your Honour, and then he was reemployed by us in January of '03.

PN80

MR KOWALSKI: In terms of our state legislation, your Honour, where the break is less than three months, it doesn't - - -

PN81

THE SENIOR DEPUTY PRESIDENT: Yes, I'm just trying to work out whether that was three months?---No, it was less than three months, your Honour.

PN82

It was less than three months?---Yes.

PN83

Good. Thank you.

PN84

MR KOWALSKI: Could you tell us what his approximate rate of pay was?---It was approximately $775 per week, including two hours' overtime. That equates to about $18 something an hour, I think. Something.

PN85

Did he receive any other entitlements?---There was an entitlement of a $75 commission per week and the use of a car for the last eight months of his employment.

**** BARRY NOEL COUCH XN MR KOWALSKI
PN86

What was the nature of the vehicle that he was allowed to use?---It could have been up to a two-year old Falcon or Falcon utility and he could use that at night-time, to and from home and the weekend use as well.

PN87

THE SENIOR DEPUTY PRESIDENT: So are you saying, Mr Couch, that that was a condition of employment that was available for the last eight months of
his - - - ?---Last eight months, in recognition of his position, your Honour.

PN88

Okay. Yes.

PN89

MR KOWALSKI: Could you tell us, please, why Q Automotive decided to cease operating its paint and panel shop?---Basically to do with competitive market forces. We were getting greater demand for retail mechanical repair work and we were looking for extra bays. The pressure of competition from other panel beaters and the like and the locality of other competitors to us, we found it viable to seek to give that work to other competitors and to expand our role in retail repair work. And get out of the panel work altogether.

PN90

So how then was Q Automotive going to handle any paint and panel work in future?---We had negotiated with Southside Body Works to give them all of our work, unconditionally.

PN91

Could you tell us approximately when those discussions were initiated?---They were during the month of April 2006.

PN92

Who did you initially speak to?---I spoke to a Paul Griffin. He was the name at Southside Body Works that we knew. I had not met Ruth McCracken until I was introduced to her by Paul. But Paul was the initial contact because he had worked with Q Automotive Group at some stage in the past.

PN93

What was the nature of the discussions you had with Mr Griffin?---Mainly to seek concurrence with him as to whether they would be interested maybe in taking on our work, all of our work, and subsequent panel work or smash repairs that we may have - been brought to us by outside customers.

PN94

Was there any discussion at that point about Southside taking on existing employees?---He didn't make any conclusion of that because he had to refer it to his manager, who subsequently I was introduced to, Ruth McCracken, and we had discussions with her regarding that.

**** BARRY NOEL COUCH XN MR KOWALSKI
PN95

When did you advise Mr Mills of your intention to close the paint and panel shop?---Peter was advised on 1 May 2006, in a meeting with the dealer principal of Q Ford.

PN96

Giving what sort of lead time?---We gave them a month's notice, that we would be severing on 1 June 2006.

PN97

Did you make arrangements for Mr Mills initially to speak to Paul Griffin?---I did.

PN98

Would you have expected a job offer to be forthcoming from Southside?---Part of the negotiation subsequently with Ruth McCracken was for Peter to obtain employment at Southside Body Works.

PN99

I think you've already said you - well, are you aware if Mr Mills did speak to Mrs McCracken?---Peter himself advised me that he had spoken to Ruth McCracken and had been for an interview.

PN100

Your Honour, at this point I'd like to tender another exhibit, being an extract from company records of termination pay of Mr Mills and copy of his sick leave record. If I could have a copy of that tendered to the witness as well?

PN101

THE SENIOR DEPUTY PRESIDENT: Yes.

EXHIBIT #A1 - EXTRACT FROM ENGINEERING AWARD STATE AGREEMENT 2002
EXHIBIT #A2 - EXTRACT OF COMPANY RECORDS OF ENTITLEMENTS OF MR MILLS

PN102

MR KOWALSKI: Now, Mr Couch, you have a copy of that extract?---I do.

PN103

Could you just take us very briefly through the top page? What does it show?
---It's headed "Termination Pay of Peter Mills", starting date 6 January 2003, and your Honour, that is the second starting date. Finishing date, 19 May 2006. It shows his hourly rate of pay, weekly rate of pay and daily rate on an hourly basis, on an eight-hour basis. The first column is showing his annual leave entitlement payment. The second - sorry, the first one is a pro rata. The second one is his actual annual leave. The third week is his final weeks' notice because of his period of employment with us, he was to have been given five weeks' notice, we gave him four weeks in verbal notification and one week in pay. And then his long service pay calculation for the period employed.

**** BARRY NOEL COUCH XN MR KOWALSKI
PN104

Just to clarify, item 3 was a week in lieu which he hadn't been given the opportunity of physically working out?---That's correct.

PN105

THE SENIOR DEPUTY PRESIDENT: So the other four weeks have been worked out?---That's correct, yes.

PN106

This was the one week remaining, which is effectively - I presume, is that the over 45 - - - ?---Yes.

PN107

Okay. The LSL is the balance between 6/1/03 and 19/5/06, is it?---That's correct.

PN108

Is that telling me that the LSL had been previously paid out and not returned, upon the first departure?---That's correct, your Honour.

PN109

So LSL started again, as it were? It wasn't deemed to be continuous?---There was no break in the continuity of his employment because it was less than two months - less than three months' break in his employment.

PN110

So had Mr Mills exhausted long service leave accrued before that, had he?---Yes, he had.

PN111

So this was the residual of the 12 years?---Yes.

PN112

Having exhausted the entitlement up to that point?---That's correct, your Honour. Yes.

PN113

Okay. I understand.

PN114

MR KOWALSKI: If you could just look at the second page there? Could you please tell us what that record shows?---I can read from the bottom, first of all it shows sick leave - payment of sick leave from the period 26 July '05 to 22 February '06, where we paid him sick leave, and then subsequently to that, there was - the sick leave had been exhausted and had three periods of sick pay there was no entitlement, 22 March, 27 April and 17 May 2006.

PN115

Would it be fair to show, then, the record shows that on his cessation of work with you, he had no paid sick leave entitlement?---That's correct.

PN116

When Mr Mills terminated with the company, did he purchase any equipment? Was there any equipment purchased from Q Automotive?---Peter approached me during the period of the notification that he wished to purchase - Peter might correct me if I get this wrong, it's a Mag lock. It's a dent removal, a seamless dent removal system that was worth approximately $2000-$2500. And he made an approach to me that he could purchase that, to maybe continue in that business as he was the only one who knew in Q Automotive how to use that equipment.

**** BARRY NOEL COUCH XN MR KOWALSKI
PN117

Did he indicate what use he might make of the equipment?---He gave me the indication that he would like to continue on doing that sort of business, maybe of his own accord.

PN118

Your Honour, I'd like now to tender a further exhibit, being an extract from a Refadex showing the general location of Q Automotive, Southside Body Works and Mr Mills' home. I wonder if a copy of that could also be given to the witness?

PN119

THE SENIOR DEPUTY PRESIDENT: Well, Ms McCracken's evidence was that the Southside Body Works was on the other side of Logan Road and it was some 2 kilometres distant.

PN120

MR KOWALSKI: I think this exhibit, your Honour, will help you to visualise that. What I have done there, your Honour, is to highlight Springwood being the general area where Q Automotive resides, Slacks Creek being the general area where Southside Body Works resides, and Shailer Park where Mr Mills lives. You will see from - or you may not see, the copy may not be particularly good, but at the top of the page there's a scale which indicates that 5 kilometres represents a distance of about 2 inches. I'm sorry, I'm not able to put that into millimetres, but approximately 2 inches represents 5 kilometres.

PN121

Now, Mr Couch, are you able to indicate from your own knowledge approximately how far Southside Body Works might be from your own site?---I would have said approximately 1.5 kilometres.

PN122

Thank you. I don't have any further questions on that exhibit, your Honour.

PN123

THE SENIOR DEPUTY PRESIDENT: Good. Thank you.

PN124

MR KOWALSKI: Lastly, Mr Couch, do you believe that Q Automotive has met its obligation to obtain acceptable alternative employment for Mr Mills?---We were of the understanding that we had, yes.

PN125

I have no further questions, your Honour.

PN126

THE SENIOR DEPUTY PRESIDENT: Good. Again, Mr Mills, do you have any questions you want to ask of the witness, to demonstrate whether he has been accurate in his representation of the circumstances or not?

**** BARRY NOEL COUCH XN MR KOWALSKI
PN127

MR MILLS: If I can, your Honour.

<CROSS-EXAMINATION BY MR MILLS [2.42PM]

PN128

MR MILLS: When I left Q Ford for that break, why did I come back to Q Ford?
---Which break are you referring to, Peter?

PN129

When I left after my - the 10 years?---When you left in February 2002?

PN130

Yes?---Sorry, your question was again?

PN131

Why did I come back to Q Ford?---I didn't - I didn't reemploy you, so I can't answer that.

PN132

I was asked to come back?---Okay.

PN133

To help out?---Yes.

PN134

That was one of the reasons I came back?---That's fair. That's fair.

PN135

I was only gone for a week?---Yes.

PN136

And I was asked to come back to help you out and in a couple of weeks, I was asked if I could come back fulltime?---Okay.

PN137

That's about all there was for you?---Thank you.

PN138

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN139

MR KOWALSKI: I have no follow-up questions, your Honour.

PN140

THE SENIOR DEPUTY PRESIDENT: The witness is excused.

<THE WITNESS WITHDREW [2.43PM]

PN141

THE SENIOR DEPUTY PRESIDENT: Mr Mills, what you are entitled to do now is also come into the stand, swear an oath or an affirmation, and to give what evidence you want to give in these proceedings so that I can have regard to it. Is that what you now wish to do?

PN142

MR MILLS: I've got no idea, your Honour.

PN143

THE SENIOR DEPUTY PRESIDENT: Well, I'll ask you some questions and perhaps then Mr Kowalski will also ask you some questions, but if you could take the stand, please?

<PETER JOHN MILLS, SWORN [2.44PM]

PN144

THE SENIOR DEPUTY PRESIDENT: Mr Mills, we'll forego some of the formalities. You've heard the evidence of Ms McCracken as to the terms and conditions on which you were offered employment at Southside Body Works. In what ways, in your view, was that offer of employment deficient or less than the employment you enjoyed at Q Automotive?---I was going to be put with Paul Griffin, or working underneath Paul Griffin and I worked with him for a few years at Q Ford and I got on quite well with him at that stage, but then when he decided to leave Q Ford, my opinion of him really changed dramatically when he tried to run the panel shop down into the ground and we really had to work hard to get it to come back up again. So I didn't feel like I could actually work with him again.

PN145

Are there other issues other than that?---No, Ruth is a very nice lady. As I said earlier, she couldn't give me a car straight away, but that was not going to be too much of an issue.

PN146

Was your concern about Mr Griffin of a personal nature or was it professional?
---Professional, I would say, because I don't think - I didn't like his attitude, the way he - what he did to the company.

PN147

You are of the belief that you could not have worked under Mr Griffin, is that correct?---No.

PN148

Is there any more evidence you wish to give about the terms and conditions of employment that you were to enjoy at Southside Body Works? Were they in any other way deficient relative to what you enjoyed at Q Automotive?---The panel shop was more dingier than what I was used to, but there again, maybe no one has ever told them to sort of brighten the place up a bit.

PN149

Okay. Mr Kowalski, do you want to ask some questions of the witness?

PN150

MR KOWALSKI: Yes, your Honour. I might just have one question.

<CROSS-EXAMINATION BY MR KOWALSKI [2.47PM]

PN151

MR KOWALSKI: Mr Mills, you've indicated you didn't feel you could get on with Paul Griffin?---That's correct.

PN152

Did you discuss that with Mrs McCracken when you were talking about the conditions of employment?---No, I would not do nothing like that because he was employed there, it would cause bad feelings.

**** PETER JOHN MILLS XXN MR KOWALSKI
PN153

Do you think it possible that Mrs McCracken might have been happy to put you in the Mt Gravatt workshop rather than the Slacks Creek one?---Well, it was stated that I was going to be down at Slacks Creek. So, no.

PN154

So you wouldn't have been working directly with Mr Griffin?---No, I don't think I would have gone to Mt Gravatt.

PN155

Thank you, your Honour. I have no further questions.

PN156

THE SENIOR DEPUTY PRESIDENT: Yes, okay. Why wouldn't you have gone to Mt Gravatt, Mr Mills?---I actually - when I went for the interview there, I didn't like the sort of atmosphere there. It's hard to say. You've really got to sort of - how can I put it? You've really got to be happy where you're working, haven't you?

PN157

Sorry, you were offered employment whereabouts, then? At the - - - ?---At the Slacks Creek one.

PN158

Slacks Creek, but were you also offered an opportunity to work at Mt Gravatt?
---No. I - she didn't offer me one there, but whether I had spoken up, I don't know.

PN159

But are you saying that even if you had been offered one at Mt Gravatt, you wouldn't want it?---No, the atmosphere at Mt Gravatt is totally different.

PN160

Mr Griffin is only employed at Slacks Creek?---That's correct.

PN161

Mr Kowalski, do you have any other questions?

PN162

MR KOWALSKI: I have no further questions.

PN163

THE SENIOR DEPUTY PRESIDENT: Mr Mills, is there anything else you want to add to your evidence?---When you're terminated, are you meant to get that in writing?

PN164

Well, it's sometimes a good practice to have a written document confirming the arrangements, but there's - - - ?---Not always?

PN165

It's not always the case. There are many oral, verbal exchanges take place in the workplace which gives the desired effect and there's no sort of formal obligation to put a termination in writing, although sometimes parties might deem it useful and effective to do so?---I just thought that was standard practice, that was all.

**** PETER JOHN MILLS XXN MR KOWALSKI
PN166

Mr Mills, have you obtained alternative employment since the time of these matters arising?---I'm now on my second job, yes.

PN167

Again, within your trade?---Within my trade.

PN168

Yes. On that basis, you can stand down, you're excused, Mr Mills. Thank you for your evidence?---Thank you, your Honour.

<THE WITNESS WITHDREW [2.50PM]

PN169

MR KOWALSKI: Thank you, your Honour.

PN170

THE SENIOR DEPUTY PRESIDENT: Sorry, before you start, Mr Kowalski, what happens now, Mr Mills, is that yourself and Mr Kowalski - Mr Kowalski will go first - get an opportunity to make general comments about all the circumstances and to put the evidence in context or to point me to certain things that were said in the evidence and that is the concluding comment, closing submissions, if you like. I'll give you an opportunity to do that, to the extent that you want to. But that's up to you.

PN171

MR MILLS: Okay.

PN172

THE SENIOR DEPUTY PRESIDENT: I rely principally on the evidence that's before me.

PN173

MR MILLS: Thank you.

PN174

MR KOWALSKI: Thank you, your Honour. Your Honour, you are no doubt aware that there are any number of decided cases dealing with the issue before you today, but I have chosen to refer to just one in particular which I believe usefully draws together and establishes principles that govern all of the issues. The matter I refer to was an appeal to a Full Bench of the Australian Industrial Relations Commission against a single Commissioner's decision refusing to exempt a company from severance payments in circumstances where finding acceptable alternative employment was in issue. I seek leave, your Honour, to tender a copy of that decision.

PN175

The decision, your Honour, is the decision of Full Bench, Peterson J, Marsh SDP, Commissioner Oldmeadow in Sydney on 12 September 1990, in a case that I'll call for shorthand, Derole Nominees Pty Ltd.

PN176

THE SENIOR DEPUTY PRESIDENT: I'm familiar with the case, Mr Kowalski, so you won't need to take me to it in any great detail.

PN177

MR KOWALSKI: Your Honour, what I've done is to highlight a number of sections of the decision. At the risk of boring you, but for the sake of Mr Mills, who I believe has the right to know what sort of arguments are presented in these matters, I would like to go through those sections that I have highlighted. I'll be as quick as I can, but as I say, I think it will help Mr Mills to understand where he stands. Now, as I said, it was an appeal against a decision of Commissioner Caesar who had initially refused to grant an exemption to a company in similar circumstances to that of Q Automotive, where they had sold off part of their business and sought alternative employment with alternative companies.

PN178

I just make on point, your Honour, there are some pages there that whilst they look blank, they aren't. There are some references at the top of those pages. I'm not quite sure why our printer printed it that way, but just so there's no belief that anything has been left out. On page 2 of the decision, towards the middle of the page:

PN179

The appeal raises questions which go to the meaning and intention of the exemption provision contained in the award -

PN180

and I should say that that exemption is identical to the one found in the Engineering Award State:

PN181

- which reflects the provisions adopted by a Full Bench of the Commission, Sir John Moore, President Madden and Commissioner Brown in a supplementary decision in the TCR case.

PN182

Going over then to page 3:

PN183

In the course of his decision, the Commissioner stated his view that the failure of the employees to accept the employment meant that necessarily the alternative employment was unacceptable.

PN184

Now here remember this is the Full Bench speaking about Commissioner Caesar's decision which was subsequently overturned in part. Says this Full Bench:

PN185

This approach is inconsistent with the decision of a Full Bench of the Commission, Munro and Patterson JJ and Commissioner Leary in a decision on appeal concerning an application by a company known as Hot Tuna Pty Ltd for exemption under subclause 51(e) of the award. This decision makes clear that the test to be applied to determine whether employment is acceptable within the meaning of the clause is an objective one. That is to say, the question whether the particular employment for an employee is acceptable must be determined according to objective standards. In the Hot Tuna case, the following was said. A considerable part of that case was devoted to questions of onus and to supporting the proposition that the test of acceptability of the alternative employment is an objective one involving a consideration of such matters as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and other matters. We have no doubt that there is an onus on the employer invoking subclause 51(c) and that matters of the kind referred to by the union may be relevant in assessing the position of the particular case.

PN186

Over at another page, page 4, this deals with the issue of obtaining:

PN187

The word "obtain" does not appear in its context to mean actually obtain in the fullest sense possible. In circumstances like those occurring at the company, one employer is incapable in law of effecting a contract of employment between his employee and another employer, whether by assignment or otherwise. The creation of the legal relationship of master and servant depends upon a mutuality being arrived at between the individual and the incoming employer. Therefore, the pursuit of alternative employment by the outgoing employer cannot be expected, by reason of itself alone, to produce new employment. There will usually and perhaps always remain the opportunity for the incoming employer and the employee to disagree as to matters such as terms of employment, suitability of the job to the employee and vice versa, so that alternative employment may not eventuate. It follows that the word "obtain" must be given some lesser meaning. The Shorter Oxford Dictionary, Third Edition Revised, provides as its relevant meaning the definition of "obtain" as to procure or gain as the result of purpose and effort. It seems to us that meaning is of assistance here. That is, the employer by purpose and effort, may establish an opportunity which suits the employee and which crystallises as alternative employment of an acceptable kind. This approach is supported if the passage quoted above from the termination change and redundancy case are read in conjunction with what was said under the heading, Assistance in Seeking Alternative Employment. There, the Commission records the ACTU objective of achieving award provisions designed to ensure that the employer assists the employee to find alternative employment.

PN188

We go down a little bit further down the page:

PN189

It will be seen that the intention is not to impose an absolute test on the employer's ability to obtain alternative employment, but rather, it refers to action which causes acceptable alternative employment to become available to the redundant employee. Employer must be a strong, moving force towards the creation of the available opportunity.

PN190

On to page 5:

PN191

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. Yet, the use of the qualification "acceptable" is a clear indication that it is not any employment which complies, but that which meets the relevant standard. In our opinion, there are obvious elements of such a standard including the work being of a like nature, the location being not unreasonably distant, pay arrangements complying with award requirements, there will probably be others.

PN192

In fact, that's the last reference I wish to make to that decision, your Honour. Your Honour, if we now look at the specific details of the matter before you, in light of the principles which have been established by those previous cases. The first issue that has to be decided is whether the steps taken by Q Automotive to find alternative employment for Mr Mills met the award requirement of "obtain". If I might just briefly harp back to the Derole case which was tendered, the Full Bench said:

PN193

It will be seen that the intention is not to impose an absolute test on the employer's ability to obtain alternative employment, but rather it refers to action which causes acceptable alternative employment to become available to the redundant employee. Employer must be a strong, moving force towards the creation of the available opportunity.

PN194

I believe, your Honour, we have shown that Mr Couch from Q Automotive was the driving force in having Southside Body Works make an offer of employment to Mr Mills. Q Automotive clearly accepted that it had a responsibility to assist a long term employee find alternative employment when it closed down its paint and panel operation, and was happy to do so. Given the fact that Q Automotive was going to send all its paint and panel work to Southside Body Works, it would have been most unusual if Southside had not agreed to offer a position to Mr Mills. To further underline that point, and this is supported by the evidence of Mrs McCracken, the current significant shortage of qualified tradespersons in the industry virtually guaranteed that Southside Body Works would be only too happy to take on Mr Mills.

PN195

Looking then, your Honour, at whether the position offered was acceptable, we have heard that Southside Body Works was prepared to match the pay Mr Mills had been on with Q Automotive. The work he would have done for Southside Body Works would have been identical to what he had been doing with Q Automotive. Mr Mills would have been able to accrue sick leave entitlements with Southside Body Works, and we have seen in Mr Couch's evidence that Mr Mills had already used up all of his sick leave entitlements at Q Automotive, so he would have suffered no detriment in starting with Southside Body Works. His accrued annual leave had been paid out by Q Automotive and he would have been entitled to accrue annual leave entitlement on commencement with Southside Body Works. So again, he would have suffered no detriment in that regard.

PN196

His long service leave was paid out by Q Automotive and it is true that he would have lost his continuity for the purpose of long service leave accrual with Southside Body Works. However, it would certainly have been possible for Mr Mills to again qualify for pro rata long service leave had he remained the requisite time with Southside Body Works. Given the shortage of tradespersons, Mr Mills' successful retention of his job with Q Automotive for almost 14 years, and the strong position of Southside Body Works in the industry, we say it is perfectly reasonable to assume he could have gained an entitlement to long service leave with Southside Body Works had he accepted the position. We have also seen that the distance from Mr Mills' home to Q Automotive was quite comparable to the distance between his home and Southside Body Works, so travel to work would have not been an extra burden.

PN197

We heard from Mrs McCracken that Mr Mills would have been employed under award conditions and receive 9 per cent superannuation on his ordinary gross earnings. So again, he would not have suffered any detriment in that regard. We say, your Honour, that viewed objectively, the job offered by Southside Body Works was acceptable. The fact that Mr Mills chose not to accept it ought not to change that assessment. Again, at the risk of repetition, I'd like again to quote from the Full Bench decision tabled earlier:

PN198

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.

PN199

We heard during Mr Couch's evidence that on termination, Mr Mills had purchased items of plant from Q Automotive with the stated aim that Mr Mills might start his own business of dentless panel repair. That should be taken into account, in our view, in determining whether that might have influenced Mr Mills to reject the job offer of Southside Body Works. In conclusion we say, your Honour, that given the facts of this case, we ask that you grant the application as sought and exempt Q Automotive from the severance payments otherwise payable to Mr Mills. If it please the Commission.

PN200

THE SENIOR DEPUTY PRESIDENT: Thanks, Mr Kowalski. Mr Mills, do you have anything you want to add by way of closing comments?

PN201

MR MILLS: I wouldn't know where to start.

PN202

THE SENIOR DEPUTY PRESIDENT: You can start anywhere. It doesn't particularly matter where.

PN203

MR MILLS: No, I'm sorry.

PN204

THE SENIOR DEPUTY PRESIDENT: Well, you have given evidence under oath and I'll have regard to that evidence if you're not inclined to make general submissions, as well as the particular evidence that you've given and which is important in these matters.

PN205

MR MILLS: Thank you, your Honour.

PN206

THE SENIOR DEPUTY PRESIDENT: That said, do you have any other remarks you want to make, Mr Kowalski?

PN207

MR KOWALSKI: Nothing further, your Honour.

PN208

THE SENIOR DEPUTY PRESIDENT: Thank you. Thank you for your submissions today, everyone. I will turn to this matter shortly and hopefully within the next few days publish a decision. On that basis, we are adjourned. Thank you.

<ADJOURNED INDEFINITELY [3.07PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

RUTH MARGARET MCCRACKEN, SWORN PN25
EXAMINATION-IN-CHIEF BY MR KOWALSKI PN25
CROSS-EXAMINATION BY MR MILLS PN59
RE-EXAMINATION BY MR KOWALSKI PN63
THE WITNESS WITHDREW PN68
BARRY NOEL COUCH, SWORN PN73
EXAMINATION-IN-CHIEF BY MR KOWALSKI PN73
EXHIBIT #A1 - EXTRACT FROM ENGINEERING AWARD STATE AGREEMENT 2002 PN101
EXHIBIT #A2 - EXTRACT OF COMPANY RECORDS OF ENTITLEMENTS OF MR MILLS PN101
CROSS-EXAMINATION BY MR MILLS PN127
THE WITNESS WITHDREW PN140
PETER JOHN MILLS, SWORN PN143
CROSS-EXAMINATION BY MR KOWALSKI PN150
THE WITNESS WITHDREW PN168