PR938759 PR938759 Download Word Document AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION Workplace Relations Act 1996 s.170CE application for relief in respect of termination of employment Barry Anderson and Copacabana Interior Linings Pty Ltd (U2003/2146) Mark Pospishil and Copacabana Interior Linings Pty Ltd (U2003/2147) Anthony Pospishil and Copacabana Interior Linings Pty Ltd (U2003/2148) Peter Richardson and Copacabana Interior Linings Pty Ltd (U2003/2149) COMMISSIONER CARGILL SYDNEY, 2 OCTOBER 2003 Termination of employment. DECISION [1] This decision arises from applications by Messrs B. Anderson, M. Pospishil, A. Pospishil and P Richardson (collectively, the applicants) pursuant to section 170CE of the Workplace Relations Act 1996 (the Act ) for relief in respect of the termination of their employment by Copacabana Interior Linings Pty Ltd (the respondent). The applications were filed in this Commission on 15 April 2003 and proceeded to conciliation. This was unsuccessful and on 23 June 2003 certificates under section 170CF(2) were issued. Notices of election to proceed to arbitration to determine whether the terminations were harsh, unjust or unreasonable were lodged by the applicants' representative on 30 June 2003. [2] Directions were issued for the filing and exchange of outlines of submissions and witness statements. The matters were heard in Sydney on 3, 4, and 18 September 2003. The applicants were represented by Mr Marshall from the Construction, Forestry, Mining and Energy Union (CFMEU). The respondent was represented by Mr Thomas from The Master Builders' Association of New South Wales. [3] The following witnesses gave evidence on behalf of the applicants: Mr W. Knight Company Delegate at the Dillwynnia site. His witness statement was marked Exhibit Applicant 2. Mr B. Redfern Organiser with the CFMEU. His witness statement was marked Exhibit Applicant 3. Mr V. Vega Organiser with the CFMEU. His witness statement was marked Exhibit Applicant 4. Mr B. Anderson Applicant. His witness statement was marked Exhibit Applicant 5. Mr P. Richardson Applicant. His witness statement was marked Exhibit Applicant 6. Mr M. Pospishil Applicant. His witness statement was marked Exhibit Applicant 8. Mr. A. Pospishil Applicant. His witness statement was marked Exhibit Applicant 9. [4] The following witnesses gave evidence on behalf of the respondent: Mr A. Grippi Project Manager at the Dillwynnia site. He appeared under summons. His witness statement was marked Exhibit Respondent 2. Mr L. McGrath Director of the respondent. His witness statement was marked Exhibit Respondent 9. Mr N. Vella Director of the respondent. His witness statement was marked Exhibit Respondent 10. FACTS AND EVIDENCE [5] The respondent operates as a dry wall and ceiling panel fixer in the commercial building and construction industry. It was engaged as a sub contractor to Richard Crookes Constructions Pty Ltd (Crookes) on the construction of the Dillwynnia Correctional Centre near Windsor in Western Sydney. The project consisted of twenty-six buildings set on an area of approximately thirty acres. [6] The respondent employed a workforce which fluctuated in size. The peak was forty-three employees in late February/early March 2003, Exhibit Respondent 1 refers. In some instances employees had followed the respondent from employment on other projects, in other cases they were new employees. [7] Employees were employed under the provisions of the National Building and Construction Industry Award 2000 (the Award). By arrangement with the CFMEU the respondent applied the wage rates and other conditions contained in standard CFMEU agreements although there was no certified agreement between the respondent and the CFMEU. All employees were engaged under a daily contract of employment and hence were excluded from the operation of section 170CL of the Act relating to notice of termination. [8] Mr Anderson commenced employment with the respondent on 17 April 2002; Mr Richardson in May 2002; and both Messrs M. Pospishil and A. Pospishil on 28 October 2002. I note that the application form relating to Mr M. Pospishil indicates a commencement date of 4 September 2002. However, this must be an error as the evidence of both Pospishils was that they both commenced on 28 October. [9] All four applicants were employed as ceiling fixers/plasterers. The employment of each applicant was terminated on 28 March 2003 and each received one day's payment in lieu of notice as required by the Award. In each case the reason for termination provided by the respondent was redundancy due to the work on the particular site nearing completion, refer letters of termination Exhibits Respondent 3, 6, 7 and 8. The evidence was that five other employees resigned at or around the time of the terminations and one other employee was made redundant on the same date as the applicants. [10] The applicants allege that there were a number of key incidents or issues which caused the respondent to inappropriately target them for redundancy. These can be described as the Saturday overtime issue which relates to each of the applicants; the hearing test and subsequent claims issue which relates to Messrs M. and A. Pospishil; the inclement weather issue which relates to each of the applicants; the stand down issue which relates to Mr Richardson; and the light duties issue which relates to Mr Anderson. There was much evidence in connection with each of these issues and I have considered all of that evidence. In summary the evidence about these matters was as follows: · Saturday overtime had apparently been a regular occurrence until January 2003. The evidence of both Messrs McGrath and Vella was that neither of their foremen were available to supervise on Saturdays and Mr McGrath's evidence was that it was "a bit risky" having employees on site without supervision. Overtime was worked during the week, Monday to Thursday, to make up for the absence of Saturday work. The evidence of the applicants was that they had accepted the situation at first. However, by February Mr Richardson was of the view that Saturday overtime was actually being worked. He informed Mr Knight. A meeting was held with the respondent about the issue. There is conflict about the outcome of the meeting. The applicants and the CFMEU witnesses testified that it was agreed that a roster for overtime would be drawn up so that all employees would have a fair share. They also state that it was agreed that Messrs Richardson and Anderson would receive payment as compensation for not having been allocated overtime. Mr Vella's evidence was that there was no agreed roster but rather that he had agreed that he would consider a roster. This evidence was supported by the testimony of Mr Grippi. Mr Vella denied that he had any intention of, or had made any agreement to pay employees for work that they hadn't performed. He recalled that Mr Grippi had said that Crookes would pay the men. There was no evidence from Mr Grippi on this point. Mr Richardson again became concerned that overtime was being worked on Saturday and conveyed this to Mr Knight. Mr Knight attended the site on one Saturday morning and noted that, contrary to the usual arrangements, employees' cars were parked inside the fence. He also noted that the sign-on book was not in the shed. Mr Knight raised the issue with the foreman, Mr Southwell and Mr McGrath on the following Monday. All overtime was stopped late in February due to budgetary constraints. · Hearing tests were held on-site in November 2002. These were organised by the CFMEU solicitors on instruction from Mr Redfern. It appears that Crookes were informed about this. As a result of the tests four employees of the respondent made claims. These included the two Pospishils. Their evidence was that Mr McGrath had pressured them to withdraw their claims. Mr McGrath's evidence was that he asked them if they realised "that you're suing us". He denied that the claims had any influence on the decision as to who should be terminated. Both claims were processed and Mr M. Pospishil received compensation for hearing loss. · The site was on clay based soil which apparently became slippery when wet. The evidence of the applicants and the CFMEU witnesses was that there was a difference in approach to the question of inclement weather. The applicants' approach was to wait in the shed until the safety committee had inspected the site and had recommended that it was safe to work. This was the standard metropolitan practice. The applicants' evidence was that Mr McGrath and other employees, "the Central Coast boys", attempted to work before the safety committee had authorised it. Mr McGrath's evidence was that he hadn't led employees out to work in inclement weather. He testified that Crookes had a "white board" which indicated which areas of the site were open and which were closed. His evidence was that the site was "crawling with occupational health and safety" and there would have been trouble if he had attempted to work if the site wasn't cleared. Although nothing was put to Mr Grippi about the issue of inclement weather his evidence was that there was a strict safety regime on the site, in part, because it was a public works project. · In September 2002 Mr Richardson was sent from Dillwynnia to another job of the respondents on which he had previously worked. At the completion of that work he was approached by the foreman, Mr Southwell, who told him to have a few days off as he had no work for him. Mr Redfern became involved and he spoke to Mr Grippi about the issue. A meeting was held with Mr Vella and it was agreed that Mr Richardson would be paid for the time for which he had been stood down. The respondent conceded that it did not have the right to stand down an employee in the particular circumstances although it had not previously been aware of this. Mr Vella's evidence was that the CFMEU had applied pressure and had made threats of industrial action about the issue. Mr Redfern's evidence was that there was no pressure or threats of industrial action. · Mr Anderson suffered a work-related injury to his right elbow in mid-February 2003. He obtained Workcover medical certificates dated 13 and 20 February, Exhibits Respondent 4 and 5. Exhibit Respondent 5 indicates that Mr Anderson was fit for "suitable duties" from 21 February to 21 March 2003. It placed a restriction upon him lifting more than ten kgs and also provided for "walking up to light duties". This latter provision is unclear, however, it appears to indicate that Mr Anderson should have been on light duties for that period of time. Mr Anderson provided these certificates to Mr Southwell who apparently gave them to Mr Vella. Mr McGrath's evidence was that he was unaware of the restrictions on Mr Anderson. He testified that he probably should have been aware of them but wasn't. Mr McGrath testified that this was not an issue in the selection of Mr Anderson for redundancy. Mr Anderson's evidence was that despite repeated requests he was not provided with a number for the workers' compensation claim. His evidence was that it was only after indicating that he would contact the CFMEU about the issue that the claim number was provided. Mr Anderson testified that after providing the certificates to Mr Southwell he was often given heavy work when he was required to lift weights of more than ten kgs. He was unable to estimate what percentage of his work involved the heavy lifting. Mr Anderson testified that, following his injury, he began to have problems with Mr Southwell who also kept making smart remarks to him. [11] In addition to the specific issues outlined above, the applicants also gave evidence of other matters which they allege caused them to be targeted for redundancy. These included difficulties in being paid the correct amount of holiday pay at Christmas 2002 and a general level of conflict between Mr Richardson and Mr Southwell. The applicants also allege that Mr Southwell had deliberately manoeuvred them into jobs that were coming to an end so that they would be the ones chosen for redundancy. The applicants' evidence was that, at the time of termination, there was work remaining which could have been undertaken by them rather than other employees. [12] Five new employees commenced on the site in late February, Exhibit Respondent 1 refers. The evidence of the applicants and CFMEU witnesses was that these employees should have been made redundant instead of the applicants as they had lesser skills and service. Mr McGrath's evidence was that these new employees were taken on because of pressure from Crookes who wanted work done on the four buildings in "P" Block without any reduction in labour on the remainder of the site. That evidence was supported by the testimony of Messrs Vella and Grippi. [13] The evidence of Messrs McGrath and Vella was that the applicant's employment was terminated along with that of the other employee, because there was a need to reduce labour on the site. Mr McGrath's evidence was that, shortly before the terminations, Mr Vella had told him to start cutting numbers because of financial reasons. His evidence was that, in the week leading up to the terminations, he saw an opportunity to do this as he had been informed by Crookes that "M" Block would not be available for about six weeks. [14] Mr McGrath's evidence was that Messrs Richardson and Anderson were selected for redundancy because they weren't working in a team. He testified that Mr Anderson was going to work on "M" Block but that was not then available. Mr McGrath's evidence as to the Pospishils' selection was that they operated as a team and the jobs on which they had been working were complete and new work was not available to commence for some time. His evidence was that there was no other consideration for the selection of the applicants. [15] Mr Vella's evidence was that the reason for the redundancies was that it had come to the time to reduce the workforce. The applicants had each come to an end of their part of the project. His evidence was that it made sense to leave the new employees to finish the work on "P" Block rather than try and integrate other employees into that team. Mr Vella testified that the selection for redundancy had been made by Mr McGrath in conference with himself. He denied that the applicants had been manoeuvred into dead-end jobs or that they had been dismissed for their union activities or for making workers' compensation claims. [16] Mr Grippi's evidence was that, at the time of the terminations, the project had reached a stage where "its back had been broken". He testified that the decision to make employees redundant then was an issue for the respondent and not for him to comment on. Mr Grippi testified that both prior to and after the terminations he was "generally happy" with the respondent's progress on the job. [17] As indicated earlier, the employment of each of the applicants was terminated on 28 March 2003. The evidence was that Mr Southwell spoke to Messrs Anderson, Richardson and A. Pospishil on that day and told them that their employment was being terminated because of lack of work. They were each given a letter of termination, Exhibits Respondent 3, 6 and 8. Mr Southwell also gave Mr A. Pospishil a letter of termination for his brother, who was on annual leave, Exhibit Respondent 7. Mr Southwell asked for the latter's mobile phone number. There was no evidence as to whether Mr Southwell attempted to contact Mr M. Pospishil as Mr Southwell was not called to give evidence, however, Mr Pospishil's evidence was that his mobile phone did not have reception at his holiday location. His evidence was that he did not know about the termination until his return from holiday a few days later. [18] The evidence of the applicants was that they should have remained in employment with the respondent for approximately four to six weeks. Exhibit Respondent 1 shows that the next redundancies were effected on 15 May 2003. The evidence was that it was at this time that the employees who had been taken on in February left. It is unclear whether this was due to redundancy or resignation. [19] It was also the evidence of the applicants that their previous experience in the industry was that when a job was nearing completion the employer would give them forewarning to look for another job. Their evidence was that it was unfair that the respondent had not provided them with warning that termination was likely. Indeed the evidence of Mr M. Pospishil was that when he went on leave Mr Southwell had said "see you when you get back". [20] All four applicants are presently employed. They do not seek reinstatement. Mr Anderson moved to Cowra shortly after the terminations. He commenced work with a local firm on 22 May 2003 earning approximately $130 per week less than when employed with the respondent. Mr Richardson's evidence was that he started another job on 5 May 2003. He receives approximately $100 per week less than when with the respondent. [21] The evidence of Messrs M and A Pospishil was that they were both unemployed until 9 April when they commenced working for a company but not on wages. They estimated that they lost approximately $2000. Since 31 July they have been employed on the same conditions as they received from the respondent. SUBMISSIONS ON BEHALF OF THE APPLICANTS [22] As required by the directions issued prior to the hearing a written outline of submissions was provided. That outline was marked Exhibit Applicant 11. Mr Marshall relied on that outline and also made oral submissions. [23] The outline of submissions refers to the applicants' long history in the industry and the fact that they are experienced ceiling fixing plasterers who are able to carry out all aspects of their work quickly and competently. It is submitted that there was no prior notice of a downturn in work or of the impending or actual redundancies. [24] In the outline it is submitted that there was no transparent process, procedure or criteria adopted by the respondent in effecting the redundancies. It is also submitted that neither the applicants nor their union representatives were provided with an opportunity to respond in a manner which may have mitigated the effects of the redundancies. Similarly they were not able to suggest alternatives or influence their selection for redundancy. It is submitted that these defects caused the terminations to be unjust and unreasonable. [25] It is noted that additional lesser skilled persons were employed about six weeks prior to the terminations and that these persons were retained after the applicants were made redundant. It was submitted that these persons, with lesser skills and service, could have been made redundant instead of the applicants. [26] In the outline it is submitted that the terminations were harsh as they were timed so that the applicants did not receive payment for the public holidays at Easter. They were also harsh and unreasonable as the applicants had almost no chance of mitigating their losses by obtaining employment in light of the ensuing Easter and Anzac Day holidays and associated industry rostered days off. [27] It is submitted that each of the applicants was victimised in terms of section 170CK of the Act . In relation to subsection 170CK(2)(b) it is submitted that all of the applicants had objected to an unfair and discriminatory allocation of overtime and had participated in a process of challenging this. It is submitted that the respondent deliberately concealed the fact that overtime was being worked on Saturdays. Furthermore the allocation of overtime was in breach of an agreement which had been reached with the union. In addition it was submitted that the respondent did not honour an agreement about payment to Messrs Anderson and Richardson relating to the issue of Saturday overtime. [28] In relation to subsection 170 CK(2)(e) of the Act it is submitted that Messrs A and M Pospishil were victimised and harassed by the respondent in respect of the claims relating to their hearing. It is also submitted that Mr Anderson was victimised by Mr Southwell in relation to his workers' compensation claim and requirement for light duties. Further it is submitted that Mr Richardson was victimised by Mr Southwell in respect of his illegal stand down. It is submitted that this victimisation related to both the stand down itself and to the work given to Mr Richardson in the following months. [29] The outline of submissions notes that Mr A. Pospishil was made redundant whilst on annual leave and was not informed of the termination until after his return. This should actually have been a reference to Mr M. Pospishil. [30] In his oral submissions Mr Marshall stated that Mr McGrath had provided crucial evidence at Transcript PNs 1715-1755. He submitted that in his evidence, Mr McGrath conceded that the respondent's part of the Dillwynnia project was not complete or at the tail end at the time of the terminations. Mr Marshall submitted that it appeared that the pressure to reduce the workforce dropped off after the terminations. He noted that the applicants would have been fairly made redundant after 15 May 2003. [31] Mr Marshall referred to Mr McGrath's evidence at Transcript PN 1716 that fifteen new employees had been taken on since Christmas 2002 and that he hadn't considered them for redundancy. Mr Marshall also referred to Exhibit Applicant 10 which, he submitted, revealed that the new employees were less experienced than the applicants. [32] Mr Marshall submitted that, in the circumstances, it would have been fair for the respondent to have consulted the applicants and their representatives about the terminations. He noted that the applicants received only one day's pay in lieu of notice and no prior warning. Mr Marshall submitted that the reason for the lack of notice and consultation was that the applicants had been targeted as a result of their activism. [33] Mr Marshall noted that there was a conflict between the evidence of Mr McGrath, at paragraph 1 of Exhibit Respondent 9, that the work and men were merging into one area of the project, and that of Mr Vella, that it would be unusual to merge teams together. [34] Mr Marshall submitted that Mr McGrath had conceded that the new employees had less skills and experience than the applicants. He also submitted that, at Transcript PN 1730/1, Mr McGrath conceded that Mr A Pospishil was preparing to do more work at the time of termination. Further at Transcript PN1732 he had conceded that Mr Southwell had informed both Pospishils that they could work on Block "S". [35] Mr Marshall submitted that it was interesting that the fifth person who had been made redundant at the same time as the applicants had been on site for one month only. Mr Marshall submitted that the applicants had provided extensive evidence about the discriminatory action of Mr Southwell towards them in relation to the allocation of overtime. He noted Mr McGrath's evidence at Transcript PN 1755 that he was inclined to believe the applicants when they had testified that Mr Southwell had not asked them to work Saturday overtime. [36] Mr Marshall submitted that the case had revolved around the fact that the applicants had been prepared to stand up to Mr Southwell. He noted that Mr Southwell had not been called to give evidence although he had been in the employee of the respondent until approximately six weeks prior to the hearing. Mr Marshall submitted that he was entitled to assert that Mr Southwell's evidence would not have been helpful to the respondent. [37] Mr Marshall submitted that the applicants should receive six weeks compensation each. SUBMISSIONS ON BEHALF OF THE RESPONDENT [38] As required by the directions issued prior to the hearing a written summary of submissions was provided. That was marked Exhibit Respondent 11. Mr Thomas relied on that summary and also made oral submissions. [39] Mr Thomas submitted that the evidence supported the contention that the employment of the applicants had not been unfairly or unlawfully terminated. The terminations had been due to redundancy which was brought about by the particular stage which had been reached in the Dillwynnia project. He referred to Exhibit Respondent 1 as providing a snapshot of progress on the project between 19 December 2002 and 26 June 2003. This showed that the number of employees fluctuated between eleven and forty-three during that period. [40] Mr Thomas submitted that each of the applicants had acknowledged the project nature of the industry and the effect that this had had upon them. He submitted that employment was mobile; when a project was nearing completion employees chose to resign or take redundancy. Mr Thomas referred to clause 16 of the Award relating to redundancy. He also noted clause 16.2.2 whereby an employee who resigns after twelve months service attracts redundancy entitlements. This, he submitted, was a recognition of the project nature of the industry. Mr Thomas noted clause 18.4.2 of the Award and the calculation of the pay rate therein which includes provision for "follow the job". [41] Mr Thomas referred to the Full Bench decision of Mullins v Wideform Constructions Pty Ltd ( PR902162 ) (Mullins case) and, in particular, to the comments in paragraphs 14 and 15 thereof. Mr Thomas submitted that those comments should provide guidance in the present matter. He submitted that the circumstances of both cases were comparable as well as the relevant legislation and industry practices. The decision was also relevant as to the process leading to the terminations. [42] Mr Thomas referred to the decision of Ross VP in the matter of an application to vary the Award in relation to part-time work ( PR929454 ). He submitted that the decision reflected the views of industry participants about the industry. Mr Thomas referred in particular to His Honour's comments about the nature of employment in the industry as well as the views of the CFMEU set out at paragraph 39. Mr Thomas also referred to the decision of Merriman C in the matter of the simplification of the Award (Print R7494). Mr Thomas submitted that both of these decisions were important in relation to acknowledging the nature of the industry and the rationale of daily hire employment. [43] Mr Thomas submitted that there was a valid reason for the termination of the applicants' employment. He referred to the body of evidence of Messrs Grippi, McGrath and Vella regarding the progress of the job and the consideration of the numbers required to meet the respondent's contractual obligations in the context of the budgetary constraints. In particular Mr Thomas referred to the evidence of Mr Grippi at Transcript PN 590 and 596; Mr McGrath's testimony at Transcript PN 1607/16; and Mr Vella's evidence in relation to the staffing requirements of the job. [44] Mr Thomas submitted that, as far as process was concerned, it was of note that the decision to reduce the number of employees was made less than seven days prior to the terminations. Mr Thomas noted the evidence of the applicants that they had been retrenched on other jobs and had also resigned from other jobs. He also noted that five other employees had resigned at the time the applicants' employment was terminated. [45] Mr Thomas submitted that the respondent categorically denied the applicant's allegations that management of the job and assignment of work had been contrived so that the applicants were in dead-end jobs. Mr Thomas submitted that the evidence had demonstrated that there was a real and substantive reason for the terminations which was redundancy due to the stage of the project. [46] Mr Thomas referred to the evidence of Messrs Knight and Anderson that they may have managed the project differently but noted that some of the applicants had acknowledged that the respondent was within its rights in organising work the way it had. He submitted that it was a matter of balancing contractual obligations with budgetary constraints. Mr Thomas referred to the decision of the High Court in The Federated Clerks Union and Registrar of the Industrial Relations Commission (Vic) v Victorian Employers' Federation and Others (1984) 54 ALR 489 as being of relevance to the issue of the difficulties of managing. [47] Mr Thomas submitted that, in this case, the respondent managed its resources within its rights and in a manner which didn't target the applicants other than in respect of the fact that their work had been completed. Rather than significantly rearranging the work the respondent had adopted a scheme that had kept teams intact until their particular jobs had been completed. [48] Mr Thomas submitted that the allegations put forward by the applicants as the reasons for their targeting were part and parcel of everyday life on building sites. He submitted that there was insufficient evidence that any of these issues had provided a basis for the terminations. Mr Thomas noted that some of these matters had been remote in time from the terminations and, for that reason alone, it was difficult to demonstrate any causal link. [49] Mr Thomas submitted that the applicants each received written notice of the termination and one day's pay in lieu of notice which was the only entitlement under the Award. This was consistent with industry practice. Mr Thomas submitted that the terminations had been effected in a manner which was usual in the industry in the Sydney metropolitan area. [50] Mr Thomas submitted that I should find that the employment of the applicants had been fairly and reasonably terminated because of redundancy and should therefore award no remedy. In the alternative he submitted that there was no basis for assuming that the applicants would have retained employment for another six weeks. [51] The oral submissions of Mr Thomas were generally reflective of the outline of submissions lodged on behalf of the respondent, hence there is no need to summarise all of the outline. I shall refer only to some additional points. [52] In relation to the provisions of section 170CG(3) of the Act it was noted that because the terminations did not relate to the capacity or conduct of the applicants there was no requirement for them to have an opportunity to respond. Similarly there was no requirement for any warnings about performance. [53] It was noted that Messrs M and A Pospishil had been engaged as a team and that they were retrenched rather than integrated into another team. [54] The respondent absolutely rejected the allegations that the terminations were made for any reason set out in section 170CK, including that they were designed to disadvantage the applicants financially in the lead up to Easter or in relation to any workers' compensation claim. The respondent also rejected the allegations regarding overtime and submitted that overtime was allocated in accordance with the needs of the project. SUBMISSIONS IN REPLY ON BEHALF OF THE APPLICANTS [55] In response to the respondent's submissions concerning the project-based nature of the industry, Mr Marshall noted that the applicants each had a long history in the industry but had never found themselves in this situation before. [56] Mr Marshall referred to paragraph 15 of Mullins case and submitted that, by contrast in this case, Exhibit Respondent 1 showed that at the time that the applicants' employment was terminated, the project was not coming to an end. He referred to the evidence of Mr Grippi at Transcript PN 590 that "the back of the job was broken" at the time but completion was not pending. Mr Marshall submitted that Mullins case was not relevant to this matter. [57] Mr Marshall submitted that each of the applicants had been confident that there was sufficient work for them to have remained in employment until Easter. He submitted that, as there was no evidence as to the reasons for the resignation of five employees at the time of the terminations, this factor was not relevant. [58] In response to Mr Thomas' submissions about the balancing of management and industrial issues, Mr Marshall submitted that the evidence had shown that the business had been managed in a deceptive manner. He referred in particular to the testimony of Mr Knight about the working of Saturday overtime. CONCLUSIONS [59] The primary issue I need to determine is whether the termination of the employment of the applicants, or of any one of them, was harsh, unjust or unreasonable. In this regard I need to consider the factors set out in section 170CG(3) of the Act . [60] This section provides as follows: "In determining, for the purposes of arbitration, whether a termination was harsh, unjust or unreasonable, the Commission must have regard to: (a) whether there was a valid reason for the termination related to the capacity or conduct of the employee or to the operational requirements of the employer's undertaking, establishment or service; and (b) whether the employee was notified of that reason; and (c) whether the employee was given an opportunity to respond to any reason related to the capacity or conduct of the employee; and (d) if the termination related to unsatisfactory performance by the employee - whether the employee had been warned about that unsatisfactory performance before the termination; (da) the degree to which the size of the employer's undertaking, establishment or service would be likely to impact on the procedures followed in effecting the termination; and (db) the degree to which the absence of dedicated human resource management specialists or expertise in the undertaking, establishment or service would be likely to impact on the procedures followed in effecting the termination; and (e) any other matters that the Commission considers relevant." [61] It is also of relevance to consider the provisions of section 170CA(2) which provide that the procedures and remedies concerning the conciliation and arbitration of claims such as these, as well as the manner of deciding on such remedies, " are intended to ensure that, in the consideration of an application in respect of termination of employment, a `fair go all round' is accorded to both the employer and the employee concerned." [62] In relation to the meaning of the term "harsh, unjust or unreasonable" in section 170CG(3) I refer to the comments of McHugh and Gummow JJ in the decision of the High Court in Byrne and Frew v Australian Airlines Pty Ltd (1995) 61 IR 32 : "It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted." (p72) [63] The first matter to which I need have regard is whether there was a valid reason for the termination of the applicants' employment. The meaning of valid reason is a matter which has often been considered by the courts in relation to section 170DE(1) of the former Industrial Relations Act 1988 and also by the Commission both in relation to that section and, more recently, with regard to the statutory provisions currently before me. There appears to be general acceptance of the often quoted words of Northrop J in Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR @373 : "In its context in s.170DE(1), the adjective "valid" should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s.170DE(1). At the same time the reason must be valid in the context of the employee's capacity or conduct or based upon the operational requirements of the employer's business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must "be applied in a practical, commonsense way to ensure that" the employer and employee are treated fairly, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd (1995) 60 IR 1, when considering the construction and application of s.170DC." [64] The reason for the terminations relied on by the respondent in these matters is redundancy due to a downturn in work, in other words, solely due to the operational requirements of its undertaking in terms of section 170CG(3)(a). On the other hand, the applicants contend that other, inappropriate, factors were taken into account. [65] In Smith and others v Moore Paragon Australia Ltd [ PR915674 ] (Moore Paragon) a Full Bench summarised the approach taken by the Commission in the application of section 170CG(3) to redundancy situations. At paragraph 74 it stated: "In our view Windsor Smith is authority for the following propositions: 1. Where employment is terminated on redundancy grounds it is a question of fact whether the employees selected for redundancy were selected for a reason related to the operational requirements of the employer's business, for a reason related to the employee's capacity or conduct, or for reasons of both kinds. 2. Where the reason for selection is solely related to the operational requirements of the employer's business, it is not necessarily significant if no opportunity was given to employees to comment on the basis for their selection. 3. Where the reason for selection is related, in whole or in part, to the capacity or conduct of the employees and no opportunity is given to the employees to respond to that reason then that is a factor which the Commission must take into account. 4. An objective assessment of skills will only be necessary if selection is based on employee capacity. 5. Length of service is an objective criterion unrelated to capacity or conduct." [66] The reference to Windsor Smith is to the decision of a Full Bench in Liu and others v Windsor Smith [Print Q3462]. [67] At paragraph 79 of Moore Paragon the Full Bench stated: "In our view Sulocki is authority for the following propositions: 1. While operational requirements may provide a valid reason for reducing the size of an employer's workforce, they do not necessarily provide a valid reason for the retrenchment of particular employees. 2. The Commission must be satisfied, on the facts as they appear before it, that there was a valid reason for the dismissal of the particular employee in question in that the reason was "sound, defensible or well founded" and not "capricious, fanciful, spiteful or prejudiced". 3. The fact that employees are not given an opportunity to respond to allegations of unsatisfactory performance may justify a finding that the termination of their employment was harsh, unjust or unreasonable even though there was a genuine need to reduce the size of the workforce." [68] The reference to Sulocki is to the decision of a Full Bench in Sulocki v Lockwood Security Products Pty Ltd [ PR908053 ]. [69] Furthermore, at paragraph 90, the Full Bench in Moore Paragon concluded that, contrary to submissions on behalf of the appellant in the matter, the Sulocki decision was correct. [70] On the basis of the evidence before me, I do not accept that the respondent's work on the Dillwynnia project was nearing completion at the date of termination of the applicants' employment. Clearly there was some way to go. However that does not mean that the respondent could not decide to reduce the numbers in its workforce. I accept the evidence of Messrs Vella and McGrath that the work was at such a point where the balancing of their contractual obligations and financial considerations made it necessary for such a reduction to take place. [71] The question however is whether any of the matters raised by the applicants caused them to be inappropriately chosen for redundancy. In other words was the reason for their termination due to reasons of both operational requirements and capacity or conduct, or just the former. [72] It is appropriate that, at this point, I address the issue of the absence of Mr Southwell from the proceedings and the matter of whether an adverse inference should be drawn. The decision of Jones v Dunkel (1959) 101 CLR 298 is relevant in this regard. I note that Mr Vella's evidence provided at least a partial explanation for the respondent's failure to call Mr Southwell to testify. However, even if I concluded that his evidence would not have assisted the respondent's case, in my view that does not lead me to determining that there was no valid reason for the terminations. On the material before me I am not satisfied that Mr Southwell had any input into the selection of which employees were to be made redundant. The evidence of Messrs McGrath and Vella was clear that it was they who made the decision. [73] I am satisfied, on balance, that neither the capacity nor the conduct of the applicants was relevant to the termination of their employment. I accept the evidence of the respondent, and of Mr McGrath in particular, as to the reasons for selecting the applicants for redundancy. I note that there was no objective skills audit carried out by the respondent but that would only be necessary if the selection had been based on reasons of employee capacity. I also note that, unlike the situation pertaining to some other employers in the industry, there is no certified agreement in place which would have required the respondent to have necessarily applied a "last-on, first-off" approach to the redundancies. [74] I am satisfied that the respondent had a valid reason for each of the terminations based upon its operational requirements in terms of section 170CG(3)(a). I am also satisfied that the provisions of paragraph (b) have been met in relation to Messrs Anderson, Richardson and A. Pospishil in that they were informed of the reason for their dismissal prior to the terminations being effected. I have also had regard to the fact that Mr M. Pospishil was not informed of his dismissal or the reason therefor until his return from holidays. In view of my findings in relation to paragraph (a), paragraph (c) is not relevant as it is concerned with reasons connected with capacity or conduct. Paragraph (d) is not relevant as the terminations did not relate to unsatisfactory performance. [75] Nothing was put to me about the provisions of either paragraphs (da) or (db). I have had regard to the evidence before me about the size of the respondent's workforce at the Dillwynnia project. I have no specific evidence about the numbers of employees at other sites although their existence was alluded to during the proceedings. I have noted that it would appear, though no direct evidence was sought on this issue, that there was no dedicated human resources management specialist or expertise within the respondent's undertaking. [76] Neither party specifically submitted that there were other relevant matters in terms of paragraph (e). I have however had regard to all of the various issues raised by the applicants and the respondent. In particular I have considered the absence of any forewarning of the terminations; the timing of the redundancies, their proximity to Easter and Anzac Day with the consequences for the applicants; and the overall context of the nature of the building and construction industry. In addition I have, of course, had regard to all of the factors raised by the applicants and set out at paragraphs 10 and 11 above. [77] After taking all of these matters into account, I have concluded that the termination of the employment of each of the applicants was not harsh, unjust or unreasonable. In arriving at this conclusion I consider that I have afforded each of the applicants and the respondent a "fair go all round". [78] The applications are dismissed. An order reflecting this decision is set out in PR938760 . BY THE COMMISSION: COMMISSIONER Appearances : S. Marshall of the Construction, Forestry, Mining and Energy Union for the applicants. G. Thomas of The Master Builders' Association of New South Wales for the respondent. Hearing details : Sydney 2003. September 3, 4, and 18. Printed by authority of the Commonwealth Government Printer <Price code D>