Full Bench dismisses appeal against Industrial Magistrate Court redundancy severance pay decision
The Full Bench has dismissed an appeal against an Industrial Magistrates Court decision which had found the respondent was made redundant and had ordered that the appellants pay severance pay.
The appellants were a steel manufacturing partnership, of which the respondent was Chief Executive Officer. In 2020, the appellants informed the respondent they could not afford his $250,000 remuneration, and that his employment would be terminated unless he accepted a reduction. The respondent did not agree and was sent a termination letter.
The respondent commenced an Industrial Magistrates Court claim alleging contravention of the Commission’s termination, change and redundancy General Order in  WAIRC 01715; (2005) 85 WAIG 1681.
The Industrial Magistrate held that the respondent was made redundant. The appellants appealed to the Full Bench under s 84 of the Industrial Relations Act 1979 (WA) (‘IR Act’). The appellants sought to challenge the redundancy conclusion, to quash the decision, and set aside its orders.
The appellants contended that the Industrial Magistrate erred in her findings in various matters of fact and law. The appellants contended that if the Managing Partner took over responsibility for the CEO position, the appellants had not decided that they no longer wished the job to be done by the respondent or anyone. The appellants further contended that a CEO position cannot be made redundant, unless wound up businesses requires this position.
The appellants also contended that the Industrial Magistrate erred in relying on Bampton v Viterra Limited  SASCFC 87 and the cases within was an error, as they applied where redundancy obligations were not defined by any industrial instrument, and that the decision in UGL Rail Services Pty Ltd v Janik  NSWCA 436 (‘UGL’) should instead be followed.
The respondent contended that there were no errors of law in the decision at first instance and contended that the job of the CEO was no longer required, as restructuring meant work previously performed by the respondent was performed by the Managing Partner and an external consultant.
The Full Bench considered the history and context of the redundancy General Order; and the broader principles surrounding redundancy.
The Full Bench found the evidence did not support a conclusion that the appellants wished to keep the respondent in his job. The Full Bench found the dismissal was in prospect if the respondent did not accept lower remuneration offered. The Full Bench found the respondent was dismissed on financial grounds, that a definite decision had been made and that this was communicated unequivocally.
The Full Bench noted the appellants’ advanced no authority or principle to support the impossibility of a CEO being made redundant, and that was never contended at first instance. The Full Bench noted that except in limited circumstances, a point not raised in proceedings cannot be raised for the first time on appeal. The Full Bench found it was not in the interests of justice to permit raising the point on appeal for the first time and noted that it was not persuaded it had merit. The Full Bench considered that the appellants were entitled to terminate and abolish the CEO position, noting that there is no requirement for a partnership to have a CEO as decision maker.
The Full Bench found UGL could be distinguished factually and because its redundancy provision involved an undefined common law contract term.
The Full Bench found cl 4.1 of the General Order must be construed faithfully to its text, with the definition of redundancy being broad and informed by its industrial history and context, and breadth of meaning. The Full Bench noted that the termination resulted from the decision to cease having a CEO due to financial constraints, and at this time, the position no longer existed. The Full Bench found that as the position no longer existed, and the respondent had no duties to perform, that he was redundant under cl 4.1 of the General Order.
The Full Bench found on the evidence the Industrial Magistrate’s findings were open and the only ones reasonably open. The Full Bench found no error in the decision of the Industrial Magistrate and dismissed the appeal.
The decision can be read here.