WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT

PARTIES ROBERT  PEMBERTON

CLAIMANT

-v-

CIVIL SERVICE INSURANCE AGENCY PTY LTD

FIRST RESPONDENT

 -and-

 TONI WALKINGTON

              SECOND RESPONDENT

 -and-

 BRENDON HEWSON

                 THIRD RESPONDENT

 -and-

 DEREK SPRAY

             FOURTH RESPONDENT

CORAM INDUSTRIAL MAGISTRATE G. CICCHINI

HEARD Wednesday, 22 October 2008, Thursday, 23 October 2008

DELIVERED Thursday, 20 November 2008

FILE NO. M 31 OF 2008

CITATION NO. 2008 WAIRC 01690

CatchWords Workplace Relations Act 1996, Redundancy, Employers obligation to inform and discuss, Alleged breach of section 41 of the Minimum Conditions of Employment Act 1993 operating as a notional agreement preserving a State award, Alleged breach of the General Order made by the Western Australian Industrial Relations Commission operating as a notional agreement preserving a State award, Whether the second, third and fourth Respondents were involved in the alleged contravention by the first Respondent

Result Alleged contravention of the Workplace Relations Act 1996 not proved

Legislation: Minimum Conditions of Employment Act 1993 – ss 40(2), 41.

General Order of the Western Australian Industrial Relations Commission [2005 WAIC 01715] - 1 June 2005.

Workplace Relations Act 1996 – Schedule 8 Division 3, Division 2, Part 14, ss 43, 728.

Workplace Relations Amendment (Workchoices) Act 2005.

Industrial Relations Act 1979

Case(s) referred to in Decision: Garbett v Midland Brick Company Pty Ltd [2003]

83 WAIG 893.

Case(s) also cited:  Lansdell v Reed (1981) 28 SASR 253.

Representation: Mr G McCorry of Labourline – Industrial and Workplace Relations Consulting appeared as agent for the Claimant

 Mr P Fraser, counsel instructed by Ilberys Lawyers, appeared for the Respondents

Reasons for Decision

1          I find the facts in this matter, which are in the main uncontroversial, to be those set out below.

Facts

2          The Civil Service Association of Western Australia Incorporated (CSA), an organisation registered under the Industrial Relations Act 1979  (IR Act) wholly owns the Civil Service Insurance Agency Pty Ltd (CSI) a corporation providing domestic insurance services to CSA members.  The second, third and fourth Respondents were at the material times directors of CSI.

3          The Claimant Robert Pemberton, born 13 June 1937, commenced working for CSI in December of 1988.  He was appointed its manager in April 1989, a position which he held until his employment with CSI ceased on 4 July 2006.  His management responsibilities required him to provide monthly written reports to CSI’s Board of Directors (Board) for consideration at their monthly meetings. He was an invitee at each of those meetings when his relevant monthly report was discussed.

4          CSI’s insurance services were underwritten by other insurers.  Leading up to the end of 2005 CGU Insurance (CGU) was its underwriter.  CSI maintained an agency shop front access for its customers whilst CGU provided other administrative services for CSI’s insured.  Mr Pemberton and CSI’s only other employee Louise McGovern dealt with CSI customer queries.

5          By mid-2004 Mr Pemberton became concerned about the level of service then being provided by CGU.  He was also concerned that the premium and commission structure of CGU policies were such that it was becoming increasingly uncompetitive resulting in the loss of volume of business and a decline in the CSI customer base.  Mr Pemberton’s concerns which were referred to in some of his reports at about that time were the subject of Board discussion in September and October 2004.  Mr Pemberton recommended that another underwriter be found to run CSI’s business.  The issue was further discussed at a Board meeting on 29 April 2005 at which there were differing views as to what should be done.  One director favoured selling the business whilst another wanted to keep the same model but transfer its business to another underwriter.  At that meeting the Board resolved that Mr Pemberton should make enquiries within the industry to ascertain interest in the possible purchase of CSI’s business.

6          At that same Board meeting Mr Pemberton asked the Board to initiate a review of his and Ms McGovern’s salary and to consider the payment of bonuses.  The annual review of salaries and bonuses was then due.   The Board decided to further discuss the matter at its next meeting.  At that meeting held on 23 May 2005 the Board again decided to defer its consideration of the matter pending the provision, by Mr Pemberton, of a business case for increases in salary and the payment of bonuses.  The issue was to be further discussed at its June meeting.  The issue of salary review and bonuses, although unrelated to the CGU issue, nevertheless impacted upon that issue for reasons which will later become apparent.

7          The CGU issue was discussed by the Board at its meeting held on 23 May 2005.  At that meeting Mr Pemberton presented the Board with a draft insurance solution document prepared by Vero Insurance Australia Ltd (Vero).  In it, Vero offered to come to a mutually acceptable arrangement with CSI for the provision of insurance and to assist in the resolution of the intractable situation then existing with CGU.  From the personal diary entries made by Brendon Hewson, the Board’s Chair, on 27 May 2005, it can be ascertained that the Vero proposal as discussed at that meeting entailed the closure of CSI’s Perth shop front operations with all business to be conducted from Adelaide.  It was apparent to all including Mr Pemberton and Ms McGovern that if the Board were to accept Vero’s proposal that Mr Pemberton’s and Ms McGovern’s positions would become redundant.  That scenario was the subject of an informal discussion held by Mr Hewson with Mr Pemberton and Ms McGovern on 27 May 2005 during which the futures of Mr Pemberton and Ms McGovern was discussed.  Mr Pemberton who was about to turn 68 signalled his intention to retire in the event of the Vero proposal succeeding.  At that stage it was hoped that Ms McGovern would in some way be “picked up” by Vero.

8          When the Board next met on 16 June 2005 it resolved to give CGU the required one hundred and twenty days notice to exit the “Authorised Representative Agreement” between them.  It further resolved to reach a decision by 31 July 2005 about the future business of CSI operations by actively pursuing offers made by HBF Insurance (HBF) and Vero. At that same meeting the Board again decided to defer the issue of bonuses and salary review.

9          At its meeting on 21 July 2005 the Board was informed that because of delays in obtaining legal advice its decision to give CGU one hundred and twenty days notice to exit the Authorised Representative Agreement had not been actioned.  By that stage the Board had also received an offer from QBE Insurance (QBE) and accordingly it was resolved that Mr Pemberton, at the earliest possible time, provide a comparison schedule across products between Vero, HBF and QBE including benefits to members.  At that meeting the Board also resolved that bonuses were to be paid to Mr Pemberton and Ms McGovern upon the successful resolution of CSI’s proposed change.  The issue of salary however remained unresolved at that time.

10      At its meeting on 18 August 2005 the Board resolved to reject QBE’s offer and to discontinue negotiations with HBF.  It decided to choose the Vero proposal.  It consequently resolved to continue negotiations with Vero in an endeavour to conclude terms for the transfer of its business by 31 August 2005.  CSI committed itself to a transfer of its business to Vero.  To facilitate that the Board resolved:

1        To transfer the business to Vero subject to final agreement with both Vero and CGU;

2        That the Chair of the Board write to Vero advising of the Board’s decision; and subsequently

3        That the Chair write to CGU at the conclusion of the transition arrangements with Vero advising of the Board’s decision.

11      At that same meeting the issue of staff salaries and bonuses was further discussed.  The Board agreed to an increase in salary for each of Mr Pemberton and Ms McGovern however it remained uncommitted with respect to the amount of bonus payable to each and the timing of those payments.

12      Subsequently at its meeting on 27 September 2005 the Board resolved to pay Mr Pemberton $8,000.00 and Ms McGovern $4,000.00 in bonuses for the 2004/2005 financial year. Mr Pemberton, unhappy with the Board’s decision, tendered his resignation during that meeting.  The Board did not, at that time, progress any other matter relating to the transfer of business to Vero.

13      On 29 September 2005 Mr Hewson, with Mr Pemberton present, met with Ashley McFarland from Vero to discuss the practical measures necessary to facilitate the transfer of CSI business to Vero.  Mr McFarland agreed to take on the day to day transfer of CSI’s business and to keep Mr Pemberton and Mr Hewson informed of progress.  Mr McFarland expected that client details would be acquired and installed on Vero’s system ready for commencement in late October or early November 2005.  It was agreed that Vero’s “Authorised Representative Agreement” was to be submitted to CSI’s lawyers for consideration and advice.

14      Mr Pemberton’s resignation which had been announced at the Board’s meeting on 27 September 2005 caused Mr Hewson a great deal of consternation.  He was concerned that without the benefit of Mr Pemberton’s knowledge and experience the transfer to Vero which was under way could either be compromised or be defeated.  He was anxious to retain Mr Pemberton’s services until the transfer had been successfully concluded.   On the morning of 5 October 2005 he met with Mr Pemberton and Ms McGovern in order to discuss their situation in the hope that Mr Pemberton would withdraw his resignation.  During the meeting he invited Mr Pemberton to write to him in his capacity as Chair outlining his grievances and what needed to be done to facilitate a withdrawal of Mr Pemberton’s resignation.

15      By letter dated 5 October 2005 addressed to Mr Hewson, Mr Pemberton, on Ms McGovern‘s behalf and his own made certain demands, which if satisfied would facilitate the withdrawal of his resignation.  In his letter he said that he wanted either a doubling of the bonuses or, alternatively the payment of the bonuses at the proposed rate provided that his and Ms McGovern’s pay would be increased backdated to August 2004.  Further because his position and that of Ms McGovern had become redundant, he wanted a guarantee that their employment would continue until 1 July 2006.  He indicated in his letter that he also wanted better long service leave and redundancy benefits.  He set 12 October 2005 as the deadline for compliance.

16      On 7 October 2005 Mr Hewson met with his fellow directors, Ms Walkington and Mr Spray, to discuss Mr Pemberton’s demands.  Some of the demands were considered to be acceptable in principle whilst others required further investigation and consideration.  Later that day Mr Hewson briefed Mr Pemberton and Ms McGovern about the directors’ discussion concerning his demands.  At that time Mr Pemberton agreed to extend the deadline for a response.

17      In subsequent days Mr Hewson continued to correspond with his fellow directors about the situation.  He had many sleepless nights, concerned that if Mr Pemberton went ahead with resignation, CSI would be left in a vulnerable situation at a critical time when the transfer of business to Vero was taking place.  He was anxious for Mr Pemberton to remain and oversee a seamless transition to Vero.  Although not being opposed in principle to their employment continuing until July 2006, there was at that stage (October 2005) a concern about whether Mr Pemberton and Ms McGovern’s jobs could be guaranteed.   It was not known at that stage whether there was capacity to guarantee their continued employment until July 2006.

18      Mr Pemberton’s resignation, which had been confirmed in writing on 11 October 2005, was due to take effect on 25 October 2005.  Prior to that date and following his return from leave, Mr Hewson met with Mr Pemberton.  As a result of their discussions Mr Pemberton agreed to withdraw his resignation, which he did by letter dated 20 October 2005.  There was no written response to Mr Pemberton’s letter of 5 October 2005.  At that stage Mr Pemberton’s demands remained unresolved.

19      During the period from October 2005 until late January 2006 CSI’s efforts were directed at the successful transfer of business to Vero.  In his oral report to the Board at their meeting on 24 January 2006 Mr Pemberton advised that the rate of CGU’s policies conversion to Vero had reached seventy-six per cent, however, difficulty was still being experienced because of incorrect data provided by CGU.  Mr Pemberton, at that meeting, again raised the unresolved issue of the payment of staff bonuses.  It was agreed at that meeting to pay staff bonuses (as per the resolution reached on 27 September 2005) in the next fortnightly pay cycle.

20      Further Board meetings were subsequently held on 7 March 2006 and again on 14 March 2006.  Mr Pemberton attended the 7 March meeting at which practical issues concerning the transfer of business to Vero was discussed.  By 14 March 2006, the transfer of business to Vero was progressing very well with a high uptake of Vero policies by CSI members.  It was against that background that the 14 March 2006 Board meeting was held.  Mr Pemberton did not attend that meeting.  At that meeting the Board considered the continuing requirement for service delivery to CSI clients and maximising the retention rate.  Balanced against that was recognition of a significant reduction in commission income under the new arrangements with Vero and the need to appropriately manage staffing costs by not maintaining the Perth agency office any longer than required.  It was resolved that given its then workload there was no longer a need for the Perth CSI agency office and that it would close on Monday, 3 July 2006.  The Board decided to offer Mr Pemberton and Ms McGovern a redundancy package comprising twelve week’s notice from Monday, 3 April 2006 together with three week’s salary for each year of service up to a maximum of forty week’s pay plus the payment of all accrued leave entitlements.

21      The next Board meeting was held on 4 April 2006.  The minutes of the meeting indicate that Mr Pemberton attended that meeting whereas Mr Pemberton does not recall attending it.  At that meeting a written report was received from Mr Pemberton indicating that the retention rate of CSI’s customers in the transfer to Vero was at eighty-five per cent which was considered exceptional and indicative of the fact that the client base had remained loyal to CSI.  At that meeting Mr Hewson reported that he had not as yet sent Mr Pemberton and Ms McGovern notice of the office closure and details about their redundancy.

22      On 12 April 2006, Mr Pemberton was handed a letter by Mr Hewson bearing the previous day’s date which informed him that on 14 March 2006 CSI’s Board had made a decision to close CSI’s Perth shop front with effect from 4 July 2006.  That would, as had been planned, result in the cessation of his employment and the termination of his contract of employment.  In the same letter he was informed about the terms of his redundancy.  Mr Hewson went on to thank him for his assistance in making the transfer to Vero so successful and wishing him a long and enjoyable retirement.

23      On 11 May 2006 Mr Pemberton and Ms McGovern wrote jointly to Mr Hewson in his capacity as Chair of the Board.  They pointed out to him that they had not been given twelve week’s notice of termination, that their severance pay offer was not in accordance with the terms and conditions of their employment and that their termination pay did not include their back pay entitlements.  They asked him for details about their accrued entitlements and enquired as to whether they would be given time off to attend interviews.  They offered to meet with the Board to discuss those issues.  By letter dated 15 May 2006 Mr Hewson acknowledged receipt of their letter and informed Mr Pemberton and Ms McGovern that following the receipt of relevant information he would further respond.  On 23 May 2006 he wrote to Mr Pemberton giving him details of the payments to be made upon his cessation of work.

Overview

24      Mr Hewson on behalf of the Board dealt with Mr Pemberton and Ms McGovern throughout the relevant period.  He saw himself as being responsible for liaising with them about the various issues including CSI’s transfer of business to Vero.  Ms Walkington and Mr Spray on the other hand had nothing to do with them other than speaking to Mr Pemberton in the formal setting of Board meetings.  They took an arms length approach in dealing with CSI staff.

25      The decision made in August 2005 to accept Vero’s offer in principle was known to Mr Pemberton as soon as it happened. He also knew from well beforehand that if CSI were to accept the Vero offer that his position and that of Ms McGovern would become redundant.   At no time between August 2005 and when his employment ceased on 4 July 2006 was he spoken to formally about the effects of his redundancy.  Nothing was done to avoid or attempt to ameliorate the effects of the redundancy.  He was very much left to his own devices.  Nothing was done to assist him in gaining alternate employment.  That occurred because so far as Mr Hewson was concerned Mr Pemberton had indicated his intention to retire upon the closure of CSI’s Perth agency.  Mr Pemberton, on the other hand, suggests that he only ever expressed the view that he might retire depending upon what was on offer.  In any event it is apparent that CSI’s failure to do what was required resulted from Mr Hewson’s and other Board member’s ignorance of the requirements of the General Order made by the Western Australian Industrial Relations Commission on 1 June 2005 [2005] 85 WAIG 1681 (Redundancy General Order) and the redundancy provisions of the Minimum Conditions of Employment Act 1993 (the MCEA).

Claim

26      Mr Pemberton alleges that on or about 14 March 2006 the second, third and fourth Respondents made a decision to close CSI’s office and operate its business differently as from 4 July 2006.  That decision to introduce that change was likely to have a significant effect upon him and accordingly CSI was bound to comply with the requirements of the Redundancy General Order and the MCEA to notify him as soon as practicable of the decision and to consult with him about the significant effects of the decision and what could be done to avoid or minimise the effects of the change.

27      Mr Pemberton asserts that he was not notified as soon as practicable after the decision was made and that CSI did not consult with him about the introduction of the change, the effects the change was likely to have on him and the ways to avoid or minimise those effects.  Further, he alleges that CSI did not discuss with him the likely effects of the action taken and the measures that might have been taken by him or CSI to minimise or avoid the significant effect.

28      Mr Pemberton claims further that the second, third and fourth Respondents were knowingly concerned in or party to CSI’s breach of the applicable provisions and pursuant to section 728 of the Workplace Relations Act 1996 (the WR Act) they are taken as having contravened the applicable provisions.

Response

29      On 18 August 2005 the Board of CSI agreed to transfer its business to Vero subject to final agreement.  That became known to Mr Pemberton immediately the decision was made.  In any event by no later than November 2005 CSI had notified Mr Pemberton of the consequences of the transfer to Vero being that his position would be made redundant.

30      CSI asserts that it took steps to minimise the impact of the redundancy by ensuring that Mr Pemberton was aware at all times of the status of negotiations with Vero, by notifying him within a reasonable time from the making of the decision to transfer the business to Vero of the likely impact of that decision upon his employment and by negotiating an extended transitional period resulting in Mr Pemberton being able to continue in his employment for the longest practicable period. 

31      The second, third and fourth Respondents assert that they cannot be in breach of the relevant provisions if CSI is not in breach.  It follows that the claim against them must fail.

32      Finally the Respondents contend that the WR Act does apply to them because the decision which had a significant effect upon Mr Pemberton was made prior to 27 March 2006 when the WR Act commenced with respect to the enforcement of  “Notional Agreements Preserving State Awards” (NAPSA). Consequently the relevant provisions of the Redundancy General Order and the MCEA, which in each instance became a NAPSA on 27 March 2007, cannot be enforced under the WR Act because the WR Act did not apply to those provisions at the material time.

Determination

33      Section 41 of the MCEA provides:

41    Employee to be informed

    (1)   Where an employer has decided to — 

  (a) take action that is likely to have a significant effect on an employee; or

  (b) make an employee redundant,

  the employee is entitled to be informed by the employer, as soon as reasonably practicable after the decision has been made, of the action or the redundancy, as the case may be, and discuss with the employer the matters mentioned in subsection (2).

  (2)   The matters to be discussed are — 

  (a) the likely effects of the action or the redundancy in respect of the employee; and

  (b) measures that may be taken by the employee or the employer to avoid or minimize a significant effect,

  as the case requires.

34                      Section 40 of the MCEA defines what is meant by the term “redundant” and further what is meant by an action of an employer having a significant effect on an employee.  It provides:

40.       Terms used in this Part

 (1) In this Part — 

  “employee” does not include a casual employee or an apprentice or trainee;

  “redundant” means being no longer required by an employer to continue doing a job because the employer has decided that the job will not be done by any person.

(2)  For the purposes of this Part, an action of an employer has a significant effect on an employee if — 

   (a) there is to be a major change in the — 

   (i) composition, operation or size of; or

   (ii) skills required in,

    the employer’s work-force that will affect the employee;

   (b) there is to be elimination or reduction of — 

   (i) a job opportunity;

   (ii) a promotion opportunity; or

   (iii) job tenure,

    for the employee;

  (c) the hours of the employee’s work are to significantly increase or decrease;

   (d) the employee is to be required to be retrained;

  (e) the employee is to be required to transfer to another job or work location; or

   (f) the employee’s job is to be restructured.

35      Clause 3 of the Redundancy General Order provides:

3.1 Employer’s Duty to Notify

 (a) Where an employer decides to introduce changes in production, program, organisation, structure or technology, that are likely to have significant effects on employees, the employer shall notify the employees who may be affected by the proposed changes and, if an employee nominates a union to represent him or her, the union nominated by the employee.

 (b) “Significant effects” includes termination of employment, major changes in the composition, operation or size of the employer’s workforce or in the skills required; the elimination or diminution of a job opportunity, a promotion opportunity or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations and the restructuring of jobs.

3.2 Employer’s Duty to Consult over Change

 (a) The employer shall consult the employees affected and, if an employee nominates a union to represent him or her, the union nominated by the employee, about the introduction of the changes, the effects the changes are likely to have on employees (including the number and categories of employees likely to be dismissed, and the time when, or the period over which, the employer intends to carry out the dismissals), and the ways to avoid or minimise the effects of the changes (e.g. by finding alternate employment).

(b)              The consultation shall commence as soon as practicable after making the decision referred to in the “Employer’s Duty to Notify” clause.

(c)               . . .

36    The making of a decision that is likely to have a significant effect on an employee or make that employee redundant is the trigger which invokes the employer’s obligation pursuant to section 41 of the MCEA and the Redundancy General Order.  Mr Pemberton contends that CSI’s decision made on 14 March 2006 is that which brings into operation the aforementioned provisions.  CSI, on the other hand, says that it was its decision made on 18 August 2005 that triggers the operation of those provisions.

37    When on 18 August 2005 CSI’s Board made its decision to transfer its business to Vero it was well known to all concerned, including Mr Pemberton (who knew from as early as May 2005), that the acceptance of the Vero option would result in the closure of CSI’s shop front agency, resulting in the redundancy of the positions held by CSI staff.  It is evident that on 18 August 2005 CSI committed to the Vero option.  From then on it would have been difficult if not impossible to retreat from its decision.  CSI had set the wheels in motion for the transfer to take place even though all the formal requirements necessary to conclude the arrangements had at that stage not been completed.  Whilst the documentation may have not been completed the practical steps necessary to facilitate the transfer had commenced.  Consequently although Mr Pemberton did not then know precisely when his job would end, he nevertheless knew that it would happen.  It is quite apparent that Mr Pemberton was not only kept informed about what was happening but also was directly involved with what was happening.  Indeed such is reflected in his letter to Mr Hewson dated 5 October 2005 in which he stated that once the bulk of CSI’s portfolio had been transferred to Vero that the then present staff (Mr Pemberton and Ms McGovern) would no longer be required.  It was for that reason that he sought a guarantee of employment until at least 1 July 2006. 

38    When the Board accepted the Vero proposal Mr Pemberton knew that that decision would have a significant effect upon him in that his job would be eliminated.  Indeed the writing had been on the wall for him from at least May of 2005.  Notwithstanding that, when the decision was made on 18 August 2005, CSI had an obligation to discuss with him the likely effects of redundancy and the measures that may have been taken to minimise the significant effect of redundancy.  It seems that did not occur because Mr Hewson thought that Mr Pemberton would retire upon the closure of CSI’s Perth agency office.  Despite that, CSI was under an obligation at that time to bring to Mr Pemberton’s attention his entitlement to discuss his redundancy with CSI in order to see what could be done to minimise its effect (see Garbett v Midland Brick Company Pty Ltd [2003] 83 WAIG 893 per Heenan J at paragraph 94).  The obligation was on CSI to initiate discussion about those matters (see Garbett (supra) per Hasluck J at paragraph 44).  CSI was required to give Mr Pemberton an opportunity to discuss the matter and to ensure that such discussion took place (see Garbett (supra) per Hasluck J at paragraph 42).

39    The decision made on 18 August 2005 to accept the Vero proposal was critical because the consequence of it was that the position that Mr Pemberton held would no longer exist and that his employment would be terminated.  The actual cessation date of his employment was then yet to be fixed.  On 14 March 2006 when the Board passed its resolution concerning Mr Pemberton all it did was to give practical effect to what had been decided earlier.

40    I find that CSI was under an obligation to bring to Mr Pemberton’s attention those matters referred to in section 41 of the MCEA and the Redundancy General Order as soon as reasonably practicable after 18 August 2005.  It was obliged to initiate discussion with him at that stage and to ascertain what his intentions were.  It should have determined whether Mr Pemberton was still intending to retire upon the closure of CSI’s Perth agency office.  Although Mr Hewson may have thought that Mr Pemberton’s retirement plans were set in concrete it is the case that people change their minds.  Despite having earlier expressed his intention to retire it was important to ensure that Mr Pemberton was not wavering in that regard as the time moved closer.  Had a discussion been held with him it might have discovered that Mr Pemberton was having second thoughts about retirement.  He could have been asked, whether he needed assistance in finding another job or other position and whether there was anything that could be done to assist him in moving forward with a view to reducing or eliminating the effects of redundancy.  It was also important to give him support at a difficult time.  It was not sufficient for some of those things to have been addressed in an ancillary way whilst dealing with the transfer of business to Vero.  Further it is apparent that Mr Pemberton’s continued employment until July 2006 had nothing to do with CSI fulfilling its redundancy obligations.  It was not aware of its obligations.  Mr Pemberton continued working for CSI until July 2006 because that was what best suited CSI.

41    I am satisfied that none of the Board members were aware of CSI’s obligations under the relevant provisions.  Although Ms Walkington is a high ranking union official and member of the Trades and Labor Council of Western Australia, which was the applicant in the proceedings which resulted in the issue of the Redundancy General Order, that of itself does not mean that she had an intimate knowledge of the relevant provisions.  I accept her evidence that at that time she was ignorant of the relevant provisions.  As a result of her ignorance and that of the other Board members CSI failed to comply with its obligations. 

Jurisdiction

42    On 27 March 2006 the Workplace Relations Amendment (Work Choices) Act 2005 (Work Choices) which amended the WR Act made employees of constitutional corporations subject to the provisions of the WR Act.  CSI is a constitutional corporation.  Consequently from that date Mr Pemberton’s employment became subject to the WR Act.  As a result of the amending legislation, clause 31 of Schedule 8 of the WR Act now provides that if the terms and conditions of employment of employees were not determined under a State employment agreement but were determined in whole or in part under an “original” State award or industrial law then a NAPSA is taken to come into operation on the reform commencement.

43    The MCEA is an original State industrial law and the Redundancy General Agreement is an original State Award.  They are in each case a NAPSA.  Given that Mr Pemberton was an employee whose employment was subject to the MCEA and the Redundancy General Order and was not bound by a State employment agreement before 27 March 2006, he was from 27 March 2006 subject to each NAPSA, which had effect according to their terms.   They may be enforced as if they were collective agreements (see clause 43 of Schedule 8 of the WR Act).  It is self evident that the Claimant will only be able to use the WR Act as a vehicle to enforce the relevant provisions if the alleged breaches occurred on or after 27 March 2006.  Breaches occurring before that date can only be enforced under State industrial laws. 

44    Mr Pemberton contends that the pivotal date which determines the jurisdictional issue is the date on which he received formal notice of the date of cessation of his employment. That was 12 April 2006 which post dates the coming into force of Work Choices.  If he is correct in that regard it will be obvious that the WR Act is available to enforce the breaches.  However I disagree with him.  In my view the critical and operative point in time when the employer became obligated and compelled to comply with the relevant requirements was when the decision was made to eliminate his position.  That occurred on 18 August 2005.  CSI’s breach of the relevant provisions crystallised when it failed as soon as practicable thereafter to discuss with Mr Pemberton the effects of redundancy.  That was well before Work Choices came into force.  The breaches were committed soon after the 18 August 2005 decision was made.  That is the pivotal date which determines the proper enforcement vehicle.  Mr Pemberton’s notification of the cessation date of his employment had nothing to do with the decision to make him redundant.  The decision to make him redundant which enlivened CSI’s obligations had been made long beforehand.  The letter received 12 April 2006 addressed practical issues necessary to give effect to what been decided back in August 2005.  Neither the decision made on 14 March 2006 to inform Mr Pemberton of the date of the cessation of his employment nor the letter he received in furtherance of that had any particular significance so far as CSI’s obligations under the relevant provisions were concerned.

45    In this matter the breaches occurred prior to Work Choices came into force.  It follows that they can only be enforced under the provisions of the IR Act.  The WR Act does not apply in this instance.  It cannot be used as the enforcement vehicle because it did not apply to the parties when the breaches occurred.

Result

46    Insofar that the Claimant alleges that CSI has failed to comply with the WR Act the claim cannot succeed and as a consequence the claims against the other Respondents also cannot succeed.

47    I will now hear the parties in relation to the orders to be made.

G Cicchini

Industrial Magistrate