In Carter v Village Cinemas Australia Pty Ltd [2007] AIRCFB 35, the Full Bench of the Australian Industrial Relations Commission published its first decision on whether the termination of an employee’s employment was for
genuine operational reasons.
Section 643(8) of the Workplace Relations Act prohibits an employee who has been terminated from applying for relief if the employee’s employment was terminated for genuine
operational reasons or for reasons that include genuine operational
reasons.
Operational reasons are defined in s.643(9) as follows:
“(9) For the purposes of subsection (8), operational reasons
are reasons of an economic, technological, structural or similar nature
relating to the employer’s undertaking, establishment, service or
business, or to a part of the employer’s undertaking, establishment,
service or business.”
Mr Carter was employed by Village, since 10 December 1986. His employment was terminated after 19 and a half years of service. He was a well-performing manager and there was no issue as to his capability or his standards of performance. He managed the Doncaster cinema for Village and on 15 June 2006, Village received a notice to vacate its Doncaster complex, and as a result of that, Village decided to close the complex effective 1 August 2006. On 25 July 2006, Mr Carter was informed that his employment would be terminated.
Consequent upon the termination of his employment, Mr Carter brought
proceedings under s.643 of the Act claiming that the termination of his
employment was harsh, unjust and unreasonable.
Village argued that the application was outside the jurisdiction of the Commission because
the employee’s employment was terminated for genuine operational
reasons, or for reasons that include genuine operational reasons.
Village’s arguments were rejected at first instance but succeeded on appeal.
The Full Bench accepted Village’s argument that the reason for the termination of Mr Carter’s employment was the
closure of the cinema. Thus, there was a genuine operational reason for
the termination of Mr Carter’s employment. This fell
squarely within the definition of “operational reasons” in s.643(9) of the Act.
The Full Bench rejected the argument that it should consider other options available to the employer such as redeployment. It said:
We agree … that the operational reason relied upon
by the employer need only be a ground or cause for the termination of
the employment of an employee. It need not be something that demands or
brings about an obligation to terminate the employment of a particular
employee. The termination of employment of the particular employee does
not have to be an unavoidable consequence of the operational reason for
the limitation in s.643(8) to operate. Consequently, whether the
employer could have done something other than terminating the
employee’s employment will generally be irrelevant in deciding whether
the termination was for genuine operational reasons, or reasons that
include genuine operational reasons.
