Allman v Teletech International Pty Ltd

Did Teletech arrange alternative employment with Telstra for the employee applicants? 11 Each employee applicant obtained employment with Telstra the day after being terminated by Teletech. The applicants acknowledge that Teletech assisted the employee applicants to gain employment at Telstra. They contend, however, that Teletech did not "arrange" such employment. The applicants point to the standard severance pay clause prescribed by industrial instruments in light of the 1984 test cases. An application to be exempted from liability to pay severance pay arises, under those clauses, where an employer "obtains" acceptable alternative employment for an employee. 12 The Australian Industrial Relations Commission has discussed the meaning of "obtains acceptable alternative employment" in the context of the redundancy test case standard. In Clothing Trades Award 1982(1) (Derole Case) (1990) 140 IR 123, a Full Bench of the Australian Industrial Relations Commission referred to "obtains" at 127 and said: …the creation of the legal relationship of master and servant [between the outgoing employer's employee and the incoming employer] depends on 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 the new employment; there will usually…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. 13 The Full Bench went on at 127 to consider "obtain" in context to signify that: …the employer by purpose and effort may establish an opportunity which suits the employee and which crystallises as alternative employment of an acceptable kind. Later, at 128, the Full Bench said: The employer must be a strong, moving force towards the creation of the available opportunity. 14 In the relevant AWAs of the employee applicants, the applicable sub-clause refers to the employer being "able to arrange alternative employment." There is no material difference between obtaining alternative employment and being able to arrange it. If an employer who is about to make an employee redundant said to the employee, "I have obtained alternative employment for you" or said "I have been able to arrange alternative employment for you", the employee would understand the employer on each occasion to be saying that it has found another job for the employee. The employee may not choose to take up the job, but it must be one that is there for the taking if the employee chooses to take it. 15 Teletech assisted its soon to be redundant employees to apply for jobs with Telstra. Teletech had active involvement in the transition of the employee applicants from work with Teletech to work with Telstra. Immediately after Telstra advised Teletech that it would not renew its contract with Teletech for the provision of services at Moe, representatives of each company met to discuss the possible employment of the call centre employees by Telstra. Teletech secured a commitment from Telstra that Telstra would give all Teletech's employees at the Moe call centre the opportunity to apply for employment with Telstra and be available to be recruited by Telstra. Teletech was not, however, a strong moving force towards the creation of the available opportunity. The available opportunity arose because Telstra was to perform functions formerly performed for it by Teletech. Telstra required staff. It made sense for it to approach Teletech staff. Teletech did not secure the offer of a job for Teletech staff with Telstra. As counsel for the applicants submitted, Teletech arranged an opportunity for the employee applicants to participate in a recruitment process undertaken by Telstra. 16 In support of that proposition counsel for the applicants referred to evidence that Telstra: · adopted its normal recruitment process for the positions it wished to fill; · based its selection on merit; · gave no preferential treatment to Teletech employees in the context of selection criteria; · desired the best applicants for the positions, wherever sourced; · gave priority to apply to Teletech employees on a shared basis with existing Telstra employees; and · offered employment to those Teletech employees who successfully, through their own efforts and merit, participated in Telstra's recruitment process. 17 Ms Louise Power is the senior organisational development specialist employed by Telstra. Ms Power gave evidence that Telstra treated its recruitment of former Teletech employees "like any other external market recruitment activity." She said that Teletech employees were invited to apply for positions at the Moe call centre "along with existing Telstra employees". Ms Power also agreed that the former Teletech employees "were assessed against the same criteria as [were] external applicants". Ms Power further agreed that the selection was "purely based on merit" and that Telstra wanted the best people for the job(s) "whether they were from Teletech, Telstra or elsewhere." 18 Counsel for Teletech submitted that his client brought the employee applicants and Telstra together and that Teletech's conduct was one of the factors that brought about the employment. So much cannot be denied but that does not mean that Teletech was able to arrange the employment. Teletech facilitated its staff applying for jobs with Telstra in circumstances where they competed on their merits with existing Telstra employees and fellow Teletech employees for the available positions. The encouragement and facilitation of a process is not the same as doing everything possible to ensure a result. Arranging alternative employment means bringing about that employment should the employee choose to accept it. Anything short of that, such as competing with competitor applicants (albeit limited to two categories of applicant: existing Telstra and Teletech employees) does not meet the test provided by the relevant sub-clause in the AWAs. 19 Consequently, the exemption in the AWAs relied on by Teletech is not available to it, as it was not able to arrange alternative employment with another employer. I now pause to consider whether if the Court were wrong in that view, the wages, terms and conditions of each employee were comparable when they left Teletech as compared with when they first joined Telstra.

Were the wages, terms and conditions of employment comparable? 20 As a result of my finding above, it is not necessary to embark on the precise exercise of comparison that I might otherwise have done. Nonetheless, I have looked carefully at the wages, terms and conditions of the employee applicants' employment at Teletech and at Telstra and I think it appropriate to set out briefly my approach to the comparative exercise and point to those applicant employees I believe would have an entitlement to severance pay if I were wrong about Teletech's ability to arrange alternative employment. 21 The exercise of comparing the wages, terms and conditions of employment involves a global approach rather than an item by item comparison of every term and condition. The Teletech AWA specifies that alternative employment is acceptable if 'it is on terms which are no less favourable in aggregate' (cl 22.2.4) than those of the Teletech employment. 22 Teletech submits that an assessment of the comparability of wages, terms and conditions must include not just the legally enforceable wages, terms and conditions as found in any relevant industrial instrument or contract, but also those discretionary terms and conditions as found in company policies that relate to the employee's employment. It was argued that this is a commonsense approach that reflects the reality of the employment accepted by the applicant employees. I am satisfied that these policies form part of the terms and conditions of employment in a broad sense. The reality, however, that any benefits conferred under the policies are subject to change at the discretion of the employer is a factor that must go into the global assessment. 23 Teletech submits that the employment position and duties of the applicant employees is not a relevant consideration in the exercise of comparing wages, terms and conditions. It is submitted by Teletech that the terms and conditions of employment are limited to the provisions of the AWAs under which the employees work and the benefits of the various policies. Counsel for the applicants submits, and I agree, that the employees' positions and duties are identified in the AWAs and are so central to the employment that they are terms and conditions of employment. On a commonsense approach, looking at the reality of an employee's employment, one must consider what it is that an employee is employed to do. This approach is consistent with considering discretionary company policies as terms and conditions of the employment, at least for the purposes of this exercise. 24 The exercise of comparing the wages, terms and conditions of the Teletech employment and Telstra employment depends in part on the purpose of the particular provision in question. The severance pay clauses in Teletech's AWAs, Teletech submits, are directed at compensating employees for unemployment that arises from redundancy, not for the loss of ongoing employment and accrued benefits. 25 I do not agree that in this case severance pay is intended only to compensate for a period of unemployment. Its purpose is to compensate for a broad range of hardships that follow being made redundant. This reflects the industrial context as discussed above at [7]. It also reflects commonsense in this particular context. Job security is an important component of employment. It would be difficult to find that wages, terms and condition of employment were comparable in circumstances where an employee has gone from one employment where he or she enjoyed job security to employment with no or minimal job security. There are many factors that contribute to job security. Accrued entitlements, seniority and length of service contribute to job security, as do other terms and conditions of employment such as probation and termination provisions. Job security generally should be taken into account when comparing the wages, terms and conditions of the Teletech employment and the alternative employment.

AWAs and positions 26 The applicant employees were covered by four different Teletech AWAs. They are: 1. Customer Service Stream - Australian Workplace Agreement - October 2003 (Attachment 2 AWA) 2. Customer Service Stream - Australian Workplace Agreement - October 2003 (Attachment 3 AWA) 3. Operations Support Stream - Australian Workplace Agreement - March 2004 (Attachment 4 AWA) 4. Leadership Stream - Australian Workplace Agreement - March 2004 (Attachment 5 AWA) 27 For the purposes of the exercise of comparison that I am engaged in, the Teletech AWAs are in similar terms. Clause numbers vary between the AWAs. For convenience, where the contents of clauses are the same, I refer to the clause numbers of AWA Attachment 2. 28 The applicant employees were employed at Teletech in one of the following positions: · Sales & Solutions Consultant; · Senior Sales & Solutions Consultant; · Customer Service Representative; · Senior Customer Service Representative; · Team Leader; · Senior Team Leader; · Reception; · Quality Assurance Specialist; or · Resource and Planning Solutions. 29 The applicant employees were employed at Telstra in one of the following eight positions under the relevant corresponding Telstra AWA: 1. Supplementary Worker - Attachment 17 AWA 2. Sales Consultant - Attachment 18 AWA 3. Memo Consultant - Attachment 19 AWA 4. General administrator - Attachment 20 AWA 5. Memo Team Leader - Attachment 21 AWA 6. Business Support Leader - Attachment 22 AWA 7. Sales Development Leader - Attachment 23 AWA 8. Mobile Sales Team Leader - Attachment 24 AWA 30 Seven out of 8 of the Telstra AWAs are in essentially the same terms, except for differences in pay rates and classifications. The Attachment 17 AWA for Supplementary Workers contains significant differences from the other Telstra AWAs. 31 Not all positions that applicant employees were employed in at Teletech had equivalent positions at Telstra. The following positions appear to be equivalent or comparable positions at Teletech and Telstra: Teletech position Telstra position Customer Service Representative Sales Consultant Memo Consultant Team Leader Memo Team Leader Mobile Sales Team Leader Reception General Administrator

32 Telstra did not have equivalent positions in terms of seniority for the following Teletech positions: 1. Senior Team Leader; 2. Senior Consultant; 3. Senior Customer Service Representative; 4. Quality Assurance Specialist; and 5. Resources and Planning Solutions. 33 There were a number of employees who were employed at Telstra in positions that were not comparable in seniority and duties to their positions at Teletech: Applicant Teletech position Telstra position Applicant 47 Senior Team Leader Team Leader Applicant 11 Senior Customer Service Representative Consultant Applicant 18 Senior Customer Service Representative Consultant Applicant 37 Senior Customer Service Representative Consultant Applicant 52 Quality Assurance Specialist Consultant Applicant 54 Quality Assurance Specialist Consultant Applicant 55 Quality Assurance Specialist Consultant Applicant 56 Quality Assurance Specialist Consultant Applicant 53 Resource and Planning Solutions Consultant Applicant 3 Team Leader Consultant Applicant 33 Team Leader Consultant

Working hours 34 Teletech's ordinary working hours for full time employees is 38 hours per week or an average of 38 hours over a roster period, which may include weekends and public holidays. Teletech may change rostering schedules on reasonable notice. The maximum number of hours of work per day is 12 and the minimum number of hours between shifts worked on consecutive days must not be less than 10 hours. Overtime is to be paid for time worked in excess of ordinary rostered hours. 35 Telstra's ordinary working hours are less well defined in its AWAs. Ordinary hours of work are 'normal business hours'. (There is no definition of 'normal business hours' in the AWAs, however the evidence of Ms Power, Telstra's Senior Organisational Development Specialist, to the Court is that 'normal business hours' means 7am to 7pm, Monday to Friday and that ordinary hours are 36.75 hours per week.) Telstra may require employees to work additional time which time will be paid in accordance with Telstra policy. Telstra may require the performance of shift work Generally employees are notified of their working hours, shift rosters and any changes of hours by their manager, but no notice period is specified. 36 The normal Telstra working hours do not apply to Supplementary Workers employed under an Attachment 17 AWA. Supplementary Workers are guaranteed to be offered at least 500 hours work per calendar year. A Supplementary Worker is required to be available for work at all times within a specified 'span' of hours over specified days as nominated at the commencement of employment. The span may be, for example, between 6am and 11am Monday - Friday. Telstra must provide a minimum of 24 hours notice of required work. 37 Telstra counts all hours that a Supplementary Worker is unavailable to attend work or is absent from work for any reason other than annual leave towards the 500 guaranteed hours of work. The effect of this is that in reality a Supplementary Worker may work less than 500 hours in a calendar year. Telstra may also offer a Supplementary Worker work outside of the employee's nominated span and days to make up the employee's 500 hours but the employee is not obliged to accept the work. 38 A number of full time Teletech employees were employed at Telstra as Supplementary Workers. For these applicant employees, they went from 38 hours per week to a guaranteed minimum of approximately 10 hours per week. Applicant employees in this category are: · Applicant 5; · Applicant 11; · Applicant 13; · Applicant 19; · Applicant 27; · Applicant 44; · Applicant 52; and · Applicant 53. 39 A number of part time Teletech employees were employed at Telstra as Supplementary Workers. The reduction in hours varied for each applicant in this category depending on how many hours they worked at Teletech. Changes in working hours for applicant employees in this category are set out below. Applicant Ordinary hours at Teletech Minimum Hours at Telstra Applicant 2 30 Approximately 10 Applicant 21 25 Approximately 10 Applicant 41 25 Approximately 10 Applicant 55 30 Approximately 10

40 Other applicant employees working hours increased. Applicant 14 and Applicant 25 went from part time at Teletech to full time at Telstra.

Wages 41 I do not think it necessary to set out a comparison of all applicant employees' comparative pay rates or salaries for different positions. In general terms, most employees' weekly and annual pay increased at Telstra. 42 In the case of two applicant employees, their salary was reduced. These were Applicant 3 and Applicant 33. I discuss these two applicant employees in more detail below at [52] - [55]. 43 In the case of all the Supplementary Workers, it is very hard to assess what their actual salary was at Telstra. Certainly, the hourly rate for all Supplementary Workers was higher than in their employment at Teletech. However, due to the lack of security in weekly working hours that may not and probably did not translate into an overall annual wage increase. Any Supplementary Worker that worked only the bare 500 hours guaranteed, even paid at the highest possible hourly rate for their 'span', would have been significantly worse off than they were at Teletech.

Leave and other benefits 44 I am satisfied that the general entitlements contained in Teletech's AWAs and policies and those contained in Telstra's AWAs and policies are comparable when looked at globally for most employees. It is hard to align Teletech's and Telstra's entitlements as they are often defined differently or bundle various entitlement together differently. In general, most of the same entitlements are covered in both Teletech and Telstra AWAs and/or policies. Whilst the benefits they confer in substance vary, the overall bundle of entitlements is comparable. I note that the bundle of entitlements conferred under a Telstra Attachment 17 AWA for Supplementary Workers is not comparable to that conferred under the Teletech AWAs and I deal specifically with those differences below at [48]. 45 An important difference in the entitlements conferred under the Teletech AWAs and Telstra AWAs is that many of the key employee entitlements that are enshrined in the Teletech AWAs are instead contained in Telstra policies, procedures and processes. Telstra AWAs specify that employees must comply with Telstra's policies, procedures and processes, though they do not form part of the AWA or the employment contract. Additionally, Telstra's policies, procedures and processes are subject to amendment at any time. Similarly, Teletech AWAs provide that employees must comply with Teletech policies and that Teletech may amend its policies from time to time according to its business needs. However, the majority of Teletech's employee entitlements are contained within its AWAs. 46 The following is a non-exhaustive list of entitlements not enshrined in Telstra's AWAs, but in supplementary policies, procedures and processes: overtime; applying for annual leave; applying for long service leave; maternity leave; parental leave; cultural leave; bereavement leave; equal opportunity complaint processes; severance pay; and dispute resolution. 47 Other entitlements are contained in Telstra AWAs but are at Telstra's discretion. The clearest example is Telstra's personal/sick leave provisions. There is no minimum, nor maximum, entitlement to personal/sick leave days. An employee has a right to 'reasonable paid sick leave', however a manager will determine on a case by case basis whether there is an entitlement to paid sick leave. 48 Supplementary Workers employed under a Telstra Attachment 17 AWA are not entitled to many key entitlements contained both in their Teletech AWAs and in the other Telstra AWAs. Entitlements that don't apply to supplementary workers include additional leave, bereavement leave, blood donor's leave, cultural leave, defence/reservist leave and volunteer leave. The only leave entitlements that Supplementary Workers are entitled to are sick/personal leave, long service leave, maternity leave and annual leave. Supplementary Workers are not entitled to public holidays.

Security of employment and loss of ongoing entitlements 49 Teletech's AWAs contained a probation clause that imposed a 3 month probation period on new employees with Teletech able to terminate employment on one week's notice. At the time of redundancy, no Teletech employee was on probation. Upon the commencement of their employment at Telstra, all applicant employees were placed on a three month probation period, pursuant to the Telstra AWAs. During that probationary period Telstra had the right to dismiss the employees without notice. 50 It was submitted by counsel for Teletech that most new employments involve a period of probation and that, in fact, the applicant employees had been subject to a probationary period on commencement at Teletech. This is so. It is not exactly to the point though. At the time of redundancy, none of the applicant employees was on probation. Had they not been made redundant and had their employment been ongoing, they would not have been subjected to a further arbitrary probation period whilst at Teletech. It is true that if they had organised their own subsequent employment upon redundancy, as I have found they indeed did in this case, a probationary period would have applied, as it did in this case. But the purpose of the exclusion that the respondent relies on, is to say, 'Teletech is not required to pay you severance pay because we have arranged alternative employment that is comparable in its wages, terms and conditions, thereby offering you a transition into new employment as if your employment were ongoing'. It is a relevant and not unimportant factor in the overall assessment of wages, terms and conditions that previously secure employment is subject to a 3 month probation. 51 All the employee applicants were paid out by Teletech for their accrued annual leave entitlements. It was submitted by the applicants that being paid out for accrued annual leave was not equivalent to maintaining the benefit of accrued annual leave days. Whilst I agree with the proposition generally, in practical terms its weight in the overall exercise is limited. With respect to the loss of other ongoing accrued benefits, such as sick days and time towards long service leave, different employees were in different positions. Though I do not intend to set out the benefits lost by each employee, the loss of these accrued benefits can significantly impact on an employee's job security.

Third applicant and thirty-third applicant 52 Both the Third Applicant, Cassandra Bailey, and the Thirty-third Applicant, Kerrie Strobridge, were employed by Teletech under a Customer Service Stream AWA as Team Leaders. They were employed by Telstra under an Attachment 18 AWA as Sales Consultants. Both these applicant employees were employed by Telstra in positions that amounted to a demotion from their employment as Team Leaders at Teletech and both suffered a diminution in their wages. 53 I am not satisfied that employment by Telstra as a Sales Consultant is comparable to the employment by Teletech as a customer service Team Leader. The team leader position these applicant employees held at Teletech involved a leadership component that was lacking in their role at Telstra. Ms Christesen gave evidence that team leaders oversee a team of customer service representatives and possibly a senior customer service representative. Upon commencing employment with Telstra, these applicant employees went from a position of seniority to performing the same duties as the applicant employees they had previously helped to oversee. 54 Both applicant employees' wages decreased correspondingly. Both applicant employees' annual incomes of $42,000 (superannuation excluded) at Teletech dropped to $37,753 (superannuation excluded) at Telstra. 55 I am not satisfied that the third and thirty-third applicant employees' employment at Telstra is sufficiently comparable to their employment at Teletech. These applicant employees would be entitled to severance pay, even if my view that Teletech had not been able to arrange alternative employment could not be sustained.

Supplementary Workers 56 I do not accept Teletech's submission that the alternative employment as Supplementary Workers was comparable to the employment of the applicant employees at Teletech. As I have shown above, these applicant employees were denied access to a number of important entitlements that they had enjoyed at Teletech and lost the security of a fixed number of working hours per week. While their hourly rate increased, the loss of almost all the job security that these applicant employees had enjoyed in their employment at Teletech cannot be compensated. Looking globally at their employment at Teletech and their employment at Telstra, I consider that the wages, terms and conditions of employment at Telstra are not comparable in aggregate. These applicant employees would be entitled to severance pay, even if my view that Teletech had not been able to arrange alternative employment could not be sustained.

All applicant employees other than Applicant 3, Applicant 33 and Supplementary Workers 57 I am satisfied that on a global assessment of the wages, terms and conditions of employment of these applicant employees that the alternative employment at Telstra is comparable to their employment at Teletech. In general terms, I think it sufficient to comment that the wages, terms and conditions of employment are comparable for the purposes of the severance pay clause in question. Generally, the positions of employment of these applicant employees were comparable, their wages were comparable and the other terms and conditions governing their employment, though not identical, were also comparable. Some of these applicant employees were employed in positions at Telstra that effectively amounted to a demotion. Nonetheless, I have weighed the change of position with the varying wage increases enjoyed by these applicant employees at Telstra and I am satisfied that the employment is comparable on this approach.

Future conduct of the proceeding 58 The proceeding is adjourned to a directions hearing to be held at 9.30am on 19 December 2008. I certify that the preceding fifty-eight (58) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall.

Associate: Dated: 2 December 2008 Solicitor for the Applicant: Australian Government Solicitor

SCHEDULE OF PARTIES NICOLE ALLMAN First Applicant DARLENE ANGELO Second Applicant CASSANDRA BAILEY Third Applicant CHRISTINE BARTLETT Fourth Applicant TRACEY BECKMAN Fifth Applicant PHYLLIS BESWICK Sixth Applicant KATRINA BOCK Seventh Applicant JACQUELINE BOLTON Eighth Applicant SANDRA BREWIS Ninth Applicant TRACEY CHAMBERS Tenth Applicant KELLY CONNELL Eleventh Applicant CHRISTINE CONSTANTINOU Twelfth Applicant MICHELLE CUMMINS Thirteenth Applicant MEGAN CURTIS Fourteenth Applicant LYNNE DAVIDSON Fifteenth Applicant PETER DOYLE Sixteenth Applicant NATASHA HEGER Seventeenth Applicant TAMMY HENDER Eighteenth Applicant CINDY HOLLOWAY Nineteenth Applicant TRACEY JACKSON Twentieth Applicant LYNETTE LLOYD Twenty-First Applicant SHAUN LYONS Twenty-Second Applicant KARIN (MARIA) MASSIE Twenty-Third Applicant HEATHER MILLS Twenty-Fourth Applicant MICHELLE NILSSON Twenty-Fifth Applicant ANGELINA OTTER Twenty-Sixth Applicant LEE PENDLEBURY Twenty-Seventh Applicant CHRISTINE PHEENEY Twenty-Eighth Applicant GAYE PRIOR Twenty-Ninth Applicant THERESES ROBINSON Thirtieth Applicant MELISSA SHORT Thirty-First Applicant JUDITH SMYK Thirty-Second Applicant KERRIE STROBRIDGE Thirty-Third Applicant MATTHEW THOMAS Thirty-Fourth Applicant SUE THOMAS Thirty-Fifth Applicant SARAH TILGNER Thirty-Sixth Applicant JEANETTE VANNAPRASEUTH Thirty-Seventh Applicant KERYN MAYER Thirty-Eighth Applicant PAUL WARE Thirty-Ninth Applicant DAVID WIJGERS Fortieth Applicant HAYLEY ALSTON Forty-First Applicant JOSEPH DE GROOT Forty-Third Applicant LYNDEL SHAND Forty-Fifth Applicant DANIEL COLE Forty-Sixth Applicant CHRIS CORSER Forty-Seventh Applicant BRENT COSGRIFF Forty-Eighth Applicant PETER DUNSTAN Forty-Ninth Applicant KATRINA HUMPHREY Fiftieth Applicant KAREN MUNDAY Fifty-First Applicant STEPHEN RIDDLE Fifty-Second Applicant JANINE HORTER Fifty-Second Applicant CHRIS HUTTON Fifty-Third Applicant ROBYN LARKIN Fifty-Fourth Applicant MANDY PECK Fifty-Fifth Applicant NICOLE VAN DEN DOLDER Fifty-Sixth Applicant KERRYN SPALDING Fifty-Seventh Applicant