Construction, Forestry, Maritime, Mining and Energy Union v Peabody CHPP Pty Ltd [2020] FWC 6287

What happened

This decision concerned whether redundancy pay payable under a transferred enterprise agreement had to include service that employees had accrued with their former employer (a contractor) prior to being separately recruited by the new employer.

Facts (as found by Commissioner Riordan):

Peabody CHPP Pty Ltd (Respondent) insourced operation of a CHPP from contractor SADA Pty Ltd in mid‑2019 ([3]).
A cohort of ex‑SADA employees (15 in total) applied for roles with Peabody via public advertisement on Seek and were offered employment by Peabody under terms stating the SADA Enterprise Agreement would 'transition' but that "All other employment entitlements will be settled between yourself and SADA and will not transfer to Peabody" ([5], [10], [39]).
Four of those former SADA employees (the Applicants' clients) were later made redundant by Peabody and received redundancy calculated by reference only to service with Peabody (about 14 months), not combined service with SADA ([6], [8]).
The CFMMEU (Applicant) asked the Commission to determine that prior SADA service had to be counted when applying clause 29 of the SADA Enterprise Agreement as it 'transitioned' to Peabody ([1], [11]).

The Commission dismissed the application, holding that clause 29 did not require Peabody to recognise SADA service for redundancy calculation, and alternatively that Peabody had given the requisite written notice under s122(1) of the Fair Work Act that it would not so recognise the prior service ([45]-[51], [52]).

Why the court decided this way

The Commission's reasoning rests on a mix of contractual interpretation and statutory context.

Textual/contractual interpretation:

Applying the interpretive principles set out in James Cook University v Ridd (quoted at [19]), the starting point is the ordinary meaning of the words read in context, with a purposive approach informed by industrial realities ([19]).
Commissioner Riordan concluded the words 'employment' and 'service' in clause 29 are used interchangeably and, read plainly, 'service' means periods of employment with the employing entity for the purposes of the clause. This led to the finding that clause 29 did not obligate Peabody to count service that the employee had with SADA when calculating redundancy owed by Peabody ([45], [46]).

Statutory context and extrinsic material:

The Applicant pressed that the definition of 'service' in s22 of the Fair Work Act (which provides that service with a first employer counts as service with the second employer in transfer situations) should govern the interpretation of enterprise agreement terms ([11], [16], [18]).
The Commission accepted that s22 was enacted to protect NES entitlements and that the Explanatory Memorandum indicates s22(5) operates principally in relation to NES annual leave and redundancy protections, and that s22(5) is subject to the exception in the Note and s122(1) where the second employer decides not to recognise prior service ([30], [37]).
The Commissioner concluded s22 does not automatically displace the ordinary meaning of contractual terms in an enterprise agreement: you do not 'automatically transport' the statutory definition into the agreement ([46]).
As a fallback, the Commissioner found that Peabody's offer letters and the manner of recruitment (separate Seek applications, no preferential transfer process) amounted to written notice under s122(1) that prior SADA entitlements would not be recognised by the new employer. Consequently, even on the Applicant’s statutory argument, Peabody had effected the statutory election not to recognise prior service for redundancy purposes ([39], [48]).

Common sense and policy:

The Commissioner echoed concerns that forcing a new employer to shoulder entitlements accrued with a prior contractor without compensation would be industrially unfair and unlikely Parliament’s intention, drawing on the High Court’s common‑sense approach in Mondelez ([33], [50]).

In short: contractual text and documented recruitment/offers meant Peabody did not accept SADA service for redundancy; statutory protection for transfers (s22) was not enough to override that result absent further support.

Before and after state of the law

Before:

Section 22 supplies a statutory definition of 'service' and 'continuous service' to assist across the Fair Work Act, including that prior service can count after a transfer of employment (s22(5)). The Note to s22(5) and section 122(1) qualify operation in certain transfer situations, particularly in relation to NES protections.
Prior Fair Work Commission authority (Stanton C in CFMEU v Peabody Energy Australia Coal Pty Ltd [2015] FWC 446) had held that s22(5) could not require recognition of service for entitlements outside the NES; the present Commission expressly agreed with that prior conclusion ([29], [43]).

After:

This decision reaffirms two propositions:
1. The meaning of 'service' in an enterprise agreement is primarily a matter of contractual interpretation; statutory definitions in s22 are not automatically imported into enterprise agreements ([45]-[46]).
2. Even where s22 might suggest prior service should count, section 122(1) allows a second employer to decide not to recognise prior service for NES redundancy, and clear written notice to employees will satisfy that statutory exception ([12], [48]).
Practically, the decision confirms that employers can, by clear written communication and by the manner of recruitment, avoid inheriting prior employer service for redundancy calculation under a transferred enterprise agreement, subject to the statutory framework.

Key passages with plain-English translation

Passage: "[I] am satisfied that the wording in the Agreement, whilst confusing at first instance, does not contain an obligation for the Respondent to recognise and reward the Former Employees' service with SADA. I agree with the Respondent and find that the words 'employment and service' in clause 29 of the Agreement are interchangeable." ([45])

Plain English: Read in context, clause 29 does not require Peabody to include the years employees worked for SADA when calculating redundancies; in that clause 'service' just means time working for the employer who is actually paying the redundancy.

Passage: "I do not accept that the definition of service in section 22 of the Act can be automatically transported into an enterprise agreement. The principles of interpretation determined in Ridd require words to be given their plain and ordinary meaning." ([46])

Plain English: You cannot just copy the statutory definition of 'service' from the Fair Work Act straight into a private enterprise agreement. The agreement's words must be read according to their usual meaning and the context in which they appear.

Passage: "If I am wrong, ... then I find that the Respondent has provided the requisite written notice to the employees that their service with SADA would not be transferring to the Respondent in accordance in with section 122(1) of the Act." ([48])

Plain English: Even if the statute's definition did apply, Peabody effectively told the employees in writing that it would not accept their earlier SADA service; that written notification means Peabody was permitted not to count it.

Passage: "It would be industrially unfair if a new employer was required to recognise and account for the accrued entitlements of a former employee without contribution or compensation from the transferring employer." ([50])

Plain English: The Commissioner accepted the practical point that making a new employer pay for entitlements earned under a prior employer could be unfair and impractical unless Parliament clearly intended it.

What fact patterns trigger this precedent

This decision will be directly relevant where:

Employees move from a contractor (old employer) to a principal/company (new employer) after a contractor's work is insourced, and the new employer hires those workers via public recruitment processes (e.g. Seek), rather than by a straight transfer or 'assignment' process ([5], [48]).
Offer letters or other clear written communications from the new employer state that prior entitlements will be settled with the old employer and will not transfer to the new employer (see offer letter wording at [10], [39]).
The enterprise agreement contains redundancy provisions using the term 'service' or 'employment' and the question arises whether prior service counts towards length-based redundancy entitlements (clause 29; see [7], [45]).
Employers wish to adopt the s122(1) route: where the statutory machinery allows a second employer, in a transfer-of-employment situation between non-associated entities, to elect not to recognise prior service for NES redundancy by giving notice (see [12], [48]).

Key distinguishing facts that may lead to a different outcome:

A straight transmission-of-business where employees are transferred without separate recruitment (i.e. 'transferring employees' in the classical sense) may present a different legal analysis; the Commissioner noted the present case involved separate recruitment (Seek) and no assistance from SADA in placing employees with Peabody ([5], [48]).
Where the enterprise agreement's language unambiguously defines 'service' to include prior employment or expressly adopts the s22 statutory definition, or where there is no clear written notice of non‑recognition, a different outcome is possible.

How later courts have treated it

The decision itself cites and follows prior Commission authority (Stanton C, CFMEU v Peabody Energy Australia Coal Pty Ltd [2015] FWC 446) and applies interpretive guidance from the Full Court in Ridd and the High Court in Mondelez. The judgment does not record any subsequent appellate treatment of this particular decision (it is a 21 December 2020 Commission decision). The Commissioner explicitly noted he did not disagree with Stanton C’s decision and that the CFMEU did not appeal that earlier decision ([43]). The decision therefore sits alongside Stanton C’s reasoning within FWC practice as persuasive internal precedent at the Commission level.

Practitioners should treat this decision as a clear statement at Commission level that:

Ordinary contractual meaning governs enterprise agreement interpretation unless statutory language or clear textual indication points otherwise ([46]); and
Written offers and separate recruitment conduct can constitute notice under s122(1).

Because this is a Commission decision and not a higher court ruling, its persuasive weight beyond similar Commission matters is limited; the decision cites higher court authorities for interpretive principles (Ridd, Mondelez) that will carry greater binding authority in appellate litigation.

Still-open questions

Degree of notice required under s122(1):
- The Commissioner accepted offer letters with the phrasing "All other employment entitlements will be settled between yourself and SADA and will not transfer to Peabody" as sufficient notice ([39], [48]). It remains open how specific or formalised the notice must be in different fact patterns; for example, whether a less explicit communication would suffice.
Enterprise agreement language that explicitly adopts statutory definitions:
- The decision emphasises that s22 does not automatically transport into enterprise agreements ([46]). But if an enterprise agreement expressly refers to or adopts the Fair Work Act's definition of 'service', whether that would alter the outcome is not decided here.
The dividing line between NES protections and enterprise agreement benefits:
- The Commissioner treated s22 as principally protective of NES entitlements, following the Explanatory Memorandum and Stanton C ([30], [37], [43]). The precise limits of this approach where enterprise agreement benefits closely mirror or replicate NES entitlements remain an area where future decisions may clarify interaction.
Commercial arrangements between transferring and receiving employers:
- The decision notes potential unfairness if receiving employers must bear prior entitlements without compensation ([50]). It leaves open how commercial indemnities, transfer payments, or contractual arrangements between employers could influence the legal obligations of the receiving employer.
Appellate confirmation:
- As a Fair Work Commission decision, the reasoning has persuasive value but would be consolidated and clarified by appellate decisions addressing the same questions. There is no appellate ruling recorded in this judgment that directly affirms or displaces these conclusions.

Practitioners advising clients should:

Ensure written communications on recruitment and entitlements are clear and explicit if employers intend not to recognise prior service.
Consider and document whether hiring is by separate recruitment (public advert) or by transfer of employees as part of a transmission of business, that factual distinction materially affects the legal analysis.
Where employers provide superior redundancy provisions, assess commercial and administrative implications, and consider whether variation of an enterprise agreement (s320) or other arrangements are advisable to remove ambiguity (the Applicant suggested s320 but the Commission did not find it determinative here; see [15]).

Conclusion: The decision is a practical application of normal contractual interpretation principles to enterprise agreements in transfer contexts, reinforced by statutory provisions that permit a second employer to elect not to recognise prior service where properly communicated. The factual matrix, separate recruitment and specific written offer terms, was decisive.

Judgment (68 paragraphs)

[1]

The Applicant referred to section of 22 (5) of the Fair Work Act 2009 (the Act), which states:

[2]

22 Meanings of service and continuous service

[3]

(1) A period of service by a national system employee with his or her national system employer is a period during which the employee is employed by the employer, but does not include any period (an excluded period) that does not count as service because of subsection (2).

[4]

(5) If there is a transfer of employment (see subsection (7)) in relation to a national system employee:

[5]

(a) any period of service of the employee with the first employer counts as service of the employee with the second employer; and

[6]

(b) the period between the termination of the employment with the first employer and the start of the employment with the second employer does not break the employee's continuous service with the second employer (taking account of the effect of paragraph (a)), but does not count towards the length of the employee's continuous service with the second employer.

[7]

Note: This subsection does not apply to a transfer of employment between non-associated entities, for the purpose of Division 6 of Part 2-2 (which deals with annual leave) or Subdivision B of Division 11 of Part 2-2 (which deals with redundancy pay), if the second employer decides not to recognise the employee's service with the first employer for the purpose of that Division or Subdivision (see subsections 91(1) and 122(1)).

[8]

(6) If the national system employee has already had the benefit of an entitlement the amount of which was calculated by reference to a period of service with the first employer, subsection (5) does not result in that period of service with the first employer being counted again when calculating the employee's entitlements of that kind as an employee of the second employer.

[9]

(a) the accrued paid annual leave to which the employee is entitled as an employee of the second employer does not include any period of paid annual leave that the employee has already taken as an employee of the first employer; and

[10]

(b) if an employee receives notice of termination or payment in lieu of notice in relation to a period of service with the first employer, that period of service is not counted again in calculating the amount of notice of termination, or payment in lieu, to which the employee is entitled as an employee of the second employer.

[11]

(7) There is a transfer of employment of a national system employee from one national system employer (the first employer) to another national system employer (the second employer) if:

[12]

(i) the employee becomes employed by the second employer not more than 3 months after the termination of the employee's employment with the first employer;

[13]

(ii) the first employer and the second employer are associated entities when the employee becomes employed by the second employer; or

[14]

(i) the employee is a transferring employee in relation to a transfer of business from the first employer to the second employer;

[15]

(ii) the first employer and the second employer are not associated entities when the employee becomes employed by the second employer.

[16]

Note: Paragraph (a) applies whether or not there is a transfer of business from the first employer to the second employer.

[17]

[12] The Applicant submitted that, although section 122(1) and the Note in section 22(5) of the Act state that section 22(5) does not apply when a second employer decides not to accept the service of the first employer, this exception only applies to the NES redundancy provisions and not those contained in an enterprise agreement.

[18]

122 Transfer of employment situations that affect the obligation to pay redundancy pay

[19]

Transfer of employment situation in which employer may decide not to recognise employee's service with first employer

[20]

(1) Subsection 22(5) does not apply (for the purpose of this Subdivision) to a transfer of employment between non-associated entities in relation to an employee if the second employer decides not to recognise the employee's service with the first employer (for the purpose of this Subdivision).

[21]

[13] Further, the letters of offer only made mention of the annual leave and long service leave entitlements. Importantly, redundancy is not mentioned by the Respondent in any correspondence as an exclusion from the transfer of employment.

[14] The Applicant argued that the words 'employment' and 'service' in clause 29 are not interchangeable and that the Commission should apply the ordinary meaning to those words. In doing so, the Applicant submitted, the provision takes on a whole new meaning and strengthens the case for the Commission to adopt the definition of service in section 22 of the Act.

[15] The Applicant also submitted that the Respondent could have utilised section 320 of the Act and sought a variation of the Agreement to remove any ambiguity in relation to the prior service of the transferring employees.

[16] Further, the Applicant submitted that section 22 of the Act applies to all provisions of the Act and is not confined to the NES, e.g. the definition of service also applies to the unfair dismissal provisions of the Act (sections 384 and 392 of the Act)

[17] The Applicant submitted that the paragraph contained in the letters of offer (see paragraph 10 above) does not have the effect of informing the employee that their prior service will not be recognised for redundancy.

[18] In the alternative, the Applicant submitted that if there was no direct obligation to recognise service as per section 22 of the Act, then clause 29 of the Agreement should be intended to adopt the meaning of service contained in of the Act.

[22]

"[65] The relevant principles applicable to the interpretation of an enterprise

[23]

(i) The starting point is the ordinary meaning of the words, read as a whole and in context (City of Wanneroo v Holmes [1989] FCA 553; 30 IR 362, 378; City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; 153 IR 426 [53]; WorkPac Pty Ltd v Skene [2018] FCAFC 131; 264 FCR 536 [197]).

(ii) A purposive approach is preferred to a narrow or pedantic approach - the framers of such documents were likely to be of a "practical bent of mind" (Kucks v CSR Limited [1996] IRCA 166; [1996] 66 IR 182, 184; Shop Distributive and Allied Employees' Association v Woolworths SA Pty Ltd [2011] FCAFC 67 [16]; WorkPac Pty Ltd v Skene [2018] FCAFC 131; 264 FCR 536 [197]). The interpretation "turns upon the language of the particular agreement, understood in the light of its industrial context and purpose" (Amcor Limited v Construction, Forestry, Mining and Energy Union [2005] HCA 10; 222 CLR 241 [2]).

(iii) Context is not confined to the words of the instrument surrounding the expression to be construed (City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union ; 153 IR 426 [53]). It may extend to "... the entire document of which it is a part, or to other documents with which there is an association" (Short v FW Hercus Pty Ltd ; 40 FCR 511, 518; Australian Municipal, Administrative, Clerical and Services Union v Treasurer of the Commonwealth of Australia ; , 178).

[24]

Applying these principles, the Respondent argued that the terms 'employment and service', in clause 29 of the Agreement, are interchangeable.

[25]

[20] The Respondent submitted that the clear intention of the Respondent was to not recognise the service of the Former Employees with SADA. The Respondent argued that the letters of offer are clear and concise and satisfy section 122(1) of the Act. Therefore, section 22(5) of the Act does not apply.

[21] The Respondent submitted that it was "plainly unfair" that the Former Employees have not received a benefit referable to their service with SADA, but that was a matter to be resolved between the Former Employees (with the support of the CFMMEU) and SADA.

[22] The Respondent argued that if the Commission were to adopt the reasoning of the Applicant in relation to section 22(5) of the Act, then such a conclusion would create a degree of difficulty in relation to consistency and plainly result in unintended consequences.

[23] The Respondent submitted that if an enterprise agreement does not contain a redundancy provision then the NES applies. In this current circumstance, an employer has the right to refuse the prior service in a transmission of business situation. However, if the enterprise agreement replicates the NES, based on the submission of the Applicant, the source of the redundancy entitlement is the enterprise agreement and the employer cannot do anything but accept the prior service in a transfer of business scenario.

[24] The Respondent argued that the Applicant's submission creates an inconsistency on the basis that section 22(5) of the Act applies to enterprise agreement benefits but the right of the employer to not recognise service (section 122(1) of the Act) does not apply. The Respondent submitted that such an outcome was illogical and would be an unintended outcome

[26]

313 Transferring employees and new employer covered by transferable instrument

[27]

(1) If a transferable instrument covered the old employer and a transferring employee immediately before the termination of the transferring employee's employment with the old employer, then:

[28]

(a) the transferable instrument covers the new employer and the transferring employee in relation to the transferring work after the time (the transfer time) the transferring employee becomes employed by the new employer; and

[29]

(b) while the transferable instrument covers the new employer and the transferring employee in relation to the transferring work, no other enterprise agreement or named employer award that covers the new employer at the transfer time covers the transferring employee in relation to that work.

[30]

(2) To avoid doubt, a transferable instrument that covers the new employer and a transferring employee under paragraph (1)(a) includes any individual flexibility arrangement that had effect as a term of the transferable instrument immediately before the termination of the transferring employee's employment with the old employer.

[31]

(3) This section has effect subject to any FWC order under subsection 318(1).

[32]

[28] The Respondent argued that this section of the Act makes no mention of the term 'service'; but states that the transferable instrument, i.e., the Agreement, only comes into effect for the Respondent at the time that the employee becomes an employee of the new employer, i.e., the Respondent.

[29] The Respondent submitted that the issue of service and section 22(5) of the Act has been dealt with previously by the Commission in a matter between the two parties to this dispute. In CFMEU v Peabody Energy Australia Coal Pty Ltd_4F4F[5]__,_ Commissioner Stanton held:

[33]

"[66] As a matter of construction, it must therefore follow that s.22(5) cannot require an employer to recognise service for the purposes of conferring a benefit outside of those established under the NES, such as the bonus scheme. The application of s.22(5) is restricted to a situation where there is a transfer of employment and the second employer elects to recognise the employee's service with the first employer for the purposes of redundancy. Moreover, s.22(6) states that where a transferring employee has already received an entitlement based on service with the first employer, the provisions of s.22(5) do not require that period of service to be counted again when calculating the employee's entitlements with the second employer. Wambo was not required to recognise a transferring employee's service with Downer with respect to the NES requirements concerning annual leave and redundancy pay.

[34]

[67] The proposition put by the Union that s.22(5) requires Wambo to recognise a

[35]

transferring of employee's service with Downer for the purpose of administering the bonus scheme has no legislative support. The provisions of s.22 of the Act do not create an obligation on the employer per se but rather provide a set of definitions concerning the meaning of "service', "continuous service", "transfer of business" and the like. Nor does s.22 of the Act require that prior service with Downer be recognised "for all purposes" as contended by the Union. The provisions of s.22(6) clearly prevent "double dipping" and prevents a period of service in respect of an entitlement taken with the first employer from being counted again when calculating the same entitlement of the transferring employee with the second employer. For the sake of further clarity, the Explanatory Memorandum relevantly states at Items 103 and 113 to 115: 5F5F_[6]_

[36]

[30] The Respondent also referred me to the relevant provisions of the Explanatory Memorandum of the Act.

[37]

"103. Clause 22 defines the meaning of service and continuous service in general terms that apply to the Bill as a whole (including the NES), and also in the specific context of identified Divisions of the NES where a particular meaning is required.

[38]

113 Broadly, these provisions are intended to ensure that an employee's service related entitlements under the NES are not affected merely because the employee's employer changes as a result of a transfer of business, or because the employee's employer changes within a group of employers who are associated entities.

[39]

114. A legislative note under paragraph 22(5)(b) makes clear that this subclause does not apply to a transfer of employment between non-associated entities in relation to the NES annual leave provisions in Division 6 of Part 2-2 of the Bill, or the NES redundancy pay provisions in Subdivision B of Division 11 of Part 2-2 if the second employer decides not to recognise the employee's service with the first employer.

[40]

115. Subclause 22(6) is an 'anti-double dipping' provision. Where an employee has taken the benefit of an entitlement and that entitlement was calculated by reference to a period of service with the first employer, then subclause 22(5) does not result in the employee's period of service with the first employer being counted again when calculating the employee's entitlements of that kind as an employee of the second employer."6F6F[7]

[41]

[31] The Respondent also referred the Commission to section 55(6) and what it described as an awkward clause.

[32] The Respondent posited that this provision means that if an employer provides a benefit which is greater than the NES through an enterprise agreement, as SADA has done in relation to redundancy, then the benefit is required to be broken down into two separate benefits. The Respondent submitted that the NES entitlement will be protected by the NES protections whilst any additional entitlement will not be subject to these provisions.

[33] The Respondent also referred to the recent High Court of Australia decision in Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union; Minister for Jobs and Industrial Relations v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (_Mondelez)_7F7F[8], to highlight the fact that the High Court had applied a common-sense interpretation to arrive at a result which it believed was the intended outcome of the Parliament. The Respondent suggested that the same common-sense approach be adopted in this circumstance.

[42]

[34] I have taken into account all of the submissions and evidence that has been submitted by the parties. The fact that an issue is not mentioned in this decision does not mean that it has not been taken into account.

[35] I have taken into account that section 22(5) of the Act only applies to NES accumulated annual leave and redundancy provisions. The Applicant has made it abundantly clear that this application does not involve NES entitlements.

[36] I have taken into account, the opposing submissions in relation to the plain and ordinary meaning of 'service'. I note that the Concise Oxford Dictionary (tenth edition) defines 'service' to mean;

[43]

"Service - a period of employment with a company or organisation."

[44]

[37] I have taken into account the Explanatory Memorandum of the Act. Paragraph 103 of the Explanatory Memorandum states that the definition of service and continuous service of clause 22 apply throughout the entire Act, including the NES. However, paragraph 114 categorically states that service with a former employer can count as service with the second employer for the purpose of NES Annual Leave or NES Redundancy, unless the second employer decides not to recognise the employees service with the first employer.

[38] I have taken into account the letter of offer which was provided to the Former Employees prior to their commencement with the Respondent.

[39] This correspondence sets out the "offer of employment" that was made to each of the Former Employees. All the Former Employees accepted this offer. Relevantly, the following extracts help to provide an understanding of the dispute:

[45]

Your Coal Long Service leave will remain in place. All other employment

[46]

entitlements will be settled between yourself and SADA and will not transfer to

[47]

When you commence with Peabody you will start accruing annual leave and

[48]

personal leave as specified in the Enterprise Agreement."8F8F[9]

[49]

[40] I have taken into account that the Former Employees accepted that all of their employment entitlements (except for their coal industry long service leave) will be settled with SADA and not transfer to the Respondent. It is not in dispute that redundancy is an employment entitlement, which in this case, is governed by the terms of the Agreement.

[41] In response to questions from me, Mr Ackerman said:

[50]

"Thank you. Now, there is evidence which you may not have seen that's been put on by Mr Kruger, which is an email train between himself and a Ms Stephanie Gelland. Are you aware of who Ms Gelland is?---Ms Gelland was the HR officer at Peabody.

[51]

Were you talking to her about your entitlements that might be coming across with you from SADA to Peabody?---Personally, no, but there was a letter given to us about our - Sada would pay our - what do you call it - sick leave and holidays; that would be paid out.

[52]

Did anybody ask Ms Gelland, from your information, about whether or not you were entitled to redundancy?---Not that I'm aware of.

[53]

Was there every any discussion from Ms Gelland to suggest to you that when you came across to Peabody that you would not get redundancy?---No, there was no discussion because as people were asking when the redundancies came out this time, people were worried about their financial situation and were trying to find out about years' service."9F9F[10]

[54]

[42] I have taken into account the following answer by Mr Ackerman to a question from Mr Williams:

[55]

"This letter says, "All other employment entitlements will be settled between yourself and Sada." Did you give any consideration at the time or since to making a claim against Sada for redundancy based on the Sada service?---No, no, we were just happy to get a job with Peabody at the time."10F10F[11]

[56]

[43] I have taken into account the decision of my former colleague, Stanton C in CFMEU v Peabody Energy Australia Coal Pty Ltd. I note that the CFMEU did not appeal this decision and whilst that decision was in relation to the length of an employee service for the purpose of calculating a bonus, the fundamental issue of prior service is common. I do not disagree with the reasoning or finding of my esteemed former colleague.

[44] I have taken into account the approach adopted by the High Court in applying the normal and ordinary meaning of a word, along with the utilisation of extrinsic material in determining a common-sense solution to a problem. I note that the use of extrinsic material is a common approach used by the High Court in statutory interpretation.

[57]

[45] I am satisfied that the wording in the Agreement, whilst confusing at first instance, does not contain an obligation for the Respondent to recognise and reward the Former Employees' service with SADA. I agree with the Respondent and find that the words 'employment and service' in clause 29 of the Agreement are interchangeable.

[46] I do not accept that the definition of service in section 22 of the Act can be automatically transported into an enterprise agreement. The principles of interpretation determined in Ridd require words to be given their plain and ordinary meaning. I endorse the definition from the Oxford Dictionary in providing the plain and ordinary meaning of this term, that is, service is the period of time where an employee is employed by an organisation.

[47] Based on the evidence of Mr Ackerman, I am satisfied that the employees were aware that all of their service-related entitlements were to be paid out by SADA. It is not unusual for employees facing a redundancy situation to be focused on finding new employment rather than worrying about entitlements. The Respondent's representative, Mr Williams, is a very experienced legal practitioner. Mr Williams believes that the Former Employees have a prima facie case against SADA for a redundancy payment for their service at SADA. Based on the limited material before the Commission, he may be correct in his assessment.

[48] If I am wrong, and the term "service" should be defined as per section 22 of the Act, then I find that the Respondent has provided the requisite written notice to the employees that their service with SADA would not be transferring to the Respondent in accordance in with section 122(1) of the Act. Apart from the wording in the letter of offer, the Former Employees had to undertake and endure a totally separate recruitment process through Seek. They weren't given preference due to their employment with SADA or simply transferred between SADA and the Respondent, which is what usually happens when a contractor loses a contract to a competitor and the employees start with the new employer.

[49] I do not accept the argument from the Respondent that there is a need for employers who have superior redundancy provisions than the NES to spilt the entitlements, calculation and means of accrued into two separate categorise, i.e. NES and over NES. Such a scenario would be an administrative nightmare and would not have been the intention of Parliament.

[58]

[51] For the reasons stated above, I find that the Respondent did not have to pay the Former Employees redundancy pay based on their prior service with SADA.

[52] The application is dismissed.

[59]

Mr Dan Williams, Solicitor on behalf of the Respondent.

[60]

[1] Metropolitan Coal Processing Plant Enterprise Agreement 2018, clause 29.

[61]

[2] Witness Statement of Nathan Ackerman Annexure 1.

[62]

[3] [2020] FCAFC 123.

[63]

[5] [2015] FWC 446

[64]

[8] [2020] HCA 29.

[65]

[9] Witness Statement of Nathan Ackerman Annexure 1.

[66]

[10] Transcript of Hearing on Thursday 15 October 2020 [44] - [47].

[67]

[11] Transcript of Hearing on Thursday 15 October 2020 [51].

[68]

Printed by authority of the Commonwealth Government Printer

At a glance

Result

Key principles

Issues before the court

Plain English Summary

Cited legislation

Deep Dive

What happened

Why the court decided this way

Before and after state of the law

Key passages with plain-English translation

What fact patterns trigger this precedent

How later courts have treated it

Still-open questions

Judgment (68 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (1)

Construction, Forestry, Maritime, Mining and Energy Union v Peabody CHPP Pty Ltd [2020] FWC 6287 (21 December 2020)

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