The pre-existing law
42 The phrase 'ordinary and customary turnover of labour' appears to have first been used in relation to severance or redundancy pay by the President of the Industrial Commission of New South Wales in Shop, Distributive & Allied Employees Association (NSW) v Countdown Stores (1983) 7 IR 273 (Crocker). At that time, the Employment Protection Act 1982 (NSW) required notice of intention to terminate an employee to be given to the Industrial Registrar. The Registrar was then required to report to the President concerning the termination. The Commission could inquire into the matters the subject of a report. The Commission, after consideration of a report, could make orders concerning a number of matters one of which was 'requiring the payment of severance payments to the employee concerned'. The Crocker decision considered whether there should be a single overall prescription or standard for redundancy pay. It was an inquiry undertaken at a time of recession when there was considerable economic distress both for employers and employees. In that context, Fisher P considered the various reasons why there may be a turnover of labour. As the statement has been influential in the subsequent determinations concerning redundancy pay, I set out the relevant passage in full. His Honour said:
There is of course in industry and always has been a general turnover of labour. It has been customary for employees' services to be dispensed with because it is the view of management that they are in some way less than satisfactory employees, not appropriately skilled, not appropriately motivated, unreliable or exhibiting other forms of unhelpful conduct in an industrial context, but not amounting to misconduct. Many employees, particularly in the building construction, contracting and sub-contracting industries are employed on terms which contemplate intermittency in employment. Provisions for compensating for holidays and annual leave by making an allowance in the calculation of hourly or weekly rates of pay are often made. Many awards contain a specific factor to compensate for "following the job", ie., for intermittency in employment when one job cuts out and another has to be obtained. Payments on severance would appear to be inappropriate to these circumstances and may contain an element of double counting. (See Australian Workers' Union v. Victorian Employers Federation (Print D6429).)
Similarly employees have at the height of economic prosperity been dismissed because of seasonal shifts in markets, loss of contracts or changes in contracts not relating to recession, changes in model or product, shifts in marketing emphasis and many other day to day causes removed from the present recession and its mounting toll of unemployment. All these employees are dismissed, almost invariably upon notice. If redundancy or severance payments applied generally to them a significant charge would apply to the turnover of labour generally. This would involve a major shift in the principles normally applied by this and other industrial tribunals to retrenchment situations. These types of dismissals contrast with dismissals which do not arise in any way from the behaviour of the employee or from ordinary changes in the incidents of employment, but where the employee is dismissed on a collective basis along with others and where the reason for the dismissals lies in the force of adverse economic circumstances, restricting employment opportunities and resulting in collective redundancies. Dismissals arising out of technological change or out of major company restructuring have similar characteristics.
I am not aware of any system which loads an ordinary and customary turnover of labour with a significant costs burden in relation to severance as such, or where the object of remedial legislation cannot be fairly described within the three classifications of retrenchment to which I have referred. I would therefore require to be affirmatively persuaded by clear language that it is the intention of this statute to impose upon almost all dismissals, regardless of cause, a costs burden in the midst of the worst economic recession in the last 50 years. The discussion and two tabulations appearing on p. 282 of this judgment illustrate the very wide difference in scope and application involved in these considerations.
43 It was concluded that severance pay upon retrenchment should be considered in three cases, namely 'collective retrenchment on economic grounds due to the present recession', 'retrenchment due to technological change' and 'retrenchments due to company reconstruction, mergers and takeovers'. This conclusion was reached on the basis that the remedy of severance pay 'will need to undergo the same evolutionary development as other forms of industrial amenity and compensation'. The focus of the decision was on dismissals made on a collective basis. It was terminations of that kind that were identified as instances where there should be redundancy pay. Even so, the identified categories were expected to evolve to include others.
44 Notably, the distinction between the three identified categories and 'ordinary and customary turnover of labour' was not sharply defined. However, it was said that payment for severance 'would appear to be inappropriate' where employment is undertaken in a context that 'contemplates intermittency' and therefore pay rates and conditions reflect that fact. Dismissals for misconduct and 'other forms of unhelpful conduct' were put into a different category.
45 It was also reasoned that to apply redundancy to dismissal from employment because of 'seasonal shifts in markets, loss of contracts or changes in contracts not relating to recession, changes in model or product, shifts in marketing emphasis' and other causes removed from recession would give rise to a 'significant charge' on the turnover of labour. This was not to say that redundancy pay may not apply to such circumstances in the future as part of the evolution. It was to recognise that to move, at that time, to a general recognition of an entitlement to redundancy pay in such instances would place a significant and unexpected impost on employers at the time of a recession.
46 It is to be noted that the term 'ordinary and customary turnover of labour' was deployed in a way that would embrace the three circumstances where an entitlement to redundancy pay was identified. It was used to refer to the wide range of circumstances in which redundancy was known to occur in the workplace. It was certainly not deployed to identify an exceptional category of cases where redundancy pay was not appropriate. Indeed it contemplated that future decisions would identify other instances where there would be an entitlement to redundancy pay. The basis for the decision was that generally speaking redundancy was ordinary and customary. In some types of employment there were additional payments made in recognition of the intermittent nature of the employment. In others there were not. However, the circumstances at the time justified redundancy pay being required only in the three circumstances identified.
47 Next came the Termination, Change and Redundancy Case (1984) 8 IR 34. It was brought in the federal industrial jurisdiction. The Australian Conciliation and Arbitration Commission heard a test case 'of mammoth proportions' concerning redundancy pay entitlements. It concluded that the decision it reached would 'apply to redundancy, whatever be the cause': at 75. The Commission described its conclusion as to the scope of redundancy in the following terms:
Our reasoning in these proceedings, other decisions of this Commission and various decisions of other industrial authorities, are also inconsistent with the general severance pay prescription being granted where termination is as a consequence of misconduct, where employees have been engaged for a specific job or contract, to seasonal and/or casual employees, or in cases where provision is contained in the calculation of the wage rates for the itinerant nature of the work. In addition, we are of the opinion that where termination is within the context of an employee's retirement, an employee should not be entitled to more than he/she would have earned if he/she had proceeded to normal retirement.
Furthermore, we believe that an employee should not be entitled to severance pay immediately but that some period of time should elapse before any entitlement accrues. The length of this period is a matter for judgment and has been variously determined as twelve months, two years or five years. …
48 The Commission also made clear that it did not envisage severance payments being made 'in cases of succession, assignment or transmission of a business': at 75. The parties were invited to bring in minutes to reflect the decision.
49 The employers then sought to re-open the decision. In the alternative, they submitted that the Commission should modify its decision by, amongst other things, undertaking a review of the position with respect to exemptions. The Commission ruled that it would not re-open its decision at large, but it would consider the modifications that had been suggested.
50 The employers then submitted, amongst other things, that the redundancy provisions should not apply to termination of employment 'associated with the general turnover of labour or a seasonal downturn within the industry or reclassification or alteration of working conditions'.
51 As to this submission, the Commission said that it had decided that 'there should not be any fundamental distinction, in principle, based on the causes of redundancy': Termination, Change and Redundancy Case (Supplementary Decision) (1984) 9 IR 115 at 128. It then said:
Nevertheless, it was not our intention that the redundancy provisions should apply to the "ordinary and customary turnover of labour"; an expression used by Mr Justice Fisher in his decision related to the Employment Protection Act in New South Wales ((1983) 7 I.R. 273).
However, notwithstanding the helpful submissions of the parties in these proceedings, we have some difficulty in finding a suitable expression to make our intention clear. There is no doubt that we did not intend the redundancy provisions to apply where an employee is dismissed for reasons relating to his/her performance, or where termination is due to a normal feature of a business. Furthermore, there is an overlap between the definition of redundancy for the purposes of any award and the categories of employees exempted from severance pay. To some extent the same can be said for the provisions relating to the introduction of change.
In the circumstances, we are prepared to provide that the redundancy provisions shall not apply where the termination of employment is "due to the ordinary and customary turnover of labour" but we will not include the other categories referred to by the employers.
52 The course followed by the Commission is somewhat problematic for two reasons. First, as it acknowledged, the form of words 'due to the ordinary and customary turnover of labour' lack the degree of clarity required to capture the intention of the Commission. Second, it appears that the Commission was adopting the formulation of Fisher P and applying it in a different way. Fisher P had used it to describe the many respects in which redundancy is known to occur and therefore is 'ordinary and customary'. The Commission was deploying the same phrase to capture more limited circumstances that would operate as an exception to a general entitlement to redundancy pay. Notably, the Commission rejected the claim by employers that the exception should be expressed in the much more ample terms of 'general turnover of labour or a seasonal downturn within the industry or reclassification or alteration of working conditions'.
53 The result of the Commission's decision was that the phrase 'ordinary and customary turnover of labour' was used to describe an exception to a general entitlement to redundancy. Importantly, the Commission did not otherwise reverse its earlier decision. In that context, the reference to the intention of the Commission that redundancy pay provisions not apply 'where an employee is dismissed for reasons relating to his/her performance, or where termination is due to a normal feature of a business' must be considered in the context of the more detailed reasons in the substantive decision (quoted above).
54 The language used in the substantive determination by the Commission identified the following categories to which the general right to redundancy pay would not apply:
(1) termination for misconduct;
(2) where the employee was engaged for a specific job or contract;
(3) seasonal and/or casual employees;
(4) where provision is contained in the wages paid for the itinerant nature of the work;
(5) where employment had been for less than 12 months; and
(6) succession, assignment or transmission of a business.
55 When the more shorthand language 'reasons relating to his/her performance, or … due to a normal feature of a business' was used in the supplementary decision it must be understood in the context of the substantive determination. There is no sense in which the context is suggesting that an employer may make it a normal course of its particular business that it terminates employees without paying redundancy in certain circumstances. Rather, there must be a feature of a business that means that the employment is not ongoing. So, an employer who adopted the practice of entering into contracts with employees for a particular term even though the nature of work was ongoing would not be brought within the exception. In such a case, it would not be a normal or inherent feature of such a business that the employment would have a limited duration.
56 To read the Commission's decision as allowing any business to adopt a practice of not paying redundancy and thereby bring itself outside the operation of the determination would be to give the words 'normal feature of a business' an operation of an expanded kind that was plainly inconsistent with the context in which those words were used and the nature of the issue being adjudicated at that point in the process.
57 It appears that the words 'ordinary or customary' were deployed to capture instances where the employment was of such a character that it was evident that it would not to be ongoing work of indefinite duration because the nature of the work or the kind of business activity being conducted by the employer was such that the work to be performed would come to an end even though the business would be ongoing.
58 However, the Commission's reasons do not engage with the problem at hand, namely where the task the employee is undertaking is ongoing, but the terms upon which the employer is engaged to undertake the task are for a fixed term at which time the employer's engagement is to be reviewed (by tender or negotiation) and the employer's customer may not renew the contract. In such cases, the employer may secure new contracts where employees are required to undertake the same type of work. However, the transitions between contracts produce lumpy changes in the number of employees required. In such cases, it is not the nature of the work to be done that means that it will come to an end within a specified period. Rather, it is the nature of the contract made between the employer and the employer's customer to undertake the work that means that the employment may come to an end.
59 Many businesses provide services for the term of a contract. The work required to perform the contract comes to an end when the contract comes to an end. Yet, the employees do not come and go with each contract. The business secures new contracts and the employment contracts are ongoing. This is the case even where an employee may be deployed to work full-time to undertake the work necessary to perform the obligations under a single contract with a particular customer of the employer. When that contract ends, the employee simply moves to the work required for a different contract as the work for the previous contract is complete.
60 The present case is concerned with instances where a large number of employees are required to perform the obligations under particular contracts and the end of each contract produces a transition whereby a considerable number of employees may no longer be required to undertake work for a particular contract and there may not be a new contract to which they can be deployed immediately. In such cases, even if the business of the employer involves providing services under a portfolio of contracts to which it is seeking to add over time and the employer is reallocating particular employees to the work required under different contracts in the portfolio where possible, there is still the prospect that an employee may not be able to be deployed when a contract comes to an end. In such instances, there is a prospect of termination for redundancy that might be viewed as a function of the nature of the business. On the other hand, an employee may be deployed from contract to contract or continue to work as the contract with the customer is renewed. Such deployment may be relatively common. An employee may be deployed from contract to contract in this way a number of times and then be terminated. The Termination, Change and Redundancy Case did not consider the extent to which such cases may fall within the ordinary and customary turnover exception.
61 In 1994, the Industrial Relations Commission of New South Wales was invited to revisit the issue of redundancy pay on the basis that the decision in Crocker contemplated evolutionary development in respect of redundancy pay and, by that time, the provision made by that decision was 'manifestly insufficient' both in amount and by reason of being confined to certain terminations in particular types of circumstances: Re Application for Redundancy Awards (1994) 53 IR 419 (Clerks Case). Part of the claim made was that the excluded category referred to as 'the ordinary and customary turnover of labour' should be deleted.
62 In the course of its reasons, the Commission recorded the following submission by the Labour Council:
The exclusion for ordinary and customary turnover of labour has been the source of much disputation and adjudication within the Commission. At least three cases highlight the often difficult task of defining what is ordinary or conventional or customary turnover of labour (see Soul Pattinson (Manufacturing) Pty Limited and Wassell ([1987] AR 274; 18 IR 175); Crooks, Michell, Peacock, Stewart Pty Limited v Watkins ((1984) 9 IR 182) and Norwest Beef Industries v Holdsworth ((1986) 15 IR 373). These cases demonstrate that the impact and the consequences of retrenchment have little to distinguish themselves from the impact and consequences of retrenchments due to the inclusionary factors identified in the early Crocker Case.
63 As to that part of the claim the Commission concluded:
Terminations in the context of the general turnover of labour are the norm; they are expected: there is no basis for thinking that some 'settled expectation' has been lost. The occurrence of the likely or expected event should not bring with it an unnecessary and unwarranted additional burden on the employer and a windfall gain for the employee.
The application of this category has not been without difficulty and has needed resolution from time to time by judgment. This is not a reason for the abolition of the category: the cases on the issue have served to resolve the particular matters and stand as signposts to parties in relation to prospective matters. We retain this exclusionary category.
64 Therefore, the case does not engage with the problem at hand.
65 In Fashion Fair Pty Ltd v Department of Industrial Relations (Inspector Rouse) (1999) 92 IR 271, the Industrial Commission of New South Wales considered an appeal in a case concerned with redundancy pay under an award that exempted cases where an employee was dismissed 'due to the ordinary and customary turnover of labour'. The employee worked at a Fashion Fair store in Maitland, one of 20 such stores in New South Wales. The lease of the premises came to an end. Fashion Fair determined that the store was not viable at the rent proposed for a continuation of the lease of the premises. The lease was not renewed and the store was closed.
66 The Commission observed that the concept of the ordinary and customary turnover of labour had been considered in a number of cases subsequent to those to which I have already referred. It then said that:
It has frequently been observed that whether an entitlement to redundancy or severance pay accrues upon termination depends upon whether there was a 'settled' expectation of continued employment or whether the employees were aware that their employment was for a specified period or task.
67 A number of authorities were cited to support that observation. It was said that it was necessary to examine the circumstances of each case and the cause of the dismissal and any loss of contract to determine if the dismissal was truly part of the ordinary and customary turnover of labour. It was found that the decision to withdraw from Maitland was due to a number of factors, 'including the failure of … negotiations with the lessor, … assessment of other premises in the area and the effect of new competition'. It was found that it was company restructuring that resulted in the loss of employment where there had existed 'a reasonably held and settled expectation of continuing employment' and those matters took the case outside of the ordinary and customary turnover of labour.
68 In 2005, the High Court considered a case in which claims were made that employees had entitlements to redundancy pay under the terms of an industrial agreement: Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10; (2005) 222 CLR 241. The agreement stated that 'should a position become redundant and an employee subsequently retrenched' there was an entitlement to payments. It was necessary to consider what was meant by redundancy when used in an industrial law context. As to matters presently relevant, Gleeson CJ and McHugh J said at [12]:
In the industrial context, redundancy of position is not a concept of clearly defined and inflexible meaning. Whether cases of succession to a business following corporate restructuring are regarded as justifying an award of redundancy payments is dealt with 'on the particular merits of the case rather than by way of broad prescription' [citing Crocker]. Here, however, it is necessary to apply an agreement that contains a 'broad prescription', and the task is to decide how that broad prescription operates in the particular circumstances.
69 Later, at [14] their Honours said:
Redundancy of position is not a legal or industrial term of art, although there are many cases which examine the concept of redundancy, usually for the purpose of distinguishing it from other causes of retrenchment [citing, amongst other cases, the Termination, Change and Redundancy Case].
70 Gummow, Hayne and Heydon JJ dealt with the legislative background as part of the matters that were relevant when it came to construing the agreement. Their Honours identified three features of the legislative background at [41]:
Three features of the legislative background to the Agreement must be noticed. First, there is the background provided by the introduction, by the Commission's predecessor (the Australian Conciliation and Arbitration Commission), of awards prescribing the entitlements of employees upon redundancy. Applicable standards were identified in the Termination, Change and Redundancy Case [No 1]... Secondly, some account must be taken of the provisions of Div 3 of Pt VIA of the Act regulating the minimum entitlements of employees on termination of employment. Those provisions evidently reflect general standards of the kind identified in the Termination, Change and Redundancy Case. Thirdly, the Act provides (s 170MB) that certified agreements made about industrial disputes or industrial situations are to bind not only the particular employer with whom the agreement is made but also successor employers.
71 Their Honours then considered the decision in the Termination, Change and Redundancy Case and said at [44]:
For present purposes, what is important is that the Commission appears to have been seeking a form of words that would accommodate two features. First, as was said in the Commission's supplementary decision…, it "did not intend the redundancy provisions to apply where an employee is dismissed for reasons relating to his/her performance, or where termination is due to a normal feature of a business". Secondly, the Commission did not intend redundancy provisions to be engaged by the transmission of a business. In its earlier decision, the Commission had emphasised… that it did "not envisage severance payments being made in cases of succession, assignment or transmission of a business". That is, the Commission regarded termination of employment by a particular employer as not sufficient to engage the redundancy obligations, even if that employer was ceasing any participation in the particular business. The focus of the provision was upon the work undertaken by the employee (the "job"), not upon the identity of either the employee or the employer. The relevant inquiry was whether employment in a particular kind of work then being undertaken was to come to an end. If that employment was to come to an end, it was necessary to consider why that was to happen. Was it because the employer no longer wanted the job, then being done by the employee, done by anyone? Or was it "due to the ordinary and customary turnover of labour"…? And, as the Commission's evident concerns about drafting show, these alternatives were not, and are not to be, understood as exhausting the cases that might have to be considered.
72 The exploration in the above passage of the Commission's decision identifies the relevant enquiry as to whether there has been redundancy as being concerned with whether the work being done was expected to come to an end. If so, there needs to be a consideration as to whether the end of the 'job' was due to the ordinary and customary turnover of labour. However, no view was proffered about what those words might mean. Nor was there any explication of the shorthand summary used by the Commission, namely 'termination due to a normal feature of a business'. For reasons I have given, those words were not used by the Commission to focus attention upon the peculiar termination practices of the particular business of the employer, but rather appeared to refer to an inherent feature of a business (that is the kind of business conducted by the employer) that would mean that an employee would not expect there to be ongoing employment. If termination after a period of time was a likely and foreseeable characteristic of employment by such a business (and therefore part of what the employee took on when agreeing to undertake the particular employment) then redundancy was inherent in the nature of the employment and in that sense was ordinary and customary. It was not a matter of agreeing a limited term of employment. It was not a question of what practice the employer may choose to adopt. Rather, the job itself was of a kind where it was not to be ongoing.
73 Significantly, there is nothing in the joint reasons given by Gummow, Hayne and Heydon JJ to support the view that an aspect of the business of the employer that would not be evident to an employee from the nature of the employment could mean that termination because the employer no longer wanted the work to be done could lead to termination without redundancy pay. It is not surprising that the reasons do not address that aspect of the scope of the concept of redundancy because the contentious question in Amcor was whether the succession in employment available in the unusual circumstances of that case meant that there was no redundancy. In circumstances where the issue of the scope and meaning of the words 'due to ordinary and customary turnover of labour' was not addressed, no conclusion could be drawn as to that issue from the joint reasons.
74 However, what is apparent from the joint reasons is that they acknowledge the established significance in the area of redundancy pay of the qualifying words 'due to the ordinary and customary turnover of labour'. Further, the qualification applies to redundancy in employment being a concept concerned with the loss of a job, not the termination of employment of an employee. An entitlement to redundancy pay is to compensate for the termination of employment that was otherwise indefinite (and therefore, speaking generally, was to be expected to be terminated only for wrongful conduct, incapacity or by resignation). An employee who does the right thing and can still do the job may expect to have ongoing employment and does not expect to be terminated.
75 The significance of the phrase and its established position in industrial law jurisprudence concerning redundancy pay is also recognised in the reasons of Kirby J at [108]-[110].
76 In Compass Group (Australia) Pty Ltd v National Union of Workers [2015] FWCFB 8040; (2015) 253 IR 32, the Full Bench of the Fair Work Commission considered a claim concerning the application of the redundancy provisions under enterprise agreements made in 2011 and 2013. It was common ground in the proceedings that the redundancy clauses in the agreements contained a definition of redundancy that was largely indistinguishable from that contained in the Standards and they included an exemption from redundancy pay where redundancy is due to the ordinary and customary turnover of labour (referred to as the Exception): at [4].
77 The Commission reviewed a number of earlier decisions and concluded that there was no basis in those decisions for excluding dismissals arising from loss of contracts from the concept of ordinary and customary turnover of labour: at [20].
78 As to the words of exemption, the Commission said at [27]:
In order to determine whether the Exception applies in a given case it is necessary to consider the normal features of the business and then determine whether the relevant terminations are properly described as falling within the ordinary and customary turnover of labour in that business. This is a question of fact, to be determined on the basis of the circumstances of each termination and each business. It necessarily focuses on the business circumstances of the employer.
79 The Commission appears to have based this statement upon the reasons of the High Court in Amcor. However, for reasons I have given, the High Court in Amcor was not concerned with explicating the meaning of the phrase 'ordinary and customary turnover of labour'. In their joint reasons, Gummow, Hayne and Heydon JJ were simply restating what had been said by the Commission in the Termination, Change and Redundancy Case. The decision in that case did not focus attention upon the business circumstances of the employer. Rather, it focussed attention upon the nature of the job. The distinction is fundamental and is evident in the decisions to which I have referred.
80 The relevant distinction is properly exposed by considering a case, like the present, where a business needs labour to provide the services required to perform the obligations under a contract between the employer and a particular customer. In such instances, the prospect that the work may come to an end when the contract comes to an end and when that might be are not matters inherent in the nature of the work or matters that may necessarily be evident to a prospective employee from the nature of the business being conducted. Possibly, the employer may make it known with clarity that the nature of the work is that it is for the duration of a particular contract or is from contract to contract. However, that position may change if the employment continues without any new terms being agreed when the customer's contract is renewed or the employee is reallocated to another contract. The employees may not even know that the contract has been renewed and may simply continue what appears to be indefinite employment. Alternatively, these possibilities may be generally known or expected amongst employees because of the kind of business and what is customary for a business of that type. This position may be reinforced by a practice of terminating employment of all employees at the end of a contract without any opportunity to work in the same role for the purposes of another customer contract secured by the employer. The position may not be the same for all employees with some moved on to new contracts and remaining in employment by the company in an indefinite way.
81 However, business circumstances that are only communicated to the employee when the employer comes to terminate the employment on the basis that the customer has not renewed the contract, or the employer has chosen not to seek to renew the contract with the customer, or the employer has chosen not to reallocate or redeploy the employee to undertake the same work to provide the services required to perform a contract with another customer are in a different category. In such instances, the employee is engaged in circumstances where it appears that work will be ongoing (and agrees to terms on that basis), but when terminated is confronted with a claim that the redundancy pay that would normally apply where the employer no longer requires that particular work to be undertaken is not due because of the way the employer has decided to operate its business.
82 Indeed, the evidence advanced in Compass Group exposed the importance of the distinction. It referred to some cases where the employment was for the purposes of a contract with a customer that may be rolled over or extended but only upon Compass Group securing a further contract to provide the same services. In other instances, 'the contract is only for a specific task of limited duration - for example, to provide catering and accommodation services to construction workers on a major construction project'. In the latter case, it was inevitable that employment would be terminated at some point: at [32].
83 Ultimately, there were findings at [33] that:
… it was the common practice of Compass to terminate the employment of employees when a contract is lost, especially Department of Defence contracts. It was also common for employees to be redeployed where this was possible. The notion of employing employees for a particular contract implies a link between the contract and the employment. It carries with it the understanding that loss of the contract could well lead to termination of the employment. Indeed this was expressly stated in many of the relevant contracts.
84 It was also found that Compass had a long-standing practice not to make redundancy payments: at [34]. It was also found that such a practice was to be brought to account in construing the meaning of the exemption for ordinary and customary turnover of labour expressed in the terms of the standard redundancy clauses in Compass enterprise agreements: at [34].
85 It was in the above context that the terminations of employment were found to have arisen 'from the loss of the Department of Defence contracts and in the context of Compass' business, this was due to the customary and ordinary turnover of labour': at [35].
86 Therefore, the result in the case depended upon findings as to matters that would have made it apparent to an employee of Compass from the outset that the particular work was not and could not be ongoing.
87 I note that Compass Group was a decision made after the enactment of the Act. As a result, the views expressed in that decision may be considered not to form part of the pre-existing law for the purposes of undertaking the task of construing s 119(1)(a) of the Fair Work Act. However, it did involve an application of what was considered to be previously established principles concerning redundancy pay to the facts in that case.
88 In can be seen that the case law before the enactment of s 119(1)(a) had developed a well-established jurisprudence concerning the circumstances in which payments for redundancy may be required by an employer. The state of that law was such that it focussed upon the nature of the job to be done and whether that work was still required to be undertaken by any employee. It recognised a general right to redundancy pay where the terminated employment had been ongoing and for an indefinite term such that there was a degree of security that might be expected to be associated with the employment. Amongst other qualifications, it was a right that was subject to the exception that it was not payable where employment was brought to an end as part of the ordinary and customary turnover of labour. The exception was said to apply where the termination was a normal feature of the business and also where termination after a period was to be expected by the employee. Properly understood, these two descriptions are not competing. The exception applies where it was evident that the nature of the work to be done was not ongoing. It might be evident from the nature of the job itself that it was not ongoing, such as where the task to be undertaken was inherently itinerant or for a specific project. Or it might be evident because it was a normal feature of a particular kind of business that the work would not be ongoing, such as where the business involved securing a workforce to perform services under a particular contract and it was the usual practice that all employees would no longer be required at the end of the contract. It was a concept that was considered to invite a factual inquiry in the particular circumstances of the case that was concerned with the extent to which there was an expectation, in the ordinary course, that the employment would be ongoing. In undertaking that inquiry consideration would be given to whether it was a normal feature of a business that the employment would be terminated rather than be ongoing.
89 Therefore, the use of the phrase 'ordinary and customary turnover of labour' had acquired a particular meaning within the pre-existing law. The existence of that body of industrial law decisions was part of the context in which s 119(1)(a) came to be enacted using precisely the same terminology as had been developed and applied in the decided cases.