Ferris v Woodlands H.R. Pty Ltd [2024] QIRC 172 | Case summary

Queensland Industrial Relations Commission|2024-07-22

The Applicant's contention and emphasis to the phrase "WoodlandnoLsl" on the document is irrelevant. This was an internal working document of Forum A (sic) relating to an employee engaged under a CWA that expressly and legally excluded Long Service Leave. The Applicant concedes the CWA covered his employment. For the Applicant's Representative to assert that it can be inferred that there was an intention to avoid an obligation, which Forum A (sic) had legally entered into a binding Agreement approved by the Australian Industrial Relations Commission in accordance with law to remove and otherwise compensate, is quite frankly absurd.[85]

[88] The Respondent also notes that the terminology "WoodlandsnoLsl" was not raised with any of the key witnesses: Mr Elks, Ms Tregenza or Mr B Haycroft.

[90] The Respondent notes that in its closing submissions, the Applicant conceded that the purpose of the Respondent engaging with Forum-A was to reduce its overall costs.[86] The Respondent says it goes without saying that in the course of operating a business, it is quite common for businesses to avoid unnecessary capital expenditure, improve flexibility and reduce costs.[87] The Respondent says it is absurd to assert that the Respondent intended to avoid its Long Service Leave obligations because its board of directors made a decision to reduce costs by outsourcing work.[88]
[91] With regard to the offer of employment discussed at [30] above, the Respondent says that the Applicant has conceded that during his second employment period with Forum-A, any accrued entitlement to Long Service Leave at the end of his employment was to be paid by Forum-A.[89]

[92] The Respondent says that the submissions made by the Applicant regarding the relationship between the Respondent, Small Business Union and Forum-A are irrelevant to the proceeding.

[93] The evidence leads me to a conclusion that Woodlands made a decision to enter into an arrangement with Forum-A for the provision of labour for two dominant reasons.

[94] One reason the Respondent entered into this arrangement was that Woodlands and some of its employees were looking for a way to maximise their earning capacity in circumstances where the Woodlands employment arrangements or policies did not allow for additional hours to be worked if those hours would attract overtime. It appears that, under the CWA, Forum-A workers who wanted to work additional hours than they were contracted to perform were entitled to do so. A number of things may be said about that arrangement and the context which enabled that to occur at the relevant time, but for the purposes of deciding this Application, it would be unhelpful to dwell on that. The focus of this evidence was on the ability of employees to access overtime or undertake additional hours, which is not a question before me.

[95] The other reason is that Woodlands made a business decision to move to a labour hire arrangement on the basis that it was a growing business and did not have an internal HR function. It appears that a decision was made that all employees would be engaged on this basis rather than those already employed with Woodlands remaining directly employed and additional or new staff being engaged through Forum-A.

[96] I also note Ms Tregenza's evidence that:

In or around 2009, there was an operational change to Woodlands where the following occurred:

a) To streamline the HR section of the business; and > > b) As the Company was growing, it was decided that it would be beneficial to outsource HR, to an entity who could manage the complex nature of these requirements.

Due to the operational changes to Woodlands, I processed all eligible entitlements owed to employees that were being terminated by Woodlands in or around March 2009. This included payment for Long Service Leave entitlement, where any employee that had 7 years of service with Woodlands was paid Long Service Leave.[90]

[97] I accept that the decision was made on the basis of efficiencies Woodlands thought could be gained through not having responsibility for this aspect or function of managing the business. This was articulated by Mr Elks' evidence that Woodlands did not have the internal human resources capacity to go out in search of the additional employees needed and that Woodlands made a choice to outsource the human resources function and staffing. I accept that a motivation for this may have been to reduce the costs to the business, however, I am unwilling to determine, on the balance of probabilities, that the decision to move to the labour hire arrangement was made for the purpose or with the intent of avoiding an obligation to pay Long Service Leave.

[98] Woodlands had a pre-existing business arrangement with Small Business Union. Mr G Haycroft, Director of Small Business Union filed the Australian Workplace Agreement between Woodlands and Mr Ferris. The Approval Notice of that agreement was sent to Mr Haycroft in his role as a service provider to Woodlands.[91] There is also evidence before the Commission in the form of invoices to Woodlands from Haycroft Workplace Solutions for the purposes of "Advice provided by Small Business Union".[92] There is also an invoice dated 1 October 2007 for the amount of $357.50 for "Consultancy and Lodgement of the fairness test for the following employees...".[93] This leads me to the conclusion that Small Business Union was engaged by Woodlands to provide services such as drafting, filing and confirming approval of Australian Workplace Agreements for employees of Woodlands and potentially the provision of other advices related to human resources and industrial relations matters. This is consistent with the evidence of Mr G Haycroft about the activities of Small Business Union.

[99] I understand the argument being made by the Applicant involves a consideration of the Forum-A document and a reading of the name of that document as set out in the footer, "nolsl...." to mean that the employment contract involved no payment of Long Service Leave. I accept that, on the balance of probabilities, that document was so named because employees who were employed pursuant to it were not accumulating Long Service Leave according to the content of the CWA. However, as Woodlands was not Mr Ferris' employer under that agreement, I am unable to conclude that this document evinces an avoidance of the obligation to pay Long Service Leave by Woodlands. It may be argued that the name of the document demonstrates an intent of Forum-A to not pay Long Service Leave, however this is not the question before me.

[100] With regard to the Applicant's argument considered above from [74]-[79], I accept the Respondent's submission that, to the extent there is any question about the content of the CWA that formed the basis of employment with Forum-A, this is a matter for Forum-A, and not Woodlands. Further, if there are amounts outstanding following the conclusion of the Forum-A period of employment under the labour hire agreement, this is a matter for Forum-A and not Woodlands.
[101] The Applicant contends that the letter offering Mr Ferris employment with Woodlands following the conclusion of the labour hire arrangement with Forum-A is evidence of an intention to avoid an obligation to pay Long Service Leave. I disagree that the correspondence is evidence of an intention to avoid an obligation to pay Long Service Leave, as Woodlands communicates an expectation that Forum-A will pay any entitlements owed to Mr Ferris. Further, the employment arrangement entered into by Mr Ferris with Woodlands following the conclusion of the Forum-A labour hire arrangement was on the basis that Long Service Leave would be paid in accordance with the relevant legislation.[94] I understand that the letter informs Mr Ferris that there has not been a transfer of calling and that his service with Forum-A would not be accepted for the purposes of an entitlement to Long Service Leave. This is simply a statement of the understanding of Woodlands regarding the situation. I do not accept that this statement is demonstrative of an intent to avoid an obligation to pay Long Service Leave.

[102] I understand that the Applicant seeks to draw a direct management or ownership connection between Woodlands, Small Business Union and Forum-A. On the evidence before me, I am unable to draw any nexus between Woodlands and Forum-A beyond the commercial labour hire arrangement that existed between the two entities. I have considered the content of the Statutory Declaration of Mr B Haycroft,[95] and the evidence he gave before the Commission. Mr B Haycroft's evidence, which I accept, was that Forum-A provided staff to Woodlands from March 2009 to November 2017 under the labour hire service agreement and that there is no common ownership, beneficiaries, or directors of Forum-A and Woodlands.

[103] Given the evidence before the Commission, I am not satisfied that on the balance of probabilities, Woodlands interrupted or terminated Mr Ferris' employment with intent to avoid an obligation to pay Long Service Leave when it entered into the labour hire arrangement with Forum-A. The Applicant has not demonstrated that there was, as submitted, collusion between "the three Haycroft entities" or the "Haycroft triarchy" to "form a sinister and unlawful pact to disrupt the applicant's service and subsequently avoid their obligations to pay his Long Service Leave...".[96]

[104] Therefore, given the nature of Mr Ferris' employment over the relevant period, he does not have continuity of service for the purpose of eligibility to Long Service Leave under the relevant section of the IR Act.

Does Mr Ferris have continuity of service pursuant to s 132 - Transfer of calling?

[105] The Applicant says that in consideration of s 132 of the IR Act, Mr Ferris has continuity of service giving rise to an entitlement for Long Service Leave. The Applicant argues that Mr Ferris' engagement with Forum-A was a "transfer of calling".

[106] The Applicant points to the principles outlined in Australian Liquor, Hospitality and Miscellaneous Workers Union, Queensland Branch, Union of Employees v Wilsons Parking Australia 1992 Pty Ltd ('Wilsons').[97] This case involved a parking attendant who had been employed at the same multi-story car park in Brisbane for nearly 12-years and during that time, the employee was engaged by four different companies. The employee's union made a claim for Long Service Leave. In Wilsons, the Court found that there had been a transfer of calling under s 69(1) of the Industrial Relations Act 1999 (Qld), since repealed, and the employer was ordered to pay the outstanding Long Service Leave.

[107] The Applicant says that in consideration of Wilsons, the facts of the case are analogous to the Applicant's matter and employment history. To reinforce this, the Applicant refers to the recognition of 17-years of service[98] and Mr Elk's evidence that Mr Ferris worked on-site for 17-years.[99] The Applicant notes that there is no denial that the Applicant has completed extensive service with the Respondent.

[108] The Applicant also refers to a decision of Deputy President Merrell, namely, Craig Geoffrey Fox v Programmed Integrated Workforce Ltd (No. 2).[100] The Applicant says it acknowledges that the Commission was guided by the High Court case of Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd ('Gribbles')[101] and, in particular, the principles to consider regarding transfer of calling, which the Commission referred to:

to be a 'successor', it is not enough that the new employer pursues the same kind of business activity as the old employer;

what was meant by the word 'business' in this context focuses upon succession, assignment and transmission to or of a business which is identified as the business of an employer which necessarily directs attention to what it is that the former employer had which is to be described as the 'business' of that employer;

the 'business' of an employer may be constituted by a number of different assets, both tangible and intangible, that are used in the particular pursuit, whether of profit, if the 'business' is a commercial enterprise;
in the case of a commercial enterprise, identifying the employer's 'business' will usually require identification both of the particular activity that is pursued and of the tangible and intangible assets that are used in that pursuit;

the 'business' of an employer will be identified as the assets that the employer uses in the pursuit of the particular activity and it is the assets used in that way that can be assigned or transmitted and it is to the assets used in that way that an employer can be a successor;

the new employer may be a successor, assignee or transmittee to or of the business, or part of the business, of an employer who was a party to the relevant industrial dispute if the new employer, having the beneficial use of assets which the former employer used in the relevant pursuit, uses those assets in the same or a similar pursuit; and

whether the new employer is a successor, assignee or transmittee, will require examination of whether what the new employer has can be described as a part of the former employer's business.[102]

[109] The Applicant says that in consideration of the above factors, the Respondent has been a "successor" on the basis that Forum-A has transferred employees, such as Mr Ferris who utilised the assets on Forum-A's behalf to create profit via their labour and thereafter doing the same for the Respondent.

[110] The Applicant turns to the evidence of Mr Elks and Ms Tragenza regarding the transfer of employees to Forum-A. The Applicant notes that Mr Elks agreed that the arrangement was "enticing" because Forum-A would manage all wage entitlements on behalf of the Respondent.[103] The Applicant further notes Ms Tragenza's evidence that Forum-A received a profit for its services by way of a commission or fee for managing the arrangement and that this was paid in addition to the employee's base rate.[104] The Applicant says that on the basis of this evidence, Gribbles has been satisfied and there was a transfer of calling under s 132 of the IR Act.

[111] The Respondent denies that it was Mr Ferris' employer during the Second Engagement Period in circumstances where the Applicant was employed with Forum-A at the relevant time. The Respondent also denies that there was a "transfer of calling" between Forum-A and the Respondent for the purposes of s 132 of the IR Act. As stated above, the Respondent says that if it is found that Mr Ferris is eligible for Long Service Leave, it is Forum-A who owes the payment, not the Respondent.

[112] In response to the Applicant's submissions regarding the Wilsons case, the Respondent notes that in Wilson,[105] President Hall referred to the High Court decision of PP Consultants Pty Ltd v Finance Sector Union of Australia[106] in order to determine whether there was a "transfer of calling". The test for a "transfer of calling" was set out in the Respondent's submissions as follows:

As a general rule, the question whether a non-government employer who has taken over the commercial activities of another non- government employer has succeeded to the business or part of the business of that other employer will require the identification or characterisation of the business or the relevant part of the business of the first employer, as a first step. The second step is the identification of the character of the transferred business activities in the hands of the new employer. The final step is to compare the two. If, in substance, they bear the same character, then it will usually be the case that the new employer has succeeded to the business or part of the business of the previous employer.

(emphasis added by the Respondent)[107]

[113] The Respondent goes on to note that President Hall found in favour of the Applicant because each business was successive as they took over the leased carpark where the employee worked; and each business engaged in the same service (i.e. car parks) and provided the same type of service.[108]

[114] The Respondent reiterates its position that the Wilson case does not apply on the facts of the application before me for determination, on the basis that:

25.1 the Respondent's calling is characterised and identified as the provision of poultry farming; and

25.2 Forum A's (sic) calling is characterised and identified as the provision of providing labour to industries under a contract for profit; and

25.3 no similarity in businesses exists between the character of Forum A (sic) and the Respondent.[109]

[115] I am not satisfied that there has been a transfer of calling for the purposes of the IR Act. With regard to the authorities cited by the parties above, Forum-A was undertaking a labour hire and industrial relations services business. Woodlands is in the business of poultry farming. This is not a circumstance where Forum-A was undertaking a farming business which Woodlands then took over, giving rise to a transfer of calling.

[116] Section 132 requires that Mr Ferris was a "transferred employee" who became such because of the transfer of a calling to the new employer from the former employer. This is not what occurred. Mr Ferris entered the employ of Woodlands under his new contract as a result of the CWA being terminated and Woodlands ceasing its labour hire arrangement with Forum-A. Woodlands never stopped operating the farm, as demonstrated by Mr Elks' evidence that he has been the Managing Director of Woodlands for 40-years.

[117] On 2 March 2017, Mr Ferris received correspondence from the CEO of Forum-A informing him that the Collective Workplace Agreement he was employed under would be terminated effective 1 January 2018. The letter informed him that the parties had agreed to a "timetable of steps to be taken by Forum-A to facilitate the transition to modern award conditions in the period leading up to the termination of the Collective Workplace Agreement".[110]

[118] On 7 November 2017, Mr Ferris received correspondence from Ms Kathy Knott, Workplace Partner of Forum-A informing him that "effective close of business Tuesday 14 November 2017, our hire arrangement to provide staff at Woodlands (Host Employer) will cease".[111]

[119] The letter informed Mr Ferris that "due to the nature of labour hire employment, we do not control the duration of work assignments. Work assignments are fully dependent upon the operational requirements, and at the discretion of, our clients".[112] The letter informed Mr Ferris that there may be an opportunity for direct employment through Woodlands or with a different service provider of Woodlands' choice. Mr Ferris was also informed that should he choose not to continue his engagement with Woodlands as the Host Employer, Forum-A would be happy to continue to employ him and would endeavour to place him with another client if a suitable assignment became available.

[120] Woodlands sent Mr Ferris an Offer of Employment on 1 November 2017.[113] The letter informed Mr Ferris that Forum-A would cease to provide labour to Woodlands under the labour hire arrangement from 14 November 2017 and offered Mr Ferris full-time employment in the position of Weighbridge Coordinator. The letter advised Mr Ferris that if he accepted the offer of employment, Woodlands HR would not recognise his service with Forum-A for the purposes of annual leave; redundancy; minimum period of employment; and notice of termination. Further, the letter informed Mr Ferris that:

In addition, Woodlands will not recognise your service with Forum A Pty Ltd (sic) for the purposes of your entitlement to Long Service Leave as there has not been a transfer of calling between Forum A Pty Ltd (sic) and Woodlands HR under the Industrial Relations Act 2016 (Qld). Therefore your service for the purpose of Long Service Leave will start from zero on the Commencement Date.

Any entitlement that you have to Long Service Leave, or pro-rata (sic) Long Service Leave, which accrued during your employment with Forum A Pty Ltd (sic) remain the liability of Forum A Pty Ltd (sic).[114]

[121] Mr Ferris signed a new contract of employment to commence the Third Employment Period. That contract stipulated the circumstances under which he was being permanently employed by Woodlands. Mr Ferris also recognised that his service with Forum-A was not being recognised by Woodlands and that any entitlements he had to Long Service Leave resulting from his employment with Forum-A were to be paid by Forum-A.[115] A finding that there was a transfer of calling pursuant to the legislation would displace the content of the contract. However, I do not accept that there has been a transfer of calling.

[122] To the extent that any Long Service Leave payment was owing to Mr Ferris arising from his period of employment with Forum-A, the Second Employment Period, I am satisfied that any such amount would be owed to him by Forum-A as they were the correct employer during the relevant period, and not Woodlands.

[123] I understand that Mr Ferris is in possession of a certificate recognising 17-years of work at Woodlands. It is not in dispute that Mr Ferris worked at Woodlands for 17-years. That certificate is evidence that Mr Ferris has an extensive working history in connection with Woodlands, however, it does not account for the discrete Employment Periods, namely, his employment with Forum-A. The certificate is not evidence that there has been a transfer of calling.

[124] I do not consider that there was a transfer of calling for the purposes of s 132 of the IR Act.

[1] Applicant's submissions filed 8 March 2023

[2] Respondent's submissions filed 15 March 2023

[3] Applicant's outline of submissions filed 15 June 2023.

[4] Applicant's amended outline of submissions filed 10 August 2023; Respondent's submissions in reply filed 1 August 2023.

[5] Applicant's outline of submissions (n 2) [19].

[6] Affidavit of T Ferris affirmed 15 June 2023, Exhibit TF-03.

[8] Applicant's closing submissions filed 9 April 2024, [19].

[11] Affidavit of T Ferris (n 6) Exhibit TF-05.

[13] Applicant's closing submissions (n 8) [23].

[22] Affidavit of John Donald Elks affirmed 1 August 2023, [3].

[31] TR1-71, LL17-18; reference to 24-hours occurred in re-examination see TR1-82 Ll4.

[36] Applicant's closing submissions (n 8) [34].

[39] Applicant's closing submissions (n 8) [35].

[41] Affidavit of T Ferris (n 6) Exhibit TF-03.

[42] Applicant's closing submissions (n 8) [38].

[75] Applicant's closing submissions (n 8) [45].

[77] Affidavit of T Ferris (n 6) Exhibit TF-11.

[78] Applicant's closing submissions (n 8) [49].

[79] Respondent's closing submissions filed 24 April 2024 [15].

[80] Affidavit of T Ferris (n 6) [6]; Exhibit TF-04.

[81] Respondent's closing submissions (n 79) [16].

[83] TR1-62, LL15-25 and TR1-63, LL20-25.

[85] Respondent's submissions in reply (n 4) [36].

[86] Applicant's closing submissions (n 8) [29].

[87] Respondent's closing submissions (n 79) [12].

[90] Affidavit of JG Tregenza affirmed 1 August 2023, [5].

[92] Exhibit 11, letter dated 14 December 2009; statement dated 17 March 2008.

[93] Exhibit 11, invoice dated 1 October 2007.

[94] Woodlands Salary Employment Contract, 4.

[98] Affidavit of T Ferris (n 6) Exhibit TF-09.

[102] [2022] QIRC 281, [106] (citations omitted).

[107] Respondent's closing submissions (n 79) [23].

[109] Respondent's closing submissions (n 79) [25].

[114] Affidavit of T Ferris (n 6) Exhibit TF-05.

Work Regulations 2009

Australian Liquor, Hospitality and Miscellaneous Workers Union, Queensland Branch, Union of Employees v Wilsons Parking Australia 1992 Pty Ltd [2002] ICQ 49.

Craig Geoffrey Fox v Programmed Integrated Workforce Ltd (No. 2) [2022] QIRC 281.

Ferris v Woodlands H.R. Pty Ltd

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Judgment (93 paragraphs)

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