The primary judge's decision
9 Against this factual background, the learned primary judge identified two questions which she considered required to be addressed:
1. Can it be said that the activities conducted by the respondent in its pharmacy premises are part of the business of the bank?
2. If so, does the respondent conduct those activities as successor, assignee or transmittee from the bank?
10 That identification of the issues reflects the language of s 149(1)(d) which provides:
"(1) Subject to any order of the Commission, an award determining an industrial dispute is binding on:
........
(d) any successor, assignee or transmittee (whether immediate or not) to or of the business or part of the business of an employer who was a party to the industrial dispute, including a corporation that has acquired or taken over the business or part of the business of the employer;"
11 There is no definition of "business" in the Act, although the definition of "industry" in s 4(1) commences as follows :
"industry includes:
(a) any business, trade, manufacture, undertaking or calling of employers; …"
12 After summarising the facts of the case, the primary judge referred to a number of decided cases. They included the decision of the High Court of Australia in an eligibility case, Re Australian Industrial Relations Commission; ex parte Australian Transport Officers Federation (1990) 171 CLR 216 ("ATOF"), and the first instance decision of Marshall J in Health Services Union of Australia v North Eastern Health Care Network and Western Health Care Network (1997) 79 FCR 43. [That case went on appeal to a Full Court, whose decision was announced after the date of her Honour's decision in this case: see North Western Health Care Network v Health Services Union of Australia [1999] FCA 897]. The primary judge said:
"These cases would appear to support the applicant's contention that the respondent, after September 1997, was conducting part of the business of the bank. For there was a substantial identity between the previous activities of the branch and those subsequently carried on by the respondent. Moreover they were being conducted in the same place, and by the same staff, who were doing substantially the same work as previously.
Other considerations however militate against this proposition. Some of these are referred to in cases involving continuity of employment for the purpose of long service leave. Whilst these cases are not directly on point here, many of the issues they raise are relevant to the application of s149(1)(d)."
13 Her Honour suggested one of the countervailing considerations arises when the subject employer does not receive a "going concern" . She took this consideration primarily from an English decision, Kenmir Ltd v Frizzell [1968] 1 All ER 414. The question in that case was whether, for the purpose of calculating a redundancy payment, a business had been "transferred from one person to another". At 418 the Court said:
"In deciding whether a transaction amounted to the transfer of a business, regard must be had to its substance rather than its form, and consideration must be given to the whole of the circumstances, weighing the factors which point in one direction against those which point in another. In the end, the vital consideration is whether the effect of the transaction was to put the transferee in possession of a going concern, the activities of which he could carry on without interruption. Many factors may be relevant to this decision though few will be conclusive in themselves. Thus, if the new employer carries on business in the same manner as before, this will point to the existence of a transfer, but the converse is not necessarily true, because a transfer may be complete even though the transferee does not choose to avail himself of all the rights which he acquires thereunder. Similarly, an express assignment of goodwill is strong evidence of a transfer of the business, but the absence of such an assignment is not conclusive if the transferee has effectively deprived himself of the power to compete. The absence of an assignment of premises, stock-in-trade or outstanding contracts will likewise not be conclusive, if the particular circumstances of the transferee nevertheless enable him to carry on substantially the same business as before."
14 The primary judge also noted two Australian cases: R E Hayman v Neill [1960] AR 363 and Crosilla v Challenge Property Services [1982[ 2 IR 448. In Hayman a Full Bench of the New South Wales Industrial Commission expressed the opinion (at 370) "that to be a part of a business the part must itself constitute a business". In Crosilla the South Australian Industrial Court held there had not been a transmission of a business where a motel proprietor ceased to employ its own cleaning staff and, instead, contracted with a cleaning company for the provision of cleaning services. The applicant had been employed as a cleaner by the motel proprietor but, upon conclusion of the "outsourcing" agreement, became employed by the cleaning contractor. She continued to perform the same duties. The legislation defined "business" as including a part of a business. Nonetheless, the claim failed. Richards J held at 457:
"In order to constitute a transmission of business, or part of the business, it must be shown that the business itself, or a severable part of the business itself,has been transferred to the transmittee. It is not sufficient merely to show that, as a result of the contract entered into with a contractor, the contractor has been given a licence to enter the principal's premises to perform certain functions, which are ancillary to the running of the business, by the principal." [Original emphasis]
15 After referring to these decisions, the primary judge said:
"With this background I return to the immediate case. It raises issues which have not directly been dealt with in any of the decided cases. On the one hand, ATOF and Health Services might be seen as supporting the proposition that a person who commences to conduct a group of activities formerly conducted as part of a predecessor's business is himself conducting a part of that business. However I do not take those cases to be suggesting that a substantial identity between the activities carried on by the two successive entities is, on its own, sufficient to establish succession under s149(1)(d). If it were, it would, for example, encompass the contracting out of cleaning work in Crosilla, a decision which, with respect, I think is patently correct.
As Mr Dixon points out, the respondent has no direct interest in any of the transactions conducted from its premises. The profit from these transactions is retained by the bank, which makes a monthly payment to the respondent based on the number of transactions completed. The respondent has no discretion as to how the bank business is to be transacted. It cannot, for example, determine the interest rate upon which loans are to be granted. It is bound by the terms of the bragency agreement to conduct the whole of the bank's business in accordance with the bank's direction. In effect, the respondent has become the intermediary for transactions between the Byron Bay community and the bank, thus enabling the bank to continue its operations in that area. Can it then be said that the respondent is conducting part of the bank's business? In my opinion the answer must be in the negative. Certainly it could not be said that the part of the bank's business conducted by the respondent itself constitutes a business (Hayman). Nor has the respondent acquired a going concern which it can conduct without interruption (Kenmir).
To this I would add a further element, namely that in order to conduct a business a person must be able to exert at least some control over its activities. The respondent has, as already mentioned, virtually no control at all over any of the bank's activities conducted from the pharmacy premises.
To conclude on this issue, the respondent is the lessee of the pharmacy premises; it owns the fixtures and fittings in those premises; it employs the pharmacy staff and provides 'administration and management support' for Mr and Mrs Vanarey in the pharmacy. It now also, pursuant to the bragency agreement, employs staff to perform bank duties as set out in cl 4.1 of the agreement. To suggest that in doing so it is conducting part of the business of the bank is, in my view, extending the concept of a 'business' beyond all realistic levels. I therefore find that the respondent is not conducting any part of the business of the bank."
16 Her Honour went on to say that, even if PP Consultants were conducting part of the business of the bank, she would be unable to find it was doing so by way of succession, assignment or transmission from the bank. She said: