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[2002] AIRC 320
respondent. The Commission dismissed the National Union of Workers' claim; it found the employer's redundancy selection process complied with the Agreement and concluded it could not order that Ms Fenton be...
1 cited instrument linked from this judgment.
The union asked the Commission to declare that employee Nicola Fenton had been wrongly prevented from applying for redundancy after she accepted an offered transfer into a section where redundancies later occurred. The Commission found the employer followed the redundancy procedures in the enterprise agreement: it sought volunteers from the section directly affected, had more volunteers than required and made redundancies under the Agreement. Ms Fenton was not employed in that section at the time and so was not offered redundancy. The Commission found no legal obligation to have offered her redundancy and dismissed the union's claim (Senior Deputy President Williams, 21 March 2002).
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1,683 words · generated 23/08/2026
This decision concerns an application by the National Union of Workers (NUW) on behalf of employee Nicola Fenton against Bonlac Foods Limited under the dispute resolution clause of the Bonlac Foods Limited and National Union of Workers Enterprise Agreement 2001. The Agreement, certified on 20 September 2001, contains a detailed redundancy prescription at clause 43 and a dispute settlement clause permitting unresolved matters to be submitted to the Australian Industrial Relations Commission (Commission) ([1], [9], clauses cited).
Ms Fenton had been employed by Bonlac since March 1993 in various roles ([3]). In October 2001 she was offered a position in a particular section of the Cororooke plant (the “relevant section”), accepted the offer and expected to commence on 10 November 2001. She later was informed that the position was no longer available because the incumbent (or another employee) was returning to work ([3]–[4]).
On or about 30 November 2001 Bonlac announced a reorganisation that would reduce the number of employees in the relevant section by twenty and called for volunteers for redundancy from employees in that section. Ms Fenton was not, at that time, employed in the relevant section and thus was not invited to volunteer. Twenty-five employees volunteered; five were retained and twenty were made redundant with entitlements under clause 43 of the Agreement ([5]–[6]).
The NUW claimed Ms Fenton had been wrongly prevented from applying for redundancy and sought a Commission decision that she be provided the opportunity to apply and, if she applied, be made redundant with the contractual redundancy entitlements. The Commission, Senior Deputy President Williams presiding, dismissed the NUW’s claim on 21 March 2002 ([8], [15]).
The Commission’s reasoning rests primarily on (i) the text of the Agreement’s redundancy provisions (clause 43), (ii) the factual finding that the employer sought volunteers from the section directly affected by the reorganisation and followed the selection process, and (iii) the absence of evidence showing a breach of the Agreement or an obligation to offer redundancy to an employee not employed in that section when the call for volunteers was made.
Key factual and legal points the Commission relied on include:
Clause 43 prescribes the consultation and redundancy mechanism: discussions and disclosure obligations where the company has made a definite decision that a job will no longer be done, seeking volunteers from the affected area and, if insufficient volunteers, performing involuntary redundancies in consultation with the union ([10], clause 43.1, 43.10–43.11).
The employer announced the reorganisation and sought volunteers from the affected section; the selection and terminations occurred from that section ([5]–[6], [11]).
The Commission found nothing wrong with the employer’s process of selecting the employees whose employment was terminated for redundancy and accepted that the affected employees were chosen from the section directly affected by the transfer of operations to New South Wales ([11]).
Although the Commission acknowledged that Ms Fenton might reasonably suspect the transfer had been withheld to avoid giving her the chance to apply for redundancy, and noted some evidentiary gaps in the employer’s denial of particular facts, these suspicions and gaps did not establish an entitlement or obligation to offer redundancy to her ([12]).
The Commission further noted that even if Ms Fenton had been transferred into the relevant section there was no guarantee she would have been selected for redundancy in a context where volunteers exceeded the number required; the employer retained the ultimate decisional role consistent with the agreement’s process ([14]).
On that basis the Commission concluded it could not grant the NUW’s claim; there was no legal or moral obligation to offer Ms Fenton redundancy in the circumstances and the process implemented complied with the Agreement ([11], [13], [15]).
Before this decision the operative legal framework was the Agreement itself (which sets a redundancy process) and the Commission’s role under the Workplace Relations Act 1996 to resolve disputes referred under enterprise agreement dispute clauses (clause 7 of the Agreement and s.170LW). The Commission here applied the Agreement as the binding instrument controlling redundancies at the plant ([1], [9], [10]).
After this decision the specific holding is factual: where an enterprise agreement contains a redundancy process that contemplates seeking volunteers from a particular affected part of an employer’s operations, and the employer follows that process, the Commission will not find a breach or order an opportunity to apply for redundancy for employees who were not then employed in the affected section absent compelling contrary evidence. The decision emphasises deference to the contractual process set out in the agreement and to employer selection when volunteers are in excess of required numbers ([11], [14]).
The decision does not create a broad new legal principle outside the Agreement’s terms. It is an application of deference to an enterprise agreement’s redundancy procedures and of the Commission’s role resolving disputes referred through the agreement’s dispute clause.
“[I] can find nothing wrong with the process followed by the employer in selecting the employees whose employment was to be terminated for reasons of redundancy.” ([11])
“I can readily understand Ms Fenton having suspicions that the failure to transfer her to the relevant section was intended to avoid giving her the opportunity to apply for redundancy.” ([12])
“I do not consider that, in the circumstances, the employer had any obligation, legal or moral, to offer redundancy to Ms Fenton.” ([13])
“Even if I were to assume that she had some entitlement ... there was never any guarantee that ... she would have been made redundant.” ([14])
“On the basis of the material before me, I am unable to grant the NUW's claim.” ([15])
This decision will be most relevant where:
In such fact patterns the Commission is likely to examine whether the employer complied with the agreement and whether the employee had any contractual entitlement to be in the pool from which volunteers were sought. If the employer complied and there were more volunteers than required, the Commission may defer to the employer’s selection and refuse relief.
This decision is an AIRC determination by a Senior Deputy President applying the Enterprise Agreement. The text itself does not cite subsequent appellate treatment or other cases. The Commission’s approach emphasises application of the agreement’s terms to the factual selection process and deference to the employer where it acts in accordance with the contractual redundancy procedure. Practitioners should check subsequent AIRC/FC decisions and any appellate authorities for later doctrinal developments, but nothing in this decision itself purports to overrule applicable law; it is a contextual application of clause 43 to the facts presented.
The decision leaves several practical and legal questions that could arise in future disputes:
When does an employer’s prior oral promise or offer of transfer create a binding entitlement to be treated as part of a particular section for future redundancy rounds? The Commission here accepted the offer was made and accepted in good faith but did not treat it as creating an entitlement; different facts or clearer contemporaneous written commitments might lead to a different result ([12]–[14]).
What level of evidentiary showing is required to demonstrate that the employer manipulated transfers or rostering deliberately to deny an employee the chance to volunteer? The Commission noted suspicion and some evidentiary gaps but found those insufficient to establish a breach ([12]).
How should employers handle rostering and written communications of transfers to reduce later disputes about entitlement to volunteer in redundancy processes? The case highlights the evidentiary advantage of clear written records.
Where volunteers exceed requirements, what objective criteria should employers use and document when selecting among volunteers so as to minimise challenges? The Agreement here did not prescribe an internal tie-breaking rule for excess volunteers; employers and unions might consider including such rules to reduce litigation risk (clause 43.10 and surrounding provisions) ([10]).
The decision engages moral language (“legal or moral” obligation) but ultimately focuses on legal entitlement under the Agreement; it leaves open how stronger equitable considerations might affect the outcome in materially different circumstances.
This analysis is grounded in the Commission’s reasons as delivered by Senior Deputy President Williams (Melbourne, 21 March 2002), particularly paragraphs [1]–[15] cited above. It explains what the decision says and the Commission’s application of the Agreement’s redundancy clauses to the facts before it.
This is general legal information, not legal advice. I can make mistakes. Before you act on, rely on, or use any part of this analysis or any draft based on it, get a qualified Australian lawyer to check it.
BONLAC FOODS LIMITED AND NATIONAL UNION OF WORKERS ENTERPRISE AGREMENT 2001
[1] Bonlac Foods Limited (the employer) and the National Union of Workers (the NUW) are parties to the Bonlac Foods Limited and National Union of Workers Enterprise Agreement 2001 (the Agreement).[1] The Agreement was certified by the Commission on 20 September 2001. Its nominal date of expiry is 31 May 2004.
[2] The Agreement is binding upon the employer in respect of, amongst others, its site at Factory Road, Cororooke Victoria (the plant) for the process, trade, business or occupation, of manufacturing or preparing for trade or sale butter, casein, cheese, cream, condensed milk, dried milk, sterilised milk, milk sugar or any other milk product including the treatment of bulk milk for wholesale and retail distribution.[2] It applies to employees who are principally engaged to perform work within specified classification structures.[3]
[3] Nicola Fenton has been employed by the employer in a variety of positions and sections since March 1993. In October 2001, when she was employed in one section of the plant, she was offered a position in another section (the relevant section) in which she had previously worked on various occasions for a total period of about 6½ years. According to her evidence, she was being asked to replace another employee, Tracy Cuolahan (aka Tracy Higgins), who was about to take maternity leave. According to the evidence given on behalf of the employer, the position she was being asked to fill was that of an employee, John O'Donoghue, who had been absent on sick leave for a substantial period and whose return to work was not anticipated. To that time, Mr O'Donoghue's absence had been covered by the use of casuals and another employee, Michael Loader, had in fact been allocated to fill Ms Cuolahan's position.
[4] The day after she was offered the position, Ms Fenton accepted the offer. She expected to start in the new position on 10 November 2001. Subsequently, she was informed that Mr O'Donoghue was returning to work, that he would be resuming work in the relevant section and that the position previously offered was no longer available.
[5] For some time, the employer had had under consideration the transfer to New South Wales of some of its operations at the plant. On or about 30 November 2001, it announced that, as a result of its proposed reorganisation of its operations, the number of employees employed in the relevant section would be reduced by twenty.
[6] The employer called for volunteers for redundancy from amongst employees in the relevant section. Ms Fenton was not offered redundancy as she was not at that time employed in the relevant section. Twenty five employees volunteered. Five were "convinced" to stay and the employment of the remaining twenty was eventually terminated with the provision of redundancy entitlements as prescribed by the Agreement.
[7] Ms Fenton continues to be employed by the employer. There is no suggestion that the employer wishes that the work performed by he no longer be performed. Indeed, the evidence is that, should she leave her employment, she would need to be and would be replaced.
[8] On behalf of Ms Fenton, the NUW seeks a decision from the Commission that she has wrongly been prevented from applying for redundancy, that she be provided with the opportunity to apply for redundancy and that, if she were to so apply, she be made redundant and provided with the redundancy entitlements prescribed by the Agreement.
[9] This matter comes before the Commission pursuant to the disputes settlement clause in the Agreement. Clause 7 of the Agreement sets out the steps to be followed in relation to the disputes resolution procedure and at sub-clause (d) provides -
If the matter is still not settled, it shall be submitted to the Australian Industrial Relations Commission for decision which shall, subject to any appeal in accordance with the Workplace Relations Act 1996 (Cth), be final.
[10] In respect to redundancy, Clause 43 of the Agreement provides -
(a) Where the Company has made a definite decision that it no longer wishes a particular job to be done by anyone, and this is not due to the ordinary and customary turnover of labour, and that decision may lead to termination of employment, the Company shall hold discussions with the employees directly affected and with the Union.
(b) The discussions shall take place as soon as practicable after the Company has made a definite decision under clause 43.1 (a), and shall cover, inter alia, any reasons for the proposed terminations, measures to avoid or minimise the terminations, and measures to mitigate any adverse affects of any terminations on the employee(s) concerned.
(c) For the purposes of the discussion the Company shall, as soon as practicable, provide in writing to the employee(s) concerned and the Union:
(1) all relevant information about the proposed terminations including the reasons for the proposed terminations;
(2) the number and categories of employees likely to be affected;
(4) the period over which the terminations are likely to be carried out.
(d) Under clause 43.1 (a), the Company is not required to disclose confidential information, the disclosure of which would be inimical to the Company's interests.
(a) Where an employee is transferred to lower paid duties for reasons set out in clause 43.1 (a), the employee shall be entitled to the same period of notice of transfer as they would have been entitled to if their employment had been terminated.
(b) The Company may, at its discretion, make payment in lieu of notice for an amount equal to the difference between the former ordinary time rate of pay and the new lower ordinary time rates, for the number of weeks of notice still owing.
An employee whose employment is terminated for reasons set out in clause 43.1(a) may terminate their employment during the period of notice and, if so, shall be entitled to the same benefits and payments under this clause 43 had they remained with the Company until the expiry of such notice. Provided that in such circumstances the employee shall not be entitled to payment in lieu of notice, or the retention payment applicable under clause 43.7(c).
The Company, in a particular redundancy case, may make application to the Australian Industrial Relations Commission to have the general severance pay prescription varied if the Company obtains acceptable alternative employment for an employee.
(a) Where a business of the Company is before, on or after the date of this Agreement, transmitted from the Company to another company (Transmittee), and an employee who at the time of such transmission was an employee of the Company in that business, becomes an employee of the Transmittee:
(1) the continuity of the employment of the employee shall be deemed not to have been broken by reasons of such transmission; and
(2) the period of employment which the employee has had with the Company shall be deemed to be service of the employee with the Transmittee.
(b) In this clause 43.5, "business" includes trade, process, business or occupation and includes part of any such business, and "transmission" includes transfer, conveyance, assignment or succession whether by agreement or by operation of law and "transmitted" has a corresponding meaning.
(a) employees with less than one years' continuous service;
(b) situations where employment is terminated as a consequence of conduct that justifies summary dismissal, including but not limited to malingering, inefficiency, neglect of duty or misconduct; and
(c) casual employees, or employees engaged for a specific period of time or for a specific task or tasks.
An employee who is retrenched due to organisational restructure is entitled to:
(a) four weeks' severance pay, based on the employee being made redundant whether voluntary or involuntary, and remaining with the Company until the scheduled termination date;
(1) four weeks' pay for each completed year of service; and
(2) 0.33 weeks' pay for each additional completed month of service over and above the completed year or years of service,
(c) a retention payment of $4,000 where the Company closes a site or section of such site on the nominated closing date, or later, provided:
(1) the employee remains until the nominated closing date; and
(2) where an employee leaves by special arrangement or request before the nominated date, the retention payment does not apply.
(d) a pro-rata (calculated on a monthly basis) annual leave payment on all accrued but untaken annual leave, calculated using the All Purpose Rate plus an additional 17.5%;
(e) a pro rata (calculated on a monthly basis) long service leave payment, where the employee has been engaged for no less than three continuous years. Such payment to be calculated using the All Purpose Rate; and
(f) sick leave payment on all accrued but untaken sick leave, to be paid on the employee's ordinary rate of pay excluding roster premium, shift allowance and overtime.
43.8 Redundancy entitlements during specific time periods
For the purposes of calculating redundancy entitlements under clause 43.7:
(a) the redundancy entitlements of an employee who is made redundant between 1 June 2001 and 30 November 2001 inclusive will be calculated on the assumption that their wage rates have increased by 5% (and not 2%) on 1 June 2001; and
(b) the redundancy entitlements of an employee who is made redundant between 1 December 2001 and 30 May 2002 inclusive will be calculated on the assumption that their wage rates have increased by a total of 5% (and not 2% and a further 1.5%) as at 1 December 2001.
Superannuation will be paid to employees in accordance with the retrenchment benefits of the relevant fund.
(a) Upon the establishment of the number and designation of employees required to be retrenched, the Company will seek to obtain volunteers subject to the retention of employees with the necessary skills and experience required to continue the site operating to the end of the date indicated by the Company. This will occur in consultation with the Union.
(b) Subject to the Company not being successful in obtaining sufficient volunteers under clause 43.10(a), it will be forced to have involuntary redundancies based on the need to maintain skills and experience necessary for the successful graduated cessation of the manufacturing operations. This will occur in consultation with the Union.
The parties agree that in the interest of supporting both the Company's requirements and the employees' welfare, regular consultation will take place between the representatives of the respective parties during any redundancy process.
An employee who is retrenched due to organisational restructure is entitled to the necessary time off, with pay, to attend interviews for alternative employment. This will be subject to prior approval and verification of attendance.
43.13 Itemised statement and certificates of service
(a) Redundant employees shall be given an itemised statement of all termination payments as early as possible prior to the actual date of termination.
(b) The Company will supply a certificate of service to all retrenched employees indicating the reason for the loss of employment.
43.14 Internal vacancies and financial planning
(a) The Company will make retrenched employees aware of internal vacancies through the in-house advertisements, and employees applying for such positions will be given due consideration subject to the job prerequisites being met.
(b) Where necessary, financial planning sessions will be arranged by the Company and, on a needs basis, job search services for employees who require guidance in such areas will also be considered.
(a) Where an employee has agreed to transfer or relocate inter-Region, no redundancy entitlements under this Agreement will apply.
(b) Where an employee is transferred within the Region (intra-Region) to a position of similar nature to the position previously held, no redundancy entitlements under this Agreement will apply, except as provided in clause 43.15(c).
(c) Where an employee who has transferred intra-Region is required to travel from their residence, a distance in excess of 30 km to that which they previously travelled, they are entitled to:
(1) a one off payment of $500 (nett) after one month's service at the new location; and
(2) a further payment of $800 (nett) after three month's service at the new location, subject to confirmation that they will continue in employment.
(d) Where an employee transfers within a Region (intra-Region) to a different position to the one previously held, such employee after one month's period of employment, and within three months' employment, may elect to terminate their employment by the giving of four weeks' notice and thus qualifying for redundancy payment under this Agreement.
The Company has a relocation policy which applies to its staff for inter-regional transfers only. This policy is available to all employees. In summary the policy provides for:
(a) two days for initial "look around" plus accommodation and meal expenses;
(c) temporary accommodation up to a maximum of 12 weeks;
(e) legal expenses including stamp duty for buying and selling house;
(g) transfer allowance equivalent to one month's pay.
For the purposes of this clause 43, the following sites are in the following Regions:
[11] In the circumstances, I can find nothing wrong with the process followed by the employer in selecting the employees whose employment was to be terminated for reasons of redundancy. Indeed, as I comprehend the case advanced by the NUW, it has no complaints about the process. The employees in question were selected from the section of the plant which was directly affected by the transfer of operations to New South Wales.
[12] I can readily understand Ms Fenton having suspicions that the failure to transfer her to the relevant section was intended to avoid giving her the opportunity to apply for redundancy. Her evidence as to the offer being made to her by the relevant supervisor on the basis that she was replacing Ms Cuolahan was not specifically denied by the employer nor was the supervisor himself called to give evidence. Rather, the employer relied upon the evidence of the Cheese Unit Manager who was not privy to the conversations between the supervisor and Ms Fenton. Further, it was not denied that Mr Loader was, according to the shift roster tendered in evidence[4], at the relevant time already rostered on the same shift as Ms Cuolahan. The explanation given for this fact lacked substance.
[13] I also accept that Ms Fenton accepted the offer of a transfer to the relevant section in good faith and am prepared to assume that she did so in anticipation of or in the hope of being made redundant in due course. However, I do not consider that, in the circumstances, the employer had any obligation, legal or moral, to offer redundancy to Ms Fenton.
[14] Even if I were to assume that she had some entitlement, pursuant to some agreement with the employer, that she be transferred to the relevant section, there was never any guarantee that, should she have actually taken up the position in the relevant section and subsequently volunteered for redundancy, she would have been made redundant. There being, in fact, an excess of volunteers for redundancy, it was a matter for the employer to determine in the end result which of the volunteers would be made redundant. If there had less volunteers than necessary, the employer would have been obliged to select employees for compulsory redundancy and there is no evidence to justify a conclusion that she would have been chosen.
[15] On the basis of the material before me, I am unable to grant the NUW's claim. It is apparent, however, that Ms Fenton is not happy in her current employment situation. That is not conducive to a satisfactory on-going employment relationship. That situation should be appropriately and expeditiously addressed by both Ms Fenton and the employer. It may well be that, should there be a further need to reduce the numbers of the employer's workforce at the plant, favourable consideration should be given to including Ms Fenton amongst the employees to whom voluntary redundancy is offered.
K. Irwin, W. Tonissen and G Legg for Bonlac Foods Limited.
Printed by authority of the Commonwealth Government Printer
National Union of Workers
Bonlac Foods Limited re Bonlac Foods Limited and National Union of Workers Enterprise Agreement 2001 - PR911566 [2002] AIRC 320;
The Commission dismissed the National Union of Workers' claim; it found the employer's redundancy selection process complied with the Agreement and concluded it could not order that Ms Fenton be given the opportunity to apply for redundancy or be made redundant with entitlements ([11], [15]).