National Union of Workers v United FM Pty Ltd trading as United KFPW

National Union of Workers v United FM Pty Ltd trading as United KFPW - [2006] NSWIRComm 1112 - NSWIRComm 2003 case summary — Zoe

[33]

21 The evidence as to the similarity of the positions or the extent of change, if any, was not well-developed. Despite the opinion of Mr Salouros that the employees' duties have not changed in any material way, the available evidence tended to militate against a conclusion that the employees continued with SSDS in the same or closely-equivalent positions. For instance, the SSDS job application forms asked applicants to state the positions for which they were making application. Mr North was formerly a leading hand storeman in charge of Bridging, NBCD store, EOD store, EDD Store and PRA store. Mr North applied to SSDS for a number of discrete positions, namely: (1) Leading Hand, Wings; (2) Leading Hand BRG/NBCD/EOD/PRA; (3) Storeperson BRG; and (4) Storeperson NBCD. Mr North was offered a position as a Stores Attendant Level 2 with a drop of $120 in weekly wages, rather than a position commensurate in pay and status with his former position. Mr Janssen expressed interest in a leading hand or ammunition stores position; the job he was offered as a Stores Attendant Level 2 with SSDS paid $19 a week less than his employment with United. (Mr Janssen's pay subsequently increased by a promotion, but the post-recruitment promotion is plainly unconnected to any activity by United). Similarly, Mr Bugden was formerly employed by United as a courier driver but subsequently was transferred by United, with income maintenance, into a stores role. Mr Bugden obtained a position with SSDS as a Stores Attendant Level 2, but has not actually worked in a stores position. Since the day Mr Bugden started with SSDS, he has been employed as a courier driver and works at a location about a quarter of a kilometre away from the location of his former position. He earns about $20-$30 a week less than when he was employed by United. When Mr Solomon began working with SSDS, he was performing the same work as in his previous employment with United, but in a restructured working environment without a co-worker to assist with the responsibilities. The reduction in the number of employees made the role so onerously different from his former position that he applied for a transfer.

[129]

80 Principles: There are some instances of agreements with or between outgoing and incoming employers which are directly concerned with obtaining suitable alternative employment for employees. Some contractual arrangements, awards or agreements make it a condition of the transmission, transfer, sale or merger that existing employees be retained. Entering into such arrangements would be a fairly clear example of an employer obtaining alternative employment for employees. In other instances, arrangements have been put in place in connection with a sale or other transmission to guarantee offers of employment and to give explicit recognition to all service-related entitlements of transferring employees (for an award-based example in this respect, see Rocla, Adelaide Brighton and Transport Workers' Union Interim Award (IRC2003/3780, 30 July 2003). Arrangements of this type would be fairly obvious examples of obtaining alternative employment. It must be accepted, however, that lesser arrangements still may come within the concept of "obtains", even if the employees of United had to apply for the jobs with SSDS in an open, competitive selection process. For example, in Derole Nominees Pty Ltd (Print J4414) the Full Bench of the federal Commission (Peterson J, Marsh DP and Oldmeadow C) said this: The word "obtains" does not appear in its context to mean actually obtain in the fullest sense possible. In circumstances like those occurring at the company one employer is incapable in law of effecting a contract of employment between his employee and another employer whether by assignment (see Re Anderson Hosiery Mills Pty Ltd; Moore DP; Polites DP; Smith C; Print J1785 [T007]) or otherwise; the creation of the legal relationship of master and servant depends on a mutuality being arrived at between the individual and the incoming employer. Therefore, the pursuit of alternative employment by the outgoing employer cannot be expected, by reason of itself alone, to produce new employment; there will usually and perhaps always remain the opportunity for the incoming employer, and the employee, to disagree as to matters such as terms of employment, suitability of the job to the employee and vice versa so that alternative employment may not eventuate. It follows that "obtain" must be given some lesser meaning. The Shorter Oxford Dictionary (third edition, revised) provides as its relevant meaning, the definition of "obtain" as "to procure or gain, as the result of purpose and effort". It seems to us that meaning is of assistance here; that is the employer by purpose and effort may establish an opportunity which suits the employee and which crystallises as alternative employment of an acceptable kind. … Viewed in this way it will be seen that the intention is not to impose an absolute test on the employer's ability to "obtain" alternative employment but rather it refers to action which causes acceptable alternative employment to become available to the redundant employee. The employer must be a strong, moving force towards the creation of the available opportunity.

[168]

107 While Mr Gardner submitted that United was not contending there had been any intentional breach of employment-related legislation in relation to continuity and transfer of business, Mr Joseph's submission was that a statutory transfer simply did not occur. Mr Gardner elaborated that submission in correspondence dated 23 June 2006 stating that United seeks a finding that it is open on the evidence that the employees individually requested, for their own individual reasons, not to have accrued entitlements transferred to SSDS and insisted payments be made to each individual instead. The evidence supports the following conclusions: First, the proposal put by United in correspondence to SSDS dated 9 September 2005 indicated that the proposal, "excludes the transfer of annual leave as it is United KFPW's desire to pay-out all accrued annual leave to each former employee upon completion of their service with the company". Hence, it was United's own "desire" that United pay annual leave to the employees on termination of employment. There is no evidence to support a conclusion that the employees had any say in this matter, given that United put the proposal to SSDS without any consultation with employees or the NUW. Second, in letters dated 14 September 2005, the four employees who had an entitlement to pro rata LSL individually advised United, for their own individual reasons, that they required United to pay pro rata LSL. Mr Nolan's letter also noted he did not authorise the payment of any monies by United to anyone other than to the NUW for union fees and Mr Solomon's letter did not authorise the transfer of anything. Third, there is no evidence Mr North made a request for his accrued entitlements not be transferred to SSDS, but it is otherwise clear from the content of Mr North's evidence that he was not interested in the transfer of LSL credits as part of the Agreement. Fourth, there is no evidence that Ms Lythall requested the pay-out of any benefits in connection with her termination of employment or acceptance of employment with SSDS. The Agreement did not provide for transfer of her service for LSL credits and United determined to pay-out her annual leave.

[176]

115 Mr Gardner submitted the employees and the NUW had attempted to "maximise their opportunities to obtain redundancy pay, even if that meant rejecting the opportunity to accept ongoing new employment on the terms that United had offered to them". However, on the evidence, the employees did not consider the Agreement provided any real benefit to them and that is the principal reason it was rejected. Viewed objectively, this was not an unreasonable view to take. SSDS had advised the employees that any issues concerning redundancy payment were strictly matters between United and the employees. The Agreement subsequently brokered between the companies did not furnish the benefits that would accompany genuinely continuous service and provided, in return, only partial recognition of service in relation to LSL credits (whereas employees preferred to exercise their entitlement to a cash payment), probation-free employment and notional commencement from 1 October 2005 (even if it were accepted that this may create some eligibility for one day's wages). Mr Solomon, for example, said that the fact sick leave was not being "rolled over" was a relevant consideration. Given the employees probably considered the Agreement may jeopardise redundancy payments, and given how comparatively little the Agreement offered in return, the employees did not want the Agreement applied to them. For example: . The pro rata LSL credits would have been transferred to SSDS, in circumstances where they would otherwise have been cashed-out to four employees; those four employees preferred the certainty of payment from United rather than the complex of uncertainties involved in working with a new employer. The employees, not unreasonably, wanted to keep their employment "options" open. For example, Mr Bugden pointed out that if he resigned from SSDS after two months to take another job, he would not be entitled to pro rata LSL. Mr North was not interested in the Agreement because of his impending retirement even though it provided a LSL benefit not otherwise available to him. Ms Lythall's service would not have been recognised at all under the Agreement.

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