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

Annual Holidays Act 1944 LEGISLATION CITED: Industrial Relations Act 1996 ss101-105, s127, s130, s173, s406, Industrial Relations Act 1991 s86 Long Service Leave Act 1955 Storeman and Packers (General) (State) Award 317 IG 1097 cl34

Amcor Ltd v Construction Forestry, Mining and Energy Union and ors (2005) 214 ALR 56 Australian Workers' Union v Great Lakes Community Resources t/as Resource Recovery [2004] NSW IRComm 327 Derole Nominees Pty Ltd (Print J4414) Gribbles Radiology Pty Ltd v Health Services Union of Australia (2005) 214 ALR 24 Metal Trades Employers Association v Amalgamated Engineering Union (1935) 54 CLR 387 CASES CITED: R v Industrial Commission of South Australia; Ex parte Adelaide Milk Supply Co-op Ltd (1977) 16 SASR 6 Re Clerks (State) Award and Other Awards (1987) 21 IR 29 Re Government Cleaning Service (Privatisation) Award (No 2) (1994) 55 IR 199 Re Government Cleaning Service (No 3) (1995) 59 IR 348 Re Nurseries Employees State Award (Renaissance Herbs and AWU re application for exemption from redundancy payments) (unrept; IRC03/4233; 3 October 2003; McKenna C) Rocla, Adelaide Brighton and Transport Workers' Union Interim Award (unrept; IRC2003/3780, 30 July 2003; McKenna C) PP Consultants Pty Ltd v Finance Sector Union (2005) 214 ALR 24

HEARING DATES: 08/05/2006, 09/05/2006, 19/06/2006

APPLICANT (on the dispute notification) Mr A Joseph of counsel

LEGAL REPRESENTATIVES: RESPONDENT (on the dispute notification) Mr D Gardner, solicitor Maddocks Lawyers

DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

NOTIFICATION UNDER SECTION 130 BY NATIONAL UNION OF WORKERS, NEW SOUTH WALES BRANCH OF A DISPUTE WITH UNITED FM PTY LTD TRADING AS UNITED KFPW RE REFUSAL TO PAY SEVERANCE PAY

1 An industrial dispute has arisen between the National Union of Workers, New South Wales Branch ("the NUW") and United FM Pty Ltd trading as United KFPW ("United"). The dispute concerns the question of whether six former United employees have an entitlement to redundancy payments in circumstances where their employment with United terminated on the cessation of a contract between United and the Department of Defence ("the Department"), given they secured employment with the incoming contractor.

2 United is a facilities management company that provides multi-disciplinary services at various locations for client organisations. United formerly held a contract to provide services for the Department at a location known as the Liverpool Military Area ("the LMA"). The LMA contract period was from 10 June 1997 to 30 September 2005. On 10 May 2005, the Department advised United it had been unsuccessful in re-tendering for the LMA contract. It later transpired Serco Sodexho Defence Services ("SSDS") was the successful tenderer. SSDS began operations at the LMA on 1 October 2005.

3 Various events unfolded around May to September 2005 which are relevant to the determination of the competing claims before the Commission. The details are considered more fully later in this decision but, shortly stated, SSDS, United and the Department held discussions at an early stage about transitional arrangements, including arrangements to facilitate making of job applications with SSDS.

4 United and SSDS also confirmed an agreement on 13 September 2005 (which I will refer to as "the Agreement") which concerned certain employment-related matters for employees of United who may be re-employed by SSDS. Under the Agreement, SSDS would have: given certain recognition to prior service with United for long service leave ("LSL"); waived the probationary period of employment; and recognised employment as having commenced on 1 October 2005, irrespective of the official starting date.

5 The employees were not involved in any discussions concerning the Agreement and, on being informed of its terms, did not want it applied to them. In particular, four of the six employees asserted entitlement to payment of pro rata LSL in connection with their termination of employment with United, rather than the transfer arrangements that would have applied under the Agreement. United paid redundancy payments only to permanent employees who were neither redeployed within United nor employed by SSDS. United issued Employment Separation Certificates to the employees indicating redundancy payments had been made, when payment had not in fact been made. United subsequently sent letters to the employees who had secured employment with SSDS advising redundancy payments would not be made.

6 On 24 August 2005, the NUW filed a dispute notification under s130 of the Industrial Relations Act 1996. The dispute notification relevantly advised:

A. United KFPW Pty Ltd ("the respondent") is an outsourcing company that provides logistics to the Commonwealth of Australia (Department of Defence). B. The contract between the Respondent and the Commonwealth of Australia will run out on 30th September 2005. C. The Department of Defence entered into a new contractual agreement with Serco Sodexho Defence Services Pty Ltd which will commence on 1 October 2005. D. The Respondent currently employs approximately 30 employees [at the Liverpool Military Area]. E. On 4th August 2005 a memorandum informed the employees that the employees could submit an application form for employment to SSDS. … F. SSDS does not offer employment under the same terms and conditions as they are currently employed. There will be no immediate re-employment and no continuity of service. G. The Respondent refuses to pay severance pay to employees who are successful in finding employment with SSDS.

7 Attempts to conciliate the dispute were unsuccessful. The file was subsequently reallocated to me for arbitration, following a disqualification of Tabbaa C effected under s173 of the Industrial Relations Act. As to the matters now before the Commission for arbitration, there are discrete and competing claims made by United and the NUW.

8 Although the NUW was the notifier of the initial dispute, United was the applicant on a claim for exemption from payment. United's contentions were threefold. First, United contended that redundancy payments do not arise as there were no redundancies involved in the case of the employees who were recruited by SSDS. Second, in the event the Commission finds redundancies were involved, redundancy payments should be waived or reduced because United had, within the meaning of dedicated award provisions, "obtained" suitable alternative employment with SSDS for the employees. Third, as a further alternative, redundancy payments should not be required because there were no redundancies in circumstances whereby, under the Long Service Leave Act 1955, the Annual Holidays Act 1944 and Ch 2 Pt 8 of the Industrial Relations Act (Protection of entitlements on transfer of business), the employees have continuity of service as between United and SSDS.

9 For its part, the NUW filed on 19 December 2005 an application seeking orders for payment of redundancy monies, which relevantly read:

A. The applicant: National Union of Workers, New South Wales Branch B. claims that: United FM Pty Ltd t/as United KFPW C. is liable to pay to:

Eric Nolan [$09,560.20] Anthony North [$10,128.45] Donald Solomon [$09,560.25] Jonnanes Janson [$09,560.25] Kalinda Lythall [$02,185.20] Ron Bugden [$08,043.00] D. …Interest is also claimed for each individual from the date of termination being 30 September 2005. E. under the following industrial instrument: Clause 34(v)(i), Storemen and Packers General (State) Award 2004 …

10 The application filed by the NUW seeking payment is not strictly necessary (except as it concerns a claim for interest), for if United's contentions fail the corollary is that the award-based obligation to make payment continues to apply. UNITED'S FIRST CONTENTION - NO REDUNDANCY 11 On 30 September 2005, the employment relationship between United and Eric Nolan, Anthony North, Donald Solomon, Johannus Janssen and Ron Bugden terminated as a result of the cessation of the commercial contract at the LMA between United and the Department. The evidence as to Kalinda Lythall was atypical; her claim is considered separately later in the decision.

12 United contended that redundancies were not involved in the terminations of employment with United. The employees' employment with United may have terminated in conjunction with the cessation of the contract between United and the Department, but, it was submitted, the employees or the positions they occupied did not become redundant as the employees were re-employed by the SSDS in comparable roles. Mr D Gardner, solicitor for United, submitted that redundancy should be determined not by whether there is simply a change of employer but, rather, by whether there is a proven discontinuity of employment sufficiently distanced in time between one employer and another - where the compelling conclusion is that the particular position has ceased to exist and the work performed for the new employer is something quite different and not something closely equivalent to the former employment. Mr A Joseph, counsel for the NUW, submitted that the simple fact a person had a job with a particular employer and now has another job with a different employer in a situation with some temporal connection does not mean there has been no redundancy, and nor is the requirement to make severance payments negated.

13 Mr Gardner drew particular attention to the decision of the High Court in Amcor Ltd v Construction Forestry, Mining and Energy Union and ors [2005] HCA 10; (2005) 214 ALR 56 in submitting that the most recent and authoritative consideration of the meaning of redundancy focussed on a consideration of the position held by the employee. Mr Joseph submitted that Amcor does not really narrow the bases on which redundancy applies, as the case turned on its own facts and the provisions of the relevant industrial instrument.

14 In my opinion, the facts in Amcor are readily distinguishable from the situation in this matter. In Amcor, the employees' employer changed as part of a seamless transmission between related corporate entities. Here, there was no corporate relationship between the incoming and outgoing employer: United and SSDS were in competition as commercial rivals for work being tendered by the Department at the LMA. There were other pertinent points of distinction, including those outlined below, in relation to pay and conditions, making job applications, and continuity of service.

15 Pay and conditions: Nothing at all changed concerning the employees' position or duties in Amcor, or the terms and conditions under which the work was performed (except in relation to a share scheme); and continuity of service was not broken on transmission of business between the related corporate entities. As Mr Gardner submitted, there was a "paucity of data" about the actual earnings for each employee at SSDS, nonetheless Mr Joseph conceded the pay and conditions were reasonably comparable. However, the employment at United came under a State award whereas SSDS used AWAs for industrial regulation. There was dispute about the payment of a laundry allowance at SSDS and how this affected earnings. Mr Bugden was adamant he was not receiving the laundry allowance. Mr Gardner submitted that even if SSDS was not paying the laundry allowance to the employees, they were entitled to payment under the AWA. Mr Janssen thought that even if the allowance was taken into account, his wages were still less with SSDS than with United. Ms Lythall thought she may be a little better off with the allowance. The employees had to change occupational superannuation schemes when they commenced employment with SSDS. The change of superannuation schemes was a matter of concern to at least one employee, namely Mr Solomon.

16 It seems the terms and conditions of employment at SSDS were inferior in some respects than at United and, while the exact amount was indeterminate on the evidence, the employees' overall package was degraded somewhat - significantly so in the case of Mr Bugden and Mr North. A number of conditions of employment adverted to by Mr Joseph also differed from those under the award that applied at United, including the role of industrial tribunals in dispute resolution in matters such as disagreement about redundancy payments.

17 Job applications: The employees in Amcor did not have to apply for jobs with the incoming employer, whereas the applicants for positions at SSDS went through an open, competitive selection process which involved demonstrating suitability at interview. The SSDS job applicants also underwent "pre-employment functional assessments" involving medical screening and agility tests, such as lifting boxes. Mr North described, with a little disquiet, having to pass sit-up tests at age 61. He also had to lift weights, hop around and push a chair around. There was evidence that not all SSDS job applicants were offered employment, including a witness in the proceedings. Obviously, the interview and selection process was not a mere formality and there was nothing automatic about re-engagement with SSDS from October 2005.

18 Continuity of service: Unlike the employees in Amcor, the SSDS employees did not have full continuity of service of all service-related entitlements, although the Agreement proposed to partially recognise service with United for LSL purposes. There was no agreement for continuity in relation to annual leave (which United wished to pay-out), redundancy payments or any other matters - with a resulting loss of accumulated benefits of the type usually described as non-transferable credits. Mr North, for example, lost the contingent benefit of approximately fifteen days of sick leave credits he had accrued in his employment with United. On taking-up employment with SSDS, the employees would not have certain personal/carer's leave entitlements, at least until such time as sick leave or annual leave credits re-accumulated; parental leave entitlements would take twelve months to re-accrue; and, in the event SSDS determined to effect redundancies at the LMS, the scale of severance payments for employees would hinge on the service with SSDS, irrespective of service previously accumulated during the period of employment with United.

19 It is important to note that even if the Agreement was applied to the employees it did not purport to preserve continuity of service. The Agreement provided only that employment with SSDS would be recognised as starting from 1 October 2005 - which is qualitatively quite different from providing continuous service. The accrual of service-related benefits for the SSDS recruits would have started afresh from October 2005, except for partial recognition of LSL under the Agreement for employees with three or more years' service. Long service credits would not have been recognised for employees with fewer than three years' service, such as Ms Lythall. The Agreement did not recognise any other form of service-related entitlements.

20 The positions: Putting aside the differences in the factual underpinnings in Amcor and the circumstances of the United employees, there was a dearth of evidence on which it could be concluded the employees' former positions continued to exist in SSDS. There was no evidence, for instance, as to the position structure that existed at United in comparison with the structure at SSDS, so as to support (or discount) a conclusion that the positions formerly held by the employees were redundant. Self-evidently, an examination of the position structure or establishment structure would be an important matter in any assessment of whether there had been a redundancy of a position.

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.

22 Considering the markedly different factual circumstances in Amcor and this matter, the differences in the wording of the industrial instruments, and a consideration of the state of the evidence as to the positions formerly held by the employees and their current jobs, I do not think Amcor-derived principles ultimately support United's contention that the terminations of employment did not amount to redundancies. The evidence does not establish there was a continuum at SSDS.

23 Bray CJ in his oft-quoted decision in R v Industrial Commission of South Australia; Ex parte Adelaide Milk Supply Co-op Ltd (1977) 16 SASR 6 at 8, said this of redundancy: … the concept of redundancy in the context we are discussing seems to be this, that a job becomes redundant when the employer no longer wishes to have it performed by anyone. A dismissal for redundancy seems to be a dismissal, not on account of any personal act or default of the employee dismissed or any consideration peculiar to him, but because the employer no longer wished the job the employee has been doing to be done by anyone.

24 Similarly, in Re Government Cleaning Service (Privatisation) Award (No 2) (1994) 55 IR 199, Schmidt J considered an application for a redundancy award for former employees of the Government Cleaning Service ("the GCS"), being employees who were subsequently employed by private contract cleaners. Her Honour said this (at p218): When a business is sold, or a governmental undertaking privatised, the original employment comes to an end. Employees do not always obtain work with the new employer. The fact that the old employer assists the employees to find work with the new employer does not alter the consequence that the termination of the original employment arose as a result of the employer's decision that it no longer wished any of its employees to perform the work they were performing and not through any fault on the employee's part. It seems to me that employees in that situation have been made redundant, whether or not they were assisted in finding alternative employment.

25 In the course of dismissing an appeal against the decision of Schmidt J to award redundancy payments to the former employees of the GCS, the Full Commission in Re Government Cleaning Service (No 3) (1995) 59 IR 348 concluded (at p378): In so far as the appellant relied upon an argument that her Honour had made a finding that the circumstances gave rise to a redundancy, we are of the view the circumstances clearly fell within the usual concept of redundancy and thus no error has been demonstrated.

26 The principles discussed by Schmidt J and the Full Commission in the GCS cases, as well as those canvassed by Bray CJ, are apposite to this matter. Even with long-standing redundancy-related principles being tempered by Amcor, I consider the circumstances of this matter fall, as a matter of law and of fact, within the "usual concept of redundancy". Here, the employees' jobs with United became redundant on 30 September 2005. Moreover, evidence does not support a conclusion the positions and the employees' employment continued without change. The fact United made certain arrangements with SSDS (as discussed later in this decision) does not detract from the proper characterisation of the terminations as being redundancies. As it was submitted before the Full Commission in Government Cleaning Service (No 3), it is wrong "to suggest that the sine qua non of severance payments was the loss of employment so that where alternative employment had been arranged that was the end of the matter" (at p373). The question of whether United obtained suitable alternative employment for the employees with SSDS is a discrete issue from the question of redundancy. I am satisfied that on 30 September 2005 the employment relationship at the LMA between United and the employees terminated by redundancy and United also retrenched the employees.

27 I have not been satisfied United should be relieved of the award-specified obligation to make redundancy payments to the employees on the basis of the primary contention that the terminations of employment were not redundancies. Hence, the first aspect of United's claim for relief from payment is rejected.

UNITED'S SECOND CONTENTION - OBTAINED SUITABLE ALTERNATIVE EMPLOYMENT 28 United sought relief from the obligation to make the scale of redundancy payments set out in cl34(v) the Storeman and Packers (General) (State) Award 317 IG 1097, as varied ("the award"). Clause 34(v)(c) of the award has a dedicated provision allowing scale payments to be varied, by order made on application to the Commission, where the employer obtains acceptable alternative employment for an employee. The clause reads: cl34(v)(c) Alternative Employment - Subject to an application by the employer and further order of the Industrial Relations Commission, an employer may pay a lesser amount (or no amount) of severance pay than that contained at paragraph (a) above if the employer obtains acceptable alternative employment for an employee.

29 The application tendered by United in proceedings on 11 October 2005 concerning cl34(v)(c) of the award relevantly read:

A. The applicant … B. Seeks direction/orders that United FM Pty Ltd trading as United KFPW in matter 4444/05 that as the employer of a number of personnel under the Storeman and Packers (General) State Award that suitable alternative employment under clause 3, (v), (c), has been secured for these employees upon conclusion of the current contract with the Department of Defence on 30 September 2005. In seeking this direction/order, United FM seeks not to be bound by the provisions of clause 34, (v), (a), of the subject award. [sic] C. The grounds on which such directions/orders are sought are that United FM Pty Ltd trading as United KFPW did facilitate the employment of its employees with the new contractor. D. Particulars of these grounds are that United FM Pty Ltd trading as United KFPW facilitated the employment of its staff through allowing paid attendance at information sessions, presentations, interviews and did negotiate transfer of accrued LSL, recognition of continuity of service and payment for the Labour Day Public Holiday of 3 October 2005 for all the staff engaged with the new contractor. …

30 This decision deals with the question of whether United obtained suitable alternative employment for the employees under two broad headings. I will first consider the Agreement and, secondly, the evidence concerning matters other than the Agreement. Consideration - The Agreement

31 On 10 May 2005, United's General Manager Facility Management, Ian Stewart, informed George Salouros, the LMA Project Manager, that United had lost the contract for the LMA. Arrangements were made for a meeting the following day to inform the employees. At that stage, the identity of the successful tenderer was not publicly known. However, Mr Stewart was in a position to inform the meeting the contract would expire on 30 September 2005 and he expected that would be the last day services would be delivered at the LMA by United. 32 The background to the making of the Agreement: At the first "Transition-Out" meeting on 20 July 2005, redundancy-related issues were plainly in the contemplation of Mr Salouros, who had been authorised to manage the "transition-out" process. He asked SSDS to bring forward its recruitment timetable, so applicants would know quickly whether they would be employed by SSDS. In so suggesting, Mr Salouros explained his view that United probably would not then have to give notice to some employees. (Notice was required as there are notice requirements under cl34(iv) of the award and the employees' employment with United was going to be terminated.) In any event, Peter McMahon, the Human Resources Manger of SSDS, advised it was impracticable for SSDS to adjust the recruitment timetable and there was no reason why United should "hold-off' on the notice letters. Mr Salouros inquired about transfer of employee entitlements, but Mr McMahon informed him SSDS did not expect employees to start with annual leave and other accruals. Mr McMahon said SSDS wanted to start at the LMA with a "clean slate".

33 In a further meeting with United on 3 August 2005, Terry Portman, SSDS's Transition-In Manager, reiterated advice that SSDS was keen to recruit as many United employees as possible. He explained SSDS did not have a "boat-load of people" waiting to take the LMA jobs. Amanda Cook, United's Project Manager, made some arrangements with Mr Portman about fielding telephone calls from those applicants who did not attend the presentations.

34 Following-on from the discussions with SSDS on 20 July 2005 where Mr Salouros had instigated conversation on the topic of transfer of employee entitlements, Mr Salouros attended a further meeting on 16 August 2005 with Mr McMahon at the SSDS Transition Office. Once again, Mr Salouros raised the topic of transfer of employee entitlements. Mr McMahon, once again, indicated SSDS preferred to start with a clean slate in relation to such matters. Nonetheless, and for reasons which were not developed in the evidence, Mr McMahon said he would set-up a meeting with another SSDS manager to see what could be arranged.

35 On 25 August 2005, United advised all the LMA employees that their notice periods commenced on 26 August and the contract was scheduled to end on 30 September 2005. All employees, irrespective of the length of service, were thus given five weeks' notice, which was the period that would have been applied under cl34 of the award to an employee aged over 45 with more than five years' service. Discussions were subsequently held between United and SSDS on 26 August 2005 concerning a range of matters, including recognition by SSDS of service with United and the waiving of probationary periods. Further communications ensued between the two companies, coupled with preparation of financial calculations concerning the costs involved in the transfer of entitlements. 36 On 8 September 2005, Mr Salouros raised a new matter with SSDS, namely, the fact SSDS had offered employment from Saturday, 1 October 2005 only to those employees whose services were actually required that day. SSDS's letters of offer started the other employees on Tuesday, 4 October 2005, being the first ordinary working week-day after the Labour Day public holiday on Monday, 3 October 2005. In this respect, two employees' offers of employment from SSDS contained a commencement date of 1 October 2005, namely, Mr Janssen and Mr Solomon. The other employees' employment was scheduled to commence on 4 October 2005.

37 Mr Salouros was concerned about the commencement dates in the SSDS offers of employment. Mr Salouros stated to Mr Portman of SSDS: "Terry, while that is your prerogative I am concerned that this means you will not be paying people for the public holiday on Monday (3 October) and that this can be taken as a break in service". Another employee of SSDS, Lindsay Olsen, subsequently telephoned Mr Salouros to assuage concerns about breaking continuity of service, stating: "Rest assured George that that is not the case and that people's service will be recognised as continuing." Despite this advice, Mr Salouros's concerns continued. As a result, he obtained instructions from Kim Gray, the Manager of Finance & Administration, to continue to try to "get [Mr McMahon of SSDS] to recognise continuing service from 1 October and to cover the Labour Day public holiday on 3 October".

38 By letter dated 9 September 2005, Mr Salouros wrote to SSDS with the following proposal: Dear Peter [McMahon]

Following our meetings on 16 and 26 August 2005 and review of processes for selection and recruitment I wish to meet with you on 12 September 2005 to discuss further facilitating the transfer of United KFPW personnel to Serco Sodexho Defence Services.

United KFPW is prepared to offer Serco Sodexho Defence Services a transfer of funds in order to assist employees in taking up employment with you. This transfer of funds will consist of funding

. the accrued LSL entitlement for permanent personnel who have completed five or more years of service with United KFPW and who accept an offer of employment with SSDS . United KFPW will also provide a pro rata payment for LSL for permanent personnel who have completed less than five years but more than three years service with United KFPW and who accept an offer of employment with SSDS.

In return for this offer United KFPW seeks the following for its personnel upon commencing employment with SSDS:

. Recognition of the transfer of the LSL entitlement

. Employment with SSDS will be recognised as commencing with effect from 1 October 2005

This 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.

I look forward to meeting with you to discuss this proposal.

GEORGE SALOUROS Project Manager

39 An in-principle agreement reached on 12 September 2005 was confirmed on 13 September 2005 in correspondence from SSDS which read: Dear George [Salouros]

In light of your correspondence received by myself dated 9 September 2005 and as discussed at our meeting in your office on 12 September 2005, Serco Sodexho Defence Services (SSDS) agrees to the following.

SSDS will recognise the service of all former employees of United KFPW employed by SSDS in the Sydney West South Contract with the Department of Defence for the purposes of LSL (LSL) only.

SSDS will not invoke the three (3) month probationary period for all former employees of United KFPW employed by SSDS in the Sydney West South Contract with the Department of Defence.

SSDS commences the Sydney West South Contract on the 1st October 2005, all former employees of United KFPW employed by SSDS during the commencement of the Sydney West South Contract with the Department of Defence, will be recognised by SSDS as commencing their employment on the 1st October 2005 irrespective of their official start date.

Peter McMahon National Human Resources Manager Serco Sodexho Defence Services

40 (It may be noted that SSDS's letter seems to go further than United's proposals. Read literally, the Agreement provides recognition of the service of all former employees for the purposes of LSL, not just permanent employees with more than three years' service. Hence, if the Agreement were applied literally, Ms Lythall's service credits would have been recognised. However, the evidence would not otherwise support a conclusion that the companies intended to cover all employees in this way. For example, there was nothing to suggest a transfer of funds was arranged for employees with service shorter than that addressed in the Agreement. Similarly, the Agreement, read literally, does not seem to be contingent on the employees accepting a transferral of their LSL credits. Again, this needs to be considered in the context of the intention, namely, Mr Salouros's advice that insistence on payment of pro rata LSL would disentitle employees to the other matters addressed in the Agreement.)

41 On 14 September 2005, Mr Salouros convened a meeting at which he advised the employees about the Agreement, being advice confirmed in letters (dated 13 September 2005) handed-out at the meeting, which read: Dear [name of employee]

I am writing to advise you that United KFPW (UKFPW) and Serco Sodexho Defence Services (SSDS) have reached an agreement with regard to all permanent United KFPW personnel who take up the offer of employment with SSDS. In summary all employees with more than three years permanent service with UKFPW and who accept employment with SSDS will be entitled to the following benefits: . Accrued LSL entitlements on a pro rata basis will be transferred to SSDS. This means that your service with SSDS will be recognised as continuing from that time you commenced permanent employment with UKFPW on [date].

. SSDS has agreed to remove the requirement for the three month probation period from your offer of employment

. SSDS has agreed that employment will be deemed to commence from 1 October 2005 so that you will be eligible for payment of the public holiday falling on Monday 3 October 2005.

Your letter of offer from SSDS identifies that you will be engaged under the Storage Services - Serco Australia Pty Ltd-NUW Award 1998. This Award is similar in terms of your conditions of employment under which you have been engaged under with this company. I therefore encourage you to consider taking up the offer of employment from SSDS by no later than Monday 19 September 2005 and that if you have any questions on the terms of your engagement as offered by SSDS then please contact their representatives as advised in their covering letter to you.

I have been further advised by SSDS that failure to take up the offer of employment by this date will result in the withdrawal of the offer of employment and the possible rejection of any application for employment by you with SSDS after 1 October 2005.

GEORGE SALOUROS Project Manager

42 At the meeting on 14 September when the letter outlining the Agreement was issued to employees, Mr Bugden inquired as to the situation if employees did not want LSL transferred to SSDS. Mr Salouros replied that such advice should be confirmed to him in writing. He added that the result of rejecting the Agreement would be: … you will start employment with SSDS on probation, your employment clock for LSL starts at zero and you will miss out on pay for the public holiday.

43 The employees' rejection of the Agreement: The employees took umbrage at the Agreement that had been brokered by SSDS, as Mr Solomon described it, "behind our back". Mr Bugden was similarly unimpressed, stating: But [Mr Salouros] didn't ask me prior to [making the Agreement], he never got us together and said he was going to do that. The letter was just sent saying he'd done that.

… The offer. Well, that's like a gun at your head, like if you don't take this offer, you don't get this.

44 The evidence makes it plain that those who had a LSL entitlement were undeterred by the advice from Mr Salouros that if they pressed for payment of pro rata LSL they would not obtain the other matters under the Agreement. The quartet of employees who had an entitlement to pro rata long service informed United in writing on 15 September 2005 of their position. That is, they advised United they wanted payment of pro rata LSL on termination of employment and noted United had no authority to direct the payment elsewhere. Mr North did not send a letter, as he did not have a pro rata LSL entitlement under the Long Service Leave Act that would have been payable by United to him on termination of employment. Although Mr North's service credits would have been transferred under the Agreement, his evidence indicated that he saw no personal benefit in the Agreement because, as he is now aged 61, he intends to resign/retire from SSDS before LSL would be fully accrued at ten years' service. Ms Lythall did not send a letter and nor is there any evidence as to her views on the Agreement. She would not have had an entitlement under the Long Service Leave Act, and nor would the LSL aspects of the Agreement have applied to her as it did not cater for employees with fewer than three years' service.

45 The Agreement post-dated job offers: If United is to be successful in its application for relief from the obligation to make severance payments in accordance with the scale of entitlements in the award, the Commission must be satisfied United obtained suitable alternative employment for the employees. Mr Gardner submitted that United was instrumental in negotiating the transfer of a number of entitlements and this goes towards demonstrating that United obtained acceptable alternative employment for the employees. This question can be shortly answered in relation to the Agreement. The employees secured employment with SSDS following an open, competitive selection process. The fact the employment was secured by the employees themselves, rather than obtained for them by United as a result of the Agreement, is underscored by one incontrovertible matter. With the exception of Ms Lythall, the employees had been successful at interview and already had offers of employment in letters from SSDS dated 2 September 2005 before the Agreement was made. The Agreement between United and SSDS, confirmed in correspondence dated 13 September 2005, post-dated the offers of employment. Nothing turns on the fact, in terms of having obtained the employment, that employees may not have signed the AWAs until after the Agreement was ratified. Thus, irrespective of the proposals being promoted by United until mid-September, recruitment had progressed at the exact pace determined in the timetable SSDS had shown to Mr Salouros at the first Transition-Out meeting on 20 July 2005, i.e., interviews were conducted in August and selections were finalised by 2 September 2005. As such, United cannot plausibly maintain its assertion the arrangements sought by United and agreed to by SSDS under the Agreement were instrumental, in any way, in obtaining employment for the employees.

46 In any event, the Agreement is not relevantly concerned with obtaining employment for employees. Properly considered, the Agreement would have applied to employees who already had obtained employment with SSDS. That is, provided employees were already successful in obtaining employment with SSDS, the Agreement would then cut-in on the following matters: waiving the probationary period; commencing employment from 1 October 2005 for those employees who would otherwise have commenced work on 4 October 2005; and partially recognising prior service as an employee with United for LSL entitlements.

47 Status of the Agreement - Generally: The status or legal enforceability of the Agreement is questionable. As Latham CJ noted in Metal Trades Employers Association v Amalgamated Engineering Union (1935) 54 CLR 387 at 403: "An agreement between two persons may produce an effect upon third persons, but it can impose duties and confer rights only upon those who make the agreement." Here, the employees did not appoint United as an agent to act on their behalf in negotiations. They did not otherwise instruct United to seek to negotiate the matters that ultimately formed part of the Agreement. Indeed, the employees considered the Agreement had been negotiated behind their backs with a view to depriving them of both a redundancy payment and the benefits of genuinely continuous service. I doubt the Agreement could be forced on the employees by United. Moreover, SSDS did not otherwise take steps to amend its job offers and AWAs to reflect any aspect of the Agreement.

48 In any event, the Agreement, or any agreement for that matter, cannot override the minimum entitlements provided by an award given the operation of s406 of the Industrial Relations Act. Clause 34 of the award specifies the scale of redundancy payments to be applied to redundant employees, subject only to an order of the Commission reducing or waiving the payments in cases where the applicant for the order establishes an incapacity to pay or that suitable alternative employment has been obtained by the employer for the employee. The unambiguous statutory position is that an employee and an employer cannot "contract-out" of award minima, even if there is agreement between the employer and employee. Equally clearly, an agreement between one employer and another employer could not operate to deprive past, current or future employees of award minima - even if (unlike five employees in this case who wanted no part of the Agreement) the employees accepted the terms of an agreement. That is, s406 of the Industrial Relations Act provides: 406 Awards and other industrial instruments provide minimum entitlements (1) The conditions of employment set by an industrial instrument are the minimum entitlements of employees. (2) The provisions of a contract of employment or other contract do not have effect to the extent that they provide an employee with a benefit that is less favourable to the employee than the benefit to which the employee is entitled under an industrial instrument. (3) …

49 Status of the Agreement - Mr North: In an affidavit dated 24 January 2006, Mr Salouros deposed that Mr North's LSL was in the process of being transferred to SSDS. In this respect, it appears from United's financial records that a payment in the amount of $3,056.67 was earmarked for transfer to SSDS with respect to Mr North's LSL credits.

50 As noted earlier, Mr North did not wish to have the Agreement applied to him, principally because he intends to retire/resign from SSDS before LSL becomes fully accrued. In those circumstances, it would have been financially rational for him to elect to press for a redundancy payment of $10,128.45 rather than a contingent financial benefit in relation to LSL, which would not crystallise on his intended resignation/retirement before completing ten years' service.

51 Mr Joseph submitted that United presented the Agreement with a "carrot and stick approach". Here, Mr North was not interested in the potential benefit to him under the Agreement and, as I have noted earlier, I doubt the Agreement could be forced on unwilling employees. It was open to Mr North to forgo the potential benefit that would have resulted from the LSL arrangements in favour of a claim for redundancy payment; that was his decision to make. Mr Gardner submitted that although Mr North may not have been "terribly impressed with the idea [of having the Agreement applied to him] but it happened anyway". If United has determined to pay an amount of money to SSDS with respect to LSL credits for Mr North, despite his own wishes in the matter, that does not mean it should be accepted that such payment can be used as a pretext by United to unilaterally deny Mr North a redundancy payment. There was no evidence of any transfer of funds for Mr North as at the date the Mr Salouros had prepared his first affidavit in the proceedings, namely on 24 January 2005; Mr Salouros indicated that a transfer was still being "arranged". By January 2006, however, United was already fully aware that Mr North was one of the employees personally named in the NUW's application for orders for payment that had been filed on 19 December 2005. In those circumstances, it is unclear why SSDS determined that it should be arranging payments with respect to Mr North in 2006 - for there has never been any suggestion that the employees were seeking to double dip, as it were, by claiming not just redundancy payments but also any benefits under the Agreement.

52 Given my conclusions in this matter, United may wish to seek to recover from SSDS any money transferred on account of Mr North's LSL credits. As I have accepted that Mr North did not want the Agreement applied to him, SSDS may have a financial windfall as a result of any payment made by United because Mr North intends to retire before the LSL entitlement would crystallise.

53 The Agreement was not applied by SSDS to five employees: Despite any suggestions to the contrary in United's case, I would conclude the Agreement simply was not applied to five of the six employees. The evidence was patchy on whether the Agreement was applied, but the following matters tend to militate against concluding it was applied: . United's direct advice that the Agreement would not be applied;

. the terms of SSDS's offers of employment and AWAs;

. the date of commencement in Ms Lythall's employment offer;

. the absence of evidence concerning payment for the public holiday Monday;

. the absence of evidence concerning waiver of probationary periods.

54 United's direct advice that the Agreement would not be applied: Mr Salouros made it plain in his discussions with employees the Agreement would not be applied to the employees if they required payment of pro rata LSL. In accordance with that advice from Mr Salouros, it seems reasonable to conclude that none of the four employees who asserted their claim to payment of LSL would have received any conditions under the Agreement. This is confirmed in financial records concerning LSL payments to be transferred to SSDS. Messrs Bugden, Janssen, Nolan and Solomon are recorded as "Elected pay out", and the records contraindicate any suggestion that service credits were being transferred by United to SSDS for those employees.

55 The terms of SSDS's offers of employment and AWAs: Significantly, SSDS did not re-issue offers of employment or amended AWAs to any of the employees. Mr Salourous understood that SSDS did not re-issue amended offers of employment and AWAs because of a lack of time. Nonetheless, the original offers of employment and the AWAs are the only materials documenting the employment terms agreed between the individual employees and SSDS.

56 The date of commencement in Ms Lythall's employment offer: Ms Lythall received her offer of employment from SSDS on 24 September 2005, quite some time after the Agreement was ratified between United and SSDS. She had not been party to any of the earlier discussions concerning the Agreement and nor did United issue the letter to her dated 13 September 2005. Despite the terms of the Agreement, SSDS offered Ms Lythall a commencement date of 4 October 2005, rather than 1 October 2005. Given the fact Ms Lythall's employment offer post-dated the Agreement, it cannot be concluded there was a time-related problem preventing a date of 1 October 2005 being included in her offer of employment - more particularly as there is no evidence she had communicated any rejection of the Agreement. Moreover, Mr Salouros wrote to Ms Lythall in a letter dated 6 October 2005 noting that she had, "elected to commence employment with [SSDS] from Tuesday 4 October 2005". The date specified in Mr Salouros's letter reinforces the conclusion the Agreement had not been applied to Ms Lythall concerning the commencement date.

57 The absence of evidence concerning payment for the public holiday Monday: Mr Salouros's evidence indicated there would be payment to employees for the public holiday on Monday, 3 October 2005 as part of the Agreement. For example, Mr Salouros suggested to the employees the Agreement would encompass payment for the public holiday in discussions and in his letter dated 13 September 2005. The employees also appear to have understood that a rejection of the Agreement would result in non-payment of the public holiday. It is important to note, however, there is no evidence of any agreement as to which company was going to "cover" payment for the public holiday. That is, United's proposal on 9 September 2005 did not propose payment for the public holiday or address transfer of funds other than for LSL. SSDS's response on 13 September 2005 did not include any reference to paying employees for the public holiday. Nor is there anything in the otherwise detailed evidence of Mr Salouros concerning communications between United and SSDS as to agreement between the companies on payment or means of payment.

58 The highest the evidence can be taken is that Mr Salouros was instructed to try to, "get [Mr McMahon of SSDS] to recognise continuing service from 1 October and to cover the Labour Day public holiday on 3 October." As things transpired, the Agreement did not subsequently bestow continuous service; it provided for something qualitatively different, namely, that SSDS would recognise employment with it as commencing on 1 October 2005, irrespective of the official starting date. Nor did the Agreement address which company would have the financial liability for payment.

59 Under the Agreement, employment would notionally commence on Saturday, 1 October 2005, even if the official commencement date was 4 October 2005. SSDS arranged an induction session between 8.30am and 1.00pm on Sunday, 2 October 2005. Mr North, whose job offer specified a commencement date of 4 October 2005, inquired whether employees would be paid for attending the induction session. SSDS's Transition Manager, Mr Portman, advised Mr North there was no payment for attendance, but if he did not attend he would not have a job. Against this background, it seems inherently improbable that SSDS would have unilaterally paid the employees for non-attendance on the public holiday Monday, when payment was not made for actually attending a half-day, work-related session on the Sunday in the middle of that long weekend. It seems equally improbable that SSDS would have unilaterally paid the employees for the public holiday as some form of corporate largesse for the benefit of either the employees or United in the circumstances. Moreover, the evidence of Mr Bugden squarely addressed the issue by indicating he commenced work on 4 October 2005, in accordance with the date in his letter of offer, and did not receive payment for the public holiday Monday.

60 Mr Salouros did not know whether the employees were paid for the public holiday Monday and there is an absence of evidence to objectively establish any contention that payment was made, apart from suggestions from Mr Salouros to the employees that it had been negotiated. The difficulties in objectively ascertaining whether payment was made are compounded by the fact that at least some of the payslips issued by SSDS for the first week of employment contained information which is plainly wrong or otherwise unreliable. There was nothing to indicate the employees would receive payment for any date before 4 October 2005 unless SSDS job offer already specified a commencement date of 1 October 2005.

61 I emphasise I intend no criticism of Mr Salouros in relation to his evidence concerning payment for the public holiday; my observations merely comment on the fact that, if payment for the public holiday was negotiated, there is an absence of evidence both as to what was negotiated and as to any payment having been made to the employees for their first week of employment with SSDS. Shortly stated, there is no evidence to establish there was any agreement concerning payment for the public holiday and nor was there evidence to establish the employees received payment under the Agreement for the public holiday if their offers of employment did not otherwise have a commencement date of 1 October 2005.

62 The absence of evidence concerning waiver of probationary periods: There was no evidence whether SSDS had waived the probation period. Mr Salouros said he did not know what had occurred in relation to probation. The employees' evidence did not otherwise address the matter.

63 In conclusion, the contentions by United that the Agreement formed a basis for making an order relieving it, in whole or in part, from making redundancy payments on the basis United obtained suitable alternative employment fail for a number of distinct reasons. First, the employees (other than Ms Lythall) secured offers of employment by 2 September 2005, whereas the Agreement was confirmed only as late as 13 September 2005. Second, United had no actual or ostensible authority to purport to negotiate on the employees' behalf in relation to the matters in the Agreement. Third, the evidence does not support a conclusion that the Agreement was applied to five employees having regard to: United's direct advice concerning LSL; the terms of the job offers and AWAs; the commencement date in Ms Lythall's job offer; payment for the public holiday; and the absence of evidence concerning waiver of probation.

Consideration - Actions and arrangements other than the Agreement

64 It was clear from the outset of discussions that SSDS was keen to employ United employees from October 2005. The Department also supported this view. This much was communicated at the first Transition-Out meeting on 20 July 2005 when an SSDS manager broached the topic by stating: "[W]e are keen to secure as many people as possible from United in order for us to commence effective operations at LMA". Thus, SSDS indicated employment would be available immediately upon commencement of its operations. During the meeting, SSDS also tabled its recruitment timetable, which was as follows: . 1-5 August Two presentations at LMA

65 Mr Salouros confirmed United was also keen to see its employees secure employment with SSDS. To this end, the evidence adduced by United adverted to the following matters, whereby Mr Salouros and other United employees: . suggested SSDS should bring forward its recruitment timetable and discussed the recruitment process;

. discussed the practicalities of SSDS's intention to provide presentations to employees, advised on the suitability of venues and assisted in setting-up venues (i.e. lectern, chairs and presentation equipment);

. on the request of SSDS, provided information about the applicable industrial instruments and contact details for key personnel;

. investigated the costs of providing training to employees in CV preparation and interview training, and passed-on information that SSDS needed only short, "bullet point" job applications;

. offered SSDS the use its internal mail courier system for job applications and facilitated collecting forms on site;

. sent supervisors details about the SSDS presentations, and asked supervisors to encourage employees to apply for jobs;

. printed details in the staff newsletter about matters such as the SSDS presentations;

. allowed employees paid leave to attend interviews and presentations with SSDS;

. made miscellaneous other arrangements directly or indirectly apposite to the transition and further employment, such as: - encouraged employees to apply for SSDS job, e.g., by advising: "If you cannot get through [to SSDS] the first time - keep trying, you must remember you are one of 300 trying to get through";

• gave map directions to the venues for presentations;

• provided advice about the outcomes of the Transition-Out meeting on 20 July 2005, including advice SSDS was interested in recruiting United employees, about the SSDS presentations and where to obtain job application forms;

• offered to follow-up on why some employees who had been offered employment had not responded to SSDS and arranged for a copy of an offer to be provided to Mr Bugden;

• briefed senior staff on the "joint vision" of United and SSDS for the transition.

66 There are general expectations underpinning the award's redundancy provisions that employers should take reasonable steps to facilitate alternative employment opportunities for employees. For example, cl34(1)(c) of the award states: Notwithstanding anything contained elsewhere in this clause, this clause shall not apply to employees with less than one year's service and the general obligation on employers shall be no more than to give such employees an indication of the impending redundancy at the first reasonable opportunity, and to take such steps as may be reasonable to facilitate the obtaining by the employees of suitable alternative employment.

67 Similarly, cl34 (iv)(c) provides: Time Off During the Notice Period (1) During the period of notice of termination given by the employer, an employee shall be allowed up on [sic] one day's time off without loss of pay during each week of notice, to a maximum of five weeks, for the purpose of seeking other employment. (2) …

68 The course United adopted during the transitional period, consistently with the intent of the award, was to be facilitating in relation to the obtaining of alternative employment. The difficulty for United, in so far as its claim for relief from payment under cl34(v)(c) of the award is concerned, is that, when scrutinised in context, its actions did not amount to all that much at all in terms of obtaining suitable alternative employment for the employees. This is the case even when considered in the light of Mr Gardner's submission that United's actions might seem "in isolation to be small things", but nonetheless show the efforts that were taken. On the other hand, Mr Joseph submitted that it would be "pretty easy" for employers to avoid award-based redundancy entitlements if United's actions were found to amount to obtaining alternative employment.

69 SSDS had squarely indicated it had employment opportunities available and it wished to employ United employees. As Mr Joseph submitted, this was so "without any prompting" from United. United's suggestion concerning timetabling was rejected outright by SSDS, as was United's offer to take interview booking on behalf of SSDS. United dropped its plans to provide CV and interview training; the training simply did not eventuate. United's suggestion concerning the scheduling of presentations was accepted by SSDS, but the evidence as to the discussions makes it plain the suggestion was aimed principally at minimising disruption of United's own services to the Department that would have been caused by the bulk absence of staff at only two presentations.

70 Various meeting were convened during which there was discussion or reports by United about developments concerning the transition process, including at least some information relevant to job applications - but, once again, it is difficult to see how such matters could be construed as obtaining employment for the employees. Reliance was also placed in United's case on the provision of information such as that contained in a memorandum dated 22 September 2005, titled "Frequently Asked Questions". However, that information had nothing whatsoever to do with obtaining alternative employment with SSDS. Notably, perhaps, none of the communications with employees broached the topic of United's intentions concerning continuity of service and transferring employees' entitlements, until the Agreement was already in place.

71 References: The evidence concerning references indicated it was against United's policy to provide written references. For instance, United declined to provide Mr Solomon a reference for a job with SSDS, but did issue a statement of service after he had accepted employment with SSDS. I doubt that acting as a referee could be construed as obtaining suitable alternative employment for an employee: Re Nurseries Employees State Award (Renaissance Herbs and AWU re application for exemption from redundancy payments) (unrept; IRC03/4233; 3 October 2003; McKenna C). Putting those views aside, the limited extent of the evidence would not support a conclusion in this case that references provided to SSDS were relevant to obtaining employment for the employees. Ms Cook acted as a personal referee when her name had been listed by individual applicants. Another United employee, Robert Field - Project Scheduler, informally discussed job applicants over coffee, indicating he would employ the people discussed. Mr Salouros was approached by the SSDS recruitment co-ordinator concerning references for about a dozen employees who had listed him as a referee, but Mr Salouros does not recall whether the references concerned any of the employees and there was no evidence from the employees they had listed Mr Salouros as a referee. There was some evidence about discussion concerning Mr Bugden. The evidence did not indicate whether the reference concerning Mr Bugden was positive or negative, although it presumably was not negative given that SSDS offered him a job.

72 It was contrary to United's company policy to provide written references and any references provided were either informal or personal references provided on an individual basis. The references provided by Mr Salouros, Mr Field and Ms Cook were personal references rather than official, company references. As such, the evidence as to references does not assist United at all in its claim that any references were relevant to obtaining suitable alternative employment for the employees. As Mr Joseph submitted, United played no role in deciding who SSDS would employ; it was "totally SSDS's decision". I accepted Mr Joseph's submissions there was no evidence United was in any way influential in obtaining employment for any of the employees, either individually or collectively. It was up to SSDS to decide which job applicants from United, if any, would be offered employment. The evidence adduced by United displayed that understanding. For example, there was a United email in evidence which read, in part: The incoming service provider (Serco) has indicated it will consider our current people to do the work but intends to interview people and make decisions after that. Serco will be looking to ensure they take on only 'suitable' candidates.

73 Courtesies to SSDS: United extended a number of courtesies to SSDS as part of the transitional arrangements, such as in relation to mailing facilities (including those for job applications) and arranging to have a bundle of twenty job application forms left on site. There is no evidence, however, that any of the employees collected the job applications on site or used United's mail service to submit applications to SSDS. Indeed, to the limited extent the evidence deals with the matter, it indicated the employees attended the SSDS presentations and personally obtained the job application forms directly from SSDS (as with Messrs Nolan, North, Bugden, Janssen and Solomon). Hence, the actions of United in allowing a bundle of job applications to be left on site did not assist in obtaining employment with SSDS. Similarly, Ms Cook offered to assist in referring employees to SSDS, but there is no evidence any employees, let alone the employees in these proceedings, were referred by United.

74 United extended a courtesy to SSDS in relation to its mail service, but it would be drawing a long bow to find that providing mail facilities amounts to obtaining suitable alternative employment for the employees. If that were the case, Australia Post equally could be said to have had a role in obtaining employment for those who may have sent applications by ordinary mail. This would an unrealistic or absurd interpretation of the award's provisions. To the limited extent the means of delivery of individual applications is dealt with in the evidence, Mr Bugden and Mr Janssen personally delivered their applications to the SSDS office.

75 United provided SSDS with a list of awards and contact details for key internal and external personnel, and provided map directions on how to get to venues. These courtesies to SSDS personnel could not objectively be regarded as obtaining employment for the employees, unless, for instance, the Commission were, improbably, to conclude the employees would not have got the jobs because SSDS personnel could not find their own way to venues. Similarly, providing a list of industrial instruments and the contact details for key internal and external personnel (not the employees themselves) has no relevance whatsoever to obtaining alternative employment for the employees. In this respect, Mr Joseph noted United played no part in the determination of the pay and conditions of the employees at SSDS, except those that dovetailed with the Agreement.

76 On matters potentially more positive to United's claim under cl34(v)(c) of the award, Mr Salouros passed-on information that SSDS needed only short job applications. The information may well have assisted some employees in drafting their applications, but there was no evidence one way or the other in that respect. In any event, SSDS had standard, printed forms for job applicants to complete which required concise answers to specific questions. Similarly, United printed details about the SSDS presentations in the monthly staff newsletter, which was attached to payslips and circulated in communications to supervisors. The newsletter had, since at least December 2004, contained a segment titled "Tender Update" informing employees of developments. These communications may well have been a primary source of information about details for the SSDS presentations. SSDS itself subsequently issued various materials to employees who attended the presentations, such as a list of vacancies and a leaflet titled "Sydney West South Vacancies - Things to Remember!"

77 United employees also helped set-up the venue for the SSDS presentations, which would have assisted SSDS in relation to giving its presentations, but it is difficult to see how this courtesy to SSDS could be construed as obtaining alternative employment for the employees. For instance, if a contractor had helped set-up the venue, could this be viewed as obtaining employment? Although United offered to follow-up on why some employees had not responded to SSDS's offers of employment, those employees, self-evidently, already had obtained job offers from SSDS. United provided an atmosphere conducive to job applications by asking its supervisors to encourage employees to attend the SSDS presentations and to apply for jobs; and also encouraged employees to keep trying to telephone SSDS if they could not get through the first time, reminding employees there were 300 people competing for jobs.

78 Paid leave: United granted paid leave to attend SSDS presentations in early August and SSDS interviews later that same month (and made similar arrangements for another company named Skilled Engineering). However, the significance of such paid leave is very much diminished as granting such leave would be within the spirit of or, depending on the timing of the absence, the letter of the award.

79 Clause 34(v)(c)(1) of the award provides that employees shall be allowed up to one day's paid leave during each week of notice, to a maximum of five weeks, for the purpose of seeking other employment. Hence, the employees would have had a minimum entitlement of five full days' paid leave to seek alternative employment during the notice period. On the evidence, the SSDS presentations lasted about one hour and the interviews much less than that. Most or all the paid absences for the SSDS presentations and interviews would have pre-dated the commencement of the notice period, but there is no evidence any of the employees applied for the five days' paid job-seeking leave entitlement during the notice period. Thus, assuming United granted paid leave before the notice period had commenced to attend a one-hour presentation (plus travelling time) and a ten-minute interview, then, equally, it must be noted the employees did not claim the other five full days' paid job-seeking leave. The granting of early paid leave was consistent with the general intention of the award and, by happenstance, probably resulted in a financial windfall for United. That is, by 2 September 2005, the employees knew they had job offers from SSDS and did not, therefore, access the full suite of paid job-seeking leave entitlements during the notice period otherwise available under cl34(v)(c)(1) of the award.

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.

81 Despite the submissions of Mr Gardner, I do not consider United was a strong moving force of action, rather than just being facilitative. United did not cause the employment to become available and nor was it a strong moving force in the creation of the employment, in the sense considered in Derole. The evidence just does not support a conclusion United obtained the employment for the employees. It was clear from the outset SSDS would have alternative employment available from October 2005, subject to a competitive selection process in accordance with the recruitment programme SSDS tabled at the first Transition-Out meeting. United did not obtain that available alternative employment for the employees; the work was potentially available on competitive application and the employees personally obtained the jobs: Australian Workers' Union v Great Lakes Community Resources t/as Resource Recovery [2004] NSW IRComm 327.

82 SSDS publicly acknowledged the assistance Mr Salouros had provided in the transitional process, noting his assistance had made that process easy to manage. There can be no doubt this was the case but, to reiterate, the matter under consideration has the narrower focus of whether United's actions obtained suitable alternative employment so as to justify a departure from the scale of severance payments. The actions of United, while certainly cooperative, could not be said to have obtained the employment for the employees, even applying the "lesser meaning" considered in Derole. It may be noted that SSDS has not, apparently, reciprocated the courtesies it was extended by United. Mr Gardner submitted the reason there were gaps in some of the evidence was because of difficulties in obtaining information from SSDS for the purpose of these proceedings.

83 United, the applicant for the order under cl34(v)(c) of the award, has not established it "obtained" employment with SSDS for the employees. As the condition-precedent to the making of an order has not been met, there is no basis on which to further consider whether United should be granted an order relieving it, in whole or in part, of the award-based requirement to make redundancy payments. It is unnecessary, therefore, to consider the line of decisions referred to by Mr Gardner on the suitability of the alternative positions and the submissions of Mr Joseph on why the positions were not relevantly suitable. As Mr Joseph submitted, United did not get over the "first hurdle" in the award of establishing that it obtained employment for the employees.

84 By extension, there is no utility in considering the line of decisions discussed by Mr Gardner and Mr Joseph concerning the purpose of redundancy payments and discretionary considerations as to the level of payments - because the evidence did not demonstrate a basis to make an order under cl34(v)(c) of the award which differs from the scale entitlements. Unlike the award application proceedings in the GCS case where Schmidt J determined to award redundancy payments that were less than the standard provisions that may otherwise have applied to the employees in question, the Commission in these proceedings does not have the power at large to determine the scale of entitlements that should be awarded to the employees. The scale of entitlements is already a fixture of the award. Assuming redundancies were involved, the ability to order a departure from the award's scale arises only on satisfying the prerequisite for, the portal to, an order under cl34(v)(c).

85 As such, the second aspect of United's claim for relief fails. I should say, however, if discretionary considerations had come into play, it is clear the employees have suffered a detriment as a result of the loss of a range of service-related conditions and non-transferable credits, as outlined earlier in this decision, and should be compensated. This would be the case even if the Agreement had been accepted by, or applied to, all the employees.

86 The evidence concerning Ms Lythall falls into a category different from the other employees. As with all the other employees, Ms Lythall was advised in a letter dated 25 August 2005 that the LMA contract would finish on 30 September 2005, and her notice period would commence on 26 August 2005. Around this time, Ms Lythall made an expression of interest for ongoing employment with United as a customer service officer at the Area Clothing Store. On 23 September 2005, Mr Salouros advised Ms Lythall her expression of interest had been successful. Ms Lythall responded affirmatively to the advice. As such, Mr Salouros prepared a draft letter on 23 September 2005 to revoke the notice letter dated 25 August 2005.

87 Ms Lythall subsequently had misgivings about continuing to work for United. First, on 23 September 2005 she had received a late job offer directly from SSDS; second, the job with United was expected to continue only until February 2006. On 26 September 2005, Ms Lythall telephoned Ms Cook to advise she intended to accept a position with SSDS and inquire whether she needed to submit a resignation letter. Ms Cook replied a resignation letter was not necessary as she had not issued a letter revoking the termination notice dated 25 August 2005. However, other United staff later contacted Ms Lythall to inform her the advice from Ms Cook was incorrect and a resignation letter was required.

88 On 29 September 2005, Mr Salouros personally handed Ms Lythall a letter, which bore an earlier date of 23 September 2005. The letter read: Dear Kalinda

As you are aware United KFPW recently requested expressions of interest from interested personnel to continue in employment with the company in a variety of roles.

As a result of your expression of interest and continuing employment opportunity I am now advising that your Issue of Notice presented on 25 August 2005 is now revoked and you are to continue employment with the company until otherwise advised.

If there are any questions then please do not hesitate to contact me.

89 Later that day, Ms Lythall went to Mr Salouros's office, accompanied by her fiancé. Ms Lythall asked why she had been given the letter. Mr Salouros replied: I offered you a job and you verbally accepted it. Since you have taken up a job with Serco you need to submit a resignation letter.

90 Ms Lythall deposed she thought it was "ridiculous" she should be expected to submit a resignation letter. There was no further communication between Ms Lythall and United. Ms Lythall did not put in a resignation letter. She began working for her new employer, SSDS, on 4 October 2005.

91 I do not consider it was necessary for Ms Lythall to submit a resignation letter; she had been given notice of termination in relation to her former position and had not actually commenced in the position that had been offered to her. At best, Ms Lythall might have been asked to confirm she did not want to take-up the offer of the new position, but even this would have been in circumstances where she did not herself have anything in writing either confirming the offer or employment or waiving any need to submit a resignation letter. Looked at another way, Ms Lythall could hardly be asked to effect a written resignation from a job she had not yet started and in circumstances where she had nothing in writing from United concerning the job offer.

92 The evidence concerning Ms Lythall is different from the common elements of the other employees' circumstances. I would conclude Ms Lythall's former position with United as a storesperson in the Area Clothing Store became redundant on 30 September 2005. Before a retrenchment eventuated in connection with the redundancy of Ms Lythall's position as a storeperson, there was offer and acceptance of the new position at United as a customer service officer in the Area Clothing Store. Ms Lythall subsequently decided to reject the offer of alternative employment with United, preferring instead to accept SSDS's offer.

93 In a letter dated 6 October 2005, United advised Ms Lythall that a redundancy payment would not be made. The letter read: CESSATION OF EMPLOYMENT Dear Kalinda

I am writing to advise you that despite our offer of continuing employment with United KFPW you have elected to commence employment with Serco Sodexho Defence Services from Tuesday 4 October 2005.

As a result of your decision I wish to advise you that all your outstanding wages and entitlement to annual leave has been paid into your nominated bank account. I also wish to advise you that as you have rejected our offer of continuing employment you are not eligible for severance payment. …

94 It appears the job offered to Ms Lythall would have been "suitable alternative employment". That is, the only evidence as to why Ms Lythall rejected the alternative employment with United was her concern about the short duration of the alternative job with United and because the SSDS position had some expectation of greater longevity. However, if Ms Lythall had taken the alternative position with United she may have been given further offers of employment by United. In the absence of any such offers, Ms Lythall would, presumably, have had an entitlement to a redundancy payment if she had been retrenched by United around February 2006. There was no evidence to indicate the alternative position had inferior pay or conditions, or that there were any other reasons which would have rendered it objectively unsuitable.

95 Ms Lythall ultimately rejected the alternative position at United in favour of the SSDS position, but the fact she rejected the position does not negate the making of an order under cl34(v)(c) of the award (see Re Clerks (State) Award and Other Awards (1987) 21 IR 29 at 49, 50 where the Commission in Court Session indicated there is a positive obligation on employees not to unreasonably refuse to accept a transfer, reclassification or relocation). I am satisfied United obtained suitable alternative employment within its own operations for Ms Lythall as a customer service officer and should, therefore, have an order in its favour relieving it of the obligation requiring any redundancy payment. I should note, for completeness, that for the reasons common to the other affected employees, United cannot be said otherwise to have obtained for Ms Lythall suitable alternative employment with SSDS. Indeed, United's actions were ultimately anything but facilitating in relation to Ms Lythall moving into another job with SSDS.

96 The third area of United's contentions in opposing redundancy payments raises questions concerning continuity of service and transfer of business. Mr Gardner submitted the requests made by the eligible employees for payment of pro rata LSL ran contrary to the Long Service Leave Act; the purported employees' requests and agreement by United concerning payment of pro rata LSL was, therefore, void and of no effect. United made a similar submission in relation to annual leave under the Annual Holidays Act.

97 Given my earlier conclusions that the terminations of employment amounted to redundancies, I do not consider there was anything legislatively untoward in the payment of accrued annual leave and pro rata LSL, irrespective of whether payment occurred at the desire of United (concerning annual leave) or on the insistence of the employees (concerning pro rata LSL). That then leaves only the question of whether Ch 2 Pt 8 of the Industrial Relations Act was invoked in the circumstances of this case.

98 Mr Gardner submitted that ss101-105 of the Industrial Relations Act applied to the employees and deemed there had been a statutory transfer of business from United to SSDS. As such, the continuity of the employees' contracts of employment was taken not to have been broken by the transfer of business; and the period of service with United was taken to be a period of service with the new employer. The meanings of "transfer of business" and "transferred employee" are defined in the Industrial Relations Act: 101 Definitions (1) In this part: … transfer of business means the transfer, transmission, conveyance, assignment or succession, whether by agreement or by operation of law, of the whole or any part of a business, undertaking or establishment.

transferred employee means a person who becomes an employee of an employer ( the new employer ) as a result of the transfer of business to that employer from another employer ( the former employer ) …

99 Whether one employer is a transmittee is a mixed question of fact and law, and "business" is a word that may have application in a wide variety of different circumstances. The Full Commission in Re Government Cleaning Service (Privatisation) Award (No 3) considered the provisions of the Industrial Relations Act 1991 which preceded s101 of the present Industrial Relations Act concerning transfer of business (the old and present transfer provisions are relevantly identical), and concluded (at 378): On changeover day, 18 January 1994, all the contracts of employment of the GCS [Government Cleaning Service] employees were terminated; accrued long leave and other entitlements were paid and those who chose to accept the new positions entered into new contracts of employment with the respective contractors. The GCS relied on the transactions before [Schmidt J], and again on appeal, as demonstrating that a transfer of business had occurred in the terms of s86 of the [Industrial Relations Act 1991], as follows:

Division 6 - Protection of accrued entitlements on transfer of business

The transactions were variously described as transmission of a business, sale of businesses and as the privatisation of government enterprises. We do not regard the determination of the correct or appropriate characterisation of the GCS transactions as necessary for the determination of the appeal, notwithstanding the considerable time occupied both at first instance and on appeal with that question.

We particularly note, as pointed out by both senior counsel for thye respondents, that the successful tenderers were to have no right to transfer the "business" (or to dispose of it) without the permission of the Department and that whatever was acquired by them terminated at the end of the contract period of three years or at the end of the extra period of two years if the Department chose to extend it. The tender documents, and the various announcements made about the disposal of the GCS, referred continuously to the transactions in terms of the sale of the "business" of the GCS, but as was explained by Humpty Dumpty in Through the Looking Glass, words can be made to mean what the user chooses. The range of classes of reference which the word "business" might have attached to it by entrepreneurs is, no doubt, large; we have however, serious doubts whether the term "sale of business" as it is normally used was one which could be applied to the di9-sposal of the GCS in the manner described in this case. We think, whatever the parties choose to call the transactions, the reality was that they had more of the characteristics of the familiar tender process, that is calling for the performance of cleaning by contract rather than the sale of a business as a going concern.

In so far as the appellant relied upon an argument that her Honour had made a finding that the circumstances gave rise to a redundancy, we are of the view the circumstances clearly fell within the usual concept of redundancy and thus no error has been demonstrated.

100 The Full Commission did not consider that circumstances akin to "a familiar tender process" amounted to a transfer of business as contemplated in the Industrial Relations Act 1991, the Employment Protection Regulation and the Long Service Leave Act. Similarly, I do not consider the tendering in this matter relevantly amounted to a transfer of business, notwithstanding the submission by Mr Gardner that the transfer of business provisions in the Industrial Relations Act are "much wider" than federal transmission provisions. Support for this conclusion may be drawn from the decision of the High Court in Gribbles Radiology Pty Ltd v Health Services Union of Australia (2005) 214 ALR 24 (see also the earlier decision of the Court in PP Consultants Pty Ltd v Finance Sector Union [2000] HCA 59; (2005) 214 ALR 24). The facts in Gribbles, as recounted in the decision of Kirby J, are not dissimilar to those in this matter albeit a different statutory scheme concerning transmission was under consideration. Those facts were that: [58] At the address of Southern Radiology in Moorabin was an integrated facility operated by Heritage Clinic, the trade name for a number of such facilities operated by Region Dell Pty Ltd …

[61] On 31 August 1997, Southern Radiology ceased to provide radiographic services in the Moorabin clinic. The next day, 1 September 1997, MGID began providing such services in the same facility in the clinic. On 1 September 1999, MGID ceased business at the Moorabin clinic. It was at that stage that Gribbles, another provider of radiology services, took over at the Moorabin facility. Gribbles was not named as a respondent to the award. It was a business in competition with MGID.

[62] Being aware of the approaching termination of the contract with MDIG, Region Dell took steps to facilitate the employment of MGID's radiographers by Gribbles. On 20 July 1999, Region Dell wrote to the MGID employees and invited them to send their details of their qualifications and current registration to Gribbles. It advised them that Gribbles would contact them to discuss working conditions and offers of employment. Gribbles duly contacted MDIG and asked for permission to approach its staff for the purpose of employing them. MDIG agreed and, by inference, provided Gribbles with the relevant contacts. Telephone conversations ensued in which Gribbles explored offers of employment with the MDIG radiographers. On 20 August 1999, Gribbles wrote to the MDIG radiographers formally offering them part-time employment on the same rostered shifts as they had worked for MDIG …. [63] The changeover from MDIG to Gribbles was uneventful. Signage in some public areas of the Moorabin clinic was unaltered. However, otherwise the business was conducted by Gribbles at the Moorabin clinic in the same way as MGID, using the same equipment and furniture as supplied by Region Dell. The nine radiographers performed the same duties. ….

101 In finding that the employees were not entitled to severance payments which would have counted their combined service with the successive employers, Gleeson CJ, Haynes and Heydon JJ) said this at [20]: The "business" must be the business of the person identified in the succession provision. It is that "business" which provides the essential link … Demonstrating no more than that the two employers engage in identical business activities does not establish that link. It does not do so because it fails to address an important element of what we have identified as a compound conception. It fails to consider whether the "business" to or of which the new employer is a successor, assignee or transmittee, was the business of the employer who was a party to the relevant industrial dispute.

102 The Court stated at [22]-[23] the business of an employer must be understood as a compound conception and cannot be understood as a reference to no more than a kind of business activity, noting there can be no assignment or transmission of a kind of business activity; there can only be an assignment or transmission of the whole or a part of a particular business. Mr Gardner submitted it cannot be assumed that the transfer of business provisions in the Industrial Relations Act are limited to circumstances such as a sale of a business; the provisions are broad enough to apply where there is a succession in law of the business - relevantly, in this case, the contract for the provision of outsourced services to the Department by United and then by SSDS. He submitted there had been a statutory transfer here and the only thing that has changed is the identity of the employees' employer. Although Mr Gardner submitted Gribbles was of little assistance, given the different statutory schemes, I think Mr Joseph's submissions on the relevance of the decision in this matter may be accepted.

103 I accept that the provisions of Ch 2 Pt 8 of the Industrial Relations Act are cast broadly and would not be limited only to a transfer by sale; the definitions in s101(1) make that clear. I also note that the meaning of "transfer of business" is chameleon-like and needs to be sufficiently flexible to achieve the statutory intention of giving anti-avoidance protections. Despite the breadth of the provisions of Ch 2 Pt 8, SSDS was not, in my opinion, a transmitee of any part of the business of United even though the activities conducted by United and SSDS at the LMA for the Department were the same or similar. There was a competitive tendering process for the work at the LMA. United did not transfer its business as it had no business at the LMA, as such, which it had the ability to transmit; it had "lost" the business. All that happened was that successive arrangements were made by entirely unrelated commercial competitors to employ the employees at the LMA site. The Department and SSDS entered into their own separate contract. Mr Joseph's submissions may be accepted that no evidence was led by United to support its contention there was a transfer of business.

104 Furthermore, the employees of SSDS did not become employees of SSDS "as a result" of any transfer of business from United to SSDS, using the words in s101(1) of the Industrial Relations Act. The employees became employees of SSDS through a competitive selection process for employment, resulting in individual offers and acceptances of new contracts of employment under AWAs.

105 If, however, my conclusions are wrong and there was a statutory transfer of business, then the employees' service between United and SSDS would have been continuous. Questions would arise in relation to the intent of the Agreement made between United and SSDS, and whether it was designed to avoid employee entitlements. The corollary to a scenario involving a statutory transfer of business would be that SSDS inherited all the service the employees accrued during their employment with United for all purposes. As Mr Joseph submitted, the effect of acceptance of this submission is that SSDS would now be obliged to "pick up the slack, as it were" - and in circumstances where there have been no financial adjustments between the two companies other than those that may have applied under the Agreement. Section 104 of the Industrial Relations Act would operate to prevent a double entitlement in relation to payments, but service would continue to re-accrue from October 2005 as if it had not been broken. Mr North, for instance, would have carried-over fifteen days of sick leave credits. All the service for LSL credits, such as Ms Lythall's service credits, would have been carried over. If SSDS were to retrench the employees in future, the scale of redundancy payments would be based on the employees' combined periods of service with United and SSDS.

106 A further corollary to acceptance of United's submissions is that issues potentially may arise in relation to the certification provisions of s127 of the Industrial Relations Act (Liability of principal contractor for remuneration payable to employees of subcontractor). Section 127 provides that a principal contractor (in this case the Department) is liable for the payment of any remuneration unless the principal contractor has a written statement from the subcontractor (in this case United) that all remuneration has been paid. The principal contractor may withhold payment to the subcontractor until the statement is provided. Moreover, a subcontractor who gives a principal contractor a statement knowing it to be false is guilty of an offence. Of course, I do not have proceedings concerning s127 before me and, for reasons which are unnecessary to elaborate, there is, in any event, nothing before the Commission as to whether United has provided the written statement to the Department.

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.

108 I do not consider it is necessary to consider any further the potential implications of whether there a statutory transfer of business, given my conclusion a transfer was not involved in the circumstances of this matter. If I had been inclined to accept the submissions of United in relation to statutory transfer of business, I would, as noted in the proceedings, have caused notification to be provided to SSDS and the Department to allow them an opportunity to be heard. Given my rejection of this third aspect of United's submissions, I do not consider it is necessary to take that step.

109 United's conduct: Before concluding, there are some matters which should be addressed given they featured in the evidence and submissions. I have dealt with the following matters only because of the sharply contested views in the proceedings about whether United was acting benignly towards its employees or "going behind the employees' backs" to attempt to deprive them of an award-based entitlement while simultaneously claiming United was doing the employees "a favour"; and whether the employees' actions were a perverse rejection of a good deal that had been negotiated for them by United. The motivations of United, the NUW and the employee are, however, irrelevant to the determination of the contested claims except, perhaps, when considered in the context of determining the matter according to equity, good conscience and the substantial merits of the case. The directly relevant considerations are whether there were genuine redundancies, whether suitable alternative employment was obtained by SSDS for the employees, and whether there was statutory transfer of business - and those matters have been considered elsewhere in this decision.

110 Financial considerations: The evidence indicated United was canvassing the transfer of employee entitlements but, initially at least, SSDS had no interest in such proposals. United did not disclose to the employees the course it was advocating to SSDS until a meeting on 14 September 2005, when the Agreement had already been ratified. As United was negotiating on matters which directly affected the employees' entitlements, it properly should have informed the employees, from the outset, of its "attempts to transfer valuable employee entitlements". Specifically, cl 34(ii)(b)(3) of the award provides: Employer's Duty to Discuss Change (1) The employer shall discuss with the employees affected and the union to which they belong, inter alia, the introduction of the changes referred to in paragraph (a) above, the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees, and shall give prompt consideration to matters raised by the employees and/or the union in relation to the changes. (2) The discussion shall commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in Paragraph (a) of this subclause. (3) For the purpose of such discussion, the employer shall provide to the employees concerned and the union to which they belong all relevant information about the changes, including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that any employer shall not be required to disclose confidential information the disclosure of which would adversely affect the employer.

111 Instead of obfuscating the issues surrounding redundancy payments and the Agreement with repeated responses about not being able to advise employees concerning redundancy payment-related matters, a simple and transparent approach would have been for United to give proper, timely advice to the employees. Examples of the advice that relevantly could have, or should have, been conveyed to the employees included: (1) United did not intend to make redundancy payments to employees who secured alternative employment with SSDS; (2) United had discussed the transfer of employees' entitlements at the initial meeting with SSDS, and intended to continue to advocate to SSDS that there should be a transfer of employee entitlements; (3) United considered that acceptance by employees of, or unilateral application by United of, the Agreement would result in a disentitlement to redundancy payment; and (4) United would have to make an application to the Commission for an order to waive or reduce redundancy payments but did not consider it could make an application until it knew which employees had accepted employment with SSDS.

112 It would have been an equally simple and transparent matter to convey this type of advice to the employees by the same means in which United was communicating other matters to employees, e.g., by convening a timely meeting to inform the employees (and to discuss the views of the employees or the NUW, or both, on its intended proposals to SSDS); by printing information in the monthly staff newsletter under the regular heading "Tender Update"; by distributing advice in a letter; or by setting out the information in a memorandum styled "Frequently Asked Questions". The employees would not have considered they were being kept "in the dark" if United had been more forthcoming about its activities and intentions. The employees also would have been better-placed to make informed decisions and choices about employment-related matters. The industrial unrest that occurred in the transition period may be attributed, in part, to the fact United did not adhere to its award-based duty to discuss "the expected effects of the changes on employees and any other matters likely to affect employees".

113 The employees' conduct: There was some inherent criticism of the employees in United's case for failing to disclose to United they had received job offers from SSDS. However, there was no obligation on the employees to volunteer information to United about their future employment intentions. Employees completing a period of notice are not obliged to advise their employer whether they have obtained alternative employment scheduled to commence after the conclusion of the notice period. As Mr Joseph's submissions noted, SSDS was, as it happens, providing United with periodic updates as to who had been offered, and who had accepted, employment - so the information was, in any event, otherwise available to United.

114 The employees' rejection of the Agreement: The employees were aware from Mr Salouros's advice that a rejection of the Agreement meant their employment with SSDS would start at "zero". There was no evidence that United explicitly advised employees that acceptance of alternative employment with SSDS or the application of the Agreement would result in United withholding redundancy payments. It may be inferred, however, the employees were concerned that acceptance of the Agreement may jeopardise the entitlement to redundancy payment. The similarity of the letters the employees sent to United concerning LSL suggests there had been discussion between employees about how to respond to United. For instance, Mr Solomon indicated the employees had "sat down and talked one time along the line about it". It also may be inferred the employees' rejection of the Agreement was motivated in part or in whole by a desire to try to protect a more financially beneficial entitlement to redundancy payment than what was proposed under the Agreement.

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.

. The employees perceived no real benefit in the Agreement as it concerned probationary employment. Those whose evidence dealt with the issue felt confident they would have successfully completed any probationary employment with SSDS. That confidence was well-founded; all the employees continued to be employed after the probationary period and one received a promotion.

. The Agreement would have recognised employment as having commenced from 1 October 2005, irrespective of the official starting date. This provided no benefit to the two employees whose employment was scheduled to start on that date anyway. It provided no tangible benefit to the other four employees because, as discussed earlier in the decision, there is no evidence the Agreement was intended to cover payment for the public holiday Monday and no evidence, otherwise, of payment having been made for the public holiday. But even if it is accepted there was some incidental eligibility to payment for the public holiday under the Agreement, it was one day's pay as against the potential impact on more significant financial entitlements.

116 United's motivations: There were various suggestions in the evidence and the submissions that United's actions concerning SSDS were motivated principally by a desire to assist the employees and that United had the "best intentions of the employees in mind". The evidence does not, however, support a conclusion that United was motivated by some form of corporate altruism for the employees' benefit. While it is true United tried to facilitate the employment of its employees with SSDS, it did so against the background of trying to attain a financial benefit for itself. United hoped or expected, in a corporate sense as demonstrated in the evidence, that alternative employment with SSDS would vitiate redundancy payments and that was the approach United confirmed in its letters to the employees dated 6 October 2005. The Agreement would not have cost anything more for United than it had to pay the employees anyway, except in relation to Mr North, and United anticipated the Agreement could be used as a basis to deny redundancy payments to employees, as highlighted by United's letter dated 6 October 2005.

117 The evidence about United's motivations in this respect is reasonably unambiguous. Mark Cochrane, an official of the NUW, gave evidence as to a discussion with an industrial agent who has acted for United during these proceedings, namely Ross Smith. During that discussion, Mr Smith said to Mr Cochrane: "…We could have some arrangement with people leaving on Friday and starting with [SSDS] on Monday". In emphasising why he did not consider redundancy payments were payable, Mr Smith handed Mr Cochrane a copy of a report about the High Court's decisions in Amcor and Gribbles, stating: "There are two cases and if you read them, you will understand that we have a right to refuse to pay redundancies and we can have an arrangement with [SSDS]". Given this discussion, United presumably had knowledge of, or advice on, the decisions in Amcor and Gribbles. Further, the evidence shows Mr Salouros, for one, was aware of the redundancy provisions of the award.

118 On 22 July 2005, Mr Salouros sought approval to assist employees in CV preparation and interview training. In seeking approval for costs involved, Greg Cox of United informed the Manager of Finance & Administration: … The incoming service provider (Serco) has indicated it will consider our current people to do the work but intends to interview people and make decisions after that. Serco will be looking to ensure they take on only "suitable" candidates. Individuals not selected will be made redundant.

It is in our interests to provide as much support as possible to enhance the prospects of these "candidates" to be positively considered by Serco . …

I understand that this requirement has not been identified until this relatively late stage and therefore is now urgent. On this basis would recommend option 2. In the broad scheme of things the $6000 cost will be easily offset if redundancies are avoided. The opportunity cost of doing nothing or taking a less effective approach would be much greater. [My emphasis]

119 Mr Salouros said he did not view the actions as being a way to avoid paying redundancy payments, but conceded when cross-examined about an email concerning cost-related matters that "there was obviously an interest to have as many people move across". Mr Joseph submitted that United's actions were clearly designed to "obviate" the employees' redundancy payments. The cost/benefit analysis to United was reinforced in an email dated 27 August 2005, where Mr Salouros recommended to Mr Gray: Further to my previous email to you I have completed some further calculations on LSL entitlements and their impact based on our discussions with Serco.

The base LSL liability (5 years plus of service) for payout on termination is in the order of $85k excluding any on costs.

The amended LSL liability based on our discussions with Serco to transfer LSL funds for those personnel who have more than three years and less than 5 years service with us imposes a further $16k excluding on costs.

Total liability for transfer to employees made redundant or gaining employment with Serco is therefore $101k excluding on costs.

Given this net impact of $16k (with on costs) I recommend proceeding further with this approach.

120 There is an available inference United was motivated in its activities concerning facilitating job applications and in making the Agreement by trying to avoid having to pay redundancy payments, just as there is an available inference the employees rejected the Agreement because they were concerned it may jeopardise redundancy payments. United cannot be criticised for attempting to maximise its financial position and use mechanisms properly available to it to seek to protect its corporate funds any more than the employees could be criticised for seeking to maximise their personal financial positions. Equally, United cannot expect its actions concerning SSDS and the employees should be accepted by the Commission as being solely or principally for the benefit of the employees.

121 It is not open to employers unilaterally to determine to withhold from employees award-based redundancy payments, because the award specifies at cl34(v)(i) that the determination of whether payment should be waived or reduced resides only with the Commission. Given that letters were issued by United on 25 August 2005 noting the LMA contract would finish on 30 September 2005 and giving five weeks' notice from 26 August 2006, under cl34 of the award the employees had a presumptive entitlement to payment in connection with their terminations of employment.

122 Despite the employees' presumptive entitlement to redundancy payment, United unilaterally, that is without an order from the Commission, decided to withhold payment. That advice was confirmed in correspondence dated 6 October 2005. The letters sent to the four employees who had asserted their claim to pro rata LSL were relevantly similar and read: Dear [name of employee] I wish to advise you that as you have been successful in obtaining continuing employment with Serco Sodexho Defence Services (SSDS), the new Garrison Support Services contractor performing the same role as United KFPW at the Liverpool Military Area, all your outstanding wages and entitlement to annual leave have been paid into your nominated bank account.

As you are aware United KFPW, through negotiations with SSDS as outlined in my letter to you dated 14 September 2005, was also prepared to transfer your accrued long service leave entitlement to SSDS.

You indicated however, that you desired that your accrued long service leave entitlement be paid out to you rather than be transferred to your continuing employer. Therefore, your accrued long service leave has also been paid into your nominated bank account.

United KFPW has been able to negotiate continuing employment opportunities with SSDS, for which you have accepted employment and therefore a severance payment will not be made.

A statement of service is being dispatched by separate letter.

I thank you for your efforts with us and should you wish to discuss any aspect of this letter could you please contact me on my mobile [number].

Yours Sincerely UNITED KFPW GEORGE SALOUROS Project Manager

123 The letter to Mr North differed, as he had not claimed payment of LSL (because he did not have a statutory entitlement to pro rata LSL). The differing text read: As you are aware your service with United KFPW will be maintained by SSDS along with your balance of accrued LSL being transferred to your new employer as outlined in my letter to you dated 14 September 2005.

124 United's advice in the letter dated 6 October 2005 to the employees that "a severance payment will not be made", confirmed the position that the NUW considered United had adopted since as early as the date of the filing of the dispute notification on 24 August 2005 (e.g. see cl G of the initiating process). I accept Mr Joseph's submission that the award was "engaged" in the circumstances of this matter. At best, United properly could have advised its employees when all termination payments fell due (if not before), that redundancy payments would not be made pending the determination of an application for exemption from payment from the Commission. In conjunction with any such application, money could, for instance, have been held in trust in an interest-bearing account pending final determination of the matter. But even that approach was not adopted; United's application to the Commission for orders pursuant to cl34(v)(c) was not filed until 11 October 2005, thereby post-dating the advice United had already given to employees on 6 October 2005.

125 Mr Gardner submitted United had always taken the position that it was not placed to make a decision about redundancy payments until it received confirmation from SSDS on 6 October 2005 as to who had accepted employment with SSDS. I do not accept United's contentions 11 October 2005 was the earliest date it could have made an application seeking exemption from payment. United has been remiss in failing to adhere to its award-based rights and obligations in a timely way. It had a right to make a timely application concerning exemption from payment; failing such an application, United was obliged to make all payments due on termination of employment. It was not open to United to advise the employees, before it had even made its application under cl34(v)(c) of the award, that redundancy payments would not be made.

126 Redundancy payments under the award, with interest, should be made no later than 21 days from today by United to the employees on whose behalf the NUW has made application in these proceedings, except Ms Lythall.

127 Leave is granted to relist to address the form of orders, should that be necessary.

128 Lastly, I recommend that the parties check the pro rata LSL payments made to the employees involved in these proceedings who were engaged as casuals by United before being made permanent employees. The evidence suggests periods of casual employment may not have been counted even though the Long Service Leave Act gives certain recognition to service as a casual. __________________

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