Notification under section 130 by New South Wales Local Government, Clerical, Administrative, Energy, Airlines & Utilities Union of a dispute with Eraring Energy re entitlements; ; Notification under section 146B by Construction, Forestry, Mining and Energy Union (New South Wales Branch) of a dispute with Eraring Energy re sick leave balance be restored [2015] NSWIRComm 23 - NSWIRComm 2015 case summary

Industrial Relations Commission (NSW)|2015-06-11|Before: Harrison DP, Mr P

Industrial Representatives (Applicants): Mr M Dunstan New South Wales Local Government, Clerical, Administrative, Energy, Airlines & Utilities Union Mr K Endacott Construction, Forestry, Mining and Energy Union (NSW Branch) File Number(s): IRC 92 of 2014; IRC 220 of 2014

JUDGMENT

These matters seek the recognition of sick leave accruals extinguished on conclusion of employment with Pacific Power Residual Business Management Corporation (RBMC) prior to commencement of employment with Eraring Energy.
In Matter No IRC 92 of 2014 the New South Wales Local Government, Clerical, Administrative, Energy, Airlines & Utilities Union (USU) seek an order or recommendation that Eraring Energy recognise and credit 2,292.11 hours of accrued sick leave for Mr Mark Gill.
In Matter No IRC 220 of 2014 the Construction, Forestry, Mining and Energy Union (NSW Branch) (CFMEU) seek recognition and credit of 2,253.45 hours of accrued sick leave for Mr Geoffrey Brands.
The matters come before the Commission as presently constituted in accordance with Clause 3, Grievance and Disputes Procedures of the Eraring Energy Enterprise Agreement 2013 [1] (the Eraring Energy Enterprise Agreement) which nominates at 3.2(g)(ii) the Industrial Relations Commission of New South Wales as the dispute resolution provider.

The Arguments

The argument advanced on behalf of Mr Gill and Mr Brands is that their employment was transferred within State Owned Corporations and as transferees all accruals should have continued; further, that S101 Transmission of Business of the Fair Work Act 2009 (Fair Work Act) applies to the circumstances; and thirdly that upon the general principles of fairness and equity they should be afforded the benefit of sick leave accrual afforded other employees of Eraring Energy who were transferred to Eraring Energy on disaggregation of Pacific Power, in accordance with undertakings by the Government of the day.
The argument against continuation of accruals is that employment was not transferred; does not activate S101 of the Fair Work Act and the applicants have been treated fairly in that both were engaged by Eraring Energy on specific terms set out in letters of offer which they freely accepted as an alternative to redundancy on winding up of their then employer, RBMC.
The Applicants made it clear that there was no reliance on S10 of the Pacific Power Dissolution Act 2003.

Factual Context

Both Mr Gill and Mr Brands were long term employees in the NSW Electricity Generation industry, having commenced employment with the Electricity Commission of New South Wales (Elcom); Mr Gill in 1979 and Mr Brands in 1987.
This employment continued through a process of corporatisation, disaggregation and ultimately privatisation.
In 1991 Elcom became Pacific Power (a State Owned Corporation). In 1995 Pacific Power was disaggregated into TransGrid, Delta Electricity and Macquarie Generation; leaving only Eraring Power Station, a coal mining operation, hydro and wind assets, and some engineering consulting services within Pacific Power.
In 2000 Eraring Power Station, hydro and wind assets were separated from Pacific Power to form Eraring Energy. The coal mining operation was sold off and the remainder of Pacific Power operated as Pacific Power International (PPI), undertaking engineering consulting services. In 2003 PPI was sold and Pacific Power closed.
Eraring Energy was sold to Origin Energy in 2013. The events predate the acquisition of Eraring Energy by Origin Energy, however, Origin Energy Eraring Pty Limited, as it is now known, having acquired all the assets and liabilities of Eraring Energy, is the appropriate respondent in these matters.
The process of disaggregation and sale involved a transmission of business which included assets and employees and was attended by a series of voluntary redundancy programs which saw significant reduction in employment as well as transfer of employees within the business units to the new entities.
Both Mr Gill and Mr Brand were unsuccessful in applications for employment in the operating business and chose not to take voluntary redundancy, thus finding themselves, amongst others, employees of RBMC from 2003.
The creation and purpose of RBMC was described by the then Treasurer of New South Wales, Mr Michael Egan, in his Second Reading Speech to the Pacific Power (Dissolution) Bill on 9 July 2003, wherein he said: The closure of Pacific Power is both appropriate, as it no longer has any ongoing activities, and necessary, as the infrastructure established to support an entity that previously employed thousands of staff and was responsible for the entire State's generation and high voltage transmission systems is not suitable for the efficient wind-down of remaining residual activities. Accordingly, the Bill formally dissolves Pacific Power on 1 July 2003. However, Pacific Power holds some residual assets and liabilities that need to be managed and efficiently wound up following Pacific Power's dissolution. For this purpose, the Bill establishes a successor entity called the "Residual Business Management Corporation". This Corporation will be the statutory body managed by a General Manager with reporting and accountability lines to the responsible Minister, which in this case is myself. The structure of the Corporation is designed to reflect the nature of the Corporation as a vehicle for wind-up activities. The Corporation has no role in undertaking new business activities. Its objectives and functions as embodied in the Bill, are to efficiently, effectively, and responsibly manage and wind-up residual assets, rights and liabilities in a timely manner. The activities of the Corporation will be monitored through an annual business plan, which will be required to submit to the Minister. The Corporation will succeed Pacific Power as the employer of Pacific Power employees. This is one of the most significant aspects of this Bill for employees. It ensures they remain on their existing terms of employment with no loss or change to their entitlements including superannuation, annual and long service leave, and sick leave. The existing voluntary redundancy offer and other key employee arrangements contained in a Memorandum of Understanding applying to Pacific Power employees will also continue to apply to the employees and the Corporation. [emphasis added]
The Memorandum of Understanding (MOU) referred to by the Treasurer was not the one subsequently sought to be registered by Unions NSW. The evidence of Mr Moriarty [2] states: … … Mr Gill suggests that he was transferred from RBMC to Eraring Energy and that he is entitled to the benefits of the memorandum dated 24 October 1995. … the memorandum only applied to the restructuring in 1995 and 1996 and not to any restructuring in 2003 or 2005.
The MOU referred to in the Second Reading Speech was subject to consideration in the RBMC pay case [3] by the Commission as presently constituted; and subsequent appeal proceedings [4] leaving open the conclusion that it was in fact a memorandum of misunderstanding.
The ultimate closure of RBMC was attended by a number of proceedings before this Commission [5] ; and intense negotiations between Unions NSW, the peak industrial council, power generation unions, and the NSW Government.
Those negotiations included an attempt to develop a further MOU. A Draft MOU from Unions NSW proposed [6] : 1. The maximisation of redeployment opportunities in the electricity industry through the expansion of the vacancy notification scheme to include the distributors and the introduction of a mix 'n' match scheme and the transfer of those staff in CCES and WEST and other staff currently employed by the generators. Further that where a group of employees can be transferred to another electricity entity and they wish to do so then that should occur. 2. Employees who transfer to SOC's transfer all entitlements including all of their sick leave. 3. The period of availability of the Pacific Power package for members redeploying be extended beyond 12 months provided the relevant criteria is being met. (That being the same criteria as for salary maintenance.) 4. Those employees who are seeking voluntary redundancy have their applications dealt with expeditiously upon the sale of PPI and the closure of Pacific Power. 5. The Treasurer to honour all commitments with regard to employee entitlements given at the time of desegregation in 1996. 6. The MOU to be legally enforceable.
The MOU was never agreed. The mix and match proposal in point 1 was taken up and applied. The proposition in point 2 as to sick leave was specifically and strongly rejected as it is in these proceedings.
Also on 31 March 2005 his Honour Staff J published a Judgment [7] in which he set out the salient facts, describing the gradual movement in Government Policy from no forced redundancies consistently stated as a commitment by the Carr Government and referred to by his Honour in the following terms [8] : Mr P Ginters of counsel, who appears for the Public Employment Office and RBMC, relies on a letter from the Special Minister of State and Minister for Industrial Relations dated 20 March 2003, which in part reads: "The Carr Government remains committed to the general principle of no forced redundancies. We will continue to consult and work with the Labor Council of New South Wales to ensure that all affected employees are offered redeployment opportunities. As over the last eight years, redundancy will always be the last and unavoidable resort. Mr Ginters has emphasised the words in the last paragraph. He also relies on the statement of the then Treasurer of New South Wales when delivering the mini budget on 6 April 2004. After outlining a package of new measures that would enable New South Wales to deal responsibly with the financial pressures imposed upon it, the Treasurer said: "The Government wrote to the Labor Council before the last election to make clear that forced redundancies would only be used as the last and unavoidable resort."
His Honour noted that the circumstances then present had reached the point of last resort and that forced redundancies were imminent, concluding: I understand that there is an issue of principle at stake here, insofar as Unions New South Wales and the individual unions are concerned. However, the Government's policy of no forced redundancies has to be considered in light of the steps that employees take to place themselves in the best possible position to obtain alternative employment. Employees should avail themselves of offers of retraining and think carefully about offers of alternative positions and including involving themselves in the mix and match process before such offers are rejected.
The issues in respect to Mr Gill were reported to his Honour Staff J on 31 March 2005. Transcript of proceedings on that day records Mr Thistlethwaite for the NSW Labour Council, as it then was, reporting: Thistlethwaite: I can give a brief report on the developments over the last 24 hours and then I will ask Mr Kruse to address on the remaining issues between the parties. Since the matter was last before the Commission there has been some development by way of offers of redeployment for a number of the individuals in various corporations throughout the public sector. If I can go through the individuals that are remaining: Mr Mark Gill - Mr Mark Gill has been offered and has accepted a position with Eraring Energy.
Mr Thistlethwaite then advanced concerns in respect to a number of other individuals, some of which were resolved by redeployment or redundancy, and some unresolved at that point in time.
The outcome of negotiations for Messrs Gill and Brand was employment with Eraring Energy on specific terms.
The Letter of Offer to Mr Gill states [9] : Dear Mr Gill, Employment with Eraring Energy and Secondment to Connell Wagner We refer to our recent discussions in relation to your secondment to Connell Wagner. As discussed, your employment will be transferred from Residual Business Management Corporation ('RBMC') to Eraring Energy on 1 April 2005. During your employment with Eraring Energy, you will be on permanent secondment to Connell Wagner. This offer becomes effective when arrangements with Connell Wagner are finalised. Transfer from RBMC We confirm that your employment will transfer from RBMC to Eraring Energy from 1 April 2005. During your employment with Eraring Energy: • your pay and conditions will be subject to the Eraring Energy Employee Consent Award 2004, being Salary Point 27 (Base $1,357.20 +Loc Allow $53.90 = $1,410.90 per week) • your accrued annual leave, long service leave and eighteen (18) days sick leave will transfer with your employment to Eraring Energy; • your current superannuation will continue and the costs will be met by Eraring Energy. … … Your salary and all other employment related benefits will continue to be paid for by Eraring Energy under the terms of the Eraring Energy Employee Consent Award. Your remuneration reviews will continue to be conducted by Eraring Energy. During your secondment. you will be under the supervision of Connell Wagner, and as such any performance related issues will be addressed by Connell Wagner and Eraring Energy jointly. Notwithstanding this secondment arrangement you will be eligible to apply for Eraring Energy internally advertised positions under merit selection procedures. Salary Review A review of your position description and job evaluation will commence no later than six months following your appointment to Eraring Energy.
Mr Gill accepted the offer of employment and secondment by correspondence [10] in the following terms: Thank you for your letter of 31st March, in which you confirmed the offer of transfer to Eraring Energy, Eraring Power Station and Secondment to Connell Wagner resulting from discussion with yourself, PEO and Minister Michael Costa. I note that the offer refers to Salary Point 27 of the Eraring Employees Consent Award which accords with your oral advice that it is made on the basis of equating [as nearly as possible] with my current salary at RBMC. As discussed, that salary is now the subject of an interim order by the NSW Industrial Relations Commission, which could result in increasing my existing salary beyond its current level, and therefore beyond SP 27 in the Eraring Award. I also note your advice that the position is effectively not evaluated even though my current RBMC rate is SP32 as defined by Job Evaluation in 2004 and will be expected to work at this level at Connell Wagner. I would anticipate that there would be scope to reassess the value of the position within a six month period of time, in accordance with normal job evaluation methodology and depending on the outcome of IRC04/6483. In proceedings in the IRC 31/3/05 and discussions with the PEO this was detailed and consistent with the acceptance of position as discussed with the Minister and yourself for staff that have been employed from RBMC. I have included my understanding of these discussions and offers made to clarify my acceptance of those terms in Attachment 1 to this document. On the basis of the foregoing statement, I accept the offer on the understanding that the salary will be the subject of: 1. a review to reflect the finalisation of the RBMC Salary Award 2. a formal evaluation of the duties and responsibilities of the position within 6 months of my appointment. I would also express my appreciation to Eraring Energy for the favourable consideration of my appointment. Yours faithfully, Mark Gill Attachment 1 Clarification of Acceptance of Transfer Transfer of Leave On the 31/4/05 Minister Costa indicated that all my leave entitlements including annual, sick and long service leave would transfer, Eraring Energy have excluded my accumulated sick leave liability and have been funded for 18 days by RBMC and included the 18 days in the transfer offer. After further discussions the Minister agreed that unions would pursue the recognition of the accumulated sick leave entitlement for RBMC employees with the individual State Owned Corporations (SOC). Connell Wagner I was under pressure and coercion to avoid a state wide industrial conflict by being offered a transfer to Eraring Energy and appointed to Eraring Power Station but on permanent secondment to Connell Wagner a private company. I disagreed in the discussions of the notion of permanent secondment as it was contrary to the arrangement that had taken place previously on all my secondment work. I am the only employee out of all the RBMC employees that has been employed by SOC's that this arrangement applies to. Contrary to the submission of the Public Employment Office (PEO) in private conference in IRC proceedings on the 30/3/05 and private discussions (which I or the unions were not part of) held between Eraring Energy, Delta Electricity, Connell Wagner and the Premiers department, I restate have never been offered a position with Connell Wagner in this process and have made it abundantly clear my preference had not changed since February 2003. In regard to the details of the terms of employment with Connell Wagner and Eraring Energy including the commercial arrangements I understood from the Minister I would be involved and fully aware of those arrangements and asked Michael Gadiel to facilitate this process. I also understand that if the agreement is terminated or Connell Wagner fails to operate or operate as it currently does I would revert to employment at Eraring Power Station. This would also be terminated on appointment to a position at Eraring Power Station. I understand the work will be from time to time be in NSW only in the power industry and but mainly on the central coast Lake Macquarie Newcastle area similar to other Eraring Energy employees. It is noted this arrangement is unique and falls outside the public sector guidelines. Refer public sector handbook Section 3. Recent Award Increase March 2005 In March 2005 employees at Eraring Energy including three former RBMC employees received a 4.5% increase. Later in the same month myself and another RBMC employee were appointed/transferred and have been excluded from this increase. The discussion with Mr Peter Jackson and Mr Shaun Edwards indicated we would have the same deal as those previous staff from RBMC. Consideration should be given to this consistent with DP Harrison extempore judgement IRC04/6483 where he indicated 'I believe it is appropriate to maintain parity with Eraring Energy'. RBMC Pay Case Outcome My comments on the first draft of the offer indicated I would not be prejudiced by signing the offer of employment from the outcome of the current pay dispute IRC04/6483 (now subject to appeal) this is inherent in the letter of Acceptance of Transfer. The outcome of this process may negate the need to job evaluate given recognition of my current salary at SP 32 in a range 30 to 34. This is not about job value or job evaluation but the difference between award increases received by Eraring Energy, Transgrid, Delta Electricity and Macquarie Generation and those not received by RBMC who have contributed to the structural reforms, competition policy, performance of the industry as a whole and returns to the shareholders. This is evident in August 2000 when Eraring Energy was created as a SOC underpinning this process was the guarantees of the Treasurer Hon Michael Egan made to all employees. You have effectively reduced my salary by 5 salary points and expect me to work for Connell Wagner at SP27 not SP32 this is a disincentive to good professional practice and causes further barriers to the competent performance of my duties.
The evidence of Mr Brands is that he commenced employment with the Electricity Commission in 1987, then moved to Pacific Power in 1995, and was subject to the restructure of the industry throughout the late 1990's and early 2000's as discussed above in respect to Mr Gill.
In 2003 Mr Brands became an employee of RBMC, where he remained until accepting employment with Eraring Energy.
During this time Mr Brands was provided with assistance to obtain employment in the Electricity Industry and undertook studies at Newcastle University.
In November 2004 he was unsuccessful in the mix and match process for a senior management support position at Eraring Power Station. Mr Brands ultimately accepted employment at Eraring on 22 March 2005.
The offer of employment to Mr Brands was set out in a Letter of Offer [11] which includes the following condition: "appointment and service will be subject to all relevant Acts, regulations and by-laws. This includes the Code of Conduct, rules, elections and orders issued by or on behalf of Eraring Energy from time to time relating to the employment or service of employees of Eraring Energy"
The employment required a pre-employment medical and commenced with a period of three months probation prior to being formally confirmed.
Mr Brands' letter of acceptance [12] took up the offer of employment subject to the finalisation of a review of salary at RBMC, then subject to separate proceedings [13] , and noted that the position was effectively new and that a formal evaluation of the duties and responsibilities occur within 12 months in accordance with formal job evaluation methodology.
Both the Letter of Offer and acceptance are silent in respect to agreed entitlements and for the present purposes say nothing about sick leave.
The offers of employment afforded each applicant 18 days entitlement to sick leave on commencement with Eraring and the benefit of the Eraring Energy Enterprise Agreement [14] which, at Section 4, Leave and Holidays, Clause 20, Personal/Carer's Leave and Accident Pay sets out entitlement to personal/carers leave and accident pay in the following terms: Amount of personal leave 20.4 (a) The amount of personal leave with pay which may be granted will be ascertained by crediting each employee with the following periods: Leave on full pay Upon completion of three months' service 126 hours Upon completion of 12 months' service 126 hours Upon completion of each additional12 months' service 126 hours These periods are cumulative. In crediting the above amounts after the completion of each year of service, the minimum requirements of the National Employment Standards, will be taken into account. (b) Employees may apply to be paid personal leave at half pay for exceptional circumstances. (c) All employees transferred to Eraring Energy under the provisions of the Energy Services Corporations Act 1995, retain their personal leave credits they had at the date of transfer. … … 20.7 The maximum period of continuous paid personal leave is ordinarily 52 weeks. 20.8 Eraring Energy may approve additional personal leave with pay if: (a) The employee still has personal leave with pay outstanding after 52 weeks; or (b) All personal leave with pay has been exhausted but Eraring Energy considers exceptional circumstances exist, such as the employees' length of service, matters arising from domestic violence situations or an injury sustained during travel between their residence and the workplace; or (c) An employee is unfit for work due to a compensable incident; where Eraring Energy successfully reclaims the value of this leave from a third party. The amount of the reimbursement will be re-credited to the employee in their personal leave entitlement
Mr Gotting noted that as of 5 June 2015 Mr Gill had an accrued sick leave entitlement of 567.7 hours [15] ; Mr Brands had an accrued sick leave entitlement of 616.9 hours [16] ; and that both have access to the provisions of cl 20.8(b) in the event that current and future accruals prove inadequate.

Transfer of Employment

Mr Gotting submitted that [17] : Although the offers of employment from Eraring Energy to Mr Gill and Mr Brands in March 2005 refer to a "transfer" of employment, as a matter of law an employer cannot "transfer" employment unilaterally (see Nokes v Doncaster Amalgamated Collieries Limited [1940] AC 1014 at 1020 per Lord Simon, at 1026 per Lord Atkin; McCluskey v Karagiozis [2002] FCA 1137; (2002) 120 IR 147 at [11]-[13] per Merkel J; Cohen v iSoft Group Pty Limited [2012] FCA 1071 at [108]-[109] per Flick J (not affected by appeal) [2013] FCAFC 49); see also Sappideen, O'Grady, Riley, Warburton, Macken's Law of Employment, Seventh Edition, (2011), pp69-70, [3,60]; Creighton, Stewart, Labour Law, Fourth Edition, (2005), pp439-441, [15.56]-[15.60]) and the legal effect of the acceptance of the offers of employment was that the employment of Mr Gill and Mr Brands with RBMC came to an end by consent and new employment of Mr Gill and Mr Brands with Eraring Energy commenced (see also Nokes v Doncaster Amalgamated Collieries Limited [1940] AC 1014 at 1018, 1023 per Lord Simon).
Mr Gotting acknowledged that Mr Gill and Mr Brands regarded the move in their employment from RBMC to Eraring Energy as a transfer. Their subjective view does not alter the proper nature of the events, which were a conclusion of employment with RBMC and a fresh contract of employment on terms with Eraring Energy.
Mr Gotting submitted that the conditions of acceptance enunciated by Mr Gill and Mr Brands further support a conclusion that they were accepting a new contract of employment with a new employer.
Mr Gotting further noted that there was not a complete transfer of accrued leave for Mr Gill as 546 hours of an accrued leave balance of 896 were cashed out at his request and paid into his superannuation fund; and 350 hours taken up as a credit to him at Eraring Energy. This is a beneficial option exercised by Mr Gill, only available in these unique circumstances of a change in employer.

Transmission of Business

It was put on behalf of the applicants that S101 of the Fair Work Act was enlivened by the circumstances of their transfer from RBMC to Eraring Energy.
Mr Dunstan noted the beneficial nature of these provisions, referring in his Submissions [18] to the observations of Sams DP in New South Wales Independent Education Union and Allambia Pty Limited, trading as Cuddly Possums [19] where his Honour said in relation to the transfer of business provisions of the Industrial Relations Act 1996: 71 These provisions are intended to ensure protection of employees' entitlements when business are transferred from one employer to another, in practice, it is usual for one of two outcomes to result. Either the former employer pays out all accrued entitlements before, or around the same time, it ceases to be the employer. Alternatively, the new employer acknowledges, and accepts the liabilities for the entitlements accrued prior to the transfer. In other words, the service with the former employer is counted as service with the new employer. In short, continuity of service is retained for all purposes. 72 In either instance, the employees' accrued entitlements are not lost in a transfer of business. Thus, the beneficial intent of the legislation is not subverted or avoided.
Mr Gotting refuted the notion that S101 of the Fair Work Act was enlivened in the circumstances of these matters. Mr Gotting relied upon the Decision of the Federal Court of Australia in Urquhart v Automated Meter Reading Services (Australia) Pty Ltd [20] which followed the Decision of the High Court of Australia in PP Consultants Pty Ltd v Finance Sector Union of Australia [21] .
Mr Gotting submitted that for the provisions of S101 to be engaged it was necessary for an arrangement to occur involving RBMC and Eraring Energy and the employees, or between RBMC and Eraring Energy which the employees ultimately accepted.
Mr Gotting put that neither of those circumstances occurred and that the termination of employment with RBMC and commencement with Eraring Energy were separate and discrete events managed through a series of industrial disputes before Grayson DP and his Honour Staff J; and the involvement of registered industrial organisations and the NSW Government.
Mr Gotting further submitted that on the principles established in Urquhart and PP Consultants there must be a transmission of business which, in these circumstances, did not occur and could not have occurred.
Mr Gotting noted that the business of Eraring Energy was the generation of electricity and that the business of RBMC was to wind up particular activities residual to the operations of Pacific Power and, as noted in the 2nd Reading Speech, did not trade in any business sense.
Mr Gotting submitted that the vast differences between the functions of RBMC and Eraring Energy precluded any notion of a transmission of business as contemplated by the Fair Work Act.

Consideration

The principles enunciated in Urquhart support a finding in favour of the argument that there was no transmission of business between RBMC and Eraring Energy for the reasons enunciated by Mr Gotting.
S101 of the Fair Work Act is beneficial legislation with the intention of protecting employees from adverse consequences or exploitation arising from commercial transactions beyond their influence or control.
It cannot be held in my view that there was any direct arrangement between RBMC and Eraring Energy.
There was a transaction between RBMC and Eraring Energy, brokered by the NSW Government and Unions NSW with the assistance of the Commission, in which RBMC and Eraring Energy were passive participants. The character of that transaction, coming about as it did, was directed entirely to the benefit of the applicants and for that reason, in addition to the fact that there was no business transmitted, it cannot be held that the transmission of business provisions of the Fair Work Act are engaged.
The facts support Mr Gotting's submission that RBMC was not a party to the offers of employment to Mr Gill and Mr Brands by Eraring Energy; and for the purposes of the Fair Work Act RBMC could not be a former employer.
The applications fail on this argument.

Fairness and Equity

There is no basis for direct comparison of the circumstances of Mr Gill and Mr Brands with employees of Eraring Energy who were transferred with the business on sale. Mr Gill and Mr Brands were, simply put, not in the same position; they were not transferred.
The circumstances of the employment of Mr Gill and Mr Brands by Eraring Energy were matters of open public debate, attended by proceedings in this Commission in which each applicant had the support of their respective industrial union. In Mr Gill's case he was an active participant in framing union policy and in discussions with the NSW Government.
In the circumstances there is no foundation to an argument that the acceptance of employment with Eraring Energy with a credit of only 18 days sick leave was under duress.
Clearly both applicants were better off by employment with Eraring Energy than the alternative of forced redundancy from RBMC wherein they would have lost all their sick leave; and obviously the applicants were of this view as each chose to accept employment as offered against the alternative.
These matters are brought pursuant to the disputes procedure of the Eraring Energy Enterprise Agreement which regulates the employment relationships between Mr Gill, Mr Brands and their current employer, Origin Energy.
Antecedent events relied upon in this matter, such as the employment history of Messrs Gill and Brands, undertakings by the NSW Government such as they may have been, and the failed Memorandum of Understanding, have no bearing on the current employment pursuant to the Agreement and are misdirected.
There are two compelling reasons for this conclusion.
The first is that the scope of these proceedings is limited by the disputes procedure to issues falling within the Eraring Energy Enterprise Agreement.
The second is that by accepting employment on the terms offered, contracts of employment were established on those terms which were not unfair.
The disputes procedure of the Eraring Energy Enterprise Agreement engages the mutually cooperative elements of S740 of the Fair Work Act and s146B of the Industrial Relations Act 1996. Resolution of a matter in these circumstances must be consistent with the Fair Work Act and within the scope of the enterprise agreement.
The equity argument is not supportive of jurisdiction to intervene in the manner sought.
I further conclude that the equity argument fails on analysis of events.
It is not contested that persons leaving an employer have no entitlement to accrued personal leave.
As discussed above, the change in employment from RBMC to Eraring Energy was not a transmission of business pursuant to the Fair Work Act as there was no business transferred.
The change in employment on terms was contained at the time to avoid a forced redundancy of Mr Gill and Mr Brands, in which case they would have forfeited the accrued sick leave subject to these applications and ceased to be contributing members of the relatively generous superannuation scheme of which they had established service and related benefits.
On one view, they were subject to unfulfilled promises and the failed negotiation of a memorandum of understanding, and in the circumstances described took up employment with a diminished sick leave accrual to those personnel transferred with the business.
The other view, which is supported by the facts discussed above, is that both were the beneficiaries of intensive efforts by the USU, CFMEU, Unions NSW, the NSW Government, and this Commission, to secure ongoing employment which preserved their superannuation and service for annual leave and long service leave.
Rather than being unfairly treated, I conclude that they are beneficiaries of the processes outlined above.
The comparator for fairness should more properly be those other employees of RBMC at the time of closure. The evidence is that those people were subject to similar considerations as outlined before Grayson DP and in the Statements of Staff J as the applicants in these proceedings; though not all achieved an employment outcome as preferred by Messrs Gill and Brands. There is no basis of unfairness arising in this consideration.

Conclusion

The applications fail and I decline to intervene for the following reasons: 1. As discussed above, there was no transmission of business so as to enliven S101 of the Fair Work Act; 2. Employment with Eraring Energy was accepted without duress on the condition that 18 days sick leave accrual be afforded to Mr Gill and Mr Brands. This formed the contract of employment which contained other beneficial terms in respect to continuity of service for annual leave, long service leave and superannuation. It is not practical, fair or reasonable to separate one element of that contract and impose a new condition. 3. Neither Mr Gill nor Mr Brands have been treated unfairly, each have substantial sick leave accruals (Mr Gill 81 days; Mr Brands 88 days; at 5 June 2015) supported by cl 20.8 of the Eraring Energy Enterprise Agreement.
The applications for relief are refused. Matter Numbers IRC 92 of 2014 and 220 of 2014 are concluded.

Endnotes

AE899908 PR534160
Exhibit 11 para 74
Matter No IRC04/6483
[2005] NSWIRComm 304
IRC04/6032 before Grayson DP and before Staff J whilst Grayson DP was on leave
Exhibit 1 MG 11
Transcript 31 March 2005 IRC04/6032
Ibid at p3
Exhibit 1 Annex MG-3
Exhibit 1 MG-4
Exhibit 9
Exhibit 10
IRC04/6032
Exhibit 14
Exhibit 12
Exhibit 12
Exhibit 17 at para 13
Exhibit 16 at para 17
[2000] NSWIRComm 77
[2008] FCA 1447
(2000) 201 CLR 648 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 September 2015

At a glance

Court

Decision date

Before

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Judgment (10 paragraphs)

Cases Cited (8)