Pan Pharmaceutical Group Redundancy Award 2003 [2003] NSWIRComm 331

LEGAL REPRESENTATIVES: RESPONDENT Mr Paul Howes The Australian Workers' Union, New South Wales

Matter No IRC 5472 of 2003 THE PAN PHARMACEUTICALS GROUP REDUNDANCY AWARD 2003 Application by Pan Pharmaceuticals Ltd (in liquidation) and others for a new award.

DECISION (Extempore) [2003] NSWIRComm 331

1 The Commission has before it today an application filed on 2 October 2003, accompanied by an affidavit of urgency sworn on the same date. The application is for a new award to be known as The Pan Pharmaceuticals Group Redundancy Award 2003.

2 Appearing for the applicants are Mr David Lloyd, solicitor, of Blake Dawson Waldron, Lawyers, together with Mr Christopher Honey, the joint liquidator and administrator of the applicant companies which are Pan Pharmaceuticals Ltd (in liquidation), Pan Laboratories (Australia) Pty Ltd (in liquidation), Pan Pharmaceuticals Export Pty Ltd (administrators appointed), Pan Pharmaceuticals Services Pty Ltd (administrators appointed) and Pan Pharmaceuticals Technologies Pty Ltd (administrators appointed). Mr Paul Howes represents The Australian Workers' Union, New South Wales (AWU). The Commission has been assisted by most helpful, comprehensive and succinct submissions by the parties.

3 In evidence before the Commission are documents showing that notice of the application and of the hearing today was provided in an appropriate way to the only other organisation which could potentially have an interest in the matter, that is the New South Wales Local Government, Clerical, Administrative, Energy, Airline & Utilities Union (USU). Although there is no appearance by that organisation, it is clear from the material before the Commission that the only union with any actual membership on the site is the AWU.

4 Also in evidence is the affidavit sworn by Mr Honey to ground the urgency sought in the proceedings. As earlier noted, Mr Honey is the joint liquidator and administrator for the applicant companies and in his affidavit he deposes, initially, that the application in these proceedings for a new award is related to the liquidation and administration of the applicant companies and further, that the making of the award will assist in the orderly conduct of the liquidation and administration and will assist in providing certainty to employees as to their entitlements.

5 On the basis of these matters and other matters the subject of submissions before the Commission, the Commission is requested not only to list the application for hearing on an urgent basis, but also on an urgent basis to make the proposed award with the consent of the AWU.

6 The factual circumstances of the matter may be stated briefly. They include the difficulties which have been the subject of not only recent but ongoing publicity over the last few months in various organs of the media which have led to the situation that as of yesterday there were in the order of 125 employees employed in the affected categories at the site of the group known as Pan Pharmaceuticals at Moorebank.

7 The employees fall broadly within three groups; first, factory workers who are involved in the manufacture of drugs and related products; second, laboratory/technical staff and, third, a small number of clerical staff. Ninety-one of the employees were retrenched yesterday and their employment ended. There are 34 remaining award employees employed at the Moorebank site in a division or part of the business which is available for sale; there are attempts being made to sell that part of the business as an ongoing operation.

8 The Commission was informed in the submissions that the employees in question are subject to the relevant industry awards, the Drug Factories (State) Award and the Clerical and Administrative Employees (State) Award, and the employees are therefore entitled to the general redundancy benefits under those awards which are those set out in the most recent test case decision of the Commission in Re Application for Redundancy Awards (1994) 53 IR 419 and in the first Schedule to the Regulation made under the Employment Protection Act 1982. The present application will therefore, if granted, provide additional redundancy benefits which will become terms of employment under an industrial instrument for the purposes of the liquidation and administration.

9 It is clear that, until and but for the making of this award, the employees at this site did not have any prior site specific arrangements in respect of the issues covered by the proposed award. In the last few days the liquidator has been involved in what have plainly been intensive negotiations with the AWU. He has reached an agreement with that organisation on additional redundancy payments. The Commission has also been advised that it is able to make this award on the basis that the consent provided is one that is a highly informed consent because the AWU has held meetings with, for all practical purposes, 100 per cent of the employees affected by the award and the agreement that it gives is to be seen in that context.

10 The Commission has also been advised that the parties are of the view that there is no legal difficulty in the Commission making the award, notwithstanding that some of the applicants are in liquidation and others have had administrators appointed and, similarly, that there is no fetter on the standing of the applicants because of their respective situations.

11 The matter is put forward on the basis that the application, if granted, will provide fair and reasonable conditions of employment in terms of s 10 of the Industrial Relations Act 1996 and, to the extent that it might involve a special case situation, that circumstance is resolved by the fact of agreement between the parties. I should interpolate here that if there is seen to be a difficulty in one of the unions which has notional coverage not appearing to consent, I do not regard that, in the particular circumstances of this case, as a material factor which would tell against the consent for the purposes of Principle 2(e) of the principles under the State Wage Case 2003 [2003] NSWIRComm 174. It would, in any event, be a matter, if necessary, which could properly be determined under Principle 10 as being one appropriate to be dealt with by a single member and I so determine. I do not, however, consider that it is necessary for a formal determination of that kind to be made under Principle 10. I accept Mr Lloyd's submissions that Principle 2(e) is the relevant principle applicable in these proceedings.

12 Before concluding, I should refer briefly to some other features of the application. The application states, as required by the relevant requirements under the Commission's Rules, certain statistical information relating to the nature of the work force at the particular site. That information is in the following terms: (a) How many employees will be covered by the Enterprise Award? 125.

(b) What percentage of employees covered by the Enterprise Award is female? 35 per cent. (c) What percentage of employees covered by the Enterprise Award is from a Non English Speaking Background? 90 per cent.

13 Turning to the terms of the application as made, as to the employers concerned, it binds all the applicants in the proceedings and it also applies to employees of the applicant companies who are employed under the awards earlier referred to. The application is that the award shall operate from the date of filing, which is 2 October 2003, and have a nominal term of one year.

14 The additional redundancy benefits to be provided by the award are one week's pay for each completed year of service with a minimum of one week's pay for those employees who have less than one year's service. Also, as earlier indicated, that benefit will be in addition to redundancy payments under the common rule State awards which apply to the employees. A further benefit is that outplacement services to a maximum value of $1000 are to be provided for each employee the subject of this award. Lastly, the proposed award contains a Resolution of Disputes procedure which, in substance, adopts, or is cross-referenced to, the dispute resolution provisions in the common rule State award.

15 The Commission finds that the application satisfies the requirements of the Industrial Relations Act and further that the requirements of the Commission's wage-fixing principles are also satisfied.

16 The Commission therefore makes an award to be known as The Pan Pharmaceuticals Group Redundancy Award 2003. It shall be made in terms of the schedule at pages 6 and 7 of the application filed yesterday. The award shall commence on 2 October 2003 and shall remain in force for one year.

17 The applicants are directed to file within seven days the award as made in final form, both in hard copy and disk form, and to serve a copy of the award in hard copy form on both the AWU and the USU. These proceedings are concluded.

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