Unilever Australia Limited v The Australian Workers' Union, New South Wales and another

Industrial Relations Commission (NSW)|2004-12-17|Before: Wright J, Mr P, Ms P, Marks J, Haylen J

Industrial Relations Commission of New South Wales in Court Session

CITATION: Unilever Australia Limited v The Australian Workers' Union, New South Wales and another [2005] NSWIRComm 2

PARTIES Unilever Australia Limited A P Foods (Sydney) Pty Limited PARTIES: The Australian Workers' Union, New South Wales Transport Workers' Union of New South Wales

Industrial Relations Act 1996 s 16 s 41 s 154 LEGISLATION CITED: Workplace Relations Act 1996 (Cth) s 152 s 170LY

Campbells Cash & Carry Pty Ltd v National Union of Workers, New South Wales Branch (No 2) (2001) 106 IR 429 Electricity Commission of New South Wales v Clissold [1981] 1 NSWLR 284 Hospital Employees Conditions of Employment (State) Award, Re (1999) 96 IR 245 CASES CITED: Minister for Immigration and Ethnic Affairs v Pochi (1981) 149 CLR 139 Storeworkers - Campbells Cash & Carry Pty Ltd (NSW), NUW (NSW Branch) Award 2000, Re (No 2) (2001) 104 IR 385 Unilever Australia Ltd, AP Foods (Sydney) Pty Ltd, AWU and TWU - Various proceedings re proposed sale of Marrickville site, Re [2005] NSWIRComm 3 Western Newspapers Pty Ltd v Warren (1994) 56 IR 340

HEARING DATES: 12/17/2004; 12/21/2004; 12/22/2004; 12/30/2004

UNILEVER AUSTRALIA LTD Mr P M Kite SC and Mr S B Benson of counsel Solicitors: Baker & McKenzie (Mr P Brown/Ms P Thew)

AP FOODS (SYDNEY) PTY LTD LEGAL REPRESENTATIVES: Mr A R Moses of counsel Solicitors: Kemp Strang (Mr P Frazer)

THE AUSTRALIAN WORKERS' UNION, NEW SOUTH WALES TRANSPORT WORKERS' UNION OF NEW SOUTH WALES Mr A A Hatcher of counsel Solicitors: Jones Staff & Co (Mr A Howell)

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

CORAM: WRIGHT J, President Monday 31 January 2005

UNILEVER AUSTRALIA LIMITED v THE AUSTRALIAN WORKERS' UNION, NEW SOUTH WALES AND ANOTHER

Application by Unilever Australia Limited for a declaratory order under section 154 of the Industrial Relations Act 1996 JUDGMENT [2005] NSWIRComm 2

1 Although the present judgment deals with the proceedings brought in the Commission in Court Session pursuant to s 154 of the Industrial Relations Act 1996, it is nevertheless appropriate to set out briefly the history of the circumstances that have led to these proceedings and also details of the related proceedings before the Commission in which a decision is being handed down immediately after this judgment: see Re Unilever Australia Ltd, AP Foods (Sydney) Pty Ltd, AWU and TWU - Various proceedings re proposed sale of Marrickville site [2005] NSWIRComm 3.

2 Unilever Australia Limited (Unilever) conducts an edible oils factory and business at Marrickville in the State of New South Wales. It has been engaged in negotiations with a business group known as Atlantic Pacific Foods (APF) in respect of the purchase of the Marrickville business by a company within the APF group for some months. There has been, arising out of those negotiations, a number of industrial disputes and associated proceedings which have been the subject of hearings and conciliations before two other Members of the Commission, Marks J and Haylen J.

3 The other parties to the proceedings are the relevant unions, The Australian Workers Union, New South Wales Branch and the Transport Workers' Union of New South Wales, which have respectively approximately 73 and 13 members at the Marrickville plant affected by the various applications.

4 The "sticking point" between Unilever and APF, on the one hand, and the unions and their members at the Marrickville plant, on the other hand, is essentially that the companies wish to bring about the sale of the Marrickville business from Unilever to APF, with the sale being on the basis that the business will be an ongoing concern and that, at least until the time the current enterprise agreement operative at the Marrickville site is to expire (November 2005), the employment of the workers there will be on the same terms and conditions.

5 In that context, Unilever contends that the employment that will be available to its employees at the Marrickville plant is "acceptable alternative employment" in terms of the relevant principles and award provision concerning redundancy pay and it therefore has no obligation to make any such payment.

6 Unilever does, however, accept that the meaning of the relevant provisions of the applicable instrument, the Unilever Australia Limited (Spreads & Bakery - Marrickville) Enterprise Agreement is not particularly clear. That it is why Unilever has sought a declaration as to the meaning of the relevant provisions of the applicable enterprise agreement which, it contends, must be considered in the context of, and together with, the terms of the applicable award, the Margarine Makers (State) Award. It is from that award that Unilever contends that the avenue to avoid paying redundancy pay is available to it because the award contains a provision as to "acceptable alternative employment" which is not affected by the terms of the relevant enterprise agreement. The Unions accept that the award contains such a provision but deny that its effect is preserved by the enterprise agreement.

7 Unilever relies, in respect of its contentions as to "acceptable alternative employment" on the parts of the sale agreement between the companies as to the obligations of APF to Unilever's Marrickville employees and certain additional undertakings by Unilever to the employees. From the evidence given and Unilever's submissions the matters may be summarised as follows: (a) APF is required to make ongoing offers of employment to every employee of Unilever currently performing work within the Marrickville business under the enterprise agreement;

(b) as a condition of the sale APF is required to: (i) offer to each of the employees, terms and conditions of employment that reflect (where possible) the full range of the existing terms and conditions with Unilever;

(ii) recognise and agree to be bound by the terms of the Marrickville enterprise agreement and the underlying award; and

(iii) recognise all continuous service with Unilever as service with APF for all employee entitlements including statutory leave, sick leave and redundancy.

(c) as to a limited number of employee terms and conditions that APF is unable to match APF proposed to offer alternative additional benefits. In particular, all Marrickville employees are to be offered a one-off payment in the sum of $3,200 in consideration of foregoing access to the following Unilever benefits: (i) the staff shop at the Marrickville site, at which employees can purchase relevant Unilever products using an accrued "points" system; and

(ii) the option to purchase Unilever shares through a salary sacrifice scheme.

(d) Unilever initially guaranteed future redundancy payments to employees by APF in the event of APF's insolvency, for a period of two years. Unilever subsequently revised its offer to cover a period of three years and to provide an individual Deed to each employee employed under the enterprise agreement.

8 In its final submissions Unilever indicated that its undertaking to indemnify the employees against inability to recover severance benefits from APF was originally set out in a draft letter the terms of which made clear that the indemnity was given in circumstances of an offer of employment "on terms no less favourable overall." Unilever's instructions to its lawyers confirmed that the indemnity applied to the current scale (and rates) of severance pay (this statement is, I consider, to be taken as an undertaking in relevant terms to the Court and the Commission).

9 For convenience, the expressions "award" and "enterprise agreement" will often be used in these reasons, unless otherwise indicated, to refer to the instruments named in this paragraph.

Details of the proceedings in the Commission 10 It is useful now to set out details of the other proceedings being dealt with by the Commission in relation to the present matter although the related matters will be the subject of a separate decision in the Commission (see Re Unilever Australia Ltd, AP Foods (Sydney) Pty Ltd, AWU and TWU - Various proceedings re proposed sale of Marrickville site [2005] NSWIRComm 3). The other proceedings are as follows: (a) Matter No IRC 2004/2610 entitled NOTIFICATION UNDER SECTION 130 BY UNILEVER AUSTRALIA LIMITED OF A DISPUTE WITH THE AUSTRALIAN WORKERS' UNION, NEW SOUTH WALES AND ANOTHER RE PROPOSAL TO SELL MARRICKVILLE SITE.

(b) Matter No IRC 2004/6510 entitled UNILEVER AUSTRALIA LIMITED AND THE AUSTRALIAN WORKERS' UNION, NEW SOUTH WALES AND ANOTHER - Application by Unilever Australia Limited for an order pursuant to clause 18(5)(iii) of the Margarine Makers (State) Award.

(c) Matter No IRC 2004/6518 entitled APF (SYDNEY) PTY LIMITED (SPREADS & BAKERY MARRICKVILLE) ENTERPRISE INTERIM AWARD 2004 - Application by A P Foods (Sydney) Pty Limited as trustee of the A P Foods (Sydney) Trust for an interim award.

(d) Matter No IRC 2004/7263 entitled AP FOODS /UNILEVER (SPREADS & BAKERY - MARRICKVILLE) ENTERPRISE AWARD 2004 - Application by The Australian Workers' Union, New South Wales and another for a new award

11 Although it does not seem necessary to set out in detail the history of those proceedings it is nevertheless relevant to refer briefly to the nature of each of them. The first numbered proceedings relate to dispute proceedings which commenced on 3 May 2004 as to the proposal, or earlier forms of the proposal, of Unilever to sell the Marrickville site. Matter No IRC 2004/6510 is an application by Unilever to which both Unions are respondents which was filed at the same time as Matter No IRC 2004/6511 (the present application for declaratory relief) and is an application by Unilever for an order pursuant to clause 18(5)(iii) of the Margarine Makers (State) Award. That application is premised on the assumption that Unilever's application for declaratory relief is, at least in substance, successful and it seeks, on that basis, orders pursuant to clause 18(5)(iii) of the Award that no redundancy payments need to be made to employees of Unilever who are offered employment with APF pursuant to the sale agreement.

12 Matter No IRC 2004/6518 is an application by AP Foods (Sydney) Pty Ltd, the company set up by APF to purchase the business (other than the real property), at the Marrickville site. It is an application which seeks an interim award binding the Unions and the applicant employer for a period ending with the expiry date of the current enterprise agreement at the Marrickville site which in substance replicates the terms and conditions of the enterprise agreement except as to the employer bound by it.

13 The last application filed is that filed by the Unions on 13 December 2004 in Matter No IRC 2004/7263. It is in substance a counter application to the APF application in Matter No IRC 2004/6518. Although it also seeks to replicate the conditions of the current enterprise agreement applicable at Marrickville subject to the alteration of the identity of the employer bound, it seeks to do so on tangibly different bases. The different bases being that the Award claimed would not be an interim Award but instead will have a nominal term of three years. This is said by the applicant Unions to be necessary because the interim Award sought by APF does not provide an appropriate measure of employment security for employees should Unilever's applications in Matter Nos IRC 2004/6510 and 6511 be successful. In particular, the Unions are concerned that any interim Award made on APF's application in Matter No IRC 2004/6518 would be, because of the terms of the statutory provisions relevant to interim awards, an award which would cease to have legal effect on the date specified in the award as the date on which it was to expire: see s 16 of the Industrial Relations Act. For similar reasons as to employment security, the unions contend it is appropriate that any such award replacing a current enterprise agreement with Unilever should be for a period of three years, which is the longest nominal term available under s 16(2) of the Industrial Relations Act.

Redundancy provisions of the enterprise agreement 14 Clause 25 Redundancy and Appendix B (which also relates to redundancy) of the Unilever Australia Limited (Spreads & Bakery - Marrickville) Enterprise Agreement relevantly provide: 25. REDUNDANCY

For any redundancies occurring during the nominal term of this agreement, the parties agree to abide by the procedures, which are contained in Appendix B.

Absolute security of employment cannot be guaranteed, but it is recognised that job security is an important issue for all employees and it is therefore the company's objective to provide continuing employment.

The parties agree that external factors (such as technological change, market force etc) will have an influence on the direction and viability of the business.

In accordance with the Redundancy Agreement (see Appendix B) and the Principle of Agreement Clause (clause 3), the parties agree that the following steps should occur when redundancies are to take place:

Full consultation with all parties should occur in accordance with clause 8. - All parties agree that work being undertaken by casuals, contractors or fixed term contractors, excluding Specialist Engineering, Electrical and Welding Services, will be undertaken by the employees. - All parties agree that where the employee(s) have the relevant skills base, then the employee(s) could be transferred into another area without the loss of conditions or entitlements and without being offered redundancy. - That volunteers for redundancy should be called as a first option and the relevant redundancy clause will apply. The criteria to apply will be: (a) Redundancy will be offered to the incumbent in the position (b) Secondly, offered within the section (c) Thirdly, offered within the department (d) Finally, offered within the company (Marrickville site).

In the event that there are insufficient volunteers for redundancy, either party may refer the matter to the IRC of NSW for the purposes of conciliation as envisaged under the IR Act (NSW) 1996. Where conciliation is unsuccessful the parties consent to the IRC arbitrating: (a) whether a position is redundant; (b) fairness or otherwise of any selection criteria In the event of redundancies following conciliation or arbitration, benefits shall be as per Appendix B. APPENDIX B

Where an employee or employees are to be made redundant, the following terms and conditions will apply subject to the relevant provisions of the Principles of Agreement (Clause 3) with reference to clause 25 - Redundancy. 1. APPLICATION FOR CONSIDERATION OF REDUNDANCY

1.5 Severance Payment On acceptance of application the Company will give each employee agreed for redundancy, 4 weeks payment at average rate of pay. This provision applies only to those employees with twelve (12) months' continuous Company service.

1.6 In addition to the benefits described in paragraphs 1.1 and 1.2 above payment shall be made in accordance with the following formula: (a) three (3) weeks payment for the first year of service greater than three (3) months; and (b) three (3) weeks payment per year of service for each subsequent completed year of service, or part thereof. Basis of calculation - for a) and b) above will be at average rate of pay.

INSUFFICIENT APPLICATIONS FOR CONSIDERATION OF REDUNDANCY AND CONSEQUENT TOTAL COMPANY SELECTED REDUNDANCY Where suitable applications for redundancy and subsequent acceptance by the Company have not resulted in the reduction of numbers required, then the parties agree that the following benefits will apply to those employees who did not wish to be redundant and who consequently were redundant as a result of solely Company selection.

2.2 Severance Payment Each employee to be dismissed under clause 2 of this Appendix shall receive four (4) weeks' payment at average rate of pay.

2.3 Redundancy Formula Redundancy payment shall be made in accordance with the following formula:

(a) four (4) weeks payment for the first year of service greater than 3 months; and

(b) four (4) weeks' payment for each subsequent completed year of service or part thereof.

An employee who is redundant in award terms or who leaves the Company's employment of his/her own accord, other than in an instance described in Clause 5A hereof is not eligible for a redundancy payment. (emphasis added) (Note that when clause 25 and Appendix B are discussed subsequently, reference will be made to some parts of the Appendix not extracted above).

15 Unilever submits that the enterprise agreement and its interpretation are premised on the "Principles of Agreements" which are set out in Clause 3 of the agreement, as follows: 3. PRINCIPLES OF AGREEMENT

The parties recognise that in the implementation of change at the Marrickville site, differences of opinion in relation to interpretation and implementation may arise. Where such differences arise, the parties agree that they will be discussed and resolved through the normal Disputes Procedure. However, whenever the interpretation or implementation of any aspect of this Agreement or the detailed Agreement to follow is in question it is agreed that the Principles of Agreement document (as defined below this clause) will be the reference document, and in particular, the objectives incorporated in Paragraph 3.1. Unilever Australia Marrickville Site: Principles of Agreement

The following major issues have been previously agreed in principle and are again reaffirmed:

3.1.1. That the Company is committed to retaining the manufacturing plant, in which it has invested heavily over recent years and is continuing to invest. 3.1.2. That the long term security of employment at the site depends entirely on achieving competitive and continuously improving efficiencies and better quality products and customer service. 3.1.3. The Company commits to the principle of no forced redundancy to achieve the objective of job security during the nominal term of this Agreement subject to the process in Clause 25 - Redundancy. 16 Unilever particularly and specifically emphasises the terms of Clause 3.1.1 of the enterprise agreement which, it submits, explains why there is no provision dealing with the transfer of the business or with "acceptable alternative employment". It also relies on the history of the provisions which are described in its submissions as follows: 16. The Redundancy provisions were varied when the 2000 Agreement was made to incorporate a "no forced redundancy" provision. They were again varied in the 2002 Agreement to remove the "no forced redundancy" provision and put in place a mechanism in the event of insufficiency of volunteers.

A second change was made in the 2002 Agreement. The word "dismissal" was used in connection with "redundancy": e.g. Appendix B, clause 1.1 of the 1998 and 2000 Agreements provided: "1.1 Applications for considerations for dismissal ....." Appendix B, clause 1.1. of the 2002 Agreement provided: "1.1 Applications for consideration for redundancy ......"

It is clear that the word "dismissal" was used in Appendix B to refer to termination of employment by reason of redundancy. Hence, the word "dismissal" was replaced in the 2002 Agreement by the word "redundancy".

Clause 6 of Appendix B is a clause of some difficulty. It provides exceptions to those eligible for redundancy. It sits under the heading of "General Issues". In terms, it refers to Clause 5A which is under the same heading. Both clauses are here set out for convenience of reference. "GENERAL ISSUES

..... 4. ..... 5A. If the paid rate of an employee's new position is at a lower rate (being not less that 90%) of pay than that which he/she enjoys in his/her redundant job he/she shall maintain his/her previous rate until the rate of pay for the new position equals the employee's previous rate, subject to his/her new position not being as a result of: (i) Disciplinary reasons (ii) Inability to satisfactorily perform the tasks (iii) Employee's request for a change (iv) Reversions after acting in a temporary capacity

Application of this clause is subject to prior discussion with the Unions of the employees affected.

5B. ...... 5C. ...... 5D. .....

An employee who is redundant in award terms or who leaves the Company's employment of his/her own accord, other than in an instance described in Clause 5A hereof is not eligible for a redundancy payment.

The relevant provisions of the award 17 The corollary of Unilever's approach to the interpretation of the redundancy provisions of the enterprise agreement is that it has to be read in conjunction with Clause 18(5)(iii) of the Margarine Makers (State) Award since the terms of the enterprise agreement do not render that provision ineffective. Clause 18(5)(iii) provides: Alternative Employment - Subject to an application by the employer and further order of the Commission, an employer may pay a lesser amount (or no amount) of severance pay than that contained in the said paragraph (i) if the employer obtains acceptable alternative employment for an employee.

18 More generally and to place this provision into context, Unilever refers to and relies on clauses 17 and 18 of the Margarine Makers (State) Award which are in these terms: 17. Termination of Employment

(i) After the first week's service all employees, other than casual employees, shall be paid by the week.

(ii) Employment shall only be terminated by one week's notice on either side or by the payment or forfeiture of one week's wages in lieu thereof, provided that an employee may be discharged without notice at any time for misconduct or refusal of duty. 18. Redundancy

(1) Application - (i) This award shall apply in respect of persons employed in the classifications listed in Table 1 - Rates of Pay, of Part B, Monetary Rates.

(ii) In respect to employers who employ more than 15 employees immediately prior to the termination of employment of employees, in the term of paragraph (i) of subclause (4) of this clause.

(iii) Notwithstanding anything contained elsewhere in this award, this clause shall not apply to employees with less than one year's continuous 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.

(iv) Notwithstanding anything contained elsewhere in this award, this clause shall not apply where employment is terminated as a consequence of conduct that justifies instant dismissal, including malingering, inefficiency or neglect of duty, or in the case of casual employees, apprentices or employees engaged for a specific period of time or for a specified task or tasks or where employment is terminated due to the ordinary and customary turnover of labour. (2) Introduction of Change -

(i) Employer's Duty to Notify - Where an employer has made a definite decision to introduce major changes in production, programme, organisation, structure or technology that are likely to have significant effects on employees, the employer shall notify the employees who may be affected by the proposed changes and the union to which they belong. "Significant effects" include termination of employment, major changes in the composition, operation or size of the employer's workforce or in the skills required, the elimination or diminution of job opportunities, promotion opportunities or job tenure, the alteration of hours of work, the need for retraining or transfer of employees to other work or locations and the restructuring of jobs.

Provided that where this award makes provision for alteration, it shall be deemed not to have significant effect.

(ii) Employer's Duty to Discuss Change - (a) 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 (i) of this subclause, 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.

(b) The discussions shall commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in paragraph (i) of this subclause.

(c) For the purpose of such discussions, 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. (3) Redundancy - Discussions Before Terminations -

(a) Where an employer has made a definite decision that the employer no longer wishes the job the employee has been doing to be done by anyone pursuant to paragraph (i) of subclause (2), Introduction of Change, and that decision may lead to the termination of employment, the employer shall hold discussions with the employees directly affected and with the union to which they belong.

(b) The discussions shall take place as soon as is practicable after the employer has made a definite decision which will invoke the provision of paragraph (a) of this subclause and shall cover, inter alia, any reason for the proposed terminations, measures to avoid or minimise the terminations and measures to mitigate any adverse effects of any termination on the employees concerned.

(c) For the purpose of the discussions the employer shall, as soon as practicable, provide to the employees concerned and the union to which they belong all relevant information about the proposed terminations, the number and categories of employees likely to be affected, the number of employees normally employed and the period over which the terminations are likely to be carried out. Provided that any employer shall not be required to disclose confidential information, the disclosure of which would adversely affect the employer. (4) Termination of Employment -

(i) Notice for Changes in Production, Programme, Organisation or Structure - This subclause sets out the notice provisions to be applied to terminations by the employer for reasons arising from production, programme, organisation, mechanisation or structure, in accordance with paragraph (i) of subclause (2), Introduction of Change: (a) In order to terminate the employment of an employee, the employer shall give to the employee the following notice: Period of Continuous Service Period of Notice

Less than 1 year . . . 1 week 1 year and less than 3 years . . . 2 weeks 3 years and less than 5 years . . . 3 weeks 5 years and over . . . 4 weeks (b) In addition to the notice above, employees over 45 years of age at the time of the giving of the notice, with not less than two years' continuous service, shall be entitled to an additional week's notice.

(c) Payment in lieu of the notice above shall be made if the appropriate notice period is not given. Provided that employment may be terminated by part of the period of notice specified and part payment in lieu thereof. (ii) Notice for Technological Change - This subclause sets out the notice provisions to be applied to terminations by the employer for reasons arising from technology in accordance with paragraph (i) of the said subclause (2): (a) In order to terminate the employment of an employee, the employer shall give to the employee three months' notice of termination.

(b) Payment in lieu of the notice above shall be made if the appropriate notice period is not given. Provided that employment shall be terminated by part of the period of notice specified and part payment in lieu thereof.

(c) The period of notice required by this subclause to be given shall be deemed to be service with the employer for the purposes of the Long Service Leave Act 1955, the Annual Holidays Act 1944, or any Act amending or replacing either of these Acts. (iii) Time Off During the Notice Period - (a) During the period of notice of termination given by the employer, an employee shall be allowed up to 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.

(b) If the employee has been allowed paid leave for more than one day during the notice period for the purpose of seeking other employment the employee shall, at the request of the employer, be required to produce proof of attendance at an interview or the employee shall not receive payment for the time absent. (iv) Employee Leaving During the Notice Period - If the employment of an employee is terminated (other than for misconduct) before the notice period expires, the employee shall be entitled to the same benefits and payments under this clause to which the employee would have been entitled had the employee remained with the employer until the expiry of such notice. Provided that, in such circumstances, the employee shall not be entitled to payment in lieu of notice. (v) Statement of Employment - The employer shall, upon receipt of a request from an employee whose employment has been terminated, provide to the employee a written statement specifying the period of the employee's employment and the classification of or the type of work performed by the employee. (vi) Notice to Centrelink (or any relevant successor entity) - Where a decision has been made to terminate employees, the employer shall notify Centrelink thereof as soon as possible, giving relevant information, including the number and categories of the employees likely to be affected and the period over which the terminations are intended to be carried out.

(vii) Centrelink Separation Certificate - The employer shall, upon receipt of a request from an employee whose employment has been terminated, provide to the employee an Employment Separation Certificate in the form required by the Centrelink or any relevant successor entity.

(viii) Transfer to Lower-paid Duties - Where an employee is transferred to lower-paid duties for reasons set out in paragraph (i) of subclause (2), Introduction of Change, the employee shall be entitled to the same period of notice of transfer as the employee would have been entitled to if the employee's employment had been terminated, and the employer may, at the employer's option, make payment in lieu thereof of an amount equal to the difference between the former ordinary-time rate of pay and the new ordinary-time rates for the number of weeks of notice still owing.

(5) Severance Pay - (i) Where an employee is to be terminated pursuant to subclause (4), Termination of Employment, subject to further order of the Industrial Relations Commission of New South Wales, the employer shall pay the employee the following severance pay in respect of a continuous period of service: (a) If an employee is under 45 years of age, the employer shall pay in accordance with the following scale: Years of Service Under 45 Years Of Age Entitlement

Less than 1 year Nil 1 year and less than 2 years 4 weeks 2 years and less than 3 years 7 weeks 3 years and less than 4 years 10 weeks 4 years and less than 5 years 12 weeks 5 years and less than 6 years 14 weeks 6 years and over 16 weeks

(b) Where an employee is 45 years of age or over, the entitlement shall be in accordance with the following scale Years of Service 45 Years of Age and Over Entitlement

Less than 1 year Nil 1 year and less than 2 years 5 weeks 2 years and less than 3 years 8.75 weeks 3 years and less than 4 years 12.5 weeks 4 years and less than 5 year 15 weeks 5 years and less than 6 years 17.5 weeks 6 years and over 20 weeks

(c) "Week's pay" means the all-purpose rate for the employee concerned at the date of termination and shall include, in addition to the ordinary rate of pay, overaward payments, shift penalties and allowances paid in accordance with this award. (ii) Incapacity to Pay - 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 in paragraph (i) of this subclause. The Commission shall have regard to such financial and other resources of the employer concerned as the Commission thinks relevant, and the probable effect paying the amount of severance pay in paragraph (i) of this subclause will have on the employer.

(iii) Alternative Employment - Subject to an application by the employer and further order of the Commission, an employer may pay a lesser amount (or no amount) of severance pay than that contained in the said paragraph (i) if the employer obtains acceptable alternative employment for an employee.

(6) Savings Clause - Nothing in this clause shall be construed so as to require the reduction or alteration of more advantageous benefits or conditions which an employee may be entitled to under any existing redundancy arrangement, taken as a whole, between the industrial organisation of employees and any employer bound by this clause. (Clauses 17 and 18 will be discussed in detail subsequently.)

3.1.1 Clause 17 deals with the subject of termination of employment and gives the right to terminate the employment on one week's notice or by forfeiture or payment of one week's wages in lieu thereof. Employees may be discharged without notice for misconduct or refusal of duty.

3.1.2 Clause 18 of the Award deals with the issue of redundancy. The terms of the clause are largely as determined Re Redundancy Awards (1994) 53 IR 419 (at 444-448) save for those issues which the Full Bench left for further discussion between the parties (cf. "Employers' claims for exemptions" (at 439) and the direction to confer on outstanding matters (at 444).

3.1.3 One of those issues was acceptable alternative employment. A clause dealing with that matter is included at clause 18(5)(iii) of the Award.

3.1.4 A clause of this kind was approved by the Australian Industrial Relations Commission in the Termination, Change and Redundancy Case (1984) 9 IR 115 at 135 in the following terms: "An employer, in a particular redundancy case, may make application to the Commission to have the general severance pay varied if he/she obtains acceptable alternative employment."

Section 41(1) of the Industrial Relations Act 20 As the inter-relationship between the award and the enterprise agreement Unilever relies on s 41 of the Industrial Relations Act which provides: 41 Enterprise agreements prevail over State awards (1) The provisions of an enterprise agreement prevail over the provisions of any State award of the Commission that deal with the same matters in so far as the provisions of the State award apply to a person bound by the enterprise agreement. This subsection is subject to the terms of the enterprise agreement. (2) Nothing in this Part limits the application to an employee bound by an enterprise agreement of any conditions of employment that apply to employees generally under this Act or any other Act. (3) (Repealed) Note: Section 152 of the Workplace Relations Act 1996 of the Commonwealth sets out the circumstances in which the provisions of an enterprise agreement made under this Act will prevail over the provisions of a Federal award that deal with the same matters.

21 As for the interaction of the award and the enterprise agreement, Unilever observes that s 41 limits the prevailing effect of the provisions of an enterprise agreement to those provisions of the award which deal with the same matters in so far as the award apply to persons bound by the enterprise agreement. As to the legal effect of the relevant expression in s 41: 4.2 These provisions need to be interpreted in context having regard to the purpose for which they are enacted. The context emerges from the surrounding provisions and indeed the parallel provisions in the federal scheme which makes provision for certified agreements and awards to operate in that jurisdiction and between jurisdictions.

4.3 The key words in the section are "same matters". These words may be contrasted with the words used in sections 29 and 38(2)(b) of the Act. In those sections, the term "conditions of employment" is used in reference to enterprise agreements. We submit that the words "same matters" indicate a narrower concept than that of "conditions of employment."

4.5 Subsection 2 of section 41 makes clear that general conditions for the benefit of employees are not to be overridden by an enterprise agreement. Clearly the intent is to preserve the safety net of award statutory conditions while allowing parties to vary award conditions to suit the specific needs of the particular enterprise without the need to deal with every subject matter - see section 38(2)(b) referring to "all or some conditions of employment." Award provisions will operate unless agreement provisions clearly contradict them either specifically or by the use of clear general words.

22 Reliance is also placed, by way of contrast, on the terms of ss 152 and 170LY of the Workplace Relations Act 1996 (Cth). Those provisions depend upon the expression "to the extent of any inconsistency with the award", a test which is said to be more broadly based than that under s 41 of the New South Wales statute.

23 Applying these considerations and the authorities it relies on, Unilever contends: 6.1 The context in which one is asked to construe the words used in clause 25 and appendix B are set by clause 3 and in particular, clause 3.1 of the Agreement. That subclause makes clear that at the time of making the Agreement, the parties did not anticipate the sale of the Marrickville business.

6.2 The parties also clearly regarded security of employment as a matter of some importance. So much is reflected in the words of subclauses 3.1.2 and 3.1.3. This concept is also reflected in the language of clause 25 in the second subparagraph. There it is stated in terms that "job security is an important issue for all employees."

6.3 The language of clause 25 also confirms that the parties did not anticipate the sale of the business as a cause of redundancy - see for example the third dash point in clause 25.

6.4 The language and coverage of Appendix B under the heading "General Issues" also reinforces the notion that the parties did not anticipate a transfer of the business during the life of this Agreement. Provision is made for employees to be redeployed within the business as a result of redundancy (see, for example, clause 4 of Appendix B). There is no provision relating to employment or redeployment beyond the Company.

6.5 It is also of significance to note in the context of clauses 5C and 5D, which deal with redeployment and re-skilling of employees, that although redeployment may occur the ultimate decision on whether an employee receives redundancy pay is with the company. These clauses reflect the primacy of maintaining employment rather than the option of taking a severance benefit at the preference of the employee.

6.8 It follows, having regard to the context in which the Agreement was developed the approach of the parties, and the external context, that the matter of transmission of business and indeed alternative employment arising out of such a transfer were not contemplated and were not dealt with in this Agreement. The use of the words "any redundancies" needs to be understood as redundancies arising as contemplated by the Agreement, not as a general prescription for redundancies however arising or whatever circumstances may apply. In particular, having regard to: the structure of the Agreement; the absence of general words ousting the operation of the Award (cf. clause 2); and the premise upon which the Agreement was made, the proper construction is that the matter of transfer of business is not dealt with by the Agreement and therefore clause 18(5)(iii) of the Award continues to apply. Such a determination does not lead to a dramatic change in the balance of the Agreement. It remains a matter for the Commission to determine, at a relevant time, whether any or some redundancy pay should apply in such circumstances.

6.9 In these circumstances, Unilever is entitled to a declaration in accordance with paragraph A1 of the application.

24 Unilever also makes an alternative submission on the construction issue, as follows:

7.1 In the alternative, Unilever submits that if the Agreement does deal with the matter of acceptable alternative employment on transfer of the business it does so in the context of clause 6 of Appendix B.

7.2 The relevant part of that clause provides: "An employee who is redundant in Award terms … is not eligible for a redundancy payment."

7.3 The word "redundant" as it occurs in clause 6 had, in previous versions of the Agreement from 1995 appeared as the word "dismissal". However, the word "dismissal" as used in Appendix B was used as a synonym for "redundant". It should be understood in that context and therefore no relevant change occurs in the 2002 Agreement by the substitution of the word "redundant" for "dismissal" where that word had previously been used in Appendix B.

7.4 In any event, the use of the word "dismissal" in clause 6 would make no significant difference to the operation of the clause. Arguably, it would make the clause more onerous on employees. If "dismissal in Award terms" were taken to refer to clause 17 of the Award then any employee dismissed on notice or for misconduct or refusal of duty, would not be eligible for redundancy pay.

7.5 While that may follow as a matter of logic and reasoning in relation to the last two reasons for termination, termination on notice is a feature which applies equally to redundancy as to non-redundancy cases. It can't be seriously suggested that an employee would be deprived of redundancy benefits simply because termination on notice occurred.

7.6 Secondly, there is no reason to think that " dismissal in award terms" refers back to clause 17 of the Award. Termination arising out of disciplinary processes or on notice or for abandonment of employment are dealt with in clauses 27 and 28 of the Agreement. If the intent of clause 6 of Appendix B was to exclude from the possibility of redundancy pay those employees dismissed for reasons of discipline or resignation or abandonment then reference would logically be made to clauses 27 and 28 of the Agreement. Such clauses existed in the Agreements going back to 1995. There is no need or warrant to refer to "award terms."

7.7 Perhaps more importantly clause 6 refers to ineligibility for "a redundancy payment". The contemplation is that, although an employee may be redundant some reason exists which disentitles the employee to a redundancy payment. That points to the expression "in award terms" encapsulating the content of clause 18(5)(iii) of the Award. In short, although an employee is "redundant in award terms" they are entitled to less, or no, severance pay by reason of acceptable alternative employment being found for the employee. Such a construction gives the words meaning an effect, does not lead to any absurdity and ensures that the industrial concept of redundancy and redundancy benefits is applied consistently with the standards laid down by industrial tribunals.

7.8 Moreover, refusal of "acceptable alternative employment" is akin to "leaving of one's own accord" and equity is therefore maintained between these positions by this construction. It also lends weight to this construction that these issues are dealt with in the same clause.

25 Unilever concludes this part of its case by submitting that clause 18(5)(iii) of the Award either continues to operate or is incorporated by clause 6 of Appendix B of the Agreement.

Concession and formal submission by Unilever 26 Senior counsel for Unilever advised the Court that his client did not contest that redundancies will arise, in circumstances such as those in this case, on the authorities as they presently stand (including authorities that bind a single judge of the Court Session or a single Member of the Commission). It was specifically observed, however, that in August 2004 the High Court heard and reserved judgment in the matter entitled Amcor Limited v CFMEU & Ors and Unilever therefore made the formal submission, without taking the matter further, that upon the transmission of a business where all employees continue in employment, no redundancy arises.

27 It is of course inappropriate to speculate on the outcome of the proceedings referred to but this Court must decide the matter on the basis of existing authority and it may be relevant that the relevant enterprise agreement was entered into on the basis of "received wisdom" at the relevant time that the circumstances here under consideration would result in redundancies (the reference to "received wisdom" is to be understood in the sense used by Glass JA in Electricity Commission of New South Wales v Clissold [1981] 1 NSWLR 284 at 293).

Evidence given in proceedings 28 In the proceedings generally Unilever recalled evidence from Messrs Andrew George and Jeffrey Howard. APF called Ms Maxine McPhee; and the Unions called Messrs Vernon Falconer, Waldo Villarroel, Salvatore Rafaraci, David Connelly, Martin Kohut and Mathew Ashton. There was also a great deal of documentary material tendered.

29 Messrs George and Howard gave evidence in both the declaratory relief proceedings and the proceedings before the Commission, as did Mr Falconer. The evidence of the other witnesses was given only in the Commission proceedings.

30 Mr George and Mr Falconer's evidence was subject of cross-examination as was the evidence of Messrs Villarroel, Rafaraci and Ms McPhee.

31 The positions held by the respective witnesses may be shortly described as follows:

Unilever's Witnesses (a) Mr Andrew George is the Business Human Resources Manager - Supply Chain, Finance and Information Technology, of Unilever and has held that position since April 2003 with the Marrickville site coming within his responsibility from that time.

(b) Mr Jeffrey Howard holds the dual roles of Site Human Manager Resources - Minto and Group Industrial Relations Adviser, Australasia, for Unilever. He has been employed by Unilever since August 2002. He noted that in approximately July 2003 he was asked to assist Unilever in negotiations of a new enterprise agreement for the Marrickville site and then commenced preparations for transfer from his then current position in North Rocks to the Marrickville site.

APF's Witness (c) Ms Maxine McPhee has her own consulting business known as "McPhee Consulting Pty Limited" and her company is contracted by APF, with Ms McPhee engaged in the capacity of Manager Business Services and IT with APF. She gave evidence that through APF she is assisting AP Foods (Sydney) Pty Limited as trustee of the AP Foods (Sydney) Trust, in relation to employment issues arising out of its potential purchase of Unilever's Marrickville Spreads and Bakery operations

Union Witnesses (d) Mr Falconer is employed as an industrial officer with the AWU having held that position for approximately seven years. His functions during that time have included responsibilities for the industry in which the Marrickville site operates and in that role has been dealing with Unilever since 1997 in relation to AWU members. (e) Mr Waldo Villarroel is currently employed by Unilever at its Marrickville site in the position of Refinery Operator. In that position he operates plant in the vegetable oil refinery process at the Marrickville site. (f) Mr Salvatore (Sam) Rafaraci is employed by Unilever at its Marrickville site in the position of Operator/Maintainer Level 2 in the Finishing Hall area of the plant. He commenced employment with Unilever in August 1996 and has been a delegate of the AWU at the Marrickville site and chairman of the Occupational Health and Safety Committee. (g) Mr David Connelly is employed by Unilever at its Marrickville site in the position of Operator/Maintainer 2. He has held that position for approximately five years, having worked for Unilever since approximately November 1993. He is also a delegate for the AWU in D Shift in the Refinery area of the plant. (h) Mr Martin Kohut is employed by Unilever at its Marrickville site in the position of Operator/Maintainer 2, having held that position since August 1996 when he first started with Unilever. (i) Mr Mathew Ashton is currently employed by Unilever at its Marrickville site in the position of Forklift Driver/Storeman in the warehouse area of the site, having held this position since May 2000. He is a member of the TWU and is also a delegate of the TWU and a member of the Single Bargaining Unit (the SBU) established under the relevant enterprise agreement.

The witnesses' evidence 32 Mr Howard gave evidence as to the previous enterprise agreement at the Marrickville site (the enterprise agreement made in 2000) and also of the negotiations which took place in late 2001 in respect of the new enterprise agreement. He also gave evidence based on Unilever records which showed that in early 2002 approximately 8 employees were made redundant and there were proceedings before the Commission as to the negotiations of the 2002 agreement. In that respect particular reference was made to proceedings before Macdonald C as to the removal of the "no forced redundancy" provision in the enterprise agreement. There was reference to other proceedings before the Commission and particularly concerning the negotiations as to the removal of the words "no forced redundancy" when the 2000 enterprise agreement was being replaced by the 2002 agreement (an agreement which was not approved by the Commission until November 2003).

33 Mr George's evidence related essentially to his involvement during 2004 with the senior management of Unilever in the proposed sale of the Marrickville business. He referred to Unilever making considerable efforts to find a purchaser that would be prepared to offer on-going employment to the employees at the Marrickville site. Reference was made to the agreement with APF and to negotiations etc with the Unions and their Members.

34 Mr Falconer gave evidence as to the nature of the work on site and the most recent round of negotiations for the enterprise agreement. He also referred to the contentious nature of the negotiations and Unilever's firm position that the "no forced redundancy" provision in the 2000 agreement was to be removed. He described the position ultimately reached which is set out in the current agreement as a compromise position. Mr Falconer also gave evidence as to the announcement by Unilever of the sale of the business to APF and negotiations concerning that issue. He also gave evidence as to his concerns as to the security of employment of his members with APF expressing the view that the employment was not comparable to the employment with Unilever. He referred to the purchaser APF being only recently created having only $100 of share capital, 80 percent of which was held by a person based in the United States. ASIC records were provided in that regard.

35 In view of the conclusions reached in the various proceedings, it is not necessary to refer in detail to the evidence of employee witnesses. It is sufficient to note that the employees gave evidence as to their general contentedness in working with Unilever notwithstanding that there had been redundancies in the past. Among the factors referred to in that respect was the size, reputation and global reach of the Unilever companies. This was contrasted with the lack of knowledge about APF and concerns arising from the employees' dealings with APF. I accept that the concerns of the employees are genuine. Whether they are soundly based only time will tell although it must be accepted that, in all of the circumstances of the matter, the offers made by Unilever, together with the relevant contractual provisions relied upon, appear to be generous and a genuine attempt to allay any concerns of the employees and to offer them appropriate alternative benefits.

36 Ms McPhee gave evidence as to her role with the proposed purchase of the Marrickville business by APF. She indicated that APF Sydney is not a related body corporate within the meaning of the Corporations Act 2001 to Atlantic Pacific Foods Pty Limited. However the shareholders, unitholders and controlling structure are the same. She also referred to APF having two factories of its own in Rutherford and Maitland at which it employs approximately 60 employees. Those employees are currently covered by the terms of AP Chrushing Caines Foods Pty Limited Enterprise Agreement 2003, reflecting the fact that APF took over a business formerly carried on by a firm known as Caines Foods. The factories at Rutherford and Maitland are quite close geographically and have been producing margarine and related products for approximately 18 years and that APF Sydney and APF Holdings see the purchase of the Marrickville business as an opportunity to further develop their foods business and their industrial and bakery business.

37 She noted that, in summary, APF Holdings will purchase the real property at Marrickville and all trademarks and APF Sydney will purchase all other assets, such as significant plant and equipment, and assume all employment liabilities. It is expected that the completion of the sale contract will (subject to the pre-conditions being met) take place in March 2005 and APF Sydney will then offer employment to all former Unilever employees engaged at the business. Ms McPhee confirmed the undertaking of APF Sydney to offer alternative employment to all Unilever employees engaged at the site whose employment is subject to the enterprise agreement so as to ensure that the Marrickville plant would continue and that the security of the employees would have greater weight in circumstances where an interim award is made by the Commission as proposed by APF. She also noted that APF did not consider that if the unions' application for a three year award was successful that that would be considered satisfactory to the parties for the purposes of the sale contract.

38 During cross-examination Ms McPhee indicated that AP Foods Sydney Pty Limited was a company established for the specific purpose of the proposed purchase of the Marrickville site and that it was not a company used to operate any current or existing business. She also confirmed that the company is actually owned by two individuals, a Mr Monaghan and a Mr Phillips from the United States; that the company is one which currently has no assets and she was unable to indicate whether it had any bank accounts. Similarly, she was unaware who were the beneficiaries of the AP Foods Sydney Trust. Ms McPhee also indicated that AP Foods Holding Pty Limited and the AP Foods Holding Trust were established for the specific purpose of the proposed purchase of the Marrickville site; the former entity did not conduct any existing business and she was not aware of any assets that it might have and that it too was owned by Messrs Monaghan and Phillips. When asked why the purchase arrangement of the Marrickville site was structured in the way it was, in particular why ownership of the various assets to be purchased were to be split between the two companies acting as trustees, she indicated that she did not know why it was structured in that way; nor did she know why the employees were to be engaged by one company and the land to be purchased by another company.

39 Reference was made in Ms McPhee's evidence to a supply agreement entered into between APF and Unilever as a pre-condition of the operation of the sale agreement but she noted that the supply agreement had not be finalised although she did know that it was likely to have a term of approximately eight years. Her understanding was that the supply agreement would be fulfilled from work carried on from the Marrickville site but was not in a position to say that that was the subject of the agreement or that it had been agreed in principle.

40 Ms McPhee had earlier given evidence that it was likely that APF would utilise the Marrickville plant to meet its supply demands as distinct from moving Marrickville production to Maitland because the likely quantities could not be met at Maitland and that there was no current plan to move Marrickville plant and operation to Maitland. She also denied that APF Sydney would be a shell company because on completion of the purchase from Unilever, APF Sydney would own the substantial plant and equipment inventory and the many items worth many millions of dollars, noting that Unilever had recently invested about $45,000,000 in the Marrickville site.

41 Under cross-examination Ms McPhee indicated that the basis of her knowledge as to the unlikelihood of moving work or plant to Maitland was based on the fact that there had been no discussions or plans formed to move any work or plant. She also indicated that there was a possibility that some of the production runs in Marrickville could be run in Maitland and vice versa. She did, however, note in that respect that the Maitland plant was basically running to capacity. Ms McPhee did depose to the recent production at Maitland of a product usually manufactured at Marrickville; that is, Flora margarine which was produced for Unilever. She indicated that that had been a controlled production and that she knew little about it. She indicated that the production was a trial but she was not aware of any details of that nor what the precise purpose of the trial was. At the conclusion of her cross-examination, Ms McPhee was asked whether she was able to "rule out" certain possibilities relating to the reduction of wages and conditions of employees who might come into the employment of APF as a result of the sale. Generally speaking, she was unable to rule such matters out. It was reasonably clear that in certain important areas Ms McPhee was not privy to the policy views of APF nor had she been given instructions as to such matters.

42 I accept Ms McPhee as a witness of credit who was attempting to assist the Court and the Commission in the relevant deliberations. I take a similar view with each of the witnesses who gave evidence. However, because of the limited knowledge Ms McPhee had in certain respects, the weight that could be given to some of her evidence was inevitably limited and this is particularly so in relation to those parts of the evidence which were intended to provide assurance to the employees as to the security of their employment with APF.

The contract between Unilever and APF 43 Because of its significance to various aspects of the proceedings it is appropriate to refer now to the contract for the sale of the Marrickville plant and site which is in evidence subject to the exclusion of certain terms, including the sale price, and subject to its remaining confidential to the parties. Unilever relies, however, on the size of the transaction. Unilever refers to that aspect in its submissions in this way: Unilever has entered into an Agreement to sell its Marrickville business (Exhibit 6). An indication of the size of the transaction might be obtained from the fact that Unilever has invested around $45 million in Marrickville in the recent past (see paragraph 14 of Exhibit 19, Affidavit of Maxine McPhee).

44 The following extracts from the Business Sale Agreement are relevant: 3 Conditions of Precedent

3.1 Conditions Precedent Completion is conditional on:

(a) (Property Agreement) simultaneous completion of the sale and purchase of the Land and Buildings under the Property Agreement, the Property Agreement not having been terminated nor rescinded beforehand;

(b) (NSWIRC) the New South Wales Industrial Relations Commission making any relevant award, interim award, orders and declarations in a form satisfactory to the parties in relation to each of the applications referred to in clause 12.1 or any additional applications or variations which are agreed between the parties prior to the Completion Date and no appeal to those relevant award, interim award, orders and declarations being pursued by or on behalf of the Employees during any applicable appeal period;

(c) (offer of employment) all Employees employed being provided with an offer of employment which complies with the First Buyer's obligations under clause 12.3 and in the case of those employees covered by the Marrickville EBA, such offer being determined to be acceptable alternative employment;

(d) (Transferring Employees) the number of Transferring Employees being sufficient, in the reasonable opinion of both parties, to enable the Buyers to carry on the Business at the Business Premises at Completion;

(e) (Manufacturing and supply agreement) the parties finalising the terms of an agreement under which the Buyers agree to manufacture, package, label, store and distribute the Seller's products for sale under the Retail Brands;

(f) (Completion and Conduct of Business) the Buyers and the Seller have complied in all material respects with their respective obligations under clauses 4 and 9; and

(g) (No Material Adverse Change) there has been no material adverse change affecting the financial or trading position or prospects of the Business.

3.2 Reasonable endeavours The Buyers must use their reasonable endeavours to obtain the satisfaction of the Conditions Precedent in clauses 3.1(c) and 3.1(d). Each party must use its reasonable endeavours to obtain the satisfaction of the Conditions Precedent in clauses 3.1(a), 3.1(b), 3.1(e), 3.1(f) and 3.1(g), including negotiating in good faith to finalise the terms of the manufacturing and supply agreement referred to in clause 3.1(e). The parties must keep each other informed of any circumstances which may result in any Condition Precedent not being satisfied in accordance with its terms. 3.3 Termination of agreement If:

(a) any of the Conditions Precedent set out at clause 3.1(b) or 3.1(e) are not fulfilled by 31 January 2005 or a later date agreed on by the Seller and the Buyers; or

(b) the Conditions Precedent set out at clause 3.1(a), 3.1(c), 3.1(d), 3.1(f) and 3.1(g) are not fulfilled by the Completion Date or a later date agreed on by the Seller and the Buyers,

then, if the party who seeks to terminate this agreement has complied with clause 3.2, this agreement may be terminated at any time before Completion by notice given by that party to the other parties. 3.4 Effect of termination

If this agreement is terminated under clauses 3.3, 18.6 or 21.2 then, in addition to any other rights, powers or remedies provided by law: (a) each party is released from its obligations under this agreement other than in relation to clauses 22 and 25;

(b) each party retains the rights it has against any other party in connection with any breach or Claim that has arisen before termination;

(c) the Buyers must return to the Seller all documents and other materials in any medium in their possession, power or control which contain information relating to the Business, including the Records; and

(d) the Deposit must be paid to the First Buyer and all interest earned on it must be paid in equal shares to the Seller and First Buyer and the parties must immediately direct the Stakeholder accordingly.

12.1 New South Wales Industrial Relations Commission Within 2 Business Days following the date of this agreement: (a) The First Buyer will make an application to the New South Wales Industrial Commission for an interim award to the effect that, subject to Completion, the Marrickville Enterprise Agreement 2002 will apply to and be binding on the First Buyer as and from the close of business on the Completion Date (the " Interim Award "); and

(b) The Seller will make applications to: (i) the New South Wales Industrial Relations Commission in Court Session for a declaration that clause 18(5)(iii) of the Margarine Makers (State) Award is to be read as an additional term to the Marrickville Enterprise Agreement 2003 (the " Interpretative Declaration "); and

(ii) the New South Wales Industrial Relations Commission for an order that the Seller is not required to pay on termination of employment, or at any other time, severance or redundancy payments pursuant to clause 18(5)(iii) of the Margarine Makers (State) Award or any other industrial instrument with respect to the employees at the Marrickville site covered by the Marrickville EBA (the " Order ").

12.2 Reasonable endeavours Each party must use its reasonable endeavours to obtain the Interim Award, the Interpretative Declaration and the Order by 31 January 2005. Each party must pay their own legal costs with respect to all necessary proceedings instituted, additional proceedings and those which arose from the applications.

12.3 Offer of Employment Within 2 Business Days of satisfaction of the Condition Precedent in clause 3.1(b) and then not later than 14 days before the Completion Date, the First Buyer must make an offer of employment to each Employee then in the employ of the Seller in the Business;

(a) of ongoing employment on terms and conditions of employment that are overall, or on the whole, no less favourable than the terms and conditions of employment provided to the Employee by the Seller as at the date of the offer; and

(b) conditional on Completion and effective from the Completion Date.

45 Also relevant is the definition of "Completion Date" in Clause 34, the definitions provision. That expression is defined to mean 4 March 2005 or any other date agreed by the Seller and the Buyers.

Consequences of terms of sale agreement between the parties and their effect on the current proceedings 46 It is clear from certain of the extracts from the agreement (see, for example, clauses 3.1(b), 3.3, 12.1 and 12.2) that it is necessary that the judgment and decision in the present matters be delivered by 31 January 2005 because the failure by the Commission in Court Session and the Commission to deliver the relevant judgment or decision by that date would be one of a number of factors which may lead to the sale agreement being terminated.

47 Other circumstances which may lead to the termination of the agreement include (as set out in clause 3.1(b) of the sale agreement): (a) the Court Session or the Commission not making the relevant awards (including interim awards), orders or declarations in a form satisfactory to the parties ; and (b) if there is any appeal as to any relevant award (including interim award) or declarations made which are pursued by or on behalf of the employees affected by the application during any applicable appeal period.

48 These provisions are of some real concern and although I do not intend to act on those concerns by, for example, declining to deal with the matters further (as was submitted at various stages during the proceedings on behalf of the Unions), or by declining to issue the relevant judgment and decision by 31 January 2005, industrial parties should be made aware that provisions of this kind are objectionable by their very nature and there should be no guarantee in future that if parties decide to enter into agreements of this kind that they will necessarily receive the assistance of the Commission in meeting deadlines that they impose upon themselves.

49 There are obvious reasons why this should be the case. The first and perhaps most obvious one is that it is not a matter for parties to decide amongst themselves what priority the Court Session or the Commission will give their particular matters. Obviously, the Court Session and the Commission will always attempt to assist parties in ways that are considered appropriate. However, parties must understand that the demands on the Commission are great and there will always be competing applications which might, after appropriate deliberation in open court has been given to them, be given priority irrespective of what priority the parties to particular applications feel is appropriate for their matters. Parenthetically, it is appropriate to observe that but for the fortuitous advent of the law vacation and the availability of a vacation judge to provide dates for the hearing of the contested matters, it may not have been possible for the employer parties' self-imposed deadline to be met.

50 There is however another very important basis upon which provisions of this kind are objectionable. As observed by counsel for the Unions, whatever the outcome of Unilever's application for declaratory relief and the other applications before the Commission, the success in those matters is only one of a number of contingencies to be taken into account in determining whether the sale of this business will go ahead and the decisions of the Court Session and the Commission "accepted", in the sense of being acted upon. Counsel submitted that "[w]hatever the outcome of the application, Unilever will not be bound by its outcome but will take it into account in determining whether to proceed with its sale contract ...". I also accept the submission the situation is somewhat analogous to that in Minister for Immigration and Ethnic Affairs v Pochi (1981) 149 CLR 139 at 143 - 144 where Gibbs CJ, Mason, Aickin and Wilson JJ said: This Court should not be placed in a position where the substance of a decision which it has affirmed can be overridden by ministerial fiat and the reasons for its judgment may be treated by the Minister as no more than advice which he is at liberty to disregard.

51 In some ways the concerns here are even more profound. Clearly, issues of redundancy, security of employment and the viability of an important business are relevant to the issues in these proceedings. Such matters are matters of great sensitivity at any time. For the Court Session and the Commission to be obliged to hear proceedings in the context of such matters (subject to party imposed conditions such as those presently relevant), has a significant potential to give the appearance (although clearly not the reality) of a situation where the Commission is being diverted from appropriately applying the law or, in appropriate parts of the proceedings, from exercising its discretions appropriately by being subject to inappropriate constraints because of perceptions as to how it may have decided the proceedings where such provisions did not exist.

52 A number of other submissions were made by the Unions as to why, as a matter of discretion, the Court Session and the Commission should decline either to deal with the employer application or grant the relief sought. Particular reliance was placed on the self-imposed terms of the sale agreement, the contingent nature of many of the orders and awards sought and the failure of Unilever to follow certain procedures in the enterprise agreement. I do not consider that those arguments should be accepted in these proceedings.

Consideration of application for declaratory relief 53 It will be observed that Unilever's submissions which seek to show that Clause 18(5)(iii) of the award applies to the employees the subject of these proceedings notwithstanding the comprehensive provisions in the enterprise agreement and the terms of s 41(1) of the Industrial Relations Act, essentially rely on two alternative contentions, as follows:

(1) that Clause 18(5)(iii) continues in force notwithstanding the existence of the provisions in the enterprise agreement because the provisions in the enterprise agreement do not "deal with" the matters in Clause 18(5)(iii) for the purposes of s 41(1) which therefore does not operate to override that clause; (2) alternatively, the provisions of Clause 18(5)(iii) of the award are incorporated by reference into the enterprise agreement; the reference in the enterprise agreement which incorporates the award provision is the reference in paragraph 6 of Appendix B of the enterprise agreement to "[a]n employee who is redundant in award terms ...".

54 It is convenient to deal with the two contentions in reverse order. As to the second contention, I do not accept that Clause 18(5)(iii) is incorporated into the enterprise agreement in fact or in substance for the following reasons. Although the terms of paragraph 6 of Appendix B of the enterprise agreement may not be particularly clear it is appropriate to approach its construction by reference to its overall terms, its apparent purpose and its placement and role in Appendix B.

55 The last sentence of Clause 25 of the enterprise agreement states that the function of Appendix B is to set out the redundancy benefits that apply "in the event of redundancies following conciliation and arbitration". Reference to the whole of Clause 25 shows that situation will arise if redundancies become necessary and the redundancies cannot be "filled" or sufficiently "filled" on the basis of voluntary redundancies.

56 In that circumstance, and perhaps somewhat anomalously, the early part of Appendix B refers to applications for redundancies being made by individual employees, which seems to be indicative of voluntary redundancy; that is, however, explicable on the basis that Appendix B is also relevant where voluntary redundancies may not be sufficient in a particular situation.

57 Paragraphs 1.5 to 1.7 of the Appendix set out the levels or quantum of the redundancy benefits prescribed by the agreement in situations of voluntary redundancy. Paragraph 2 is entitled "Insufficient Applications for Consideration of Redundancy and Total Company Selected Redundancy" and applies (as stated in its opening words) where:

(a) suitable applications for redundancy and subsequent acceptance by the company have not resulted in reduction of numbers required; and

(b) the benefits set out in sub-paragraphs 2.1 to 2.4 are to apply to those employees who:

(i) did not wish to be (made) redundant and consequently; (ii) were (made) redundant "as a result of solely company selection".

58 Paragraphs 3 to 6 constitute the next part of Appendix B and, as the heading to that part of the Appendix indicates, those paragraphs deal with general issues as to redundancies. These paragraphs deal with various aspects of redundancies and the redundancy process. Some provisions deal with situations where an employee gains, or is offered, a new position with the company, other provisions do not. Paragraphs 7 to 11 complete Appendix B; it is not proposed to refer to them further as they do not seem to be relevant to the issues in this case.

59 Paragraph 6 falls to be considered in the context of Appendix B as a whole and more particularly as one of a number of "General Issues" set out in the seven paragraphs numbered 3, 4, 5A, 5B, 5C, 5D and 6.

60 Paragraph 6 read in its entirety is plainly a provision the purpose of which is to specify those employees (or describe their circumstances) who will not be entitled to a redundancy payment. It has a number of difficulties. The first is the one at the centre of the present arguments: that is, it is not clear what "redundant in award terms" means. The second is that the reference to Clause (or paragraph) 5A is plainly a mistake. The reference is clearly intended to illustrate a situation where an employee "of his/her own accord" leaves the company's employment, yet paragraph 5A does not refer to that situation. Paragraphs 5B, 5C and 5D however may well refer to that situation; perhaps 5A is meant to refer to 5B, 5C or 5D; problematically, it is not clear which of 5B, 5C or 5D should have been referred to or why only one of them should have been referred to, rather than all of them.

61 Senior counsel for Unilever helpfully took the Court to the various enterprise agreements which preceded the present enterprise agreement and particular note was made of the fact that in agreements made prior to the present one in 2002, Appendix B, although in very similar terms to the current form, had one major difference: the word "redundant" (or its variants) was not used; rather the word "dismissed" (or its variants) was used, so that there was a wholesale replacement in 2002 of the words "dismissed" etc with the words "redundant" etc. This raised the possibility, noted by counsel for the unions, that paragraph 6 which originally referred to "[a]n employee who is dismissed in award terms ..." may have been automatically, but erroneously, altered to refer to "redundant" when it was in fact meant to continue to refer to an employee "dismissed in award terms".

62 Unfortunately, the possibility raised by the unions does not seem to assist in discerning the meaning of paragraph 6. I consider it remains equally unclear what both "dismissed in award terms" and "redundant in award terms" means. This much is, however, clear: the current phrase "redundant in award terms" does not refer to Clause 18(5)(iii) of the award for this reason. Paragraph 6 of Appendix B refers to a number of categories of employees who are not eligible for, or entitled to, a redundancy payment. One of those categories is that of employees "redundant in award terms". However, employees to whom Clause 18(5)(iii) of the award applies are not employees who are ineligible, or necessarily ineligible, to redundancy pay. Clause 18(5)(iii) specifically states that employees to whom it applies (that is, employees for whom "the employer obtains acceptable alternative employment") may be entitled to three possible alternative payments as to redundancy pay (albeit referred to as "severance pay"); either the prescribed award amount, no amount or a lesser amount; in the latter two situations, subject to a decision to that effect by the Commission.

63 Paragraph 6 of Appendix B to the enterprise award could not therefore have been intended to incorporate or give effect to Clause 18(5)(iii) of the Margarine Makers (State) Award in respect of employees the subject of these proceedings.

64 Although it may not be strictly necessary to specifically determine the meaning of the expression or phrase "redundant in award terms" in paragraph 6 of Appendix B of the enterprise agreement, it seems appropriate to attempt to do so.

65 It seems reasonable to assume that the words "in award terms" direct attention to the terms of the relevant award. The terms of the award that may therefore be relevant are clause 17, Termination of Employment, and clause 18, Redundancy, (set out earlier) particularly when regard is had to the whole expression "redundant in award terms" which may possibly be read, for reasons earlier referred to, as "dismissed in award terms".

66 It is useful then to attempt to analyse the terms of award clauses 17 and 18 both for the present purpose and also because that analysis is relevant to the next part of the consideration of the issues in the proceedings.

67 Clause 17 consists of two subclauses. The first subclause in substance defines the types of employment available under the award as either weekly employment or casual employment. The second subclause is in fairly conventional award terms and permits termination of weekly employment by one week's notice on either side or by the payment or forfeiture of one week's wages in lieu thereof, with the proviso that summary termination may occur in cases of employee misconduct or refusal of duty.

68 Clause 18 consists of six subclauses. The first subclause is entitled "Application" and specifies in its first three paragraphs those categories of employees to which the clause applies and those in respect of which it does not apply. The fourth paragraph provides that clause 18 does not apply to certain categories of employee and certain circumstances of employment termination. They are: (a) where employment is terminated as a consequence of conduct justifying instant dismissal;

(b) in the case of casual employees, apprentices or employees employed for a specific period or for a specified task or tasks; or

69 The second subclause of clause 18 imposes a duty on employers to notify change when a decision has been made to introduce major changes in production, organisation etc and a duty on employers to discuss the introduction of such changes with affected employees and their union(s). The third subclause requires an employer which had made a decision that is likely to lead to redundancies to discuss the matter with affected employees and their union(s).

70 The fourth subclause is entitled "Termination of Employment". It sets out: (a) the notice provisions for employees whose employment is terminated pursuant to the second subclause;

(b) provisions for time off during the notice period;

(c) the provisions that apply to employees whose employment is terminated, other than for misconduct, during the notice period;

(d) the requirements on employers to provide certain documentation such as statements of employment and Centrelink notices and certificates; and

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