United FM Group Services Pty Limited trading as United KFPW v National Union of Workers, New South Wales Branch

Judgment (8 paragraphs)

[1]

DECISION

Before the Commission are three applications by Kiama Municipal Council (Council) to exempt it from the payment of redundancy pursuant to the relevant awards.
Application matter number 2025/59613 is an application pursuant to clause 43(iv)(c) of the Nurses' (Local Government) Residential Aged Care Consolidated (State) Award 2021 (Nurses' LG Award). This application has the consent of the New South Wales Nurses and Midwives' Association.
Application matter number 2025/59639 is an application pursuant to clause 40(vii) of the Local Government, Aged, Disability and Home Care (State) Award (LG AD&HC Award). This application has the consent of the Health Services Unions NSW.
Application matter number 2025/59652 is an application pursuant to clause 40(vii) of the Local Government (State) Award (LG Award). This application has the consent of the New South Wales Local Government, Clerical, Administrative, Energy, Airlines & Utilities Union (USU); The Local Government Engineers' Association of New South Wales (LGEA); The Development and Environmental Professionals' Association (DEPA); and the New South Wales Nurses and Midwives' Association of New South Wales (NSWNMA).
The Council moved its application in each matter at the hearings listed yesterday. However, the material filed did not contain the relevant employees' names and I granted leave to the Council to file additional material containing that information. This material has been received by the Commission.

[2]

Consideration

As already stated, each of the Awards entitles an employee who is dismissed on the basis of redundancy to receive a severance (or retrenchment) payment and each Award contains an avenue for the employer to apply to the Commission for relief from paying a severance payment. The relevant clauses are referred to in each application and there is no material difference between the relevant clause in each of the Awards. For example, cl 43 of the Local Government (State) Award 2023 provides: (xii) Subject to an application by the employer and further order of the Industrial Relations Commission of New South Wales, the employer may pay a lesser amount (or no amount) of severance pay than that contained in subclause (iii) above if the employer obtains acceptable alternative employment for an employee.
In United FM Group Services Pty Limited trading as United KFPW v National Union of Workers, New South Wales Branch [2006] NSWIRComm 391 the Full Bench observed: "78. The purpose, then, of severance pay is to compensate for 'non-transferable credits and the inconvenience and hardship imposed on employees'. See also Westfield Holdings v Adams (2001) 114 IR 241 at [144] and the cases referred to therein. However, under the test case standard, which is reflected in cl 34 of the Award, it is open to an employer to seek relief from the general obligation to pay severance pay if it is able to show it has obtained acceptable alternative employment for an employee. In considering an application for relief it will be important for the tribunal to have regard to whether 'previous service with the previous employer was recognised as service with the new employer'. 79. Thus, it seems to us that where an employer, through its efforts, has obtained alternative employment involving minimal dislocation for employees, no loss of accumulated employment benefits such as sick leave and long service leave, where there is continuity of service and the employees are not disadvantaged by the terms offered in the new employment (as would be the case in a succession, assignment or transmission of business), the employer would have a prima facie case for the exercise of discretion in its favour for the granting of an exemption, either in whole or in part, from the award obligation to make severance payments. We elaborate on this view in the following paragraphs. 80. For the reasons expressed by the Full Bench in Re Clothing Trades Award we do not consider that the word 'obtains' should be given a narrow, literal interpretation. As the Full Bench determined in that case, where the employer is a 'strong moving force' in causing the employment to become available, that will be an important consideration for a tribunal of fact in exercising its discretion as to whether an exemption from the requirement to make severance payments should be granted. However, there is the additional consideration, that cannot be ignored or overlooked, of whether the employment was acceptable. There will be circumstances, as is the case here, where the incoming employer intends to employ the employees of the outgoing employer, regardless of any overtures or effort of the outgoing employer to secure that employment. In those circumstances it is necessary for the tribunal to consider what role the outgoing employer has played in causing the new employment to be available on acceptable terms. 81. In other words, the tribunal will have regard to the full extent of the role of the outgoing employer in the placement of its employees, not simply in alternative employment, but in acceptable alternative employment. That is to say, even though the outgoing employer did not 'obtain' employment for the employees in the fullest sense of that word, when regard is had to the employer's overall role, including the part played in bringing about new terms of employment that were acceptable when viewed objectively, it may be concluded that in the absence of the employer's effort or request, acceptable alternative employment would not have become available to the employees. 82. To express the notion differently, if the outgoing employer is a strong moving force in causing acceptable alternative employment to become available to employees or, in circumstances where employment becomes available regardless of the outgoing employer's efforts or overtures, but the outgoing employer is a strong moving force in causing the employment to become available on acceptable terms, we consider the employer would have an arguable case for the exercise of the tribunal's discretion in favour of granting an appropriate exemption, whether in whole or in part. 83. We take the view that the primary objective should be maintaining employees in acceptable employment and thus, where an employer is a strong moving force, to use the words of the Full Bench in Re Clothing Trades Award, in causing to have made available acceptable alternative employment for employees, the employer should, prima facie, be entitled to the exercise of discretion in its favour granting an exemption from having to make severance payments, either in whole or in part. To take a different approach is likely to have the effect of removing the incentive for employers to make the necessary effort to maintain employees in acceptable employment."
Each application was accompanied by an affidavit of Giuseppe Gaudiosi, the Chief Operating Officer of the Council, affirmed on 13 February 2025 and an affidavit of Peter Bell, a Senior Industrial Officer with Local Government NSW, affirmed on 13 February 2025.
In all but one respect, the affidavits of Mr Gaudiosi and Mr Bell, respectively, filed in connection with each application were identical. The exception was that Annexure A to each of Mr Bell's affidavits contained a comparison between the Award relevant to the specific application and the Freshfields Aged Care (NSW) No 1 Pty Ltd NSWNA, ANMF NSW Branch and HSU New South Wales Branch Enterprise Agreement 2021 ("Hall & Prior Enterprise Agreement 2021"), which applies to the employees of Hall & Prior.
In his affidavit, Mr Gaudiosi deposed as to the negotiations between the Council and Hall & Prior regarding the divestment of Blue Haven. He described efforts by the Council: to consult with the affected employees and their union representatives, to explain the agreed arrangements between the Council and Hall & Prior, and to address any questions or concerns the employees may have had. In addition, Mr Gaudiosi deposed: "19. Of the 163 employees employed at Blue Haven, 49 are covered by the Local Government (State) Award 2023, 98 are regulated by the Local Government Aged Disability and Home Care (State) Award and 16 are covered by the Nurses' (Local Government) Residential Aged Care Consolidated (State) Award 2021. 20. Of these employees, approximately 50% will receive an 'Over Enterprise Agreement' Rate of pay, in addition to the rate of pay which is provided in the Freshfields Aged Care (NSW) No 1 Pty Ltd NSWNMA, ANMF NSW Branch and HSU New South Wales Branch Enterprise Agreement 2021 (Hall & Prior Enterprise Agreement). 21. This will ensure that no employee is disadvantaged in their rate of pay. Council has also required Hall & Prior to ensure that employees will receive a salary increase on their total rate of pay (Enterprise Agreement Rate of Pay+ Over Enterprise Agreement Rate of Pay) when the Enterprise Agreement is renegotiated, and thereafter in the ordinary course. 22. 22. A further requirement is that employees of Blue Haven were to be offered positions that were at least equal or identical to the positions they held with KMC."
In his affidavit, Mr Bell deposed that he had compared the provisions of the Awards with those of the Hall & Prior Enterprise Agreement 2021. The results of that comparison were contained in a spreadsheet attached to each of his affidavits.
Mr Bell further deposed that: 1. he was satisfied that the Hall & Prior Enterprise Agreement 2021 "provides no less favourable terms and conditions" than the Awards "when considered holistically"; 2. he was further satisfied that employees transferring from Kiama Municipal council to Hall & Prior "will experience the same or better conditions of employment when considered holistically"; and 3. in the "limited circumstances" where the Awards provide more beneficial rates of pay, he understood that Hall & Prior would maintain those rates for transferring employees.
The material filed by the Council following the hearing contained amendments to Annexure 3 to each application filed by the Council. The amended annexure contained the names of the relevant employees for each application.
Having regard to the evidence, and in light of the observations of the Full Bench in United FM Group Services, I am satisfied that the Council obtained alternative employment for the affected employees and that it was acceptable. I am fortified in this view by the fact that the USU, DEPA, LGEA, the NSWNMA and the HSU supported the Commission granting the relief sought by the Council.

Matter No: 2025/00059639 Local Government, Aged, Disability and Home Care (State) Award Juliana Oglouyan Sharon McCurry Karin Andersen Belinda Bysterveld Whitney McIntosh Anita Hollier Leonie Brandon Sharon McGuinness Diane Holman Joanne Humphry Joanne McAlinden Louise Dalmazzo Mandy Swan Rattana Korkaew Vilma Creighton Neil Spence Sandra Lee Thompson Alphiya Issac Kim Daley Shuhua Li Susan Kearins Agnes Jouannet Clinton Flanagan Eboni Perez Peita Ward Samuel Nwagbara Maria Teresia Mary-Anne Vanzwan Mary-Jane Von Borstel Rebecca Powell Scott Hillard Peter Virtu James Kirkland Jenade Bell Cassie Crilly Elizabeth Gonzalez Juvy Murray Karen Featherstone Lolly Willard Nida O'Brien Rissa Armas Shontel Vause Chelsea-Lee Benson Jacqueline Dalmer Jeanet McCarthy Katherine Leighton Kathy Craddock Keith Ramsay Lorraine Saville Niphaphone Sihamaya Philippa Mannisto Rachana Gurung Sandra Bell Tammy Jelinic Tara King Rita Paudel Cynthia Butrica-Benavente Neta Masala Navya Isee Bec Jones Gemma Allen Cassandra Baird Maddi Farrer Michelle Boniface Sanjay Patwal Fern Punkamol Jules Dingle Byron Davis Reuben Whitford Sean Walter Jeeva Thomas Sunera Siddique Sandhya Karki Khulual Basnet Kiah Walsh Karen Drain Warren McLachlan Nirmal Karki Rosiel Zejnoski Sarah Giokas Eleanor Giokas Gracie Pantalon Hadassah Kerr Jeanneven Salva Katie Fox Josefina Carter Suzy Cicin Michelle Evans Kimberlie Smalle Lisa Harmer Sophia Kelly Helena Band Joanne Brisbane Grant Roberts Karina Winley Kristen Delahunty Judy Tusino Leanne Dryburgh

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Judgment (8 paragraphs)

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Cases Cited (2)