1
Fair Work Act 2009
s.739—Dispute resolution
“Automotive, Food, Metals, Engineering, Printing and Kindred Industries
Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
DL Employment Pty Ltd
(C2014/289)
SENIOR DEPUTY PRESIDENT DRAKE SYDNEY, 8 JULY 2014
Alleged dispute about any matters arising under the enterprise agreement and the
NES;[s186(6)] - Redundancy entitlements - New Location clause - Extra Claims clause.
[1] This decision arises from the notification of a dispute pursuant to section 739 of the
Fair Work Act 2009 (the Act) lodged by the Automotive, Food, Metals, Engineering, Printing
And Kindred Industries Union (AMWU) on 26 February 2014.
[2] Ms Lucy Saunders, Legal Officer, appeared for the AMWU and Mr Fergus Reid,
solicitor, appeared for DL Employment (DLE). The application was listed on 26 and 27
March; 2, 9 and 15 April; and 15 May 2014.
[3] The Darrell Lea Chocolate Shops Pty Ltd Collective Agreement, 2009-2012 (Darrell
Lea Agreement), approved by Deputy President Booth on 23 July 2012,
applied to all employees at the existing Kogarah and Ingleburn sites1,
bound Darrell Lea Chocolate Shops Pty Ltd trading as Darrell Lea (Darrell Lea), the
AMWU, the National Union of Workers (NUW), New South Wales Branch, and the
Liquor, Hospitality and Miscellaneous Union (LHMU) (Warehouse Employees)
(Cleaning Employees)2,
remained in force until 30 September 20123,
stipulated that no employees would be employed on terms other than its terms4,
stipulated that no party bound by the agreement shall pursue extra claims for the life
of the Darrell Lea Agreement5,
contained an Introduction of Change clause which described Darrell Lea’s Duty to
Notify and Duty to Discuss Change6,
specified Darrell Lea’s obligation to provide information in languages other than
English for employees of non-English speaking background7,
contained a Redundancies Clause that governed Discussions before Redundancies8,
specified that, to the extent practicable, redundancy would be on a voluntary basis9,
and,
[2014] FWC 3877
REASONS FOR DECISION
E AUSTRALIA FairWork Commission
[2014] FWC 3877
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contained a Transmission of Business Clause which specified that, in the event of a
Transmission of Business, the provisions of the Darrell Lea Agreement would
continue to bind the new employer and cover all or part of the work10.
[4] Darrell Lea was placed in voluntary administration on 3 July 2012. On 10 July 2012
PPB Pty Ltd trading as PPB Advisory (PPB) was appointed as administrator. Although
employees continued to perform work it was not disputed that, following this event,
employees suspected that their continuing employment was under threat.11 The business of
Darrell Lea was contracted to be sold by PPB to DLE in August 2012. The sale settled on 7
September 2014.
[5] The DL Employment Pty Ltd Enterprise Bargaining Agreement 2012-2015 (the DLE
Agreement)12, was approved by Commissioner Cargill on 20 June 2013. It continues to
govern the terms and conditions of the employees of DLE who are the subject of this dispute
notification. There has been no application to terminate the DLE Agreement.
[6] The DLE Agreement;
applies to all employees at the existing Kogarah and Ingleburn sites13,
binds DLE, the AMWU and the NUW, New South Wales Branch14,
Remains in force until 30 September 201515,
stipulates that no employees will be employed on terms other than its terms16,
stipulates that no party bound by the agreement shall pursue extra claims for the life
of the agreement17,
contains an Introduction of Change clause which describes the DLE’s Duty to Notify
and Duty to Discuss Change18,
specifies DLE’s obligation to provide information in languages other than English
for employees of non-English speaking background19,
contains a Redundancies Clause that governs Discussions before Redundancies20,
specifies that, to the extent practicable, redundancy will be on a voluntary basis21,
and,
contains a Transmission of Business Clause which states that in the event of a
Transmission of Business the provisions of the DLE Agreement will continue to
bind the new employer and cover all or part of the work22.
[7] The issues I had to determine can be conveniently considered in two parts. The first
issue was whether new contracts containing a location clause, signed by employees at or in
the days following a meeting called by DLE for 3 September 2013, were enforceable against
the employees who signed them. Did those contracts impose a new obligation on those
employees to accept work at the direction of DLE at Ingleburn, instead of at Kogarah, where
they had always worked until 3 September 2013?
[8] Following the determination of that issue, the individual circumstances of some of the
eleven employees who had been directed to work at Ingleburn in mid 2014, but, for various
reasons, did not consent to do so, had to be considered.
[9] During the course of the hearing of this application, I gave an indication in conference
concerning the circumstances of some these eleven employees. The application in respect of
those particular employees was withdrawn by the AMWU.
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[10] At the conclusion of the hearing DLE’s plans for removal to Ingleburn were pressing.
It wished to move to Ingleburn with its preferred workforce. This workforce included the
remaining workers who were disputing the direction to move and the alleged refusal of DLE
to meet its obligation to make redundancy payments pursuant to the DLE Agreement. To meet
that pressing timetable, I listed the application and delivered my findings in relation to both
questions, and orders in relation to the particular employees whose circumstances remained
before me for determination. Mr Reid, who does not regularly appear in the Fair Work
Commission, misinterpreted what had occurred as merely being indicative and did not
immediately instruct his client to comply with the order. A further listing took place on which
occasion the situation was clarified.
[11] I will now provide my reasons for my findings and orders in relation to the first issue.
I will deal with the second issue concerning the individual circumstances of particular
employees in separate reasons for decision.
[12] Early in the afternoon of 3 September 2012, employees were divided into two groups
and were directed to 2 different locations. They had had no prior warning regarding the
meeting and they were not told the purpose of the division. As it transpired, employees who
were not to be offered continuing employment were sent to the canteen and employees who
were to be offered continuing employment were sent to the High Boil Room. This notification
only concerns the circumstances of the employees who were directed to the High Boil Room.
[13] It is important to consider the letters and documents provided to the employees in the
High Boil Room. I have set out below the substance of the documents provided to Mr Paul
Gioffre. The letter, table and contract provided to all employees were the same.
“3 September 2012
PRIVATE & CONFIDENTIAL...
...
Dear Paul
Darrell Lea Chocolate Shops Pty Ltd
ACN 000 498 386
Ricci Remond Chocolate Co Pty Ltd
ACN 000 489 654
(Both Administrators Appointed)(“the Companies”)
As you are aware, we were appointed joint and several voluntary administrators of the
Companies.
The sale of the business to DL Assets Pty Ltd (“DLA”) is scheduled to be completed
on 7 September 2012.
We understand that DLA has offered you employment from completion through its
related entity DL Employment Pty Ltd (“DLE”). The Purchaser has advised us that
the offer is on terms and conditions of employment that are no less favourable
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overall than your current terms and conditions of employment with the
Companies.
If you wish to accept DLA’s offer, we would be happy for your employment with the
Companies to terminate my mutual agreement effective on 7 September 2012. If you
wish to accept, please sign below, and (subject to the completion of the sale) that
termination will occur.
If you accept the offer, all of your accrued leave entitlements (if acceptable) will
transfer to DLE on completion. Accordingly, the Companies will not make any
payments in respect of such entitlements. Further, as your employment will
terminate by agreement, you will not be entitled to notice of termination of
employment or severance/redundancy pay. Your salary will be paid up to 7
September 2012 in the usual fashion.
This letter is not an indication that the Administrators are adopting any previous
contracts of employment that existed or may have existed between you and the
Companies.
If you have any questions please do not hesitate to contact Jaimie Carmichael of my
office on 02 8116 3000. Otherwise, if you wish to accept DLA’s offer, please sign
below were indicated and return to me no later than 7 September 2012.
Employee Commonly asked questions - transfer of employment
Further to DL Assets Pty Ltd (“DLA”) purchasing the business and majority of assets
of Darrell Lea Chocolate Shops Pty Ltd and Ricci Redmond Chocolate Co Pty Ltd
(“Darrell Lea”), and the offer of employment from its related entity DL Employment
Pty Ltd (“DLE”) that all employees present today received, we have set out below a
list of key questions we expect employees to have.
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1. WHEN DO I
NEED TO RETURN
THE COPY
LETTERS BY
It is important that as many as possible completed copy letters
are signed and returned by close of business on Monday 3
September 2012.
We appreciate not all employees will be on site to complete
this, accordingly the deadline for return is Friday 7
September 2012.
Please return your completed letters to a PPB representative if
one is available or return to your line managers who scan and
email them to Jaimie Carmichael of PPB on
jcarmichael@ppbadvisory.com and also put the original in the
post to:
PPB Advisory
FAO Jaimie Carmichael
MLC Centre, Level 46
19 Martin Place
Sydney
NSW 2000
2. What terms and
conditions will I be
on at VIP?
DLE are offering you the same terms and conditions as you
had at Darrell Lea.
3. What happens
with my current
entitlements?
DLE will recognise your current accrual of annual leave and
leave loading, long service leave and personal/carer’s leave, as
well as your prior service with Darrell Lea. Your effective
employment start date will not change.
4. What happens if I
say no?
If you do not accept the offer to be employed by DLE.
You will not be entitled to any redundancy pay as
you have been offered employment on the same
terms and conditions and you have chosen to decline
that offer;
The administrators will confirm that you have
resigned and may require you to work your notice
period. We will not meet any payments in lieu of
notice; and
You will be entitled to your annual leave and long
service leave entitlements at the time you finish with
Darrell Lea. There is no guarantee Darrell Lea will
hold sufficient assets to discharge these obligations
at that point in time. Please note that as you have
been offered employment on the same terms and
conditions and therefore may not be eligible to apply
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for GEERS. Please contact GEERS for further
information.”
(my emphasis)
“30th August 2012
Paul Gioffre
c/- 160 Rocky Point Road
Kogerah NSW 2217
Private and Confidential
Dear Paul,
1. Offer of employment
Subject to the completion of the sale of the Darrell Lea business to the Company, the
Company offers you employment in the same position on terms the same as your
current terms and conditions of employment with Darrell Lea Chocolate Shops
Pty Ltd (ACN 000 498 386) (Darrell Lea).
This offer of employment is conditional upon the completion of the sale of the Darrell
Lea business to the Company. The date on which this sale occurs is deemed
‘Completion Date’ and is anticipated to be the 7th of September 2012.
This employment offer is automatically withdrawn if the sale of the Darrell Lea
business is not completed.
You will commence work on and from the Completion Date.
The Company will recognise your current accrual of annual leave and leave loading,
long service leave and personal/carer’s leave, if applicable, as well as your prior
service with Darrell Lea.
Your notice period under your current employment contract or applicable enterprise
bargaining agreement will remain the same.
2. Location:
The Company currently conducts its business at 160 Rocky Point Road, Kogarah
and 200 Rocky Point Road, Kogarah (Kogarah Sites) and at 3 Brooks Road,
Ingleburn (Ingleburn Site). Initially your position will be based at the Kogarah
Site(s) but if the Company decides to move all or some of the operations of the
business to the Ingleburn Site you may be required to work at the Ingleburn Site
or at any other location from which the business may be conducted in the future
(not being more than the distance between the Kogarah Sites and the Ingleburn
Site from your home address).
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...
Yours sincerely
[signed]
…”
(my emphasis)
The Meeting of 3 September 2012
[14] Ms Bates, the Human Resources Manager of DLE, was one of the employees directed
to the High Boil Room. She had been employed by Darrell Lea from 29 March 2010. She
signed a new contract with DLE on 7 September 2012. Ms Bates provided a statement23 and
was cross-examined.
[15] Although Ms Bates was in a better position than most employees to speculate about
the purpose of the meeting on 3 September 2013, she had not been informed of its purpose
beforehand. Like most employees she had only heard whispers on that day24.
[16] In relation to the meeting of 3 September 2012, Ms Bate’s evidence is set out below25:
“9. I attended the meeting and I recall as follows:
a) Representatives of PPB Advisory on behalf of Darrell Lea Chocolate Shops
Pty Ltd opened the meeting by advising the employees in the room of the
circumstances surrounding the sale of the Darrell Lea business to the Quinn
Family and that all of the employees in the room would be offered
employment with a company associated with the Quinn Family.
b) Representatives for the Quinn Family and senior staff members of their other
business interests were in attendance. I now know those individuals to include
Tony Quinn, Christina Quinn, Klark Quinn, Rex De Vantier and Felicity
Spittle.
c) On behalf of the Quinn Family both Rex De Vantier and Tony Quinn
addresses the employees.
d) I recall Rex De Vantier stating: “An offer of employment is made to each of
you in the room. The new owners were looking at building a state of the art
facility for production at Ingleburn. Employment with the new employer will
involve the employees being based at Kogarah initially and at Ingleburn when
the business relocated to that site”.
e) Rex De Vantier also said: “The relocation of the business to Ingleburn will
take place in about 18 months time”.
f) Tony Quinn also spoke: I recall that he said: “The relocation of the business to
Ingleburn will occur in about 18 months time”.
g) The employees were told by Rex De Vantier that offers of employment were
available for collection at the back of the room via Felicity Spittle and Jim
Tsiakos.
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10. I collected my offer of employment which was delivered to me in an envelope.
Other employees did the same.”
[17] In cross-examination Ms Bates confirmed that at the end of that meeting she was
provided with a document from PPB Advisory which contained the question “What if I say
no?”. The answer provided to that question in the same document was “You will not be
entitled to any redundancy pay.”
[18] Ms Bates confirmed that Mr de Vantier, the General Manager of the Quinn family’s
group of companies, which included DLE, advised that the new owners were looking at
building a state of the art facility for production at Ingleburn and that employment would be at
Kogarah initially and then at Ingleburn when the business relocated. It was clear that there
would be no change to jobs in the immediate future, that it would be work as usual at
Kogarah. Mr Quinn, one of the new owners, confirmed that the move would happen in
approximately 18 months time.
[19] In answer to a question from Ms Saunders, Ms Bates confirmed that no one advised
the assembled employees that if they accepted the offer they would have to move to
Ingleburn26.
[20] Mr Tsiakos, the operations manager of Darrell Lea provided a statement27, gave
evidence and was cross-examined. His evidence in relation to the selection process of
employees selected to work for the Quinn family at DLE employment is extracted below28:
“9. On or about mid August 2012 I became aware of the Quinn Family’s interest in
buying the Darrell Lea business through discussions I had with Daniel Cawthorne and
Aaron Finlayson (PPB Advisory)
10. On or about mid August 2012, I was informed by Aaron Finlayson and Daniel
Cawthorne (PPB Advisory), that my assistance would be required in identifying
existing employees that would be suitable for continued employment with Darrell Lea.
Employees that I was asked to identify were employees that has the requisite skill set
for work in the following areas:
a) Liquorice
b) Choc manufacturing
c) Enrobing
d) Choc / Sugar panning
e) Kitchen
f) Maintenance, and
g) Rocky Road
11. I completed a list of names and delivered that list to the Quinn Family’s
representatives.
12. On or about the end of August 2012, I became aware of a business sale agreement
that had been entered into between the Quinn Family and the Administrators and I was
advised by Aaron Finlayson and Daniel Cawthorne (PPB advisory) that tight time
frames existed in terms of completing the transaction.
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13. It was made clear to me by Daniel Cawthorne (PPB Advisory) that those
employees that had been identified as employees that would be asked to continue to
work in the Darrell Lea business would need to be approached and offers of
employment would need to be made within a short period of time.”
[21] In relation to the meeting of 3 September 2012 Mr Tsiakos gave the following
evidence29:
“14. On or about the end of August 2012, I was advised by Daniel Cawthorne (PPB
Advisory) that two meetings would be held on 3 September 2012. Those meetings
were held at about 2:00pm on that day at the Darrell Lea Kogarah plant.
15. In the first meeting (which was held on the ground floor), employees that had been
identified as continuing employees would be advised of their opportunity for ongoing
employment. I was present at this meeting.
16. In the second meeting (which was held on the upper floor), other existing staff of
Darrell Lea were advised that employment with the proposed buyers would not be
available to them. I was informed by Daniel Cawthorne of PPB advisory that those
employees were addressed by the Administrators. I was not present at that meeting.
17. In relation to the first meeting I recall as follows:
a. The Administrators initially addressed the employees on the purpose of the
meeting.
b. The Administrators introduced the Quinn Family and their representatives.
c. The Administrators said that the Quinn Family were experienced in the
manufacturing industry and that the Quinn Family had “big plans” for Darrell
Lea which included a relocation of the business to Ingleburn.
d. The Administrators said that the employees in the room would all be offered
employment by the Quinn Family.
e. The Quinn Family, via Tony Quinn and Rex De Vantier, spoke to the
employees about their plans for Darrell Lea. This included addressing the
employees on their plans of relocating the business to Ingleburn.
f. It was stated that relocation to Ingleburn would be likely to occur in or about
Easter 2014.
g. The message that was delivered by the Quinn Family was such that the
employees had been selected and would be offered employment.
h. Employees were given the opportunity to consider the offers of employment
and either accept them or reject them.
i. If an employee elected to reject their offer of employment, the employees were
simply directed to the Administrators (e.g. their current employer to deal with
their employment).
j. Employees were advised that if they returned their signed letters of offer of
employment their acceptance of the terms of employment would be
acknowledged and they would be able to secure ongoing employment.
k. Employees were directed to read the offers of employment and return any
signed offers of employment to either myself or Felicity Spittle (CFO for the
Quinn Family’s group of companies).
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l. The letters requested a return date of no later than 5 September 2012 (e.g. two
days after the meeting).
m. The meeting was concluded by employees being advised by Rex De Vantier
that they could collect their letter of offer of employment from me or Felicity
Spittle.
n. Felicity Spittle and I handed out envelopes containing the offer of employment
to each employee.”
[22] Mr Tsiakos prepared the list of critical employees but he had no idea which employees
would be retained. He did not know whether his own employment would be continued. He
did not know what employees were thinking about the circumstances of Darrell Lea because
he did not have any meetings with them. He did what PPB asked him to do.
[23] In cross-examination he confirmed that no one from PPB, the Quinn family companies
or Darrell Lea went through the contract of employment with employees in the High Boil
Room. No one told the employees that they were agreeing to move to Ingleburn. Employees
would have understood following the meeting that they could keep working at Kogarah until
at least April 201430. Employees were given 2 days to sign the contract. He confirmed that it
would have been possible for employees to have been told that they were going to be offered
employment earlier than 3 September 2012 if PPB or the Quinn family had authorised it.
[24] After the meeting Mr Tsiakos told employees who had not been offered employment
that they had to speak to the administrators who he regarded as their current employer. He
told employees who had been offered employment that they could accept that employment by
signing the letter they had been given on 3 September 2013 or not accept and deal with the
administrators who were in the building31.
[25] Mr Rex DeVantier, the General Manager of the Quinn family group of companies,
which includes DLE, gave the following evidence regarding the meeting of 3 September
201232.
“...19.
(d) I addressed the employees. I said words to the effect:
“The Family is delighted to be in this position. The Family has
purchased the warehouse facilities in Ingleburn. The move of the
business to Ingleburn will occur at around Easter of 2014.
The Family has selected all of you in this room to continue employment
based on your particular skill set. For this reason, we would like to offer
you employment with a company associated with the Quinn Family.
I ask that you see Felicity Spittle and Jim Tsiakos at the conclusion of
this meeting. Felicity and Jim will hand out offers of employment. I ask
that you consider those offers and if you wish to accept employment,
please return those letters (once signed) to either Felicity of Jim. If you
do not wish to accept employment, I ask you to deal directly with the
administrators.”
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(e) Tony Quinn also addressed the employees. Tony Quinn said words to the
effect of:
“We are in the business of manufacturing. We have some pet food
interests and now we will be running the chocolate business.
As part of this process we are going to move to Ingleburn in about 18
months. The new facility at Ingleburn will be made into a high level
manufacturing plant. We want to offer everyone in this room
employment. We look forward to working with you all in the future.”“
Consultation
[26] Ms Bates gave evidence33 of EBA negotiations, and discussions regarding the
proposed relocation to Ingleburn, which occurred from December 2012 until March 2013.
The AMWU raised as an issue the cost of transport to Ingleburn and employees and the
position of particular employees who did not wish to work out Ingleburn. Ms Bates replied as
follows “... the business is offering a travel allowance to assist employees in adjusting to the
additional cost, however all employees are required to go, so we will not be specifically
writing a clause in the EBA to give employees the choice. The business requires all
employees to go to be able to run equipment and produce product.”34
[27] No specific new clause was inserted into DLE agreement as requested by the AMWU.
The relevant DLE Agreement clauses remained as they had been in the Darrell Lea
Agreement.
[28] Ms Bates had meetings with individual employees concerning the proposed relocation.
She had standard questions for the employees. These are set out below.
“...14.
1) Have you thought about the relocation to Ingleburn and whether you
will be relocating?
2) If not, what is your reason?
3) Is there anything the business can do to help you?
4) Do you have any questions or is there anything you would like to know
about the relocation?”35
[29] Discussions took place between the AMWU and Darrell Lea and the requests from
Darrell Lea for information regarding the difficulties of individual employees regarding the
move to Ingleburn. Darrell Lea required information regarding employees circumstances so
that they would be able to “… deal with these matters.” The AMWU was slow in providing
this information. Eventually, a memorandum dated 19 December 2013 was forwarded to
employees. It is extracted below:
“DATE: 19 December 2013
TO: All Permanent Employees
FROM: Kimberley Bates, HR Manager
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RE: Relocation
Dear All,
As you are aware, the Union and the business have been working towards trying to
assist all employees in the transition to Ingleburn, however the Union have indicated
that a number of employees believe that they will be unable to relocate to Ingleburn.
If you believe you are unable to go to Ingleburn, please detail the reasons why in a
letter addressed to me by Friday 10 January 2014, so that the business can look at
individual employee circumstances.
Following review of each submission, a meeting will be arranged with individuals to
discuss their circumstances.
All jobs are moving to Ingleburn and as such, it is the aim of the business to assist
employees where possible to make this relocation as smooth as possible.
If you have any questions, please feel free to come and speak with me.
Cheers,
[signed]
Kimberley Bates
HR Manager.”36
[30] As a result of this memorandum there were eight meetings with the employees37.
[31] Ms Bates agreed that employee concerns regarding the proposed relocation to
Ingleburn were a major issue in all EBA discussions38, that the AMWU position in
discussions was consistently that employees who could reasonably refuse to go to Ingleburn
would be redundant and that the travel allowance discussed was not included in the DLE
Agreement. Her evidence was that DLE did not wish to crowd the EBA. She agreed that DLE
did not refer to the contracts signed in 2012 when discussions took place around any
prospective redundancies.
[32] The following exchange took place between Ms Bates and I:
“...you were aware that the AMWU’s view was that their positions would be
redundant?---Yes.
Okay, and you were aware that the AMWU didn’t believe the company had a right to
move those employees?---Yes.
And you didn’t bring up the contracts signed in 2012 in that meeting, did you?
---No.
THE SENIOR DEPUTY PRESIDENT: If you thought that there was no power to
move - to claim redundancy as a result of those contracts, why was the company
[2014] FWC 3877
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interested in hearing about the personal circumstances of the employees? They would
be irrelevant in those circumstances, would they not?
---We were really looking at whether - did the employees have a reason why they
couldn’t go, and it was a reason that we could help them to get there? Could they
change shift, I guess is an example. So we wanted everyone to go, so we were happy
to meet with everyone and at least see if there was something the business could do to
help them transition - - -
So it was about changing the circumstances of the move to meet their convenience,
rather than finding out whether the reasons meant that they could not go and therefore
were redundant?---Yes, we were looking at trying to get them there.
And if those circumstances couldn’t be changed, what was the company’s attitude?---
Well, we looked at every individual as an individual, and I guess from that, even their
personal circumstance, the business didn’t believe that it warranted a redundancy.
And if their circumstances had warranted that situation, what would the
company’s position have been?---Well, if the business had thought it had
warranted a redundancy then they would have been paid a redundancy.
All right, so the argument really is whether or not the personal circumstances are
in fact sufficient for the move to Ingleburn not to be reasonable in all the
circumstances?---Yes.”39
(my emphasis)
[33] Ms Bates’ answers to my questions seemed to be inconsistent with DLE’s submissions
regarding the effect of the contracts offered on 3 September 2012 and its arguments as to their
effect. I asked Ms Bates to leave the hearing room and took that opportunity to raise the issue
with Mr Reid. DLE maintained its position.
[34] Ms Bates gave evidence regarding a meeting between herself, Klark Quinn and Jim
Tsiakos to discuss the circumstances of the individual employees who had raised difficulties
with the move to Ingleburn. The purpose of the meeting was “… to see if it would change
anything.”40 Ms Bates’s evidence was that, if there had been something significant in the
material provided by the various employees, she would have gone back to Mr Quinn and said
“X, Y, Z, what do you think?”41.
[35] In re-examination Ms Bates agreed that she didn’t have authority to bind DLE on
redundancy.
[36] Mr Tsiakos gave evidence42 regarding the negotiations with the AMWU and
employees from November 2012 until March 2013. He emphasised to employees how
important it was to DLE that employees with critical skills move to Ingleburn.
[37] Mr Tsiakos confirmed that the AMWU raised concerns in EBA negotiations about
individual members whose circumstances did not enable them to go to Ingleburn43.
[38] Mr Tsiakos’ evidence was that that DLE was willing to consider the individual
circumstances of particular employees which might make it unreasonable for them to move to
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Ingleburn the purposes of ensuring that “… we could get our people to Ingleburn”44. Mr
Tsiakos was cross-examined about the operation of clause 11A to 11D Introduction of
Change; Discussions before Redundancy; Redundancy Provisions of the Darrell Lea
Agreement. Mr Tsiakos confirmed in cross-examination that he did not raise the operation of
the 2012 contracts when meeting with the AMWU to discuss the personal circumstances of
some members45. Mr Tsiakos did not raise any issue about the operation of the contracts or
the possibility that those contracts might override the Darrell Lea Agreement which was in
place when they were signed. He emphasised that employees were needed. He did not tell any
employee that they had to go to Ingleburn46.
Conclusion
[39] In August 2012 the business of Darrell Lea was sold by PPB to DLE. The sale of the
business was completed on 7 September 2012. The employees of Darrell Lea who moved to
the employment of DLE took their accrued entitlements with them. Despite PPB’s claim that
they were not adopting any previous contracts of employment that existed or may have
existed between employees and “the Companies”, those employees had continuity of
employment from Darrell Lea to its administrators and then to DLE, the Quinn family
enterprise. The Darrell Lea Agreement applied from certification on 23 July 2012 until 30
September 2012. All of its obligations applied in the period before Darrell Lea went into
voluntary administration, in the period when Darrell Lea was being administered by PPB and
continued to apply when Darrell Lea was purchased by DLE.
[40] The contract offered by DLE was described by PPB in its letter of 3 September 2012
and the table provided to employees as an offer on the same terms as their current terms and
conditions of employment with Darrell Lea. This statement was not accurate. It was
misleading for PPB to put that proposition to employees as a statement of fact. It was patent
that the contract DLE were offering was intended to impose the new Location Clause set out
below.
“2. Location:
The Company currently conducts its business at 160 Rocky Point Road, Kogarah and
200 Rocky Point Road, Kogarah (Kogarah Sites) and at 3 Brooks Road, Ingleburn
(Ingleburn Site). Initially your position will be based at the Kogarah Site(s) but if the
Company decides to move all or some of the operations of the business to the
Ingleburn Site you may be required to work at the Ingleburn Site or at any other
location from which the business may be conducted in the future (not being more than
the distance between the Kogarah Sites and the Ingleburn Site from your home
address).”
[41] The proposed new Location Clause contemplated altering specific entitlements and
obligations of the parties, to the detriment of employees, by imposing a new and unrestrained
obligation on employees to move to Ingleburn at the direction of DLE, or a location at a
similar distance, without triggering any entitlement to redundancy payments. This obligation
did not exist in the Darrell Lea Agreement.
[42] The Darrell Lea Agreement contained a No Extra Claims clause47. I am satisfied and
find that the Location Clause sought to be imposed by DLE on any employee who wished to
continue in employment, which employment was governed by the Darrell Lea Agreement,
[2014] FWC 3877
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was an extra claim. I am satisfied and find that a commitment to the Location Clause in the
contracts offered on 3 September 2012 could not be imposed upon the employees of Darrell
Lea as a condition of continued employment. The Darrell Lea Agreement stipulated that no
employees could be employed on terms other than its terms48. The proposed Location Clause
was not a clause of the Darrell Lea Agreement and employees could not be required to work
in accordance with that term.
[43] It was not open to PPB or DLE to set aside any term of the subsisting agreement and
oblige employees to enter into a new contract with different terms. I am satisfied and find that
the contract of employment offered by DLE on 3 September 2012, commitment to which was
expressed to be a condition of continued employment, could not be offered or entered into
without breach of the Darrell Lea Agreement. The contracts offered on 3 September 2012 and
signed by employees on that date or thereafter are of no effect to the extent that they purport
to amend or set aside any term of the Darrell Lea Agreement.
[44] Clause 2.F and Clause 2.E h) of the Darrell Lea Agreement were not the only clauses
attempted to be breached by those conducting the 3 September 2012 meeting. The meeting
was conducted as if there were no subsisting obligations arising from the continued operation
of Darrell Lea Agreement. The Introduction of Change clause and the Redundancy Clause
were also breached.
[45] If I was in error in relying on the continued application of the terms and conditions of
Darrell Lea Agreement, I would not in any event have been persuaded that the events of 3
September 2013 were capable of giving rise to a contractual obligation between the High Boil
Room employees and DLE.
[46] The employees directed to the High Boil Room did not know what the employees in
the canteen were being told. There was no evidence before me concerning what happened at
the meeting with employees who were directed to the canteen. I do not know what the canteen
employees were told. The High Boil Room employees had to make a decision on the material
provided to them at their own meeting. They did not know if the other employees in the
canteen were going to be paid their entitlement. They did not have any independent
information as to what would happen to them if they rejected the offered contract and went
into the rest and residue pool of employees in the canteen.
[47] The only information the High Boil Room employees had was that provided orally at
the 3 September 2012 meeting supported by materials provided by PPB at that meeting. They
were told that if they rejected the offer by DLE they were to be referred to the administrators,
who were present in the room. They were told that if they refused the offer they would not be
entitled to redundancy payments. The documents provided to them confirmed that.
“4. What happens if I say no?
If you do not accept the offer to be employed by DLE.
You will not be entitled to any redundancy pay as you have been offered
employment on the same terms and conditions and you have chosen to decline that
offer;
[2014] FWC 3877
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The administrators will confirm that you have resigned and may require you to work
your notice period. We will not meet any payments in lieu of notice; and
You will be entitled to your annual leave and long service leave entitlements at the
time you finish with Darrell Lea. There is no guarantee Darrell Lea will hold
sufficient assets to discharge these obligations at that point in time. Please note that
as you have been offered employment on the same terms and conditions and
therefore may not be eligible to apply for GEERS. Please contact GEERS for further
information.”
[48] The proposition being put by all those in charge of the meeting of 3 September 2012,
that is, that the offer from DLE was in exactly the same terms as the existing terms and
conditions of employment in the Darrell Lea Agreement, or that they would be no worse off
overall, was incorrect. The manner in which it was put was designed to present it as an
indisputable fact. The employees had no opportunity to make an informed choice.
[49] Even if the offer of continuing employment on the proffered terms could have been
made, it should not have been made hand in hand with an announcement that failure to accept
would result in non-payment of redundancy payments. I am satisfied and find that this
conduct amounted to duress.
[50] These employees were long-term employees. Their entitlements were significant.
They were mostly not young. They had been employed in specialised work and, outside the
confectionery industry, their skills might well be regarded as limited. It was of the utmost
importance to these employees that they understood what their choices were.
[51] To exacerbate the situation a significant proportion of these employees did not have
English as their first language. Although many of them had been in Australia for a long time,
they had mostly worked with immigrants from their native lands and many continued to speak
in their native languages. Despite management’s knowledge of these particular circumstances,
no attempt was made to provide interpreters for any of these workers at the meeting of 3
September 2012.
[52] Despite the employees lack of sophistication and experience in such matters no
attempt was made to provide separate advice to each employee, nor was there any opportunity
to consult separately, before they had to make a choice on this very significant issue and face
the alternative of being sent to see PPB and, as far as they were aware, receive no redundancy
payments. They had to choose, without any knowledge of what the alternative might provide,
and then see PPB to find out.
[53] This arrangement, for long-term employees in a crisis situation, with likely problems
of understanding and language, was a paltry and shabby exercise. For very good reasons, the
focus of PPB and DLE was on obtaining the best employees from the pool to suit DLE’s
prospects. Unfortunately there was insufficient attention to the needs of the High Boil Room
employees and no attention to existing obligations pursuant to the Darrell Lea Agreement.
[54] Did DLE have an absolute right to redeploy employees from Kogarah to Ingleburn
arising from contracts offered on 3 September 2012? I have already answered this question in
the negative.
[2014] FWC 3877
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[55] I will deal with the circumstances of the particular employees whose circumstances
were before me for Decision in separate Reasons for Decision.
SENIOR DEPUTY PRESIDENT
Appearances:
L. Saunders appearing on behalf of the Applicant
P. Reid appearing on behalf of the Respondent
Hearing details:
2013:
26 - 27 March;
9 and 15 April; and
15 May;
Sydney.
Printed by authority of the Commonwealth Government Printer
Price code C, PR551926
1 Clause 2.A of the Darrell Lea Chocolate Shops Pty Ltd Collective Agreement, 2009-2012
2 Clause 2.B of the Darrell Lea Chocolate Shops Pty Ltd Collective Agreement, 2009-2012
3 Clause 2.C of the Darrell Lea Chocolate Shops Pty Ltd Collective Agreement, 2009-2012
4 Clause 2.E h) of the Darrell Lea Chocolate Shops Pty Ltd Collective Agreement, 2009-2012
5 Clause 2.F of the Darrell Lea Chocolate Shops Pty Ltd Collective Agreement, 2009-2012
6 Subclauses 11.A a) and b) of the Darrell Lea Chocolate Shops Pty Ltd Collective Agreement, 2009-2012
7 Subclause 11.A b) of the Darrell Lea Chocolate Shops Pty Ltd Collective Agreement, 2009-2012
8 Clause 11.B of the Darrell Lea Chocolate Shops Pty Ltd Collective Agreement, 2009-2012
9 ibid
10 Clause 12 of the Darrell Lea Chocolate Shops Pty Ltd Collective Agreement, 2009-2012
11 Transcript PNs 104-106
12 [2013] FWCA 3907
13 Clause 1.3 of the DL Employment Pty Ltd Enterprise Bargaining Agreement 2012-2015
14 Clause 1.4 of the DL Employment Pty Ltd Enterprise Bargaining Agreement 2012-2015
15 Clause 1.2 of the DL Employment Pty Ltd Enterprise Bargaining Agreement 2012-2015
16 Subclause 1.5 g) of the DL Employment Pty Ltd Enterprise Bargaining Agreement 2012-2015
17 Clause 1.8 of the DL Employment Pty Ltd Enterprise Bargaining Agreement 2012-2015
SEAL OF FAIR THE AUSTRA ORK COMMISSION
[2014] FWC 3877
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18 Subclauses 2.3 a) and b) of the DL Employment Pty Ltd Enterprise Bargaining Agreement 2012-2015
19 Subclause 2.3 b) of the DL Employment Pty Ltd Enterprise Bargaining Agreement 2012-2015
20 Subclause 6.6 a) of the DL Employment Pty Ltd Enterprise Bargaining Agreement 2012-2015
21 Ibid
22 Clause 6.8 of the DL Employment Pty Ltd Enterprise Bargaining Agreement 2012-2015
23 Exhibit DL Employment 1
24 Transcript PNs 111-114
25 Above 23
26 Transcript PNs 141-143
27 Exhibit DL Employment 5
28 Ibid
29 Ibid
30 Transcript PN 2588
31 Exhibit DL Employment 18
32 Exhibit DL Employment 6
33 Exhibit DL Employment 1, para 12-25
34 Exhibit DL Employment 1, para 12(a)
35 Exhibit DL Employment 1, para 14
36 Exhibit DL Employment 1, attachment KB-4
37 Exhibit DL Employment 1, attachment KB-5
38 Transcript PN 154-179
39 Transcript PN 180-187
40 Transcript PN 317
41 Transcript PN 321
42 DL Employment 5, para 23-35
43 Transcript PN 2595
44 Transcript PN 2600-2602
45 Transcript PN 2645-2648
46 Transcript PN 2685-2694
47 Clause 2.F of the Darrell Lea Chocolate Shops Pty Ltd Collective Agreement, 2009-2012
48 Subclause 2.E h) of the Darrell Lea Chocolate Shops Pty Ltd Collective Agreement, 2009-2012
