1
Fair Work Act
2009
s.604 - Appeal of decisions
Maritime Union of Australia, The
v
FBIS International Protective Services (Aust) Pty Ltd
(C2014/4854)
SENIOR DEPUTY PRESIDENT WATSON
DEPUTY PRESIDENT GOSTENCNIK
COMMISSIONER CRIBB MELBOURNE, 21 OCTOBER 2014
Appeal against decision [[2014] FWC 1922] and orders [PR550814 and PR550817] of
Commissioner Gregory at Melbourne on 20 May 2014 in matter number C2013/7271 –
permission to appeal granted, appeal upheld decision and orders quashed – jurisdictional
basis for making of orders under s.120 of the Act within s.120(1)(b)(i) has not been
established – application for order under s.120 of the Act dismissed – decision and orders
quashed.
[1] This is an appeal by The Maritime Union of Australia (the Appellant) made under
s.604 of the Fair Work Act 2009 (the Act) against a decision1 and orders2 of Commissioner
Gregory. The decision and orders were made consequent to an application under s.120 of the
Act by FBIS International Protective Services (Aust) Pty Ltd (the Respondent) to reduce the
redundancy payments to which employees would have otherwise been entitled under s.119 of
the Act. One order3 reduced the amount of redundancy pay in respect of 48 employees to nil.
The second order4 reduced the amount of redundancy pay in respect of a further employee,
Ms D Pickering, to 50 per cent of that which the employee would have otherwise been
entitled under s.119.
Sections 119 and 120 of the Act
[2] Sections 119 and 120 of the Act form part of the National Employment Standards
(NES) and prescribe minimum standards in respect of Notice of termination and redundancy
pay in Division 11 of Part 2–2 of the Act. Section 119 sets out the amount of redundancy pay
to which an employee is entitled, subject to variation under s.121, exclusions in s.120, the
effect of transfer of employment situations in s.122 and limits on the scope of Division 11 of
Part 2–2 of the Act.
[3] Section 120 provides for variation of the amount of redundancy pay an employee is
entitled to be paid because of s.119 and is in the following terms:
“(1) This section applies if:
[2014] FWCFB 6737 [Note: refer to the Federal Court decision dated 26
June 2015 [2015] FCAFC 90 for result of appeal.]
DECISION
E AUSTRALIA FairWork Commission
http://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2015/2015fcafc0090
[2014] FWCFB 6737
2
(a) an employee is entitled to be paid an amount of redundancy pay by the
employer because of section 119; and
(b) the employer:
(i) obtains other acceptable employment for the employee; or
(ii) cannot pay the amount.
(2) On application by the employer, the FWC may determine that the amount of
redundancy pay is reduced to a specified amount (which may be nil) that the FWC
considers appropriate.
(3) The amount of redundancy pay to which the employee is entitled under
section 119 is the reduced amount specified in the determination.”
[4] The application before Commissioner Gregory was brought and the orders made by
him on the basis that the employees affected by the orders were entitled to be paid an amount
of redundancy pay by the employer because of s.119 (s.120(1)(a)) and on the basis that the
employer obtained other acceptable employment for the employees (s.120(1)(b)(i)).
Background to the Respondent’s application under s.120 of the Act
[5] Until 31 October 2013, the Respondent held the contract with Asciano Executive
Services Pty Ltd (Asciano) for the provision of security services in several locations within
Australia, principally at stevedoring facilities. It was unsuccessful in its tender to secure a
further contract beyond that time. A different contractor, ACG National Pty Ltd (ACG) was
successful in securing the contract, effective from 1 November 2013.
[6] Each of the employees who were subject to the order reducing their redundancy pay to
nil were offered and accepted employment with ACG in the same position, and on the same
terms and conditions but without recognition of their service with the Respondent.
Ms Pickering, who was subject to the order reducing her redundancy pay to 50 per cent of her
entitlement under s.119 was offered and accepted employment with ACG in a lesser position,
and without recognition of her service with the Respondent.
[7] The Respondent’s application under s.120 of the Act was made on the basis that it had
obtained other acceptable employment for each of the employees who were offered and had
accepted employment with ACG.
Appeal Grounds
[8] The Appellant’s notice of appeal raised three appeal grounds:
“1. The Commissioner erred in finding that the Respondent obtained alternative
employment for the employees.
2. The Commissioner erred in finding that the relevant employment was
acceptable alternative employment.
[2014] FWCFB 6737
3
3. The Commissioner erred in determining that the employees’ redundancy pay
should be reduced to nil.”
[9] At the commencement of the appeal hearing, the Appellant sought and was granted
permission to amend its notice of appeal by adding two additional grounds of appeal:
“4. The Commissioner erred by failing to consider and make a finding as to
whether the employees respondents were ‘entitled to be paid an amount of
redundancy pay by the employer because of s.119’, as required by s.120(1)(a)
of the Fair Work Act 2009.
5. The Commissioner erred in determining s.120 of the Fair Work Act 2009
empowered the making of the orders.”
[10] The Appellant’s notice of appeal advanced three matters which it contended made it in
the public interest to grant permission to appeal:
“1. The employees have suffered an injustice by having their redundancy
entitlements reduced to nil;
2. The decision is affected by sufficient error to warrant appellate intervention.
3. The appeal raises issues about the proper test to be applied under s.120 of the
Act.”
[11] Grounds 1 and 2, as advanced by the Appellant in its notice of appeal raised findings
of fact in respect of whether the Respondent obtained the employment of each employee with
ACG and whether the employment was acceptable employment, each of which is a
jurisdictional pre-requisite to the making of an order under s.120 of the Act. Each of the
grounds attacks a discretionary decision going to the establishment of a jurisdictional fact.
[12] The third appeal ground in the notice of appeal, concerned the extent of reduction in
the entitlement going to an alleged error in the exercise of the discretion within s.120 of the
Act, in the event that the jurisdictional prerequisite is established.
[13] The additional appeal grounds (4 and 5) introduced through the amendment of the
notice of appeal raise questions of the construction of the Act in relation to the entitlement of
the relevant employees to be paid an amount of redundancy pay by the employer because of
s.119, having regard to the operation of the FBIS International Protective Services (Aust)
Collective Agreement 2012 - 20165 (the FBIS Agreement) which covered and applied to the
relevant employees when employed by the Respondent and the effect of ss.55(5) and (6) of
the Act.
The standing of the Appellant to bring the appeal
[14] Whilst the Appellant was not a party to the proceedings before Commissioner
Gregory, it contended that it is a “person aggrieved” by the decision and orders because all of
the employees affected by the orders are eligible to be members or are members and have
asked the Appellant to bring on the appeal. An unchallenged witness statement of the National
Legal Officer of the Appellant states that eight persons named in the orders are members and
[2014] FWCFB 6737
4
a number of them asked for the assistance of the MUA to appeal the decision. The
Respondent does not challenge the Appellant’s standing to bring the appeal.6
[15] We are satisfied that the Appellant is a person aggrieved by the decision and orders the
subject of this appeal and is entitled to bring on the appeal.
Application by United Voice to put submissions in the appeal
[16] United Voice was not a party to the proceedings before Commissioner Gregory but
applied under ss.589 and 590 in the appeal as a person able to establish a relevant interest in
the matters raised by the appeal grounds.7 United Voice asserted that it had such an interest in
that two of the employees named in the orders of the Commissioner were members and it had
an interest on behalf of its membership more broadly in the issues raised in the appeal –
redundancy payments in circumstances of a change in contract. The Appellant supported the
application by United Voice. The Respondent opposed the application but chose not to
challenge the assertions in relation to members affected by the orders. We allowed United
Voice to make submissions, restricted to those raised by the appeal grounds (including the
additional grounds in the Appellant’s amended notice) on the basis of the relevant interest
established through its affected members.
Background to the hearing before Commissioner Gregory
[17] The Respondent’s application before the Commissioner was opposed by some affected
employees on their own behalf and behalf of other employees. Some employees provided
written submissions and statements of evidence but none appeared in the proceedings before
the Commissioner or gave evidence. The Respondent relied on evidence of Mr J Christmas,
the Respondent’s National Operations Manager which was accepted without cross-
examination or challenge. It follows that the evidence before the Commissioner was limited to
that of Mr Christmas. The appeal is necessarily directed to the establishment of error on the
basis of the evidence before Commissioner Gregory.
Consideration
Entitlement of the relevant employees to be paid an amount of redundancy pay by the
employer because of s.119
[18] The amended grounds of appeal (grounds 4 and 5) raise for consideration whether the
employees affected by the orders made by the Commissioner had an entitlement to
redundancy pay because of s.119 of the Act. The Appellant argued that the Commissioner fell
into error because he failed to consider whether these employees had such an entitlement.
[19] The Appellant, supported by United Voice, maintained that the Commissioner should
have concluded that the relevant employees did not have an entitlement to redundancy pay
because of s.119 and consequently the Commissioner did not have power to make any order
varying redundancy entitlements under s.120 of the Act.
[20] It is clear that the power to reduce an amount of redundancy pay under the NES is
only enlivened if, relevantly “an employee is entitled to be paid an amount of redundancy pay
by the employer because of section 119”.8
[2014] FWCFB 6737
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[21] The Appellant submitted that the entitlement to redundancy pay of the relevant
employees arises under clause 2.5 of the FBIS Agreement and not s.119 of the Act. It says
that by reason of ss.55(4), (5) and (6), the NES operates as a minimum standard but not the
source of entitlement to redundancy pay in the relevant sense. In consequence, so was
submitted, s.120 is excluded by the express terms of the FBIS Agreement. As s.120 is only
enlivened if an entitlement arises “because of” s.119, there is no displacement of the
minimum standards of the NES contrary to s.61 of the Act.
[22] We are not persuaded that this construction is correct.
[23] Section 55(4) of the Act permits an enterprise agreement to include terms that are
“ancillary or incidental to the operation of an entitlement of an employee under the” NES or
“that supplement the” NES. Terms that are ancillary or incidental to, or that supplement, the
NES must not be detrimental to an employee in any respect when compared to the NES.
Section 55(5) permits an enterprise agreement to include terms that have the same or
substantially the same effect as provisions of the NES whether or not such terms are ancillary
or supplementary terms.
[24] Section 55(6) of the Act relevantly provides that if an enterprise agreement includes
terms permitted by ss.55(4) or (5) then if such terms give an employee an entitlement that is
the same as an entitlement under the NES, the enterprise agreement terms operate in parallel
with the employee’s NES entitlement, but not so as to give the employee a double benefit, and
the provisions of the NES “relating to the NES entitlement apply, as a minimum standard” to
the enterprise agreement entitlement.
[25] Clause 2.5.2.1 of the FBIS Agreement9 contains a term that gives an employee an
entitlement to redundancy pay that is the same as the NES entitlement, although it is not clear
whether the precondition that an employee “is made redundant by the Company” under the
FBIS Agreement has the same meaning as the preconditions to the entitlement in s.119(1) of
the Act. Nonetheless to the extent that the FBIS Agreement provides the same entitlement to
redundancy pay as the NES entitlement, the entitlement to redundancy pay may be sourced
both in the FBIS Agreement and in the NES because they “operate in parallel”. The
entitlement may be enforced under either source but not both sources so as not “to give a
double benefit”. This is the effect of s.55(6). This construction is clear in the words of s.55(6)
but lest there be doubt, the construction is also consistent with the explanation of the
provision in the Supplementary Explanatory Memorandum to the Fair Work Bill 2008, which
provides:
“24. The amendments make clear that an enterprise agreement can include terms
that are the same (or substantially the same) as an NES entitlement. These could be
terms which simply replicate the NES or terms that make ancillary or supplementary
provision in relation to the NES and subsume the NES entitlement. This means that an
employer can make a comprehensive enterprise agreement with the employer’s
employees.
25. Such terms operate in parallel with the NES entitlement, and do not confer a
double entitlement. The same applies to terms of modern awards that are ancillary or
supplementary to a NES entitlement. This means that a NES entitlement can be
sourced both in the NES and in an enterprise agreement or modern award and can be
enforced as an entitlement under either. Also, the mechanisms contained in the
[2014] FWCFB 6737
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agreement are available to resolve any dispute about the entitlement.”10 [Our emphasis
added]
[26] However the entitlement to redundancy pay under the FBIS Agreement does not
operate writ large. Whilst it is possible for an enterprise agreement to provide for a term
which requires a redundancy entitlement to be paid unencumbered by s.120 of the Act, the
FBIS Agreement does not so provide. Clause 2.5.5 of the FBIS Agreement contains
exclusions, clause 2.5.5.1(c) of which provides that the redundancy clause shall not apply:
“. . . in a particular redundancy case if the Company arranges suitable alternative
employment for the Employee; or the Employee unreasonably refuses to accept such
employment”
[27] It is immediately apparent that the effect of this exclusion is that redundancy
entitlements under the FBIS Agreement are not payable at all in the circumstances
contemplated by the exclusion. For present purposes it is not necessary to decide whether
there is any material difference between the phrase “obtains other acceptable employment” in
s.120 of the Act and “arranges suitable alternative employment” in clause 2.5.5.1(c). Under
clause 2.5.5, unlike s.120, there is no requirement for an application to be made to the
Commission before the exclusions may be invoked and there is no possibility in the
circumstances contemplated by the exclusions for a reduction of the entitlement rather than a
complete loss of the entitlement. It cannot therefore be said that the clause is ancillary or
incidental to, or supplements the NES within the meaning of s.55(4) of the Act because to the
extent identified above, it is detrimental to an employee. Nor can it be said that the exclusions
term in clause 2.5.5 has the same or substantially the same effect as any provision of the NES.
Even if it were such a term it cannot displace s.120 by reason of s.61(1) of the Act.
[28] Moreover, to the extent that it was submitted that s.120 was excluded by operation of
clause 2.5 of the FBIS Agreement, the submissions, in the circumstances of the exclusions in
clause 2.5.5, flies in the face of s.55(1) and if it so operated it has no effect by reason of s.56
of the Act.
[29] To the extent that the redundancy pay entitlement in clause 2.5.2 provides an
entitlement that is the same as the NES entitlement in s.119 within the meaning of s.55(5)
then as s.55(6)(b) makes clear the provisions of the NES relating to the NES entitlement apply
as a minimum standard to the enterprise agreement entitlement that is the same as the NES
entitlement.
[30] It seems clear to us that s.120 of the Act is a provision of the NES relating to the NES
redundancy pay entitlement in s.119. For reasons already given, it is not as suggested by the
Appellant, excluded by the express terms of the FBIS Agreement. Rather it continues to apply
as a minimum standard to the redundancy pay entitlement under the FBIS Agreement that is
the same as the NES entitlement. In our view, this construction is consistent with the statutory
note found at the end of s.55(6) of the Act which provides:
“Note: For example, if the award or agreement entitlement is to 6 weeks of paid annual
leave per year, the provisions of the National Employment Standards relating to the
accrual and taking of paid annual leave will apply, as a minimum standard, to 4 weeks
of that leave.”
[2014] FWCFB 6737
7
[31] It is also consistent with the explanation of this provision in the Supplementary
Explanatory Memorandum to the Fair Work Bill 2008, which provides:
“28. The amendments made by this item also make clear that where:
an enterprise agreement contains terms that are the same or substantially the same as
a NES entitlement, or terms that are ancillary or incidental to, or which supplement,
a NES entitlement; or
a modern award contains terms that are ancillary or incidental to, or which
supplement, a NES entitlement,
the provisions in the NES that relate to that entitlement (e.g., in relation to rate of
accrual of leave, or what notice must be given to access an entitlement) apply to the
entitlement in the award or agreement (as a minimum standard) to the extent that the
award or agreement entitlement is the same as the NES guaranteed entitlement.”11
[Our emphasis added]
[32] The construction we prefer also gives full effect to s.61 of the Act. The construction
argued for by the Appellant would displace the NES redundancy entitlement in s.119 and the
NES standard relating to that entitlement found in s.120. The NES entitlement would not
operate in parallel with the enterprise agreement entitlement, while the NES standard related
to the NES entitlement it would not apply as a minimum standard to the enterprise agreement
entitlement, and the exclusion of the entitlement would be subject to a less stringent test. As
we have indicated above, an enterprise agreement may expressly or by necessary implication
allow the NES redundancy entitlement to operate without the strictures in s.120 of the Act.
That is, it might allow an employee an entitlement even if an employer obtained acceptable
alternative employment for the employee. This would be a term that fell within s.55(4) of the
Act. Clause 2.5.5.1(c) is not a term that has that effect, to the contrary it is detrimental to the
employee.
[33] It follows that the Commissioner had power to reduce the amount of redundancy pay
under s.120 of the Act that would otherwise have been payable to the employees under s.119
of the Act as the employees were entitled to be paid an amount of redundancy pay because of
that section. No appellable error has therefore been disclosed.
“Obtained”
The decision of Commissioner Gregory
[34] Commissioner Gregory noted12 actions taken by Mr Christmas to obtain acceptable
employment with ACG for the relevant employees:
A series of discussions with ACG representatives about employees’ future
engagement by ACG;
Provision to ACG of details about those “employees who agreed to allow FBIS to
pass on their contact details”;
Provision to ACG of information about the arrangements within the FBIS
Agreement; and
[2014] FWCFB 6737
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Provision of advice to ACG that FBIS paid the employees “their wages up to and
including 31 October 2013 . . . together with all accrued leave entitlements”.
[35] The Commissioner was satisfied that the Respondent had obtained employment for the
relevant employees with ACG.13 In coming to this conclusion,14 the Commissioner:
noted the submissions and evidence of Mr G Crampton “that the employees
themselves did most of the work to obtain employment with the new contractor”,
were interviewed before being engaged and their employment was subject to a
probationary period;
stated that the evidence of Mr Christmas indicates “there was a significant degree
of contact, and in some cases negotiation, with the new contractor about engaging
the employees, and on what terms”.
[36] The Commissioner considered the Full Bench decision in The Australian Chamber of
Manufacturers v Derole Nominees Pty Ltd15 (Derole Nominees), stating that it indicated that
“obtain” cannot mean obtain “‘in the fullest sense possible’ because one employer is
incapable of effecting a contract of employment with its employees and another employer,
and the word must be given ‘some lesser meaning’”.
[37] Commissioner Gregory was satisfied that “the evidence of Mr Christmas, in particular,
indicates FBIS has done enough in all the circumstances to ‘obtain’ alternative employment
for the employees”.16
Submissions
[38] The Appellant submitted that the conclusion by Commissioner Gregory that the
Respondent had obtained employment for each of the relevant employees with ACG was
unreasonable having regard to the evidence of Mr Christmas and reflected error on the
Commissioner’s part. The Appellant submitted that there was no evidence that the
Respondent had secured an agreement or commitment from ACG that it would make offers of
employment to the relevant employees or the terms on which such an offer would be made.
The Appellant submitted that notwithstanding an obligation upon it to facilitate a meeting
between the incoming contractor and the outgoing employees,17 Mr Christmas’ evidence was
that “he was unaware of any ‘arrangement for meetings between ACG and FBIS employees
during which offers of employment might be made’” and sought to prevent such meetings
unless facilitated through him.
[39] The Appellant submitted that, at the date of the conclusion of its contract, the
Respondent was unaware if any offers of employment had been made by ACG to any of the
relevant employees, with the Respondent asking the employees to advise if they had been
offered employment with ACG.
[40] The Respondent submitted that no error is evident in the finding of Commissioner
Gregory that it had obtained employment for employees with ACG. It submitted that the
Commissioner considered and appropriately applied the approach in Derole Nominees and
Datacom Systems Vic Pty Ltd v Khan and Another18 (Datacom) and was correct to find that “a
[2014] FWCFB 6737
9
significant degree of contact, and in some cases negotiation, with the new contractor about
engaging the employees, and on what terms”.19
[41] The Respondent submitted that the Commissioner’s conclusion was supported by the
evidence of Mr Christmas that the Respondent met with ACG to discuss transition to the new
contract, wrote to the relevant employees seeking permission to pass contact details to ACG
and passed on that information where authorised and sought to negotiate recognition by ACG
of accrued entitlements and past serve with the Respondent.
Conclusion in relation to “obtained”
[42] The question of what is required by the word “obtains” was considered by the Full
Bench in Derole Nominees. It found:
“The word ‘obtains’ does not appear in its context to mean actually obtain in the fullest
sense possible. In circumstances like those occurring at the company one employer is
incapable in law of effecting a contract of employment between his employee and
another employer whether by assignment or otherwise; the creation of the legal
relationship of master and servant depends on a mutuality being arrived at between the
individual and the incoming employer. Therefore, the pursuit of alternative
employment by the outgoing employer cannot be expected, by reason of itself alone, to
produce new employment; there will usually and perhaps always remain the
opportunity for the incoming employer, and the employee, to disagree as to matters
such as terms of employment, suitability of the job to the employee and vice versa so
that alternative employment may not eventuate.
It follows that ‘obtain’ must be given some lesser meaning. The Shorter Oxford
Dictionary (3rd ed revised) provides as its relevant meaning, the definition of ‘obtain’
as ‘to procure or gain, as the result of purpose and effort’. It seems to us that meaning
is of assistance here; that is, the employer by purpose and effort may establish an
opportunity which suits the employee and which crystallises as alternative
employment of an acceptable kind.”20 [citations removed]
and
“Viewed in this way it will be seen that the intention is not to impose an absolute test on
the employer’s ability to ‘obtain’ alternative employment but rather it refers to action
which causes acceptable alternative employment to become available to the redundant
employee. The employer must be a strong, moving force towards the creation of the
available opportunity.” 21
[43] In Datacom Vice President Lawler also expressed the view that the word “obtains” in
the context of s.120 should be given a very broad interpretation.22
[44] In Allman v Teletech International Pty Ltd,23 Marshall J considered whether Teletech
International Pty Ltd (Teletech) had been “able to arrange alternative employment” which
appeared in provisions for relief from the obligation to pay redundancy payments within
relevant workplace agreement, upon its employees being offered employment by Telstra upon
taking over a contract formally held by Teletech. His Honour considered the Full Bench
[2014] FWCFB 6737
10
decision in Derole Nominees, finding that “[t]here is no material difference between obtaining
alternative employment and being able to arrange it.” 24
[45] Justice Marshall found that Teletech assisted its employees to apply for jobs with
Telstra, had active involvement in the transition of the employees to work with Telstra, met
with Telstra to discuss the possible employment of the employees by Telstra and secured a
commitment from Telstra that Telstra would give all redundant Teletech employees the
opportunity to apply for employment with Telstra. He found:
“Teletech was not, however, a strong moving force towards the creation of the available
opportunity. The available opportunity arose because Telstra was to perform functions
formerly performed for it by Teletech. Telstra required staff. It made sense for it to
approach Teletech staff. Teletech did not secure the offer of a job for Teletech staff
with Telstra. As counsel for the applicants submitted, Teletech arranged an opportunity
for the employee applicants to participate in a recruitment process undertaken by
Telstra.” 25
[46] Whilst accepting that Teletech brought the employees and Telstra together and that
Teletech’s conduct was one of the factors that brought about the employment, Justice
Marshall found that it did not mean that Teletech was able to arrange the employment, finding
that Teletech facilitated its staff applying for jobs with Telstra, competing on their merits for
the available positions.26 His Honour found that:
“The encouragement and facilitation of a process is not the same as doing everything
possible to ensure a result. Arranging alternative employment means bringing about
that employment should the employee choose to accept it. Anything short of that, such
as competing with competitor applicants (albeit limited to two categories of applicant:
existing Telstra and Teletech employees) does not meet the test provided by the
relevant sub-clause in the AWAs.” 27
[47] Mr Christmas’ evidence28 was as follows:
On 23 September 2013, after the Respondent had tendered to provide continued
security services to Asciano, Asciano Group Commercial Risk Manger,
Mr S Kelson telephoned him, advising him that it was likely that the Respondent
had lost the contract, with a likely transition date of 31 October 2013 but
recommending that he not inform anyone of the decision at that point;
On 25 September 2013, Mr Christmas received a courtesy copy of an email from
the Mr Kelson to Mr B Tresider, General Manager of Special Projects, asking
Mr Tresider to engage Mr Christmas on transitional matters;
On 3 October 2013, Mr Christmas met with Mr Tresider:
Mr Christmas provided him with a copy of the FBIS Agreement (which
Mr Tresider said he had already obtained from the Fair Work Commission’s
(the Commission) web-site), the terms and conditions of which Mr Christmas
and Mr Tresider discussed;
Mr Tresider advised that ACG had made a decision to accept all leave
liabilities and accruals for FBIS employees it offered employment to; and
[2014] FWCFB 6737
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Mr Christmas and Mr Tresider agreed that a transfer date of 31 October 2013
would make it difficult for the Respondent to comply with the requirements
of the FBIS Agreement and Mr Tresider would apply to Asciano to extend
the date by at least one month.
On 8 October 2013, Mr Christmas received an email stating that the Respondent
had lost the tender and the transmission of business would occur on 31 October
2013.
On 8 October 2013, the Respondent wrote to affected employees, explaining the
requirements of the Respondent in accordance with the FBIS Agreement and
seeking permission to provide the employees’ contact details to ACG.
On 9 October 2013, Mr Christmas emailed a list of all employees who had given
permission to do so to Mr J Knott, the ACG Transition Manager in order to allow
ACG to contact the employees to make offers of employment. He also asked
Mr Knott to contact him in relation to arrangements for ACG to meet the
Respondent’s employees because he was aware ACG had been attending on-site.
Mr Christmas continued to send employee details to ACG when permission was
given by employees over the following weeks. No response was received from
Mr Knott to the 9 October 2013 email.
On 10 October 2013, Mr Christmas emailed Mr Tresider requesting a meeting in
relation to transfer of leave liabilities. Mr Tresider responded saying that the only
person who could make those decisions was the ACG Chief Executive Officer,
Mr P Kyriopolous who was away at that time.
On or about 14 October 2013, Mr Tresider telephoned Mr Christmas, stating that
ACG would not accept annual leave accruals but would consider length of service
and long service accruals.
On 15 October 2013, Mr Christmas rang Mr Kyriopolous in relation to acceptance
by ACG of the liabilities. Mr Kyriopolous stated that ACG would not accept any
liabilities without compensation from the Respondent and requested a list of all
employees and their accruals.
On 21 October 2013, Mr Christmas emailed Mr Knott, providing an updated list of
employees with contact details and stating that the Respondent could not provide
the information concerning accruals requested unless employees had been offered
employment by ACG and requested a list of employees who had been offered
employment so he could forward the accrual details.
On 23 October 2013, Mr Christmas emailed Mr Knott requesting information on
which employees had been offered positions. No response was received.
On 25 October 2013, four employees contacted Mr Christmas saying that they had
been interviewed by ACG but had been unsuccessful in obtaining positions.
On 28 October 2013, Mr Christmas emailed Mr Kyriopolous a proposal concerning
compensation to ACG in respect of leave accruals.
[2014] FWCFB 6737
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On 29 October 2013, Mr Christmas spoke with Mr Tresider in relation to his
proposal. Mr Tresider advised that he was no longer involved in the transition
process. Later that day Mr Kyriopolous emailed Mr Christmas stating that ACG
had decided not to accept any liabilities or recognise service with the Respondent.
On 30 October 2013, Mr Christmas emailed Mr Knott requesting information in
relation to any offers of employment made to the Respondent’s employees by
ACG. No response was received.
On 30 October 2013, Mr Christmas received a copy of a letter of employment from
ACG to an employee of the Respondent. On 31 October 2013, Mr Christmas sent
an email to Mr Knott requesting information about any offers of employment by
ACG to the Respondent’s employees. On 1 November 2013, another ACG
Manager responded, declining to provide such information as they had not received
permission from the employees to do so.
Also on 31 October 2013, the Respondent contacted all employees affected by the
loss of the Asciano contract confirming that their employment with the Respondent
ceased on that day and asking them, as a matter of priority, to advise if they had
been offered employment with ACG and to provide a copy of the letter of offer.
[48] Mr Christmas’ witness statement discloses that the action taken by the Respondent to
obtain employment with ACG for its soon to be redundant employees was to provide a list of
employees and their contact details to ACG in respect of those employees who gave
permission to do so, with the two main communications in evidence of employee details
occurring on 9 October 2013 in respect of 32 of the employees subject to the orders made and
21 October 2013 in respect of an additional 15 employees subject to the orders made. Two
employees subject to the orders – Mr S Clancy and Mr N Giffen – were not identified in
either of the emails.
[49] The provision of the lists of employees did not obtain employment with ACG for
employees, rather it simply facilitated an invitation by ACG to the Respondent’s employees to
apply for a position and undertake an interview. That action by the Respondent did not have
the impact of securing employment for the employees, as is evident from the 25 October 2013
advice to Mr Christmas by four employees that they had been interviewed by ACG but had
been unsuccessful in obtaining positions.29 The action by the Respondent to facilitate contact
between its employees and ACG did no more than to secure the employees an opportunity to
enter the recruitment process of ACG which may or may not have resulted in an offer of
employment. The evidence of Mr Christmas concerning the four employees was consistent
with the written submissions to Commissioner Gregory by Brisbane based employees:
“. . . the applicant did not obtain acceptable employment on our behalf. To obtain
employment with the new provider we were all required to submit applications and
attend interviews. These interviews were not facilitated by FBIS and at any time the
new provider could have replaced all staff with other staff of their own.”30
[50] The limited role of the Respondent in the employment of the employees by ACG is
confirmed by Mr Christmas’ evidence of approaches by the Respondent to ACG on 23, 30
and 31 October 2013 in which it sought information from ACG as to which employees had
[2014] FWCFB 6737
13
been offered employment and, when ACG declined to provide it, the Respondent’s
31 October 2013 request to employees asking them, as a matter of priority, to advise if they
had been offered employment with ACG and to provide a copy of the letter of offer. It is plain
on this evidence that the Respondent had no knowledge of which employees had been offered
employment by ACG or of the terms and conditions of employment contained in any offer.
There was no basis to suggest, in these circumstances, that the Respondent had “obtained”
employment for its employees. At the time the employment with the Respondent came to an
end, the Respondent was unaware as to whether their employees had obtained employment
with ACG and, if so, on what terms.31 The Respondent’s action in providing contact details of
employees to ACG did no more than facilitate contact in order that the employees could
engage in the recruitment process undertaken by ACG.
[51] A further action undertaken by the Respondent, reflected in the evidence of
Mr Christmas, was to request that ACG make arrangements for ACG to meet the
Respondent’s employees through the Respondent, in order that the Respondent could manage
its obligations under the FBIS Agreement, a request not acceded to by ACG, which made its
own arrangements to contact employees and offer (or decline to offer) employment to the
employees. Whilst the Respondent sought to play a role in arranging contact between ACG
and its employees, it in fact played no role other than the provision of contact details to ACG.
[52] The only other additional actions taken by the Respondent, as reflected in the evidence
of Mr Christmas were:
its unsuccessful attempt to engage ACG in discussions directed to a commercial
agreement between the two companies in relation to the employees’ accrued leave
and accrued service with the Respondent, on the basis of its view that “[f]or an
offer from ACG to constitute acceptable alternative employment, the employee’s
continuity of service needs to be recognised by ACG, including all leave
liabilities”;32 and
its provision to ACG of a copy of the FBIS Agreement which ACG had already
obtained from the Commission’s web-site.
[53] Each action was directed to ACG offering employment which met the requirement of
“acceptable employment” for the purposes of s.120 of the Act and did not constitute action to
obtain the employment, acceptable or otherwise.
[54] In our view, the limited actions of the Respondent, which did no more than establish
contact between its employees and ACG, with the effect that employees were able to
participate in the recruitment processes of ACG falls well short of action which “causes
acceptable alternative employment to become available to the redundant employee” and the
Respondent was not a “strong, moving force towards the creation of the available
opportunity”.
[55] The finding of Commissioner Gregory that “the evidence of Mr Christmas, in
particular, indicates FBIS has done enough in all the circumstances to “obtain” alternative
employment for the employees”33 was incorrect and was not open on the evidence given the
limited actions of the Respondent which did no more than facilitate the entry of its employees
into the recruitment processes of ACG. In our view, as the conclusion was not available to the
Commissioner on the evidence it reflects a significant error of fact.
[2014] FWCFB 6737
14
[56] For that reason, we grant the appellant permission to appeal. Further, we uphold the
appeal and quash the decision and orders of Commissioner Gregory.
[57] On a rehearing, for the reasons given above, we find, that the Respondent did not
obtain employment with ACG and, as a result the jurisdictional basis for the making of an
order under s.120 of the Act within s.120(1)(b)(i) has not been established.
[58] In light of this conclusion, it is not necessary to determine the matters raised in the
remaining appeal grounds concerning “acceptable employment” or the reduction made in the
redundancy entitlements by the Commissioner. However, as the matters were fully argued
before us we will briefly address those remaining grounds of appeal.
“Acceptable employment”
[59] Commissioner Gregory noted that the tests to be applied in determining what is
“acceptable alternative employment” are to be applied objectively.34 He noted that the
decision in Derole Nominees indicated that the work being of a like nature, the location, pay
arrangements, hours of work, seniority, fringe benefits, workload and job security are all
relevant considerations in this context and found that there was no requirement that the new
employment be identical, or broadly comparable.35 Relying on authorities cited by him, the
Commissioner found that “the existence of some detrimental alteration to employment
conditions does not mean that acceptable alternative employment has not been obtained”.36
[60] The Commissioner gave consideration to the loss of non-transferable credits in respect
of accrued service, such as personal or long service leave entitlements, accepting it to be a
factor to be taken into account in determining whether that employer had obtained adequate
acceptable employment for the employees.37 The Commissioner concluded that the weight of
evidence was that there had been little or no change between what existed when the
employees were employed by the Respondent and by ACG.38
[61] The Commissioner found that “the overwhelming majority of the employees have
been engaged by the new contractor on terms and conditions of employment that are
essentially the same as those that applied when they were employed by FBIS”.39 Read in
context,40 the reference to the overwhelming majority of employees is a reference to
employees other than Ms Pickering.
[62] Having regard to the authorities cited by Commissioner Gregory and the evidence
before him, we are satisfied that his finding that the employment with ACG was acceptable
employment was reasonably open to him, notwithstanding the detriment occasioned to some
employees through the loss of accrued service with the Respondent.
Extent of reduction of employees’ entitlement to redundancy pay
[63] In considering whether the employment provided was “acceptable” the Commissioner
found that considerations such as work of a like nature, pay levels, hours of work, workload,
work location, travelling time, terms and conditions of employment disclosed little or no
change as between the employment with the Respondent and ACG. The Commissioner also
gave consideration to the loss of accrued service, noting that of redundancy payments that
now appear in s.119 of the Act are, in part, intended to compensate employees for the loss of
[2014] FWCFB 6737
15
such entitlements.41 He noted that entitlements in respect of annual leave and long service
leave (where a current entitlement existed) were paid out but employees have suffered some
detriment from the loss of accrued service by changing employment, although such detriment
was difficult to quantify.42
[64] The Commissioner conflated the issues of acceptable employment and the extent to
which the redundancy payments should be reduced by him as a matter of discretion. Having
noted that the onus of establishing that the alternative is acceptable also rests with the
employer, and the Commission may remove a redundancy benefit obligation entirely, or may
instead reduce it,43 the Commissioner considered the general terms and conditions of the two
employments and the loss of accrued service in the employment with ACG, finding on
balance that the ACG employment was acceptable employment. He then proceeded to
determine that the redundancy entitlement should be removed altogether for all employees
other than Ms Pickering, whose entitlement was halved on the basis that her employment with
ACG was at a lower classification.
[65] In respect of the employees, other than Ms Pickering, the Commissioner conflated the
issues of acceptable employment and the extent of any reduction in redundancy entitlements,
concluding that “I am accordingly satisfied the test of what is acceptable alternative
employment has been satisfied and FBIS should be relieved of any obligation to make
redundancy payments”.44 Having recognised some detriment to employees arising from the
loss of accrued service and the role, in part, of compensating employees for the loss of service
related entitlements, the Commissioner removed the redundancy entitlements entirely for each
employee other than Ms Pickering. The Commissioner did so without separately considering
the extent of any reduction and without considering the different circumstances of each
employee in terms of service, which ranged from four months to nine and a half years, and
accrued personal leave which ranged from a negative accrual through to over 300 hours.45 The
decision of the Commissioner provides no indication as to how he reached that conclusion in
exercising the discretion to reduce the redundancy pay entitlements in respect of each
employee subject to his first order to nil. In our view, this constitutes a further error in the
decision of Commissioner Gregory.
Conclusion
[66] We find that Commissioner Gregory erred in finding that the Respondent had obtained
employment with ACG for the employees subject to his orders. That finding was not open to
him on the evidence given the limited actions of the Respondent which did no more than
facilitate the entry of its employees into the recruitment processes of ACG.
[67] We grant the appellant permission to appeal, uphold the appeal and quash the decision
and orders of Commissioner Gregory.
[68] We find that the Respondent did not obtain acceptable employment for its employees
with ACG and, as a result the jurisdictional basis for the making of an order under s.120 of
the Act within s.120(1)(b)(i) has not been established. The application by the Respondent for
an order under s.120 of the Act is dismissed.
SENIOR DEPUTY PRESIDENT
[2014] FWCFB 6737
16
Appearances:
A Howell with A Jacka for The Maritime Union of Australia.
R Millar for FBIS International Protective Services (Aust) Pty Ltd.
G Starr for United Voice.
Hearing details:
2014.
Melbourne via Sydney video:
September 15.
Printed by authority of the Commonwealth Government Printer
Price code C, PR555875
1 [2014] FWC 1922.
2 PR550814 and PR550817.
3 PR550817.
4 PR550814.
5 AE898880.
6 Respondent’s outline of submissions, at para 10.
7 Australian Industry Group v ADJ Contracting Pty Ltd, [2011] FWAFB 6684, at para 4.
8 See s.120 (1) (a) of the Fair Work Act 2009.
9 Appeal Book at p. 231.
10 Supplementary Explanatory Memorandum to the Fair Work Bill 2008 at paras 24–25.
11 ibid., at para 28.
12 [2014] FWC 1922, at para 20.
13 [2014] FWC 1922, at para 48.
14 [2014] FWC 1922, at para 48.
15 Print J4414; Re Clothing Trades Award 1982(1), (1990) 140 IR 123.
16 [2014] FWC 1922, at para 50.
17 Clause 6.1.3.1(d) of the FBIS International Protective Services (Aus) Collective Agreement 2012- 2016.
18 [2013] FWC 1327.
19 [2014] FWC 1922, at para 48.
20 (1990) 140 IR 123, at 127.
21 (1990) 140 IR 123, at 128.
22 [2013] FWC 1327, at para 12.
23 [2008] 178 IR 415.
24 [2008] 178 IR 415, at 418.
25 [2008] 178 IR 415, at 419.
26 [2008] 178 IR 415, at 419.
[2014] FWCFB 6737
17
27 [2008] 178 IR 415, at 419.
28 Witness statement of Mr J Christmas.
29 Witness statement of Mr J Christmas, at para 16.
30 [2014] FWC 1922, at para 37.
31 Witness statement of Mr J Christmas, at para 23.
32 10 October 2013 email from Mr Christmas to Mr Tresider; Attachment 4 to witness statement of Mr J Christmas.
33 [2014] FWC 1922, at para 50.
34 [2014] FWC 1922, at para 51.
35 [2014] FWC 1922, at para 52.
36 [2014] FWC 1922, at para 55.
37 [2014] FWC 1922, at para 55.
38 [2014] FWC 1922, at para 56.
39 [2014] FWC 1922, at para 56.
40 [2014] FWC 1922, at paras 56–57.
41 [2014] FWC 1922, at para 55.
42 [2014] FWC 1922, at para 55.
43 [2014] FWC 1922, at para 52.
44 [2014] FWC 1922, at para 56.
45 Witness statement of Mr J Christmas, at Attachment 13.
