Allman v Teletech International Pty Ltd - [2008] FCA 1820

FEDERAL COURT OF AUSTRALIA
Allman v Teletech International Pty Ltd [2008] FCA 1820
INDUSTRIAL LAW – Australian Workplace Agreements – whether employees entitled to redundancy payments within meaning of particular redundancy provisions – whether employer was ‘able to arrange’ alternative employment – if so, whether the wages, terms and conditions of alternative employment were comparable
Workplace Relations Act 1996 (Cth) (“the Pre-Reform Act”) s 170VV
Workplace Relations Act 1996 (Cth)
Workplace Relations Amendment (Work Choices) Act 2005 (Cth)
Termination Change and Redundancy Case (1984) 8 IR 34 referred to
Termination Change and Redundancy Case (1984) 9 IR 115 referred to
Redundancy Case (2004) 129 IR 155 referred to
McLennan v Surveillance Australia Pty Ltd (2005) 142 FCR 105 cited
Amcor Limited v Construction Forestry Mining and Energy Union (2005) 222 CLR 241 applied
Clothing Trades Award 1982(1) (Derole Case) (1990) 140 IR 123 referred to
NICOLE ALLMAN AND OTHERS (as per attached schedule) v TELETECH INTERNATIONAL PTY LTD (ACN 061 711 804)
VID 138 OF 2007
MARSHALL J
2 DECEMBER 2008
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 138 OF 2007

BETWEEN:

NICOLE ALLMAN AND OTHERS (as per attached schedule)
Applicants

AND:

TELETECH INTERNATIONAL PTY LTD (ACN 061 711 804)
Respondent

JUDGE:

MARSHALL J

DATE OF ORDER:

2 DECEMBER 2008

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:
1.The proceeding is adjourned to a directions hearing to be held at 9.30 am on 19 December 2008.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 138 OF 2007

BETWEEN:

NICOLE ALLMAN AND OTHERS (as per attached schedule)
Applicants

AND:

TELETECH INTERNATIONAL PTY LTD (ACN 061 711 804)
Respondent

JUDGE:

MARSHALL J

DATE:

2 DECEMBER 2008

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

The issue for determination in this proceeding is whether the respondent, Teletech International Pty Ltd, arranged alternative employment for certain of its employees with another employer where the wages, terms and conditions of employment with the new employer were comparable with those that applied to their employment with Teletech. The proceeding is brought pursuant to, at least, s 170VV of the Workplace Relations Act 1996 (Cth) as it was prior to amendment by the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) (“the Pre-Reform Act”). Whether or not it was effectively brought pursuant to other provisions is not presently material.
The first to fifty-sixth applicants (with the exception of the forty-second applicant who is no longer part of the proceeding) are former employees of Teletech who claim an entitlement to severance pay under the terms of Australian Workplace Agreements (AWAs) which applied to their employment with Teletech. The entitlement of each employee applicant to bring this proceeding is not in dispute.
The fifty-seventh applicant is a workplace inspector under the post-reform Workplaces Relations Act (“the Act”). There is no dispute concerning her entitlement to bring this proceeding.
Teletech, amongst other activities, provides services to clients in the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2008] FCA 1820
Decision Date: 2 December 2008

CaseChat Overview and Summary

In the matter of Allman v Teletech International Pty Ltd, the applicants, who were former employees of Teletech, contested the company’s decision to terminate their employment and the manner in which their accrued benefits were handled. The dispute was heard and determined by the court, which was tasked with assessing the fairness of the dismissals and the adequacy of the compensation provided to the applicants.

The court was required to decide whether the applicants' dismissals were justified and whether the compensation offered, particularly in the form of severance pay, was appropriate. This involved examining the terms of the employment agreements, the nature of the dismissals, and the extent to which the applicants were offered comparable alternative employment. The court had to consider whether the applicants' new positions at Telstra provided comparable job security, wages, and benefits to what they had enjoyed at Teletech.

The court found that while the applicants were paid out for their accrued annual leave, this did not fully compensate for the loss of other accrued benefits such as sick leave and long service leave. The court determined that the new positions at Telstra did not offer comparable job security or benefits, particularly for the third and thirty-third applicants, who experienced a demotion and a significant reduction in their wages. The court also rejected Teletech's argument that the alternative employment offered to some applicants as Supplementary Workers was comparable to their previous roles at Teletech. The overall terms and conditions of employment at Telstra were deemed not to be in aggregate comparable to those at Teletech.

The court concluded that the applicants were entitled to severance pay, despite finding that Teletech had made efforts to provide alternative employment. The proceeding was adjourned to a directions hearing to be held on 19 December 2008 to address the next steps in the litigation.

Orders

Orders of the court

1. The proceeding is adjourned to a directions hearing to be held at 9.30 am on 19 December 2008.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

MARSHALL J

All the employee applicants were paid out by Teletech for their accrued annual leave entitlements. It was submitted by the applicants that being paid out for accrued annual leave was not equivalent to maintaining the benefit of accrued annual leave days. Whilst I agree with the proposition generally, in practical terms its weight in the overall exercise is limited. With respect to the loss of other ongoing accrued benefits, such as sick days and time towards long service leave, different employees were in different positions. Though I do not intend to set out the benefits lost by each employee, the loss of these accrued benefits can significantly impact on an employee’s job security.ConclusionsThird applicant and thirty-third applicant Both the Third Applicant, Cassandra Bailey, and the Thirty-third Applicant, Kerrie Strobridge, were employed by Teletech under a Customer Service Stream AWA as Team Leaders. They were employed by Telstra under an Attachment 18 AWA as Sales Consultants. Both these applicant employees were employed by Telstra in positions that amounted to a demotion from their employment as Team Leaders at Teletech and both suffered a diminution in their wages. I am not satisfied that employment by Telstra as a Sales Consultant is comparable to the employment by Teletech as a customer service Team Leader. The team leader position these applicant employees held at Teletech involved a leadership component that was lacking in their role at Telstra. Ms Christesen gave evidence that team leaders oversee a team of customer service representatives and possibly a senior customer service representative. Upon commencing employment with Telstra, these applicant employees went from a position of seniority to performing the same duties as the applicant employees they had previously helped to oversee. Both applicant employees’ wages decreased correspondingly. Both applicant employees’ annual incomes of $42,000 (superannuation excluded) at Teletech dropped to $37,753 (superannuation excluded) at Telstra. I am not satisfied that the third and thirty-third applicant employees’ employment at Telstra is sufficiently comparable to their employment at Teletech. These applicant employees would be entitled to severance pay, even if my view that Teletech had not been able to arrange alternative employment could not be sustained.Supplementary Workers I do not accept Teletech’s submission that the alternative employment as Supplementary Workers was comparable to the employment of the applicant employees at Teletech. As I have shown above, these applicant employees were denied access to a number of important entitlements that they had enjoyed at Teletech and lost the security of a fixed number of working hours per week. While their hourly rate increased, the loss of almost all the job security that these applicant employees had enjoyed in their employment at Teletech cannot be compensated. Looking globally at their employment at Teletech and their employment at Telstra, I consider that the wages, terms and conditions of employment at Telstra are not comparable in aggregate. These applicant employees would be entitled to severance pay, even if my view that Teletech had not been able to arrange alternative employment could not be sustained.All applicant employees other than Applicant 3, Applicant 33 and Supplementary Workers

Ratio Decidendi

Legal Principle Established

Established by: MARSHALL J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 138 OF 2007

BETWEEN:	NICOLE ALLMAN AND OTHERS (as per attached schedule) Applicants
AND:	TELETECH INTERNATIONAL PTY LTD (ACN 061 711 804) Respondent

JUDGE:	MARSHALL J
DATE OF ORDER:	2 DECEMBER 2008
WHERE MADE:	MELBOURNE

JUDGE:	MARSHALL J
DATE:	2 DECEMBER 2008
PLACE:	MELBOURNE