Legal Research
Cases
Amcor Limited v Construction, Forestry, Mining and Energy Union

Amcor Limited v Construction, Forestry, Mining and Energy Union

Link copied

Case Copied 9 March 2005 80 min read

Contents

On this page

HIGH COURT OF AUSTRALIA
GLEESON CJ,
McHUGH, GUMMOW, KIRBY, HAYNE, CALLINAN AND HEYDON JJ
Matter No M311/2003
AMCOR LIMITED  APPELLANT
AND
CONSTRUCTION, FORESTRY, MINING AND
ENERGY UNION & ORS  RESPONDENTS
Matter No M312/2003
MINISTER FOR EMPLOYMENT AND
WORKPLACE RELATIONS   APPELLANT
AND
CONSTRUCTION, FORESTRY, MINING AND
ENERGY UNION & ORS  RESPONDENTS
Amcor Limited v Construction, Forestry, Mining and Energy Union
Minister for Employment and Workplace Relations v Construction, Forestry, Mining and Energy Union
[2005] HCA 10
9 March 2005
M311/2003 & M312/2003
ORDER
Matter No M311/2003
1.Appeal allowed.
2.Set aside the order of the Full Court of the Federal Court of Australia made on 28 March 2003 and in its place order:

(a)the appeal to that Court is allowed;

(b)set aside the orders of Finkelstein J made on 12 July 2002 and in their place order that the application is dismissed.

Matter No M312/2003
Appeal allowed.
On appeal from the Federal Court of Australia
Representation:
A C Archibald QC with R J Buchanan QC and M F Wheelahan for Amcor Limited in both matters (instructed by Allens Arthur Robinson)
S C Rothman SC with S J Howells for the first and second respondents in both matters (instructed by Ryan Carlisle Thomas)
R R S Tracey QC with J L Bourke for the Minister for Employment and Workplace Relations in both matters (instructed by Phillips Fox)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

GLEESON CJ AND McHUGH J. The issue in these appeals is whether, following a corporate reorganisation described as a demerger, certain employees became entitled to redundancy payments under the provisions of an industrial agreement. The employees worked in the same jobs, under the same terms and conditions, following the demerger, but, in consequence of the corporate restructuring, their employer changed.
The resolution of the issue turns upon the language of the particular agreement, understood in the light of its industrial context and purpose, and the nature of the particular reorganisation. There is nothing inherent in the idea of redundancy that justifies an expectation either that redundancy payments will, or that they will not, become payable in the event of a reconstruction, merger, or takeover[1]. Similarly, there is nothing inherent in the nature of a corporate reconstruction that justifies an expectation either of continuity of a legal entity, or of succession, or of discontinuity. Thus, depending upon the legal regime under which it takes place, a merger between two companies might or might not put an end to the merging entities. The effects upon their pre-existing rights and obligations, and the question of succession to these rights and obligations, will require examination of the relevant legal (usually statutory) framework[2].
[1]Shop, Distributive & Allied Employees' Association (NSW) v Countdown Stores (1983) 7 IR 273 at 293.
[2]eg Gold and Resource Developments NL v Australian Stock Exchange Ltd (1998) 30 ACSR 105.
The demerger in this case was effected by a scheme of arrangement and…

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.

Keep reading for free

Create a free CaseChat account to read Amcor Limited v Construction, Forestry, Mining and Energy Un... and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2005] HCA 10
Decision Date: 9 March 2005

CaseChat Overview and Summary

The High Court of Australia heard appeals from the Full Court of the Federal Court of Australia concerning the interpretation of the Australian Paper/Amcor Fibre Packaging Agreement 1997. The dispute arose after Amcor Limited sold its paper business to Paper Australia, and its employees were subsequently terminated by Amcor and immediately re-employed by Paper Australia on the same terms and conditions. The Construction, Forestry, Mining and Energy Union (CFMMEU) contended that the employees were entitled to severance payments under the agreement, arguing they had been retrenched. Amcor argued that the positions had not become redundant in the context of the agreement, and therefore no severance payments were due.

The central legal issue before the High Court was whether, in the circumstances of a corporate demerger and the transfer of a business, the employees of Amcor had been "retrenched" and their "positions" had become "redundant" within the meaning of clause 55.1.1 of the certified agreement, thereby entitling them to severance payments. This required the Court to determine the correct construction of the agreement, particularly the terms "retrenched" and "redundant position," and to consider whether the provisions of the Workplace Relations Act 1996 (Cth) regarding termination and succession were relevant to the interpretation of the agreement.

The High Court allowed the appeals, setting aside the orders of the Federal Court. The Court reasoned that while the employees' employment with Amcor was terminated, and they were immediately employed by a successor entity, the "positions" themselves did not become redundant. The Court held that the work being performed by the employees continued to be required by the company conducting the business in which those positions existed. Therefore, the condition for severance payments under clause 55.1.1, requiring a "redundant position," was not met. The Court concluded that the Federal Court's interpretation of the agreement was not the preferable one in the circumstances.

Orders

Orders of the court

Matter No M311/2003

1. Appeal allowed.

2. Set aside the order of the Full Court of the Federal Court of Australia made on 28 March 2003 and in its place order:

(a) the appeal to that Court is allowed;

(b) set aside the orders of Finkelstein J made on 12 July 2002 and in their place order that the application is dismissed.

Matter No M312/2003

Appeal allowed.

Background

Background to the litigation

First, as has already been noted, s 170CL obliged an employer to notify the Commonwealth Employment Service if it intended to terminate the employment of 15 or more employees for reasons of an economic, technological, structural or similar nature. Secondly, s 170CM provided for the required period of notice of termination to be given by an employer. The period of notice depended upon the employee's period of continuous service with the employer. The section provided[25] that regulations might exclude from the operation of the section terminations of employment "occurring in specified circumstances that relate to the succession, assignment or transmission of the business of the employer concerned". Division 1 of Pt 5A of the Workplace Relations Regulations (regs 30A‑30CD) included such a provision. Regulation 30CD excluded from the operation of s 170CM a termination of employment that occurred because of the succession, assignment or transmission of the business of an employer if certain conditions were met. The detail of those conditions is not relevant to the present issues. What is important is that the Act provided certain minimum conditions that were to apply where there was a termination of employment. Those conditions could be engaged where there was a termination because the employer no longer wanted the job that an employee was doing to be done by anyone. But the Act also recognised (in s 170CM) that succession cases may require different treatment.[25]s 170CM(8).The legislative background – succession provisions As is apparent from what has already been said, the Act provided for cases where a new employer was a successor, transmittee or assignee of the whole or a part of the business of an employer bound by a certified agreement. Section 170MB provided that if the application for certification of the agreement stated that it was made under Div 3 (concerning agreements about industrial disputes and industrial situations) the new employer was bound by the certified agreement "to the extent that [the agreement] relates to the whole or the part of the business". Amcor did not contend in these appeals that s 170MB applied. It will be necessary later to say something further about this aspect of the matter. What is presently important is that, regardless of the terms of a certified agreement, the agreement binds any new employer who is the successor, transmittee or assignee of the whole or a part of the business concerned. Obviously, if an agreement is drafted (as the gainshare provisions of the Agreement were drafted) in terms that are specific to a particular employer, there may be some question about how provisions of that kind are to be applied if there is a succession. But these are difficulties that would have to be solved. Their existence does not deny the operation of s 170MB. There is a further point that follows from s 170MB. If the section is engaged, and a new employer becomes bound by the certified agreement, those provisions of the agreement which depend for their operation upon the length of an employee's service (like provisions for leave) may well have to be construed as depending upon the combined length of service with both the old and the new employer. That is, it may well be that the certified agreement would be construed, in such circumstances, as neither permitting nor requiring differentiation between service with one employer and service with the other. These, however, are questions which were not pursued in argument and need not be decided.The construction of cl 55.1.1

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

GLEESON CJ HUGH J GUMMOW, HAYNE AND HEYDON JJ KIRBY J CALLINAN J

Once Amcor sold its paper business to Paper Australia, Amcor's connection with the business of manufacturing paper was limited to the supply of the labour, which Amcor employed, to the company which owned the manufacturing plant and conducted the business of making and selling paper. It may be assumed that the intervention of this step, before termination of employment, demerger and re‑employment, provided the basis for Amcor not relying on the succession provisions of s 170MB. It is, however, not necessary to consider whether the sale of assets by Amcor to Paper Australia is relevant to the application of s 170MB. In particular, it is unnecessary to consider what is meant by the parenthetical expression "whether immediate or not" which qualifies the requirement of s 170MB(1)(c) that "a new employer [become] the successor, transmittee or assignee ... of the whole or a part of the business concerned". None of these issues needs to be addressed because the "positions" with which this case is concerned were positions in a business of making and selling paper. None of those positions became redundant. Neither the sale of assets by Amcor nor the later termination of employment by Amcor meant that the work then being undertaken by the employees was no longer required by the company which conducted the business in which the positions existed. The "job" of no employee was redundant. Clause 55.1.1 was not engaged.Conclusion and orders For these reasons, each appeal should be allowed. The orders made by the Full Court of the Federal Court of Australia on 28 March 2003 should be set aside. In their place, there should be orders that the appeal to that Court is allowed, the orders of Finkelstein J made on 12 July 2002 are set aside and, in their place, there be orders that the application is dismissed. Although the Union sought an order for costs against the Minister if the Minister's appeal failed, neither the Minister nor Amcor sought costs, either in this Court or the courts below, if the appeals succeeded. It follows that there should be no order for costs. These appeals, from a judgment of the Full Court of the Federal Court of Australia[29], concern the construction of the Australian Paper/Amcor Fibre Packaging Agreement 1997 ("the Agreement"). The Agreement was certified by the Australian Industrial Relations Commission ("the Commission") in June 1998, in accordance with the Workplace Relations Act 1996 (Cth) ("the Act"), Pt VIB. [29]Amcor Ltd v Construction, Forestry, Mining and Energy Union [2003] FCAFC 57 per Moore, Marshall and Merkel JJ. The question before this Court is whether the construction adopted by each of the judges of the Federal Court, both at first instance[30] and in the Full Court, providing that the appellant, Amcor Ltd ("Amcor"), is obliged to pay certain "severance payments"[31] to employees whom it was said to have retrenched, represented the correct or preferable construction of the Agreement in the circumstances. [30]Construction, Forestry, Mining and Energy Union v Amcor Ltd (2002) 113 IR 112 per Finkelstein J.[31]So-called in the heading to cl 55.1 of the Agreement.

Ratio Decidendi

Legal Principle Established

Established by: GLEESON CJ, HUGH J, GUMMOW, HAYNE AND HEYDON JJ, KIRBY J, CALLINAN J

As the judges of the Federal Court correctly pointed out, before them the issue was, and was only, the meaning and application of the Agreement, specifically cl 55.1.1. That issue required the identification of the legal rights of the parties under the Agreement. Such rights would not be determined by judges blind-folded to the industrial context. Yet in the end their duty, as in all tasks involving a judicial construction of a text having legal force, was to give effect to that text. The judges of the Federal Court, in my view, were correct in adopting that approach[63].[63](2002) 113 IR 112 at 112 per Finkelstein J; [2003] FCAFC 57 at [2] per Moore J, [53] per Marshall and Merkel JJ.Textual considerations support the Union Severance payments on retrenchment: As the judges of the Federal Court demonstrated, there are numerous textual considerations in the Agreement to support the arguments of the Union. The first of these is the general description of the payments provided for in cl 55.1. They are described as "severance payments". There is no doubt that Amcor's former employees had their employment relationship with Amcor "severed" on 31 March 2000. Therefore, it would not be surprising were the Agreement to provide for payments to be made to the employees in such circumstances. One of the two preconditions in cl 55.1.1 of the Agreement for entitlement to severance payments was that the employee be "retrenched". Although the Minister for Employment and Workplace Relations submitted to the contrary, the Full Court concluded[64] that, in the circumstances that had occurred and within the Agreement, Amcor's employees were "retrenched". Where such unilateral termination of employment occurs (as it undoubtedly did in this case), the prima facie result is the "retrenchment" of the employees[65]. I agree with the Full Court that a retrenchment by one employer does not cease to be a retrenchment simply because the employee is immediately employed by another employer following such retrenchment. So the starting point of analysis of the terms of cl 55.1.1, for the judges of the Federal Court, was the fulfilment of one of the two conditions provided in it.[64][2003] FCAFC 57 at [46] per Marshall and Merkel JJ. See also at [4] per Moore J.[65]R v Industrial Court (SA); Ex parte General Motors-Holden's Ltd (1983) 35 SASR 161 at 187; Hawkins v Commonwealth Bank of Australia (No 2) (1996) 70 IR 213 at 222. Positions in "particular" employment:Secondly, whilst "redundancy" is the heading to cl 55 and "redundant" is the word used in cl 55.1.1 in connection with the first precondition to the payments, the words are used in a special way. What must become "redundant" is not an employee but "a position". This notion is given textual emphasis in two ways. In cl 55.2, by way of contrast, the Agreement speaks of the employee becoming redundant and being transferred to a lower paid job. As well, cl 55.2(a) repeats the reference to "the redundant position". What is the meaning of "position" in this context? Is it, as Amcor urged, a disembodied notion of the work or "job", disjoined from the particular employer or any specific employer? Or is it the position held by the employee with the employer concerned? Amcor's submissions before this Court urged the disjuncture, under the Agreement, between the work and the specific employer providing the work. I agree with the other members of this Court that the Agreement, viewed as a whole, presumes such a disjuncture. However, it must be acknowledged that there are a number of textual considerations (pointed out by the Federal Court) that appear to indicate a contrary conclusion.