Amcor Ltd v Construction Forestry Mining & Energy Union

[2003] HCATrans 529

[2003] HCATrans 529

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M64 of 2003

B e t w e e n -

AMCOR LIMITED

Applicant

and

CONSTRUCTION FORESTRY MINING AND ENERGY UNION

First Respondent

NEVILLE GEORGE ANDERSON

Second Respondent

MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS

Third Respondent

Office of the Registry
  Melbourne  No M73 of 2003

B e t w e e n -

MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS

Applicant

and

CONSTRUCTION FORESTRY MINING AND ENERGY UNION

First Respondent

NEVILLE GEORGE ANDERSON

Second Respondent

AMCOR LIMITED

Third Respondent

Applications for special leave to appeal

GLEESON CJ
McHUGH J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 12 DECEMBER 2003, AT 12.42 PM

Copyright in the High Court of Australia

MR A.C. ARCHIBALD, QC:   May it please the Court, I appear with my learned friends, MR R.J. BUCHANAN, QC and MR M.F. WHEELAHAN, for Amcor.  (instructed by Allens Arthur Robinson)

MR R.R.S. TRACEY, QC:   If the Court pleases, I appear with my learned friend, MR J.L. BOURKE, for the Minister.  (instructed by Phillips Fox)

MR S.C. ROTHMAN, SC:   If the Court pleases, I appear with my learned friend, MR S.J. HOWELLS, for the first and second respondents in both applications.  (instructed by Ryan Carlisle Thomas)

GLEESON CJ:   I asked the Registrar to notify the parties that I hold some shares in Amcor and PaperlinX.  I understand that the parties have no objection to me sitting.

MR ROTHMAN:   We have no objection.

GLEESON CJ:   Yes, Mr Archibald.

MR ARCHIBALD:   Might we make two points at the outset.  First, redundancy as a concept has, in our contention, been long understood as entailing cessation of position.  The cases, in our contention, bear that out.  By way of illustration, the well‑known TCR Case referred to redundancy as involving redundancy of job in contrast to redundancy of the employee.  The Commission in that case at page 56 added that redundancy emphasises as a concept the disappearance of the job or the work.  That is the ordinary concept which we say has been long accepted and understood in the field in which this agreement was made.  Here the clause of the certified agreement picked up explicitly and unerringly that precise concept, for clause 55.1 was to be engaged upon redundancy of position.

GLEESON CJ:   These certified agreements sometimes deal with the subject of transfer of business, do they not?

MR ARCHIBALD:   They can.  A lot of them do and, on our analysis, a considerable number do not.

GLEESON CJ:   The problem that has arisen in this case has arisen because this one did not.

MR ARCHIBALD:   No, in our submission.  If our contentions are correct, it was entirely unnecessary and would have been a superfluity in the circumstances of this case to have had such a clause.  One might out of abundance of caution deal with such a circumstance, but the circumstance

that it was not in this case dealt with conveys nothing about the concept of redundancy that was explicitly invoked drawing immediate and precise source from the delineation of that notion in the cases.

GLEESON CJ:   If the argument against you is correct, does that mean that every transfer of a business involves redundancy?

MR ARCHIBALD:   Yes, because the stance taken and necessarily entailed by the Full Court’s reasoning precludes the continuance of a position upon a change of employer.  Indeed, the ramifications go even further than transmission.  On the reasoning of the Full Court, redundancy would occur in many examples of internal reorganisation of a corporation or a group of corporations.  It would occur, for example, even on a partnership incorporating.  It would arise when a division of a business within one corporation is determined by that corporation to be put into a wholly owned subsidiary or where a group of companies determine that, rather than having employees within the overall enterprise employed by a number of corporations in the group, they should all be employed by a single dedicated employing corporation.  On the reasoning with which we are concerned ‑ ‑ ‑

GLEESON CJ:   We thought we would be assisted by hearing from Mr Rothman at this stage.  Is that right, Mr Rothman, that on the reasoning of the Full Court, every time there is a merger, an amalgamation, a sale of a business, corporate reorganisation, redundancy would follow?

MR ROTHMAN:   No, your Honour, it is not right.  It is not right for a number of reasons.  Firstly, it would depend upon how it was done.  If your Honour means by that compensable redundancy, that is a redundancy for which severance payments would be made, then it clearly is not the case.  Firstly, in relation to sale of business and reorganisation, often that is done by the transfer of shareholding rather than the transfer of the corporate entity or the business as such.  Indeed, in the factual circumstances of this matter there were reorganisations which occurred prior to April 2000 which were transfers of the business arrangements, transfers of the assets, in between the group which did not involve redundancy and for which redundancy provisions were not excited.

The other aspect of course is that one then has to define who in fact or in law is the employer in a group company situation where one is reorganising within the group.  That often is the situation in which the provisions of the ordinary tests of employment would render the corporate entity and/or the group or one member of the group, the employer, and that may not change.

GLEESON CJ:   But on your argument, does every change in identity of employer involve redundancy?

MR ROTHMAN:   Every change of employer which involves a termination of employment would involve a redundancy.  The question then becomes – assuming that there is ‑ ‑ ‑

HAYNE J:   What is the qualification adding?  If there is a change of employer and you qualified it by saying which involved something, what is the qualification adding?

MR ROTHMAN:   The qualification is termination of employment, your Honour.

HAYNE J:   Yes.  What is that adding to there being a change of employer?

MR ROTHMAN:   You can have a transfer of business and a transfer of employment by agreement in circumstances where that is a prearranged factor.  In other words, where you have the consent of the employee or employees in question, that would then not be a termination of employment in the ordinary sense; it would be a transfer of employment.

McHUGH J:   It must be a change of employment surely.

MR ROTHMAN:   It is a change of employment, your Honour, but it is not a termination of employment.

McHUGH J:   It must be.  How can it be anything else?  If one employer ceases, a new employer arises.  It has to be a termination of employment.

MR ROTHMAN:   I suppose in a sense I am being – it is a technical termination of employment in the sense that employment must relate to the employer and therefore it is a change of employment.  But the question really is, your Honours, in a case like this, not whether or not there is a redundancy in the general sense, but whether there is a redundancy which would occasion the payment of severance payments.  Clearly not every redundancy occasions the payment of redundancy payments.  If this redundancy were occasioned in a way which was in accordance with the agreement itself may not have occasioned redundancy payments.

McHUGH J:   The strength of your argument is that an employee should not have foisted upon him another employer who may not be in some cases as financially sufficient and as stable as the previous employer, but that is a policy argument.  The argument against you is that on your argument the first part of clause 55.1.1 is itself redundant, is it not, when it says, “Should a position become redundant and an employee subsequently be retrenched”?  Your argument is that on termination you are retrenched.  So that the limb dealing with the position becoming redundant is irrelevant.

MR ROTHMAN:   No, your Honour.  Every award – and this is the problem with doing it in generality.  Every award or every industrial instrument will define the position differently and have a different set of circumstances.  In this particular instance of this industrial instrument, they separate out redundancy as a concept and termination of employment as a concept.  They separate that out, as your Honours will have seen from the judgments below, because in the first instance they have redundancy the effect of which will be a transfer to another position, maybe a lower paid position, maybe another location, and non‑termination of employment as such with that employer.

McHUGH J:   In this case did not the employees accept the offer by reporting for duty in the normal way on 1 April 2000 and they then performed identical work on the same terms and conditions of employment as they had prior to 1 April 2000?

MR ROTHMAN:   Almost all of the employees, I think is the finding, accepted the offer of employment by the other employer.  Your Honours, can I deal with it in this way.  The judgment at first instance and on appeal of the Federal Court do not disclose any difference of judicial opinion between the judges or indeed between those judges and the view of redundancy long held in every other jurisdiction.  Indeed, the judgments apply that test.  The submission by my learned friend, Mr Archibald, that there is a long‑held understanding to the contrary is, in my respectful submission, contrary to the authorities that were referred to below.

This is a case in which there is no construction of a statute, there is no constitutional point.  There is, in our respectful submission, no issue of principle.  It is the construction of a certified agreement, the terms of which have been interpreted and have, in our respectful submission, been put in in a way deliberately different from what are the standard clauses for termination change and redundancy and involving redundancy.  If there were other cases and the context were identical and the terms of the agreement were identical, the decision in this case may have some import on it but, with respect, that would only be because other employers and other employees or unions have found it appropriate to regulate their affairs in that way.

The terms of an industrial instrument of this kind can last a maximum period of three years.  This cannot have general application in any way, shape or form.  Amcor is in this position, in our respectful submission, only because it itself did not comply with the provisions of the industrial instrument.  The industrial instrument itself provided for a situation in which Amcor was required to consult with the employees to negotiate an outcome and, in accordance with clause 47, if an outcome could not be negotiated and agreed, then to put that to the Commission, that is the Australian Industrial Relations Commission, under a private arbitration clause pursuant to clause 47 and in which the decision of the Industrial Relations Commission would be binding.

McHUGH J:   Is the Minister right in his submissions when he contends that this is the first case in Australia where an employer has been obliged to pay severance payments in circumstances where there is continuity of employment?

MR ROTHMAN:   No, your Honour, he is not right. 

McHUGH J:   What about Stones v Simplot, that unreported decision in the Industrial Relations Court?  That is against you, is it not?

MR ROTHMAN:   Not on the question your Honour is asking me.  The decision in the Industrial Relations Court was a decision that regarded only the provisions of the particular award in question, and that is why I say there is no general principle involved in this case.

McHUGH J:   What about the Termination, Change and Redundancy Case?  …..statements in there ‑ ‑ ‑

MR ROTHMAN:   Yes, your Honour.  It provided that in the minimum standard provisions, where there has been a transmission of business, the decision itself provided that it ought not apply to transmission of business in that way or indeed the seeking of alternate employment.  The way they provided for that was that they allowed the parties to approach the Commission and seek exemption from the provisions of the standard termination, change and redundancy provision and allow the matter to be both conciliated and then arbitrated.

In a less direct way that capacity is allowed in this provision, but if your Honours look at the very terms of the industrial instrument, your Honours will see – the industrial instrument itself is not repeated in the application book, but your Honours will see that alternative employment is in fact dealt with.  Your Honours will see at either application book pages 56 or 108 in the Full Court judgment at paragraph 18 of the Full Court judgment, the Full Court sets out the provisions of clause 55 of the particular agreement.  Your Honours will see that the redundancy can be dealt with in a number of ways.  Your Honours will see, and I think I have mentioned, clause 55.2 which deals with transfer to a lower paid job.  Clause 55.3 is instructive.  It provides that:

An employee who has opted for transfer to another classification in lieu of retrenchment shall have three months in which to change their mind and accept retrenchment terms –

so that the employer and the Union employees have specifically looked at the issue of continuing employment and changes in employment.  Clause 55.5 deals with transfer to another location – that is application book 58 or 110 – and re‑employment is dealt with in 55.6:

In the event that the retrenched employee responds within fourteen days to an offer of re-employment –

that is with the company –

it is understood that the Company will maintain continuous service and preserve benefits relating to accumulated long service leave at the date of retrenchment.

There is no proposition here that there would be a repayment of redundancy pay even when re‑employed by the same company.  There are exemptions from the redundancy pay, which are indeed dealt with by the Full Court judgments, exclusion in 55.8.  Clause 55.7.2, especially paragraph (b), makes clear that it is the requirement on the employer and the Union to seek to find alternative employment.  But there is no suggestion that the finding of alternative employment will exempt the person from redundancy payments.

In the end this is a construction of a particular clause which has been looked at in a particular way and dealt with differently from the ordinary.  The notion of some general principle as to whether or not redundancy payments will always be paid on a transfer cannot be gleaned from this case because this is not the norm and this is not the generality.  This is a clause which deals with it very specifically and very differently from other clauses relating to redundancy.  We say it is the intention at the time of making the agreement which is relevant.  Redundancy is treated in the way in which ‑ ‑ ‑

McHUGH J:   Is not the important point of principle that both Justice Finkelstein and the Full Court reasoned that redundancy involves the loss of the employee’s position with his or her employer rather than the loss of the employee’s position as such?  Does that not raise an important point of principle?  You may well succeed on an appeal, but is it not an important enough question for this Court to grant special leave to consider it?

MR ROTHMAN:   Your Honour, in our respectful submission, in and of itself it is not.  The circumstances of this particular case and the

particularity of this clause we say militate against that general provision being one which is decided in this case and in each of the expressions of opinion of that kind by both his Honour Justice Finkelstein and the two judgments in the Full Court, in each case that expression of opinion is put in the context of the entirety of this agreement.  So that one would not, in our respectful submission, in this Court on this matter need to come or be, with respect, entitled to come to a general view about the meaning of redundancy absent the context of this particular certified agreement.

Your Honours, other than reliance on our outline of submissions, those are the matters we would put on the special leave application.

GLEESON CJ:   Mr Archibald, on page 71 of the application book in your draft notice of appeal, we are just a little puzzled by ground 2.2.  What does that add to the point that we have been considering?

MR ARCHIBALD:   I think it is the other side of the same coin.

HAYNE J:   Do you need it?

MR ARCHIBALD:   No.

GLEESON CJ:   In both of these matters there will a grant of special leave to appeal; in the first matter excluding ground 2.2 which appears on page 71 of the application book.  We will adjourn until 1.35 pm.

AT 1.04 PM THE MATTERS WERE CONCLUDED