Applications by Serco Australia Pty Limited T/A Serco

[2021] FWC 3221

[2021] FWC 3221

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120—Redundancy pay

Applications by Serco Australia Pty Limited T/A Serco
(C2021/1815 & C2021/1816)

COMMISSIONER SIMPSON BRISBANE, 3 JUNE 2021

Application to vary redundancy pay for other employment – Applicant obtained other acceptable employment – Applications granted.

[1] On 31 March 2021, Serco Australia Pty Limited T/A Serco (the Applicant/Serco) made two applications under s.120 of the Fair Work Act 2009 (the Act) to vary the redundancy pay that it said was otherwise due under the Serco Southern Queensland Correctional Agreement 2019-2021 (the Agreement) and the National Employment Standards (the NES), as applicable.

[2] The first application was made in relation to 124 employees employed under the Serco Southern Queensland Correctional Agreement 2019-2021 (The Agreement). The second application was made in relation to 50 ‘Non-Custodial Staff Members’, whose entitlement to redundancy pay is in accordance with the NES. The Applicant seeks that the Respondents’ redundancy payments be reduced to nil, as it submits it has obtained other acceptable employment for the employees.

[3] Directions were issued for filing of materials by the parties and copied to the United Workers Union (the UWU) on behalf of the Respondent employees. The Applicant was directed to file and serve its statements and submissions by 30 April 2021, and for any Named Respondent to file by 19 May 2021. The matter was listed for hearing on 1 June 2021.

[4] The Applicant was directed to serve each Respondent employee in both matters all statements and submissions it relied on as well as the Directions issued by the Commission.

[5] In matter C2021/1815 the Applicant relied on a statement of Mr Brendan Smith dated 30 April 2021, 1 a statement of Mr Nicholas Rowe dated 30 April 2021,2 and an additional statement of Mr Brendan Smith dated 25 May 2021.3

[6] In matter C2021/1816 the Applicant relied on a statement of Mr Brendan Smith dated 30 April 2021, 4 a statement of Mr Nicholas Rowe dated 30 April 2021,5 an additional statement of Mr Brendan Smith dated 25 May 2021,6 and a copy of a letter of offer from Queensland Corrective Services (QCS) to Ms Elizabeth Snape dated 12 May 2021 with an attached signed acceptance of that offer dated 13 May 2021.7

[7] The Applicant also relied on an Outlines of Submission filed in respect of C2021/1815 and C2021/1816 on 30 April 2021.

[8] Mr Smith deposed in his additional statements that all documents were served in accordance with the Commissions Directions in each case, and a slight reduction in the number of Named Respondents was due to resignations since the filing of the two Applications.

[9] Mr Smith deposed in his additional statement with regard to C2021/1815 that no employee, employee representative or lawyer had served any statements or submissions in response to the Application. In regard to C2021/1816, Mr Smith stated that an email from one named Respondent, Ms Elizabeth Snape, dated 13 May 2021 had been served on the Applicant’s legal representatives Baker McKenzie.

[10] Ms Snape also provided this email to chambers. On 27 May 2021 Mr Brown of Baker McKenzie sent correspondence to Ms Snape advising that the email was the subject of a formal response in Mr Smith’s additional statement and also advising among other things that Ms Snape would be required for cross examination and also requesting that Ms Snape provide a copy of the signed letter of offer of employment from QCS that Ms Snape had accepted.

[11] On the day before the hearing Baker McKenzie sent correspondence to chambers copying in Ms Snape informing the Commission that Ms Snape had provided a copy of the letter of offer which was then provided to chambers, and advising that Baker McKenzie understood Ms Snape did not intend to attend the hearing. Chambers had offered for Ms Snape to participate in the proceedings by telephone if she wished, including on the morning of the hearing, however ultimately Ms Snape elected not to participate.

[12] Written submissions were also filed by the Applicant in both matters seeking leave to be granted permission to be represented at the hearing and leave was granted. The Applicant was represented by Mr JJ Fernon SC, instructed by Mr Paul Brown of Baker McKenzie.

[13] As to the employees covered by the Agreement, the Agreement provided for redundancy pay at clause 12. Clause 12 states that redundancy pay is provided for in the NES. Clause 12(a) and (b) deal with consultation and clause 12(c) provides for a redundancy scale of consistent with the NES, however excludes the last scale in the NES where 12 weeks is payable after at least 10 years. The Agreement provides 16 weeks for service of more than 9 years.

[14] Section 119 of the Act provides as follows:

“119 Redundancy pay

Entitlement to redundancy pay

(1) An employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated:

(a) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or

(b) because of the insolvency or bankruptcy of the employer.

Note: Sections 121, 122 and 123 describe situations in which the employee does not have this entitlement.

Amount of redundancy pay

(2) The amount of the redundancy pay equals the total amount payable to the employee for the redundancy pay period worked out using the following table at the employee’s base rate of pay for his or her ordinary hours of work:

Redundancy pay period
Employee’s period of continuous service with the employer on termination	Redundancy pay period
1	At least 1 year but less than 2 years	4 weeks
2	At least 2 years but less than 3 years	6 weeks
3	At least 3 years but less than 4 years	7 weeks
4	At least 4 years but less than 5 years	8 weeks
5	At least 5 years but less than 6 years	10 weeks
6	At least 6 years but less than 7 years	11 weeks
7	At least 7 years but less than 8 years	13 weeks
8	At least 8 years but less than 9 years	14 weeks
9	At least 9 years but less than 10 years	16 weeks
10	At least 10 years	12 weeks

[15] Section 120 of the Act further provides:

“Variation of Redundancy Pay for Other Employment or Incapacity to Pay

(1) This section applies if:

(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.

(3) 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.”

[16] The Applicant states that the reason why it is seeking to vary the redundancy pay is that it has secured other acceptable employment for each of the confidential Respondent employees named in the applications. The Applicant is seeking that the Respondents’ redundancy entitlements be reduced to zero.

Applicant’s Evidence

[17] Mr Nicholas Rowe is the Prison Director for the Applicant, employed at the Southern Queensland Correction Centre (SQCC) at Gatton, and Mr Brendan Smith is the Assistant Director Human Resources – Serco Asia Pacific, Southern Queensland Correctional Centre. Their separate statements were in relation to Custodial and Non-Custodial employees. The evidence is relevantly summarised as follows.

[18] Mr Rowe states that from commencement of operation in January 2012 to present, SQCC has been operated by Serco under a series of commercial contracts between Serco and Queensland Corrective Services (QCS). Mr Rowe states that all persons engaged in prisoner supervision and welfare at the SQCC are employed by Serco, and QCS has no involvement with the recruitment or terms and conditions of employment offered to employees by Serco. He states that SQCC is the only prison facility that is operated by Serco in the state of Queensland.

[19] At the date of filing his statement of 30 April, Mr Rowe states that the SQCC workforce comprises of approximately:

(a) 187 full time employees; and

(b) 6 part time employees.

[20] The Workforce is employed by Serco on terms and conditions that include the individual’s letter of employment, the NES, and where relevant one of the two agreements operative at SQCC, being the Agreement applying to Custodial Officers; and the QMU Southern Queensland Correctional Centre Nurses Agreement (“the Nurses Agreement”). Employees covered by the Nurses Agreement are not the subject either of the two applications considered here.

[21] Mr Rowe provides that in approximately March 2019, the Queensland State Government made an announcement to commence ‘transitioning’ SQCC to public administration. He states that as this was a matter that potentially impacted the Workforce, he was approached by employees at SQCC who wanted to know if they would continue to work at SQCC following the transition of SQCC to QCS. Mr Rowe provides that he was advised the likely timeframe for the transition was 24 months, and he therefore advised employees as SQCC that he would monitor the situation and keep them advised of any developments.

[22] Mr Rowe recalls numerous full staff meetings occurring, and further notes that he participated in a number of discussions with Mr Mick McKeown, Organiser from the UWU, as “the main trade union that looked after industrial interests of Serco employees at SQCC”. Mr Rowe states that a joint consultative committee (JCC) also operates at SQCC and meets on a monthly basis.

[23] Mr Rowe states that in around September 2020, Serco was advised that the QCS Transition Team would be assembled by the Queensland Government to negotiate the ‘transition’. Mr Rowe states that he was appointed as Serco’s representative, and was primarily responsible for representing the commercial interests of Serco in all negotiations, and was authorised to approach QCS regarding the possibility of Serco employees obtaining employment with QCS. Mr Rowe states that Mr Smith assisted him, in his role of Assistant Director People and Capability.

[24] Mr Rowe states that in the negotiations, which were led by him on behalf of Serco, there was a focus on Serco attempting to encourage QCS to offer employment that, where possible:

(a) Matched or exceeded the terms and conditions that were enjoyed by Serco employees at the SQCC;

(b) Maintained existing salary levels; and

(c) Allowed for recognition of service with Serco and ensured transfer of each employees service related entitlements to QCS.

[25] Relevant to the negotiations, Mr Rowe states that there are three broad groupings of employees at SQCC, including:

(a) Approximately 125 full time and part time employees, employed by Serco under the Custodial Officers Agreement (Custodial Employees);

(b) Approximately 62 full time and part time employees who were not covered by any Agreement, referred to as ‘common law contract employees’ or non-custodial employees, including positions such as:

i. Managerial positions;

ii. Administrative positions;

iii. Educational positions;

iv. Logistics positions;

v. Psychological services positions; and

vi. Trade instructors

(Non-Custodial Employees).

(c) Approximately 13 full time and part time health care staff, including staff covered by the Nursing Agreement.

[26] Mr Rowe’s evidence is that it became apparent to him that QCS were interested in discussing opportunities for Serco staff members to join QCS.

[27] Mr Rowe notes he was not familiar with the terms and conditions applicable to QCS employees in Queensland, however states that references were made to the following industrial instruments:

(a) State Government Entities Certified Agreement 2015;

(b) The Correctional Employee’s Award (State) 2015; and

(c) Queensland Public Service Officers and Other Employees Award – State (2015).

[28] He says that while he was not aware of the relevant rates of pay applicable to Queensland Government employees, he recalls comments by QCS Negotiating Team to him that the Serco rates of pay at SQCC were ‘higher’ than the ‘Award’. He states he therefore said to members of the QCS Transitioning Team: “We want to help QCS. We believe that the best way of getting our employees to help QCS is to preserve their actual rate of pay with Serco”. Mr Rowe states that QCS through its Transition Team, expressed a preparedness to consider offering employment on the basis of continuity of service, and matching the Serco employees’ current rate of pay for their positions. However, his evidence is that the QCS Transition Team advised him QCS was only prepared to consider these requests if it received financial compensations for the potential value of these ‘actual and contingent liabilities’.

[29] Mr Rowe states that he was involved in the assessment of leave accruals, and that agreement was ultimately reached that Serco ‘pay across’ these entitlements in July 2021. Mr Rowe states that he was involved in preparing schedules for leave balances of all relevant employees, and this information was supplied to the QCS Transition Team for assessment and consideration.

[30] Mr Rowe states that it was proposed by Serco that if the employees were offered ongoing employment with QCS, this offer would include a commitment by QCS to recognise the prior service for service related entitlements Serco would recalculate for each employee who accepted the offer their accrued but untaken leave entitlements, and that these amounts would be confirmed in terms of hours of leave and dollar value of such accruals. He states that Serco has committed to pay these amounts within 14 days of demand by QCS, from the time the employees had commenced their employment with QCS (being 1 July 2021).

[31] Mr Rowe states that at the time of making his statement, no Serco employees employed at SQCC have commenced their employment with QCS, however he noted the estimated cost to Serco of the recognition of the service related entitlements by QCS is estimated to be:

(a) For accrued but untaken annual leave - $1,753,299.15;

(b) For accrued but untaken long service leave - $1,660,401.36; and

(c) For accrued but untaken personal leave - $991,724.00.

[32] He states these amounts will be payable by Serco to QCS effective 14 July 2021, on the assumption that each of the Serco Custodial and Non-Custodial Employees that have accepted employment with QCS will commence with QCS effective 1 July 2021.

[33] Mr Rowe also gives evidence that with the assistance of Mr Smith, he mapped the potential terms and conditions for Custodial and Non-Custodial Employees, and where there may have been gaps between the Serco entitlements and what QCS may have been prepared to offer to employees. He states that representatives of the QCS Transition Team repeatedly stated that QCS was not required to ‘gift’ or recognise terms and conditions of any Serco Agreement.

[34] Specifically regarding Custodial Employees, Mr Rowe states that QCS was not prepared to match the ‘shoe allowance’, and could not provide the ‘income protection allowance’ currently enjoyed by these employees under the Agreement. He said that while these would not be matched, QCS was prepared to “factor the value of these items” into their offer of employment.

[35] Mr Rowe states that pay rates were an important negotiation point, and that the parties arrived at a ‘no disadvantage’ position, whereby QCS would ‘salary maintain’ the Serco rates for Serco employees, until the QCS salary rate caught up ‘in time’. QCS would not pay the Serco rate if recruiting from the open market.

[36] Mr Rowe states that every full time and part time employee of Serco was to receive an offer of employment from QCS, excepting Senior Management and Nurses. QCS prepared the letters of offer, which reflected each employee’s current rate of pay and classification with Serco as at the date of the offer by QCS.

[37] Employees who will commence with QCS have been offered appropriate training modules via QCS, to ensure their seamless transition.

[38] Mr Rowe further states that as part of the offer, a consideration period of approximately 28 days commencing 22 February 2021 ending 22 March 2021 was offered to employees, during which employees could access representatives of the Serco Human Resources team for advice, and there were weekly meetings with members of the QCS Transition team during business hours, as well as a list of FAQs.

[39] Mr Rowe notes that not all Serco employees complied with the initial period for acceptance of the employment offer by QCS. He notes that Mr Smith facilitated extensions being provided as required.

[40] Mr Smith states that Serco employees were not required to accept the offers of employment, and had the option to decline the offer and explore redeployment opportunities and/or redundancy options with Serco.

[41] Mr Smith’s evidence includes that in his knowledge, the QCS Offer of Employment included the following beneficial features:

(a) No probationary period imposed by QCS;

(b) Accrued leave balances preserved and transferred to QCS at the expense of Serco;

(c) Prior continuous service with Serco will be recognised by QCS;

(d) Job security was enhanced as a result of the ‘no forced redundancy commitment’ of QCS;

(e) The location of the employment will not change;

(f) There was no disentitlement of redeployment/redundancy benefits in the event of rejection of the QCS offer imposed by Serco;

(g) The employment was of a like ‘identical’ nature and it was in effect the same role;

(h) Pay, conditions and work hours are comparable;

(i) The QCS offer met the preferences of the employees and very few employees either opted out of the process or declined the offer of employment with QCS;

(j) Seniority would be recognised and preserved;

(k) Any detrimental alteration to the existing terms and conditions were minor; and

(l) There was no requirement on the Serco employee to be interviewed by QCS.

Custodial employees

[42] Mr Rowe’s evidence is that approximately 115 custodial staff expressed interest, and received an offer of employment effective 1 July 2021. He is aware that two custodial staff did not accept the offer and have been redeployed at another centre; however, to the best of his knowledge, all other custodial staff accepted the offer.

[43] Mr Rowe’s evidence is that in conjunction with Mr Smith, he had frequent dealings with representatives of the UWU. Further to discussions with the UWU, an agreement was reached for a potential payment by Serco of a ‘stay bonus’. Mr Rowe says this stay bonus was deemed necessary to ensure that the Serco employees that had accepted the offer of QCS would be motivated to stay with Serco and not resign their employment prior to commencing with QCS on 1 July 2021. On 8 April 2021, Serco advised all custodial staff that they would receiving in the mid-June 2021 pay cycle the sum of $500, less applicable tax, on the basis that they had accepted employment with QCS effective 1 July 2021 and had remained employed by Serco at QCSS as at the date of the payment.

[44] Mr Rowe’s evidence is that he reviewed the list of 124 employees filed against the ‘custodial’ application and confirms that each of them have accepted the offer of employment with QCS and will commence with QCS at the SQCC as at 1 July 2021.

[45] Mr Smith Annexed to his statement a schedule comparing the terms and conditions for custodial staff when employed by Serco as compared to the QCS Letter of Offer and the QCS industrial instrument that will apply to employees on commencement. 8

Non-Custodial employees

[46] Mr Rowe states that approximately 70 non-custodial staff expressed interest and received an offer of employment with QCS effective 1 July 2021. He is aware that one non-custodial staff member did not accept the offer and will receive a redundancy payment; however to the best of his knowledge, all other non-custodial staff members accepted the offer and will commence employment with QCS effective 1 July 2021.

[47] Mr Rowe states that he has reviewed the list of the employees filed against the ‘non-custodial’ application and confirms that each of them have accepted the offer of employment with QCS and will commence employment with QCS at the SQCC as at 1 July 2021.

[48] Mr Smith Annexed to his statement a schedule comparing the terms and conditions for non-custodial staff when employed by Serco as compared to the QCS Letter of Offer and the QCS industrial instrument that will apply to employees on commencement. 9

Applicant’s submissions

[49] The Applicant submits that effective 30 June 2021, it will no longer hold the contract for the provision of services to the Queensland Government with respect to the staffing and operation of SQCC at Gatton. The Applicant submits it has in the circumstances suffered a ‘loss of contract’. QCS will be responsible for the staffing and operation of the SQCC effective 1 July 2021. The Applicant submits that there is no ‘transfer of business’ as defined at s.311 of the Act, as there is no connection between the Applicant and QCS. QCS is not an associated entity to Serco.

[50] Further to the evidence filed, the Applicant submits that it has, in the circumstances, obtained acceptable alternate employment for each of the Named Respondents in the Applications.

[51] As to the question of whether an employer has, in the context of s.120 of the Act, obtained acceptable alternate employment, the Applicant cites relevant case authorities as follows.

[52] In the decision of Commissioner Asbury, as she was then, in Oscar Oscar Group Services Pty Ltd v Ms Alyce Lees, 10 it was held by the Commission that:

“[18] The question of whether alternative employment is acceptable, must be assessed on an objective basis. It is relevant to the assessment that redundancy payments are not made solely for the purpose of assisting employees to find alternative employment. Redundancy payments are intended to tide an employee over during the search for alternative employment, and to compensate the employee for loss of credits for sick leave, long service leave and other entitlements based on length of service. The question of whether previous service with the previous employer is recognised as service with the new employer, will also be relevant”.

[53] In Sodexo Australia Pty Ltd T/A Sodexo, 11 Deputy President Sams noted the following ‘common features’ of Commission decisions prior to 2016, with respect to s.120 as follows:

“•  the test of what constitutes ‘acceptable employment’ is an objective one. It does not mean it must be acceptable to the employee.

•  ‘acceptable employment’ is not identical employment, as no two jobs could be exactly the same.

•  An employee must meaningfully cooperate with the employer in exploring or considering options for alternative positions.

•  An employee’s prima facie entitlement to redundancy pay may be at risk if the employee refuses a role or position, which is found to be objectively ‘acceptable’.

•  The acceptance of alternative employment by one or more persons in a group of redundant employees does not necessarily make the alternative employment ‘acceptable’ for all of them. Each employee’s individual circumstances must be taken into account.

•  There are a range of factors of varying weight, according to an employee’s particular circumstances, which may be taken into account to assess the acceptability of alternative employment”.

[54] In DRW Investments Pty Ltd t/as Wettenhalls v Timothy Richards & Ors, 12 Deputy President Sams held:

“[183] Notwithstanding the above general principles, whether the alternative employment is acceptable, will likely include consideration of the following matters:

•  Rate of pay;

•  Hours of work;

•  Work location;

•  Seniority;

•  Fringe benefits;

•  Workload;

•  Job security;

•  Continuity of service;

•  Accrual of benefits;

•  Probationary periods;

•  Carer’s responsibilities; and

•  Family circumstances.

This list is not exhaustive. There may be other relevant factors”.

[55] As to the current applications, the Applicant contends that each of the Named Respondents has accepted an offer of employment with QCS effective 1 July 2021, which on the evidence:

(a) Preserves the employee’s current rate of pay with Serco and level of seniority;

(b) Provides a range of employee benefits which are comparable to each employee’s current terms and conditions of employment with Serco;

(c) Recognises all service-related entitlements that accrued with Serco;

(d) Provides enhanced job security and does not involve a probationary period of employment with QCS; and

(e) Does not require the employee to change his/her location of work.

[56] Further the Applicant submits that the offer of employment with QCS was presented by QCS in circumstances where each Named Respondent:

(a) Was asked by Serco if they wished to provide their personal information to QCS;

(b) Had the opportunity to seek additional information about the QCS offer of employment;

(c) Was not required to be interviewed by QCS or be subject to any selection process;

(d) Could, at any time, decline the offer of employment of QCS; and

(e) Could, on request to Serco, access redeployment and/or redundancy or severance benefits from Serco in the event of the employee rejecting the QCS offer of employment and/or expressing no interest in the possibility of employment with QCS.

[57] The Applicant submits that the offers of employment constitute an offer of alternate employment that was acceptable to each Named Respondent and that having regard to the nature and quality of the offer, the Commission should comfortably find that the requirements of s.120(1)(b)(i) have been met with reference to the nature and quality of the QCS Offer of Employment.

[58] As for the test of whether the employment was ‘obtained’ by the Applicant, the Applicant refers to the Full Court of the Federal Court decision in FBIS International Protective Services (Aust) Pty Ltd v MUA, 13 in which the Court noted that the origins of s.120 were found in the decision of the Full Bench of the Australian Conciliation and Arbitration Commission in the Termination, Change and Redundancy Case [1984] 8 IR 34. The Full Court of the Federal Court also noted the similarity with respect to the provisions considered by the Full Bench of the Industrial Relations Commission in Re Clothing Trades Award 1982 (1) [1990] 140 IR 123. In that decision, the Full Bench of the Industrial Relations Commission made observations as to the meaning of ‘obtains’ in the context of Termination Change and Redundancy Case as follows:

“The word ‘obtain’ 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 the alternative employment may not eventuate.

It follows that ‘obtain’ must be given some lesser meaning. The Shorter Oxford Dictionary (3^rd 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”.

[59] The Applicant submits that the Full Court of the Federal Court in FBIS International, regarded the notion that the previous employer needed to be a “strong moving force towards the creation of the available opportunity” as a ‘distraction’, and that this approach would introduce unnecessary complications into the ‘connotation’ of an ordinary word in the English language. The Full Court of the Federal Court thought it useful to refer to the full entry in the Oxford English Dictionary as follows:

“To come into the possession or enjoyment of (something) by one’s own effort, or by request, to procure or gain, as a result of purpose and effort; hence, generally, to acquire, get”.

[60] As to the correct test as to whether alternative employment was ‘obtained’, the Full Court of the Federal Court held in FBIS International:

“We would not regard the references to ‘effort’ and to ‘purpose and effort’ in this meaning as implying the existence of some kind, much less a strong kind of ‘moving force’ in bringing about the new state of possession referred to. They imply, rather, that the possession must be the result of the conscious, intended acts of the person concerns, as distinct from, for example, coming into possession of something by gift or inheritance”.

[61] The Court agreed in that decision, with the observations of Marshall J in Allman v Teletech International Pty Ltd. 14 The Full Court of the Federal Court in FBIS formulated the test as follows:

“In this respect, we agree with Marshall J in Allman, that to obtain employment for an individual means to procure another employer to make an offer of employment, which the individual may or may not accept as a matter of his or her choice. If the employment is not accepted, the question whether that employment was ‘acceptable’ will then arise”.

[62] In a more recent decision of The Trustee for Altman Unit Trust No. 1 trading as Southgate Holden, 15 Commissioner Hampton had regard to the approach in Re Clothing Trades Award (referred to as ‘Derole’), with reference to the decision of the Full Court of the Federal Court in FBIS International:

“[48] I note that one element of the approach taken in Derole must however now be considered subject to the later decision of the Full Federal Court in FBIS International… In particular, the Court has qualified that the appropriate reference point to assess the efforts of the applicant employer in obtaining alternative employment does not involve consideration of whether the employer was the strong, moving force towards the creation of the available opportunity”.

[63] The Applicant’s position is that the correct formulation of the questions to be considered in the context of s.120(b)(i) of the Act regarding ‘obtained’ is as articulated by the Full Court in FBIS International as:

(a) “was the offer of employment made by QCS in respect of the conscious, intended acts of Serco?”; and

(b) “was the offer of employment one which the individual may or may not accept as a matter of his or her choice?”

[64] In discharging this onus, the Applicant submits that the following facts and circumstances are relevant in the Commission’s consideration of the applications:

(a) QCS was not legally obliged to employ nor offer to employ each of the Named Respondents as a result of its decision to transition SQCC to public administration effective 1 July 2021;

(b) In the event of QCS choosing to make an offer of employment to any Serco employee QCS was not required by law to:

i. Preserve or honour the terms and conditions of any Serco industrial instrument and/or contractual terms; and/or

ii. Recognise prior continuous service with Serco for the purposes of service-related entitlements; and/or

iii. Permit the transfer of service-related entitlements to QCS.

(c) Faced with the loss of the commercial contract with the Queensland Government and the limited ability of Serco to redeploy a workforce exceeding 187 full time and 6 part time staff members as SWCC, Serco (through its management) took active steps to obtain offers of employment from QCS for each of the Named Respondents which:

i. Could be accepted or rejected by the employee; and

ii. Did not involve the employee’s participation in any selection process.

(d) Serco ‘effected’ or ‘procured’ the offer of employment on behalf of QCS by actively negotiating with representatives of QCS with respect to:

i. Achieving comparability of terms and conditions of employment with reference to each Named Respondent’s minimum terms and conditions with Serco;

ii. Securing a commitment from SQCC that each Named Respondent’s actual rate of pay was preserved by QCS; and

iii. Ensuring that each Named Respondent’s accrued service related entitlements were recognised in full by QCS and funded by Serco by way of an offer by Serco to financially compensate QCS for the financial cost of recognition of these service-related entitlements.

[65] The Applicant submits that its actions in obtaining the offer of employment were not limited or merely facilitative of an opportunity to participate in a recruitment process for possible employment with QCS. It submits that its actions:

(a) Obtained an actual offer of employment which was not contingent upon further interview and/or any selection process; and

(b) Significantly contributed to an offer which was ‘acceptable’ by virtue of various features of the offer which addressed important issues raised by the Serco employees including:

i. Preservation of each employee’s actual rate of pay and hours of work;

ii. Recognition of prior service with Serco;

iii. The transfer of service-related entitlements; and

iv. Enhanced job security.

[66] The Applicant submits that for these reasons and on the evidence, an Order should be made varying the amount of redundancy pay to nil, or in the alternative, an amount determined by the Commission.

Ms Snape

[67] As referred to above, Ms Snape a non-custodial employee filed an email with the Commission on 13 May, however did not appear at the hearing despite being offered the opportunity to do so, including by telephone. On that basis the email could not be admitted as evidence as such given Ms Snape was not available to be cross examined, however given I admitted into evidence a statement of Mr Smith responding to the issues in the email, I will deal with them briefly.

[68] The email included assertions that the position being offered by QCS should be at a higher level given Ms Snapes responsibilities in her educational function for Serco. On that basis Ms Snape said she would be entitled to redundancy as the position offered was not other acceptable employment. Ms Snape set out in the email a range of other reasons why the position offered was not other acceptable employment. At the time the email was sent Ms Snape said in the email she had not accepted an offer of employment with QCS, however the evidence now before the Commission is that Ms Snape has accepted a position offered by QCS as at 13 May. There is no evidence that her acceptance of the offer has been withdrawn.

[69] In his additional statement of 25 May, Mr Smith provided with it a document titled ‘Confidential Annexure A’, and ‘Confidential Attachments 1 to 4’. The submissions included evidence concerning Ms Snapes position of Education Induction Trainer at the Applicant, her position description for that role, her rate of pay and other terms and conditions in her letter of offer for employment with the Applicant. The evidence also included the offer from QCS accepted by Ms Snape.

[70] On the basis of this evidence including the location, pay and conditions and seniority, recognition of prior service and job security, subject to a finding that the Applicant obtained the employment, the offer to Ms Snape on the evidence is other acceptable employment. I advised in the course of the hearing that I would issue an order treating personal information in this evidence as confidential as it was appropriate to do so.

Conclusion

[71] The two applications have not been opposed. The evidence has established that the Named Respondents to the two applications (as now amended by the resignation of a small number of employees), have accepted an offer of employment with QCS effective 1 July 2021, which preserves their current rate of pay and level of seniority; provides comparable terms and conditions of employment; recognises service-related entitlements that accrued with the Applicant; provides enhanced job security without a probationary period and does not require the employee to change of location.

[72] The evidence has also established that the Applicant asked each Named Respondent to the two applications if they wished to provide their personal information to QCS; Had the opportunity to seek additional information about the QCS offer of employment; Was not required to be interviewed by QCS or be subject to any selection process; Could, at any time, decline the offer of employment of QCS; and could, on request of the Applicant access redeployment and/or redundancy or severance benefits from the Applicant in the event of the employee rejecting the QCS offer of employment and/or expressing no interest in the possibility of employment with QCS.

[73] I am satisfied having regard to the nature and quality of the offers, the requirements of s.120(1)(b)(i) have been met with reference to the nature and quality of the QCS Offer of Employment for each Named Respondent to both applications. Orders will be issued separately and concurrently with this decision giving effect to this decision.

COMMISSIONER

Appearances:

Mr J. Fernon SC instructed by Mr P. Brown of Baker & McKenzie appearing for the Applicant

Hearing details:

2021,
Brisbane:
June 2

Printed by authority of the Commonwealth Government Printer

<PR730455>

 1   Exhibit 1 C2021/1815.

 2   Exhibit 2 C2021/1815.

 3   Exhibit 3 C2021/1815.

 4   Exhibit 1 C2021/1816.

 5   Exhibit 2 C2021/1816.

 6   Exhibit 3 C2021/1816.

 7   Exhibit 4 C2021/1816.

 8   Witness statement of Mr Smith – Custodial Staff; Annexure ‘BS1’.

 9   Witness statement of Mr Smith – Non-Custodial Staff; Annexure ‘BS1’.

 10   [2012] FWC 3901.

 11   [2016] FWC 4012.

 12   [2016] FWC 461.

 13 [2015] FCAFC 90.

 14 [2008] FCA 1820.

 15   [2018] FWC 3542.