“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v Unilever Australia Trading Limited

[2018] FWC 1150

[2018] FWC 1150

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
Unilever Australia Trading Limited
(C2017/1089)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 23 FEBRUARY 2018

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)].

[1] The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and Unilever Australia Trading Limited are in dispute over whether when calculating a permanent employees’ entitlement to redundancy pay the employee’s contiguous casual and/or seasonal service is to be counted as service.

[2] The relevant industrial instrument is the Unilever Australia Trading Limited – Tatura Site - Enterprise Agreement 2015.

[3] Attachment 4 to the Agreement sets out the redundancy agreement. It provides that it does not apply to casual or seasonal employees. The Agreement provides at clause 2.6 for severance pay. It provides:

“Severance Pay

2.6 Each Employee to be made redundant shall receive four (4) weeks payment at normal rates provided that the Employee has at least twelve (12) months continuous service.”

[4] The Agreement at clause 2.7 provides for the calculation of redundancy payments as follows:

“Redundancy payments

2.7 The following redundancy payment provisions will apply to any employee made redundant. These redundancy payments will be in addition to the benefits described in paragraphs 2.5 and 2.6 and will be made in accordance with the following provisions:

(a) Four (4) weeks’ pay per year of service and pro-rata for incomplete years of service;

(b) A cap of 104 weeks applies to redundancy payments.

The calculation of a week’s pay will be the normal hourly rate which includes shift allowance.”

[5] It was common ground that the word service was not defined in the Agreement.

[6] The dispute resolution procedure provides as follows:

“9 Dispute Resolution Procedure

9.1 The parties are confident that the combination of a responsible, committed and co-operative workforce, responsive co-operative management and consultation will result in a harmonious working relationship where grievances are resolved without disputation.

9.2 The following procedure shall be observed in dealing with any dispute or grievance concerning the interpretation, application and/or implementation of a term or terms of:

(a) This Enterprise Agreement, including the incorporated Award provision, any other provisions or arrangements recognised in this Agreement; or

(b) The National Employment Standards.

Step 1 The employee(s) with the complaint or grievance to hold discussions with his/her immediate team leader. If the employee(s) wishes he/she can nominate a representative to assist and/or represent him/her. Such a representative can, if nominated by the employee(s), be a union delegate.

If not resolved:

Step 2 The issue will be referred to the Manager. At this step, the employee(s) can also nominate a representative to assist and/or represent him/her. Such a representative can, if nominated by the employee(s) be a union delegate and/or union official.

If not resolved:

Step 3 The issue will be referred to the attention of a senior Manager. At this step, the employee can also nominate a representative to assist and/or represent him/her. Such a representative can, if nominated by the employee be a union delegate and/or union official.

Note: In the event of a dispute between a union(s) covered by this Agreement and the employer, in the first instance the parties will attempt to resolve the matter at the workplace by discussions between a union representative(s) concerned and the relevant management personnel and, if such discussions do not resolve the dispute, by discussions between union representative(s) and more senior levels of management as appropriate. This union representative may be a delegate/shop steward(s) or other official(s) at any stage of the dispute.

If not resolved:

Step 4 If the matter remains unresolved the parties may, jointly or individually, refer it to Fair Work Commission (FWC) for conciliation.

Step 5 If conciliation fails to resolve the matter in dispute and if either party wishes FWC shall resolve the matter by arbitration.

Powers of Fair Work Commission

9.3 Fair Work Commission may do the following:

(a) Take evidence on oath or affirmation;

(b) Make an order relation to all or any matters in dispute including an interim order and an order for specific performance of the terms of the agreement (the term "order" herein used does not mean an order for the purposes of the Act. Rather, an order made under this procedure has effect as if it were a term of this agreement);

(c) Give a direction, in the course of, or for the purpose of, the hearing or determination of the matter in dispute;

(d) Hear and determine the matter in dispute in the absence of a party who has been summoned or served with a notice to appear;

(e) Sit at any place;

(f) Conduct its proceedings, or any part of its proceedings, in private;

(g) Adjourn to any time and place;

(h) Refer any matter to an expert and accept the expert’s report as evidence;

(i) Direct parties to be joined or struck out;

(j) Allow the amendment, on such terms as it considers appropriate, of any application or other document relating to any proceeding;

(k) Correct, amend, or waive any error, defect or irregularity, whether in substance or form;

(l) Summon before it the parties to the agreement, witnesses or any other person whose presence FWC determines is essential in the hearing or determination of the matter in dispute and compel the production before it of documents and other things essential for the hearing and determination of the matter in dispute providing those documents and other things that are privileged or treated by the company as commercial in confidence do not become public record; and;

(m) Generally give all directions and do all such things as are necessary or expedient for the speedy and just hearing and determination of the matter in dispute.

9.4 If any party fails or refuses to follow any step of this procedure the non breaching party shall not be obligated to continue through the remaining steps of the procedure, and may immediately seek relief by application to FWC.

9.5 The status quo shall remain whilst following the Dispute Resolution Procedure.”

Preliminary issues

1. Permission to appear

[7] I granted permission for Unilever to be represented by a legal practitioner. I accepted the submissions that the matter involved some complexity and it would enable the matter to be dealt with more efficiently. Permission was not opposed by the AMWU so I exercised my discretion and granted permission.

2. Amendment to the dispute notification.

[8] At the hearing of the matter, the AMWU sought to amend its dispute notification to include service as seasonal employees.

[9] The initial notification relevantly described the dispute as follows:

“(a) The applicant contends that redundant employees (who are permanent) should have their prior contiguous casual service (if any) included for the purpose of computing severance pay. (see Attachment 4, cl.2.7).”

[10] The AMWU sought to add the words ‘and seasonal’ after ‘casual’.

[11] This was opposed by Unilever and the AMWU called evidence from Mr Jason Hefford, an organiser with the AMWU. He was involved in the dispute locally and it was his evidence that he raised with Ms Nicole Cooper, the HR representative, the issue of whether casual and seasonal service would be included in the calculation of redundancy entitlements. 1 He said he discussed it with Ms Cooper on two or three occasions.2 At that time, they did not know who was to be made redundant. At that time Mr Hefford said that the dispute was not able to be resolved and as they already had the dispute in place, they came back to the Commission.3

[12] Unilever reserved their rights in relation to this evidence as they had not been on notice of this evidence and were not able to make contact with Ms Cooper at that time as she no longer worked for the company. I determined to proceed with the matter and Unilever agreed that they would make submissions assuming that the issue of seasonal employees had been raised with Ms Cooper but if Unilever’s research discovered evidence that the matter was not discussed, then they could put on further evidence and that evidence would be heard. 4 Directions were issued for Unilever to file any further evidence by 16 January 2018. On that day, Unilever advised chambers that it did not intend making any further submissions.

[13] I am satisfied that the dispute about whether employees’ service as seasonal employees was raised by the AMWU at the local level. The Agreement permits the AMWU to initiate a dispute. The dispute resolution procedure requires discussion at a local level. Mr Hefford’s uncontested evidence was that this occurred. The dispute resolution procedure does not mandate any further steps before the dispute is notified to the Commission. It was Mr Hefford’s evidence that it was raised as part of the existing dispute already notified to the Commission.

[14] I note that the dispute resolution procedure at 9.3 (j) permits the Commission to “Allow the amendment, on such terms as it considers appropriate” and at 9.3(k) permits the Commission to “Correct, amend, or waive any error, defect or irregularity, whether in substance or form.” This is a broad power.

[15] I am therefore prepared to permit the AMWU to amend the dispute notification to include seasonal employment.

3. Transmission of business

[16] Until 28 July 2010, the agreements that covered the Tatura site named Unilever Australia Limited as the employer.

[17] In 2009, Unilever implemented a new business mode which included the establishment of Unilever Australia Trading Limited as a dedicated manufacturing company. 5 In July/August 2009 all employees were provided with a two page transfer letter.

[18] The letters advised of the establishment of Unilever Australia Trading Limited and that employment with the new company would commence on 3 August 2009. The letter further advised employees that:

“On commencement, your prior continuous permanent service with Unilever Australia Limited will be recognised for all service related entitlements. All accrued entitlements will be transferred to Unilever Australia Trading Limited.

The Enterprise Agreement (EBA) known as the Unilever Australia Tatura Collective Agreement 2006 will be transferred to Unilever Australia Trading Limited and remain binding on the relevant union and Unilever Australia Trading Limited. This means your terms and conditions will not change.

……..”

[19] It also advised that “Unilever Australia Trading Limited is a “sister” company of Unilever Australia Limited. It is wholly owned by Unilever Australia Holdings Pty Limited. Unilever Australia Trading Limited will also be acquiring the Australian factories currently operated by Unilever Australia Limited.”

[20] Unilever relied on this to submit that the only service required to be recognised by Unilever Australia Trading Limited was prior continuous permanent service.

[21] The AWMU submitted that this letter was not able to override the transfer of business provisions of the Act and s.22 of the Act.

[22] Section 22(1) of the Fair Work Act 2009 defines service:

“22 Meanings of service and continuous service

General meaning

A period of service by a national system employee with his or her national system employer is a period during which the employee is employed by the employer, but does not include any period (an excluded period) that does not count as service because of subsection (2).”

[23] Section 22(5) provides for when service with one employer counts as service with another employer as follows:

“When service with one employer counts as service with another employer

(5) If there is a transfer of employment (see subsection(7)) in relation to a national system employee:

(a) any period of service of the employee with the first employer counts as service of the employee with the second employer; and

(b) the period between the termination of the employment with the first employer and the start of the employment with the second employer does not break the employee’s continuous service with the second employer (taking account of the effect of paragraph (a)), but does not count towards the length of the employee’s continuous service with the second employer.

Note: This subsection does not apply to a transfer of employment between non-associated entities, for the purpose of Division 6 of Part 2-2 (which deals with annual leave) or Subdivision B of Division 11 of Part 2-2 (which deals with redundancy pay), if the second employer decides not to recognise the employee’s service with the first employer for the purpose of that Division or Subdivision (see subsections 91(1) and 122(1)).”

[24] Section 22(7) defines a transfer of employment:

“Meaning of transfer of employment etc.

(7) There is a transfer of employment of a national system employee from one national system employer (the first employer) to another national system employer (the second employer) if:

(a) the following conditions are satisfied:

(i) the employee becomes employed by the second employer not more than 3 months after the termination of the employee’s employment with the first employer;

(ii) the first employer and the second employer are associated entities when the employee becomes employed by the second employer; or

(b) the following conditions are satisfied:

(i) the employee is a transferring employee in relation to a transfer of business from the first employer to the second employer;

(ii) the first employer and the second employer are not associated entities when the employee becomes employed by the second employer.

Note: Paragraph (a) applies whether or not there is a transfer of business from the first employer to the second employer.”

[25] Section 22(8) defines a transfer of employment:

“(8) A transfer of employment:

(a) is a transfer of employment between associated entities if paragraph (7)(a) applies; and

(b) is a transfer of employment between non-associated entities if paragraph (7)(b) applies.”

[26] The Transfer of Business provisions of the Fair Work Act 2009 took effect from 1 July 2009 and therefore applied to the reorganisation which occurred at Unilever.

[27] Section 311 of the Act provides:

“311 When does a transfer of business occur

Meanings of transfer of business, old employer, new employerand transferring work

(1) There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:

(a) the employment of an employee of the old employer has terminated;

(b) within 3 months after the termination, the employee becomes employed by the new employer;

(c) the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;

(d) there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).

Meaning of transferring employee

(2) An employee in relation to whom the requirements in paragraphs (1)(a), (b) and (c) are satisfied is a transferring employee in relation to the transfer of business.

Transfer of assets from old employer to new employer

(3) There is a connection between the old employer and the new employer if, in accordance with an arrangement between:

(a) the old employer or an associated entity of the old employer; and

(b) the new employer or an associated entity of the new employer;

the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):

(c) that the old employer, or the associated entity of the old employer, owned or had the beneficial use of; and

(d) that relate to, or are used in connection with, the transferring work.

Old employer outsources work to new employer

(4) There is a connection between the old employer and the new employer if the transferring work is performed by one or more transferring employees, as employees of the new employer, because the old employer, or an associated entity of the old employer, has outsourced the transferring work to the new employer or an associated entity of the new employer.

New employer ceases to outsource work to old employer

(5) There is a connection between the old employer and the new employer if:

(a) the transferring work had been performed by one or more transferring employees, as employees of the old employer, because the new employer, or an associated entity of the new employer, had outsourced the transferring work to the old employer or an associated entity of the old employer; and

(b) the transferring work is performed by those transferring employees, as employees of the new employer, because the new employer, or the associated entity of the new employer, has ceased to outsource the work to the old employer or the associated entity of the old employer.

New employer is associated entity of old employer

(6) There is a connection between the old employer and the new employer if the new employer is an associated entity of the old employer when the transferring employee becomes employed by the new employer.”

[28] At the hearing, the AMWU submitted that s.311(1)(a), (b) and (c) were satisfied. Further the AMWU submitted that s.311(3) –(6) applies. 6 It submitted that Unilever Australia Limited and Unilever Australia Trading Limited are associated entities.7 It submitted further that it was not necessary that they be associated entities because s.311(3) was satisfied. As a consequence it submitted that as a result s.22(5) applies and service with Unilever Australia Limited counts as service with Unilever Australia Trading Limited.

[29] As this submission was made for the first time at the hearing, Unilever required additional time to consider the submission. 8 Directions were issued for Unilever to file and serve further submissions and evidence in relation to this issue but on 16 January 2018 they advised that they did not intend filing any further material.

[30] The AMWU noted that Unilever had not in its email conceded that there had been a transfer of business. It submitted that both Unilever Australia Limited and Unilever Australia Trading Limited are subsidiaries of Unilever Australia (Holdings) Propriety Limited. It submitted that Unilever Australia Limited and Unilever Australia Trading Limited are related bodies corporate and hence are associated entities. It further submitted that even if they are not related bodies corporate then Unilever Australia (Holdings) Propriety Limited controls Unilever Australia Limited and Unilever Australia Trading Limited and the operations, resources or affairs of Unilever Australia Limited and Unilever Australia Trading Limited are material to Unilever Australia (Holdings) Propriety Limited. Hence under s.50AAA(7) of the Corporations Law they are associated entities. Further it submitted that having regard to s.311(3) of the Act there is a transfer of business.

[31] Of course, if they are not associated entities, s.91 of the Act permits an employer not to recognise service for the purpose of calculating annual leave entitlements and s.122 similarly provides an employer to not recognise service for the purpose of calculating redundancy entitlements under subdivision 11 of Part 2-2 of the Act. Further s.384(2)(b) provides if the transfer of business is between non –associated entities then provided advice is provided to the employee in writing prior to commencement of employment with the new employee then the new employer can refuse to recognise service with the old employer for the purpose of calculating the employees period of service for the purpose of unfair dismissal.

[32] I am satisfied that there has been a transfer of employment. I am therefore satisfied that s.22 means that service with Unilever Australia Limited counts as service with Unilever Australia Trading Limited.

[33] None of the exceptions set about above is relevant in relation to the issue to be determined here. I am satisfied therefore that to the extent that the letters of offer purposed to exclude previous non-permanent service from the calculation of the employee’s service for purposes other than ss.91, 121 and 384 it has no effect.

4. Individual claims

[34] The AMWU noted that there were some factual differences between the parties in relation to the individual employees. It was suggested and I agreed that in the event I found that casual/seasonal work counted as service then the parties would confer about the amounts owed to employees and only if there was a dispute would the matter be referred to the Commission for determination. 9

Submissions of the AMWU

[35] Five employees, the subject of the dispute, were made redundant in May 2017. The five employees were initially employed byUnilever Australia Limited on a seasonal basis. When the season ended, the five employees were transferred across from the tomato line which was located away from the main factory to the Factory proper where they performed a variety of tasks. When not engaged as seasonal employees they were engaged as casual employees. Each of the five employees was subsequently made permanent employees and were permanent employees at the time they were made redundant. While the dates differed, the pattern of work was the same.

[36] It was submitted that there was little or no interruption between engagements. For the purpose of this part of the decision, I will assume that the employment relationship of each employee did not end either at the conclusion of the seasonal contracts nor at the end of each casual shift.

[37] As was considered by the Full Bench in Khayam v Navitas English Pty Ltd 10which cited with approval the Full Bench decision in Department of Justice v Lunn11:

“[25] The expressions "employment relationship" and "employment contract" are sometimes used interchangeably, as if they are exactly synonymous. They are not exactly synonymous.

[26] The common law of employment in the modern era rests upon contract. In Byrne v Australian Airlines McHugh and Gummow JJ observed:

"The evolution in the common law as to the relationship of employment has been seen as a classic illustration of the shift from status (that of master and servant) to that of contract (between employer and employee)."

[27] Whatever may have been the position in the past, under the modern law, there can be no employment relationship without there also being a contract of employment in existence between the parties to the employment relationship. However, as the Full Court of the Federal Court in Brackenridge v Toyota Motor Corporation Australia Ltd made clear, the termination of a contract of employment does not necessarily result in the termination of the employment relationship between the parties to that contract of employment: if the parties enter, or are taken to have entered, a new contract of employment of employment, the employment relationship continues notwithstanding the termination of the prior contract of employment. Thus, a "continuous employment relationship" is not inconsistent with a series of back-to-back fixed term or 'outer limit' contracts, each of which takes effect according to its terms. On the other hand, as noted by Dixon J in Automatic Fire Sprinklers Pty Ltd v Watson, it is possible for a contract of employment, and thus an entitlement to wages, to survive a termination of the employment relationship.”

[38] It was submitted that prior to the engagement as permanent employees, each of the five employees was very constant, averaging four-five days per week, with the exception of Mr Turco’s first year as a casual where his work was sparse – a day or two a week. 12

[39] The AMWU submitted that the ordinary meaning of the word ‘service’ in Attachment 4 of the Agreement would cover prior service. 13 The AMWU submitted that the only role for the exclusion of casual and seasonal employees from Attachment 4 is to make it clear that if an employee is a casual or seasonal employee at the time their position ends they, are not entitled to redundancy pay. The AMWU submitted that it does not mean that casual or seasonal service is not counted as service.14

[40] In support of that proposition the AMWU relied upon the decision of the Full Bench in Australian Manufacturing Workers’ Union v Donau Pty Ltd 15 in which a majority of the Full Bench held that a period of prior contiguous casual service counted in the calculation of severance pay under the enterprise agreement.

[41] In that decision the Full Bench determined that it needed to determine the meaning of service in s.22 of the Act because it found that the agreement incorporated the provisions of the National Employment Standards. 16

[42] As the Full Bench noted 17:

“[10] It was agreed by both parties that the terms year of service, period of service and length of service as they appear in the Agreement have the same meaning as years of continuous service in s.117 (required for notice of termination or payment in lieu) and s.119 (redundancy pay) of the Act.”

[43] This is because the agreement under consideration provided that the Company was not required to pay redundancy pay under the Agreement if the redundant employee was not entitled to redundancy pay in accordance with the NES.

[44] The Full Bench rejected the submission that the exclusion of casuals from an entitlement to redundancy pay under the NES meant that their service did not count. The Full Bench found that the exclusion did no more than provide that if an employee was a casual employee at the time of the redundancy, they had no entitlement to redundancy pay.

[45] The AMWU submitted that based on that reasoning the exclusion in Attachment 4 does no more than make it clear that a casual employee whose position is made redundant is not entitled to redundancy pay. 18

[46] The AMWU notes that the drafters of the Agreement used the term “continuous service” and “service” in Attachment 4. The AMWU submitted that the differing uses show that the drafters of the Agreement understood the distinction between service in the ordinary sense and the more circumscribed notion of continuous service. It submitted that the omission of the word continuous “points to a deliberate decision to adopt a more liberal and open concept of qualifying employment and service than continuous service.” 19

[47] The AMWU further submitted that while the Agreement did not incorporate the terms of the Act, the Agreement owes its operation and force to the Act and the Act codifies the terms service and continuous service and Donau makes it clear that the Act does not exclude a period of regular and systematic casual employment from the definition of service or continuous service for the purpose of severance payments. 20

[48] It submitted that service simply means employed. 21 The AMWU accepted that at the end of each seasonal contract the employee’s entitlements were paid out and the employees resumed casual employment. It submitted as a consequence the service continued albeit in a different form.22

[49] The AMWU relied on the decision of the Norfolk Island Supreme Court in Menghetti v Official Trustee Under the Provident Act 1958 (NI). 23 In that matter, Mr Menghetti was employed under successive employment contracts, including as a temporary employee. Weinberg J found that ‘continuous service’ should be construed according to its ordinary meaning. He then considered other decisions dealing with the same words which had found that continuous service does not require full time continuous service nor a continuous contract of employment or a single unbroken contract. Weinberg J found that “‘service’ is apt to describe the engagement of Mr Menghetti by the Administration for the entire period.”24

Submissions of Unilever

[50] Unilever submitted that on the plain reading of the Agreement, the word ‘service’ excludes casual and seasonal service and is limited to service with Unilever Australia Trading Limited only. 25

[51] Unilever submitted that there is an industrial history of casuals being excluded from redundancy pay. It submitted that the casual loading compensates casual employees for benefits associated with ongoing employment including redundancy pay. 26

[52] It submitted the Agreement itself makes it clear that the redundancy agreement does not apply to casual or seasonal employees. It submits that the AMWU reading of the word service involves a literal reading and such a reading is inconsistent with the authorities. 27

[53] It submitted that consideration must be given to the purpose of the preamble. It says that it disentitles casuals or seasonal employees to redundancy entitlements and should influence the reading of the word service to exclude casual or seasonal service. This would avoid illogical outcomes. Under the AMWU interpretation, a casual with five years’ service would have no entitlement but the same casual employee appointed to a permanent position just before being made redundant would have five years’ service and would be entitled to redundancy pay despite having been compensated for redundancy pay by a casual loading. 28

[54] Unilever rely upon a number of authorities to support its contentions. In Schuman v Pace Trading Pty Ltd 29the Industrial Relations Court of SA rejected a claim to count a casual employee’s service as continuous service. In this case Ms Schuman sought redundancy and notice payments to be calculated on the basis that her casual service should be included. This proposition was rejected by the Court. It held that she was not employed on an ongoing contract of service.30 While the Court found that Ms Schuman was entitled to additional notice, it held that clause 10.8 of the award which provided that redundancy pay was not payable to casual employees was “fatal to this part of the applicant’s claim.” The Court noted that there was no express inclusion of casual service and rejected the claim. The Court went on to say that “if the casual service did not qualify her for a redundancy during the currency of that service, it makes no sense to me that it would do so at a later juncture after some permanent service.”31

[55] Deputy President Sams in AMWU v Fairfax Regional Media 32reached the same conclusion. Again he placed significant emphasis on the exclusion in the relevant clause which provided that redundancy only applies to permanent employees.33 He also had regard to the fact the employees had received a causal loading.

[56] Commissioner Hampton in TWU v Q Catering Limited 34had to determine if causal service counted towards “years of service”. He had regard to the fact that casual employees receive a loading which compensates them for the loss of certain entitlements. While it was not stated in this agreement, he assumed that this included redundancy benefits.35

[57] He further noted that the relevant clause did not apply to casuals. He then considered other decisions dealing with the same issue. He held that the conventional approach was that in the absence of an express provision, service as a casual does not count for the purpose of redundancy entitlements. 36 Commissioner Hampton then considered the relevant clauses and held that casual service did not count towards calculating redundancy entitlements.37

[58] Unilever submitted that these decisions supported a proposition that a general exclusion clause disentitling casual employees from redundancy pay should also be taken to mean that permanent employees cannot include prior casual service in their service for the purpose of calculating redundancy entitlements. 38

[59] Further it was submitted that the authorities support the proposition that the industrial norm is that prior casual service is automatically excluded from the word ‘service’ in redundancy provisions. 39

[60] It submitted that when the Agreement uses the word ‘service’ it is used in its ordinary way. 40

[61] It rejects the submission that the meaning given to the word “service” in s.22 of the Fair Work Act 2009 should be imported into the Agreement. It submitted that the focus must be on objective intentions of the parties to the Agreement and there is no evidence to support the submission that the parties intended to import the definition of service from the Act into the Agreement. 41 It notes that the predecessor agreements used the same language and these agreements predate the Act.42

[62] It further says that the decision in AMWU v Donau is not relevant because that agreement expressly incorporated the Act and that case involved prior service with a predecessor entity. 43

[63] Unilever submitted that clause 2.7 does not say who the service must have been with. It says that the Agreement makes clear that it is service with Unilever Australia Trading Limited that must be included. This is because the Agreement only refers to Unilever Australia Trading Limited and the words employer and company are defined to mean Unilever Australia Trading Limited. In Attachment 4 ‘employer’ is defined as Unilever Australia Trading Limited and there is no reference to any predecessor entity. 44

[64] It submitted that even if casual service were to count all the employees’ casual service was with Unilever Australia Limited and therefore it would be excluded. 45

[65] It submitted that even if the Commission found that the term service was ambiguous then it submitted that an examination of the extrinsic material supports a finding that service excludes prior casual/seasonal service or service means service with Unilever Australia Trading Limited and prior continuous permanent service with Unilever Australia Limited. 46

[66] It submitted that one of the key objective background facts known to the parties at the time the 2015 agreement was made was that each employee who had transferred to the respondent had agreed that only prior continuous permanent service would be recognised by the new employer. 47

[67] The parties also knew that the applicable award provided that seasonal and casual employees were not entitled to redundancy pay and that every enterprise agreement had the same exclusion. 48

[68] Further casual employees received a loading for benefits payable to permanent employees which includes redundancy pay. 49

[69] The AMWU never raised the issue of recognition of casual/seasonal service in any log of claim or in bargaining despite being party to a decision in which the Commission held that such service was not recognised. 50

[70] Unilever has never recognised prior casual/seasonal service when calculating redundancy pay 51 and this has never been challenged by the AWMU.52

[71] This supports the conclusion that service does not include prior casual/seasonal service.

[72] Unilever submitted that there are no objective facts supporting the AMWU’s contention. 53

[73] It submitted that each of the employees agreed to a term limiting the circumstances in which service would be recognised. This contractual agreement sits outside of the Agreement but it can be considered to have been “in common contemplation between the parties and therefore constitutes a common assumption of the type referred to in Berri. 54

Consideration

[74] The parties are in agreement that the approach to the interpretation of the Agreement was set out in Berri.

[75] I am satisfied that the term service has an ordinary meaning. I am satisfied that when the word service is used it refers to the period of employment with an employer and that includes periods of contiguous casual, seasonal and permanent employment. Whether an employee has such service is a matter of fact to be determined by looking at the employment history of the employee. What is relevant is whether the employment relationship existed not whether there was one contract of employment.

[76] This is evidenced by the use of the term by the employer. For example, Unilever Australia Limited recognised Ms Gibson’s ten years of service. That service included periods as a casual employee, a seasonal employee and a permanent employee. 55 Further, Unilever Australia Trading Limited, in its letters of offer to employees of Unilever Australia Trading Limited, made it clear that only continuous permanent service would be recognised. Clearly this was premised on the notion that service can include non-permanent service.

[77] If one examines this Agreement, one sees that the Agreement includes reference to service in a variety of contexts. Attachment 4 itself distinguishes an employee’s entitlement to severance pay which requires 12 months continuous service and redundancy pay which requires payment per year of service.

[78] I have examined the Agreement as a whole. The Agreement provides at clause 25 for the entitlement to annual leave after 12 months “continuous service”. The Agreement at clause 38, Long Service Leave, refers to “per year of completed service” and “continuous service” The Agreement at clause 67, Personal Leave, refers to “the first year of employment” and “years of service” and clause 69, Statement of Service, refers to “the period of employment”. Attachment 4 provides for the accrual of personal/carer’s leave based on the length of time worked for the employer. Attachment 2, Parental Leave Policy, refers to “continuous service”. Attachment 2 provides that eligible casual employees with 12 months continuous service to be eligible for unpaid parental leave.

[79] I am not able to conclude when looking at the Agreement as a whole that the word ‘service’ has a special meaning in this Agreement.

[80] I have considered whether service has a particular meaning in an industrial context.

[81] The Workplace Relations Act 1996 provided for annual leave and personal leave. Parliament made it expressly clear that service as a casual employee was not included in an employee’s period of service. 56 By contrast when it provided for parental leave it expressly included periods during which the employee was employed as a regular and systematic casual employee who had a reasonable expectation of continuing employment with the employer.57 The Workplace Relations Act1996 also required employers to give notice of termination to employees based on their period of continuous service.58 Section 638 excluded from the operation of that entitlement a casual employee engaged for a short period within the meaning of subsection (4). As a result, casual employees engaged on a regular and systematic basis for at least 12 months who had a reasonable expectation of continuing employment with the employer were entitled to notice and that notice was calculated on the basis of their continuous service.59 These provisions make it clear that there is no automatic presumption that service excludes or includes service as a casual employee.

[82] The Fair Work Act 2009 similarly provides for service related entitlements. For parental leave employees, other than casual employees must have 12 months continuous service. 60 Casual employees who are long term casual are entitled to parental leave. A long term casual is employed on a regular and systematic basis with a reasonable expectation of continuing employment on a regular and systematic basis. The Act provides for annual leave and personal leave for each year of service but it expressly does not apply to casual employees.61 The Act provides for notice of termination and redundancy based on a period of continuous service but expressly provides at s.123 that these provisions do not apply to casual employees. These provisions equally make it clear that there is no automatic presumption that service excludes or includes service as a casual employee.

[83] The decision in Donau makes it clear that for the purpose of s.22 periods of causal service are not excluded from the definition of service or continuous service for the purpose of determining the entitlement of a permanent employee to severance pay. 62

[84] I am not satisfied that there is a common industrial understanding that the word service, when used in an industrial context, excludes service as a casual/seasonal employee.

[85] I am satisfied that unless there is a contra-indication in the Agreement then service includes service as a casual/seasonal employee.

[86] In the context of this Agreement if service excluded periods of casual service then there would be no need for the exclusion that exists in Attachment 4. If periods of casual/seasonal service were not counted towards an employee’s service with an employer then not only would casual/seasonal employees not be entitled to redundancy/severance pay if their position was made redundant but their casual/seasonal service would not count towards service if they were a permanent employee at the time they were made redundant.

[87] As a matter of construction I do not accept the submissions that the exclusion of casual/seasonal employees from an entitlement to redundancy pay answers the question as to whether service as a casual/seasonal employee counts towards a permanent employee’s service.

[88] The exclusion in Attachment 4 does no more than say that if an employee is a casual/seasonal employee at the time his or her position is redundant, the employee is not entitled to redundancy pay or severance pay. With respect to the decision makers in the cases relied upon by Unilever none of them have provided any reasons for their conclusion.

[89] The AMWU submitted that the requirement to have continuous service is a more arduous requirement than the requirement to have service and I accept that submission.

[90] I accept that there is an industrial history of casual/seasonal employees being excluded from receiving redundancy pay. I do not accept that this means that there is an industrial history that service as a casual/seasonal employee is not included in the calculation of a permanent employee’s service.

[91] I am further not satisfied that the only relevant service is service with Unilever Australia Trading Limited. As discussed above, when the transfer of employment occurred the Act was in operation. I am therefore satisfied that when the employees transferred their service with Unilever Australia Limited was recognised for all purposes under the Act including agreements made under the Act.

[92] As there is no contrary indication I am satisfied that in this Agreement when calculating a permanent employee’s contiguous period of service as casual/seasonal employees counts as service for the purpose of determining the employee’s entitlements under Attachment 4 to the Agreement.

[93] As I have found that the term ‘service’ has an ordinary meaning, it is not necessary for me to consider the extrinsic material relied upon the Unilever.

DEPUTY PRESIDENT

Appearances:

B. Terzic for the Applicant.

A. Manos of Counsel for the Respondent.

Hearing details:

2017.

Melbourne:

15 December.

<PR600643>

 1   Transcript PN 117

 2   Ibid PN 123

 3   Ibid PN 132

 4   Ibid PN 164-165

 5   Exhibit R2 at [5]

 6   Transcript PN 43-45

 7   Ibid PN 44

 8   Ibid PN 173

 9   Ibid PN 31

 10   [2017] FWCFB 5162

 11   PR974185

 12   Submissions of the AMWU at [16]

 13   Ibid at [27]

 14   Ibid at [29]

 15 (2016) 262 IR 18

 16   Ibid at [11]

 17   Ibid at [10]

 18   Submissions of the AMWU at [35]

 19   Ibid at [36]

 20   Ibid at [37]-[39]

 21   Ibid at [41]

 22   Ibid at [43]

 23 [2006] NFSC 12

 24   Ibid at [53]

 25   Submissions of Unilever at [14]

 26   Ibid at [20]

 27   Ibid at [23]-[24]

 28   Ibid at [30]

 29   [2007] SAIRC 96

 30   Ibid at [47]

 31   Ibid at [57]

 32   [2014] FWC 5631

 33   Ibid at [5]

 34 [2014] FWC 6160

 35   Ibid at [43]-[44]

 36   Ibid at [54]

 37   Ibid at [65]

 38   Submissions of Unilever at [38]

 39   Ibid at [39]

 40   Ibid at [40]

 41   Ibid at [41]

 42   Ibid

 43   Ibid at [42]

 44   Ibid at [43]-45]

 45   Ibid at [48]

 46   Ibid at [50]

 47   Ibid at [54]

 48   Ibid at [55]

 49   Ibid at [56]

 50   Ibid at [57]

 51   Ibid at [58]

 52   Ibid at [59]

 53   Ibid at [61]

 54   Ibid at [63]

 55   Exhibit A1 at EG4

 56 See s.228, 240 of the Workplace Relations Act 1996

 57   See s.263

 58   See s.661

 59   Schuman v Pace Trading Pty Ltd [2007] SAIRC 96

 60   S67(1) of the Act

 61   See ss.86.87, 95 and 96of the Act

 62   [2016] FWCFB 3075 at [19]

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