Employment National Ltd v CPSU - [2000] FCA 452

FEDERAL COURT OF AUSTRALIA
Employment National Ltd v CPSU [2000] FCA 452
INDUSTRIAL LAW – awards and certified agreement – privatisation of the services of a Commonwealth government department to which binding awards and certified agreement relate – whether the services of the department constituted “a business” within the meaning of section 149(1)(d) of the Workplace Relations Act 1996 – whether certain corporations became the “successors, assignees or transmittees” of the business – substantial identity between old and new activities – whether binding effect of awards and agreement limited to employment under the Public Service Act 1922 – whether the awards and agreement were in terms incapable of application outside the Australian Public Service – whether the making of an employer-specific award by the Australian Industrial Relations Commission constitutes an order ousting the effect of s149(1)(d) – meaning of “new employer” under section 170MB
CONSTITUTIONAL LAW – whether section 149(1)(d) of the Workplace Relations Act 1996, in operating to make awards binding upon an employer not party to the original dispute giving rise to those awards, is consistent with placita (xxxv) and (xxxix) in section 51 of the Constitution
WORDS AND PHRASES – “business” – “part of the business” “subject to any order of the Commission” – “substantial identity”
Workplace Relations Act 1996 ss 149(1)(d), 149(1A), 170MB(1) and 170LB(1)
Re-establishment and Employment Act 1945 ss 47 and 48
Public Service Act 1922 s 7(1)
Employment Services Act 1994 ss 3(1), 8, 18, 37(1), 68
Commonwealth Services Delivery Agency Act 1997
Acts Interpretation Act 1901 s 15AB
Council of the European Communities Directive 77/187 of 1977 Articles 2 and 3(1)
North Western Health Care Network v Health Services Union of Australia [1999] 164 ALR 147 followed
The Queen v Cohen, ex parte Motor Accident Insurance Board (1979) 141 CLR 577 applied
Re Australian Industrial Relations Commission; ex parte Australian Transport Officers Federation (1990) 171 CLR 216 applied
R v Coldham; ex parte Australian Social Welfare Union (1983) 153 CLR 297 applied
Re Australian Education Union; ex parte Victoria (1994-5) 188 CLR 188 applied
Melbourne Corporation v Commonwealth (1947) 74 CLR 31 applied
Ex parte Professional Engineers’Association (1959) 107 CLR 208 applied
Queensland Electricity Commission v Commonwealth (1985) 159 CLR 192 applied
State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 distinguished
Health Services Union of Australia v North Eastern Health Care Network & Western Health Care Network [1997] 79 FCR 43 applied
Australian Federation of Air Pilots v Skywest Airlines Pty Ltd (Industrial Relations Court of Australia, Marshall J, unreported, 31 October 1995) referred to
Meat & Allied Trades Federation of Australia v Australasian Meat Industry Employees Union (1995) 58 IR 90 referred to
Crosilla v Challenge Property Services (1982) 2 IR 448 distinguished
George Hudson v Australian Timber Workers' Union (1922-3) 32 CLR 413 followed
Daily News Ltd v Australian Journalists Association (1920) 27 CLR 532 referred to
Construction, Forestry, Mining & Energy Union v Australian Industrial Relations Commission & Ors [1999] 164 ALR 73 followed
ACTEW…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2000] FCA 452
Decision Date: 11 APRIL 2000

CaseChat Overview and Summary

In Employment National Ltd v CPSU, the Court was asked to determine whether certain employment awards and agreements applied to employees of Employment National Ltd (EN) and Employment National Australia Pty Ltd (ENA) after they took over certain employment services from the Commonwealth Employment Service (CES) in 1998. The CPSU argued that the awards and agreements applied, while EN/ENA contended that they did not. The case arose from a log of claims submitted to the Commission on 10 October 1997, which found a dispute on 27 March 1998. After unsuccessful negotiations, EN/ENA commenced proceedings, and the CPSU later sought to amend the claims to include additional awards, though this was not necessary for the case's resolution.

The central legal issue was whether the awards and agreements continued to bind EN/ENA after the business transfer from CES to EN/ENA. This hinged on the interpretation of section 149(1)(d) of the Constitution, which pertains to the transmission of businesses and the applicability of industrial awards and agreements. The Court had to decide if the substantial identity of the business and employment activities justified the application of the awards and agreements to the new entity, despite the change in ownership and operational model. Additionally, the Court needed to assess whether there were any compelling reasons to narrowly construe section 149(1)(d) to avoid the transmission of these awards and agreements.

The Court found that there were compelling reasons to give full effect to the transmission provisions of section 149(1)(d). It emphasised the importance of stability in the industrial relations system and the need to avoid undermining it, a principle that applies equally to both public and private sector employees. The Court held that there were no compelling circumstances to construe the awards and agreements narrowly, especially given the substantial identity between the activities CES performed and those EN/ENA now carried out. The protective purpose of the awards and agreements further supported their continued application. Consequently, the Court concluded that the awards and agreements bound EN/ENA as successors to the business of CES/EAA.

In light of the above, the Court ordered that the awards and agreements in question bound EN/ENA from 1 May 1998, the date of the business transfer. This decision ensures that the industrial protections and conditions previously applicable to CES employees were preserved for those now employed by EN/ENA, affirming the continuity of employment terms despite the change in business ownership.

Orders

Orders of the court

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Background

Background to the litigation

The CPSU was at this time concerned to establish exactly what terms and conditions of these awards and the agreement applied to employees of EN/ENA, and after submission of a log of claims on 10 October 1997, the Commission found a dispute on 27 March 1998. When discussions between the various parties did not result in agreement, EN/ENA commenced the current proceedings. Their application was amended by leave on 3 September 1998 to add the three other 1995 awards, the APS General Service Officers, Technical Officers and Specific Professional Classifications, in each case covering salaries and specific conditions like the first four. Neither of the other parties sought the same amendment and in fact CPSU said that no EN/ENA employee was, to its knowledge, covered by any of those additional awards. In the event, no separate consideration of these awards is necessary for the disposition of this litigation.Historical background Historically, the department and its predecessors have been responsible for the provision of employment services to the Australian public as one of six ‘programs’ it conducted or supervised. CES was established by section 47 of the Re-establishment and Employment Act 1945. It commenced in 1946, and from that time until April 1998 was a part of the department or its predecessors. Section 48 of that Act described the statutory functions of CES as, in part:…to provide services and facilities in relation to employment for the benefit of persons seeking to become employed, to change employment or to engage labour, to provide facilities to assist in bringing about and maintaining a high and stable level of employment throughout the Commonwealth… In its actual operations CES served as a ‘labour exchange’ providing job placement and other services including the registration, screening and vetting of job seekers and the assessment of their needs, expectations and capabilities, the canvassing of employers for suitable vacancies, matching the two in order to place people in employment, and following up on referrals to achieve actual placements. Ongoing monitoring of placements also occurred. The functions of CES also included the provision of ‘case management’ for those who were considered to be ‘long term’ unemployed, and for whom a structured or managed program was felt necessary in order to increase the prospect of finding employment for them. CES would sometimes contract with non-departmental bodies to provide job seekers with specific services such as short training courses. This element of its activities was referred to as the ‘labour market program’. CES was administered according to area and there were at one time over 300 branches around Australia. Its services were free to the public, except for certain ‘advanced’ services offered to employers, such as ‘CES Plus’, for which a fee was charged. The employees of CES were public servants employed under the PS Act. For the most part, CES consisted of ‘employment officers’ who operated the ‘labour exchange’ system.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

The emphasis in George Hudson was on stability and the need to avoid any undermining of the industrial relations system. As is clearly evident from the decisions of the Full Courts in North Western and CFMEU, this policy requires that the approach apply equally to both public and private sector employees. Thus, all other things considered, the section must apply to public sector transfers of business or ‘outsourcing’. No compelling circumstances exist, either on any of the separate issues in this case, or when the matter is looked at as a ‘single, large conception’, for construing these awards so as to allow for their frustration by the transmission of the relevant business to EN. There is no constitutional reason to give section 149(1)(d) such a narrow construction that it has no practical effect on the ‘outsourcing’ of part of the business of government, where it is clear that even the somewhat profound attitudinal and structural changes that occurred in this instance do not remove what is a ‘substantial identity’ between what the relevant employees did then and now do, and where there is no indication that the Commission did not intend the conditions of the awards and agreement to transmit. Rather, in the light of their protective purpose, there are compelling reasons for the Court to give full effect to the operation of the transmission provisions as entirely consistent with the constitutional provisions applicable to their subject matter.Conclusion It follows that the awards and the agreement bound EN/ENA when together they became the successors, assignees or transmittees of the business of CES/EAA on 1 May 1998. Orders will be made in the three sets of proceedings accordingly.

Ratio Decidendi

Legal Principle Established

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