National Union of Workers v Coles Group Supply Chain Pty Ltd
[2011] FWA 167
•25 JANUARY 2011
Note: An appeal pursuant to s.604 (C2011/3312) was lodged against this decision - refer to Full Bench decision dated 29 April 2011 [[2011] FWAFB 2425] for result of appeal.
[2011] FWA 167
The attached document replaces the document previously issued with the above code on 25 January 2011.
The spelling of ‘arising’ has been corrected in paragraph 1.
Rebecca Lee
Associate to Commissioner Bissett
Dated 21 February 2011
[2011] FWA 167 |
|
DECISION |
Fair Work Act 2009
s.739—Dispute resolution
National Union of Workers
v
Coles Group Supply Chain Pty Ltd
(C2010/4802)
COMMISSIONER BISSETT | MELBOURNE, 25 JANUARY 2011 |
Alleged dispute concerning recognition of prior service.
[1] This is an application by the National Union of Workers (NUW) to Fair Work Australia to deal with a dispute arising under an enterprise agreement.
[2] The matter in dispute relates to the application of the redundancy provisions in the Coles Group Supply Chain Pty Ltd (Hoppers Crossing) and National Union of Workers Enterprise Agreement 2010-2012 (the Agreement). In particular, the dispute relates to the redundancy payment due to Mr Jason Smith in circumstances where he will most likely be made redundant in the first half of 2011 (when the site closes down).
[3] The Agreement was approved by Fair Work Australia on 10 August 2010. This Agreement was preceded by the Coles Group Supply Chain Pty Ltd (Hoppers Crossing) and National Union of Workers Enterprise Agreement 2005-2010.
[4] The redundancy clause of the Agreement provides, in part:
APPENDIX A - REDUNDANCY
Coles Group Supply Chain Pty Ltd and the National Union of Workers agree that if Team Members are to be made redundant at the Hoppers Crossing Distribution Centre or the Laverton Distribution Centre during the period 1 July 2010 and the expiration of this Agreement, the following will apply:
a) Voluntary redundancies shall be offered in the first instance, with length of service being the determining factor for Team Member release. (Where special individual Team Member circumstances arise, these will be considered, providing satisfactory evidence is submitted supporting such special circumstance).
b) (ii) For Team Members employed at the Coles Group Supply Chain- Hoppers Crossing site and permanent Team Members employed prior to 1 July 2005, five weeks severance pay for each completed year of permanent employment, (prorate on each completed month). Any change to the content of this clause can only occur by agreement with the majority of these Team Members, their representatives, and the company.
(ii a) For Team Members employed at the Coles Group Supply Chain- Hoppers Crossing site after 1 July 2005, five weeks severance pay for each completed year of permanent employment, with the severance component only, capped at 55 weeks (pro-rata on each completed month).
(underlining added)
[5] The procedure in the Agreement for the avoidance of industrial disputes allows Fair Work Australia to determine any dispute as to the wages or conditions of employment of employees covered by the Agreement.
[6] The matter on which a determination is sought, as agreed between the parties, is:
What is the severance pay entitlement of Jason Smith pursuant to clause (b) of Appendix A of the Coles Group Supply Chain Pty Ltd (Hoppers Crossing) and National Union of Workers Enterprise Agreement 2010-2012, assuming he is made redundant on 1 April 2011.
[7] I find that this is a matter that arises under the Agreement that goes to the employment conditions and therefore can be subject to determination under the dispute settling procedures of the Agreement.
[8] All steps in the dispute settling procedure of the Agreement have been taken in accordance with the procedure. The matter has been subject to conciliation where it failed to settle.
Mr Smith’s employment
Period | Employment Status | Employer* |
October 1989 - August 1997 | Retail - permanent | Kmart Australia Pty Ltd |
August 1997 - April 1998 | Warehouse - casual | Kmart Australia Pty Ltd/Coles Myer Logistics |
April 1998 - September 2000 | Warehouse - casual | Coles Myer Logistics/Coles Group Supply Chain |
September 2000 - present | Warehouse - permanent | Coles Group Supply Chain |
[9] Mr Smith commenced working for Kmart in a retail position in October 1989. In mid 1997, he completed the paperwork for a transfer to the Kmart Warehouse at Hoppers Crossing. He was advised by his store manager that he was successful and in August 1997 he transferred to the warehouse. He was asked to but did not complete a resignation form from the retail store. Mr Smith finished at the retail store on the Friday and reported for his induction training at the warehouse the following Tuesday. At the time of arriving for his induction, Mr Smith was advised the warehouse position was a casual position. Mr Smith remained at the warehouse as a casual/limited tenure employee until he gained a permanent position in September 2000. Mr Smith’s employment can be summarised as follows:
* See the section below on changes to company name and structure over the relevant period.
Company structure
[10] This matter relates to employment of Mr Smith by various parts of what is now the Coles Group. The company has undergone a level of restructuring over the last 15 years or so.1 As is relevant to this matter, the following is an outline of changes to the group of companies:
Mid 1990s: | The Coles Myer Group (CMG) in Victoria includes Coles, Myer, Kmart and a number of other store ‘brands’. Kmart operates a distribution centre at Hoppers Crossing which services all stores within the CMG. |
Around 1998: | The CMG establishes a separate company - Coles Myer Logistics - to conduct warehousing and distribution operations for the entire CMG. The Kmart-operated Hoppers Crossing Distribution Centre is taken over by Coles Myer Logistics in 1998 and Kmart staff working at the centre, have their employment transferred to Coles Myer Logistics. |
2007: | CMG is broken up. The majority of the group - Coles, Kmart, Target and Officeworks - are acquired by Wesfarmers and is referred to as the Coles Group. Coles Myer Logistics is renamed Coles Group Supply Chain which now operates warehousing and distribution for Coles Group and operates the site at which Mr Smith works. |
For all of the relevant period, Kmart and (the now) Coles Group Supply Chain have been related companies.2
Interpreting the Agreement
There is little disagreement between the parties as to the approach that should be taken in determining the meaning of the Agreement. The parties variously took me to Kucks Case3 and Amcor 4.
[11] Madgwick J in Kucks Case stated that:
It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand. 5
[12] In Amcor Kirby J stated:
The nature of the document, the manner of its expression, the context in which it operated and the industrial purpose it served combine to suggest that the construction to be given to cl 55.1.1 should not be a strict one but one that contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the Agreement.6
[13] The Agreement is binding on Coles Group Supply Chain, the NUW and employees employed by the company at the Hoppers Crossing Distribution Centre and the Laverton Distribution Centre.7 The Agreement incorporates the Storage Services Retail Victorian Warehouses Award 2000 (as at 08 March 2002).8
[14] Redundancy provisions are contained in Annexure A to the Agreement. Those provisions are set out in part at paragraph [4], above.
[15] To determine the matter before me, consideration needs to be given to the phrase ‘permanent employment’ in the context of the redundancy procedure.
[16] Coles Group Supply Chain submits that ‘permanent employment’ cannot mean any permanent employment of the employee with any employer - such a reading it says would lead to an absurd outcome. It also submits that Mr Smith’s retail employment with Kmart can only be considered permanent employment for the purpose of the redundancy clause if it has been deemed to be relevant employment by some action of the employer (Coles Group Supply Chain) or otherwise by legislation. In this matter, it says that Coles Group Supply Chain has not deemed employment with Kmart as permanent employment for the purpose of the redundancy provisions of the Agreement nor has it been deemed employment for such a purpose in legislation. As the employment in retail with Kmart is not permanent employment for the purpose of the Agreement, there is no need to consider the status or effect of Mr Smith’s period of casual employment.
[17] The NUW for Mr Smith submits that Mr Smith’s retail employment with Kmart is permanent employment for the purpose of the redundancy clause, that this employment with Kmart is part of his continuous service and that his period of casual employment, whilst not service for redundancy purposes, does not break his continuity of service. The NUW submits that Kmart is a company related to Coles Group Supply Chain and therefore service with Kmart should be recognised.
[18] The NUW submits that redundancy pay is compensation based on continuous years of employment. Mr Smith is therefore entitled to have his continuous period of employment recognised for redundancy purposes.
[19] This is not a case of differing interpretations of a clause but whether or not certain employment is relevant for the purpose of that clause. There is, in my opinion, little that needs to be determined in terms of the meaning of the redundancy clause, except whether the period of retail employment with Kmart is employment for the purpose of redundancy pay in the Agreement. If the answer to that is yes, a further question arises as to whether or not the period of casual employment breaks continuity of service for redundancy purposes.
[20] The purpose of redundancy pay is well settled. In the Termination, Change and Redundancy Case9(the TCR Case) the Full Bench said:
We prefer the view that the payment of severance pay is justifiable as compensation for non-transferable credits and the inconvenience and hardship imposed on employees.
...
We are prepared to have regard to length of service in determining an appropriate quantum but, for the reasons outlined by the ACTU and because the problems of age on the evidence before us are related more towards the attempt to find alternative employment we have decided not to provide for age related payments. Of course, indirectly, older employees will benefit from a scale of payments based on years of service. 10
[21] This purpose was reaffirmed in the 2004 Redundancy Case11 where the Full Bench stated that:
On the material in this case, we see no justification for altering the approach which was decided upon in 1984 and which has been followed in the federal jurisdiction since. We do not intend to take income maintenance during a period of unemployment into account in assessing the adequacy of severance pay.
We think it is important, however, to identify what we intend in using the term “income maintenance”. We use that term to refer specifically to compensation for periods of unemployment. In excluding income maintenance from our consideration of the appropriate level of severance pay, we do not intend to exclude all income related loss experienced by redundant employees. We think that the Commission’s reference in the TCR No. 1 decision to “the inconvenience and hardship imposed on employees” by redundancy should not be given an artificially narrow reading. The term “hardship” should be given its ordinary and natural meaning. That meaning is broad enough to cover areas such as loss of seniority, loss of security of employment and other kinds of losses which were identified in the evidence. 12
(footnotes omitted)
[22] There being nothing to indicate otherwise in the Agreement, redundancy pay under the Agreement is for the inconvenience and hardship imposed on employees made redundant.
[23] Both the TCR Case and the 2004 Redundancy Case determined scales of payments for redundancy based on years on the employee’s period of continuous service with the employer. The basis of redundancy payments in the Agreement is ‘permanent employment.’ Save for a need to avoid confusion for casual employees who might otherwise have thought that their casual employment was ‘continuous service’ for the purpose of the clause and, given the context within which the Agreement was negotiated, I consider that the term ‘permanent employment’ relates to an employee’s period of continuous service with the employer. Given this conclusion, it is relevant to first consider if Mr Smith has been continuously employed.
Has Mr Smith been continuously employed?
[24] The Fair Work Act 2009 provides:
22 Meanings of service and continuous service
General meaning
(1) 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).
(2) The following periods do not count as service:
(a) any period of unauthorised absence;
(b) any period of unpaid leave or unpaid authorised absence, other than:
(i) a period of absence under Division 8 of Part 2-2 (which deals with community service leave); or
(ii) a period of stand down underPart 3-5, under an enterprise agreement that applies to the employee, or under the employee’s contract of employment; or
(iii) a period of leave or absence of a kind prescribed by the regulations;
(3) An excluded period does not break a national system employee’s continuous service with his or her national system employer, but does not count towards the length of the employee’s continuous service.
[25] Mr Smith’s casual employment was with Kmart in its warehouse and then Coles Myer Logistics (now Coles Group Supply Chain) when the employees of Kmart were transferred to Coles Myer Logistics.
[26] Mr Smith’s uncontested evidence is that, when working as a casual, his
hours averaged 24 each week, but I would often work a full week (36 hours over five days). Occasionally there would be a week or two when I would work between four and twelve hours, but this was very rare. I would estimate that, during the eight months of the year that I worked as a casual, I would have worked full-time hours for four months and less than full-time hours during the other four months (usually March to June, when the work would be more sporadic).
Casuals worked a daily roster. At the conclusion of each shift, a roster for the following [day] would be posted and I would know whether or not I’d have work the following day. Often, especially when I had already been working full-time hours for a while, I could anticipate what days of the week, and how many, I would work. If, by chance, the roster wasn’t available at the end of my shift, or if I wasn’t at work in a particular day, I would have to ring work to check whether or not I was on the roster the following day.13
[27] For four months each year, around August or September, Mr Smith’s evidence is that he was converted to limited tenure during which he worked full time hours. At the conclusion of that period, around January, he would convert back to a ‘permanent casual’.14
[28] The only substantial disruption to the pattern of Mr Smith’s casual employment occurred in mid -1988 when
there was a two or three month period where there was no work available for casuals at all, but we were informed that we should not seek alternative employment during this time and that, because we were “permanent casuals”, we would be expected to return to work as soon as work was available. I did as asked of me, and didn’t work at all during this period.15 (underlining added)
[29] In Cetin v Ripon Pty Ltd t/as Parkview Hotel 16 a Full Bench of the AIRC considered the meaning of the words ‘casual employee’. They considered that there are true casual employees - where the employment arrangements are irregular and uncertain - and ‘permanent casuals’ (as Mr Smith referred to himself) - that is, those employees who are engaged on a regular and systematic basis:
In Australian domestic law the words `casual employee’ have no settled meaning. The true nature of any employment relationship depends on the facts of each case. As Starke J said in Doyle v Sydney Steel Co. Ltd:
“The description “casual worker” is not one of precision: it is a colloquial expression, and where, upon all the facts, there is a reasonably debatable question whether the work is casual or regular, the question is one of fact ...”
Similarly at page 555 Dixon J said that casual employment was `ill defined’ and McTiernan J concluded, at page 565:
“Now the term `casual worker’ is not capable of exact definition. Hamilton LJ said in Knight v Bucknill (1913) 6 BWCC at 164, 165: `I think that “casual” is here used not as a term of precision, but as a colloquial term.’ Each case is to be determined on its own facts, consideration being given not only to `the nature of the work but also the way in which the wages are paid, or the amount of the wages, the period of time over which the employment extends, indeed all the facts and circumstances of the case’ (Stoker v Wortham [1919] 1 KB 499 at 503, 504, per Swinfen Eady MR). The question being one of fact, the Commission’s finding should not be set aside if there was evidence to support it.”
In our view all the facts and circumstances bearing upon the nature of the engagement should be considered in determining the true character of the employment. Consistent with the approach of Moore J in Blue Line Cruises, the informality, uncertainty and irregularity of an engagement supports a conclusion that the employment has the characteristic of being casual. Conversely regular and systematic engagements with a reasonable expectation of continuing employment are usually not characteristic of casual employment.17
[30] In Wayne Shortland v The Smiths Snackfood Co Ltd (Shortland), a Full Bench of Fair Work Australia in discussing how a period of employment under s.384 is calculated, stated that s.384(2):
draws a distinction between a period of service and a period of employment. It also draws a distinction between a period of continuous service and a period of service: a period of continuous service can be made up of a series of periods of service, some of which count towards the period of continuous service...and some of which do not. It is clear from the language of s.384(2) that an employee may have series of contiguous periods of service with an employer that may count towards a single period of employment with that employer. Any given period of service in such a contiguous series of periods of service will count towards the employee’s period of employment only if the requirements in s.384(2)(a)(i) and (ii) are met. Section 384(2) is concerned only with determining which periods of service in such a contiguous series count toward the employee’s period of employment with the employer for the purposes of s.382(a).
Continuous service by a casual employee who has an established sequence of engagements with an employer is broken only when the employer or the employee make it clear to the other party, by words or actions that there will be no further engagements. The gaps between individual engagements in a sequence of engagements should not be seen as interrupting the employee’s period of continuous employment within the meaning of s.384. In particular, a period of continuous service within the meaning of s.384(1) is not to be seen as broken by a period of ‘leave’ or an absence due to illness or injury.18 (Italics in original, underlining emphasis added).
[31] Whilst Shortland was decided in the context of the unfair dismissal provisions of the Act, the conclusion of the Full Bench (as underlined in the passage above) sets a relevant standard applicable in this matter.
In Cori Ponce v DJT Staff Management Services Pty Ltd t/a Daly’s Traffic, Roe C gave detailed consideration as to whether or not a period of casual employment could form part of a period of continuous service. For the reasons given by the Commissioner, I support his conclusion that
it is clear that a period of continuous service for the purposes of Sections 22 and 383 and 384 of the Act can include a period of casual employment notwithstanding the fact that the employee may be engaged and re-engaged on a daily or even an hourly basis during that period of casual employment. The test is simply whether or not during a period of at least six months prior to the dismissal the employment as a casual employee was on a regular and systematic basis and the employee had, during that period, a reasonable expectation of continuing employment by the employer on a regular and systematic basis.19
[32] Coles Group Supply Chain referred me to the decision in NTEU v La Trobe University (NTEU), in which Whelan C found that
[w]hile the provisions of the Award or the Act are not determinative they give weight to the proposition that in general industrial parlance, periods of casual employment are usually not regarded as continuous service unless specifically recognised as such.20
[33] The Commissioner, in determining the intent of the agreement under consideration also found that
the ordinary meaning of ‘continuous service’ excludes periods of casual employment because such employment is characterised by a series of contracts of engagement which would not normally be considered as continuous employment or continuous service.21
[34] This matter can be distinguished from the decision in NTEU. The decision in NTEU was based on the specific wording in the certified agreement in the context of a claim for redundancy payments for a period of casual employment. Further, in my view the Commissioner expressed the opinion that casual employment - being a series of contracts - is not continuous service as such but did not express any view as to whether a period of regular and systematic casual employment breaks a period of continuous service.
[35] The matter to be determined in this matter is whether or not Mr Smith’s period of employment as a causal employee for the period August 1997 - September 2000 was regular and systematic. If his period of casual employment was regular and systematic, it would not have acted to break his ‘continuous service’. If however, it was truly irregular employment, then I must conclude that he has not had contiguous periods of service such that the period of retail employment can be considered as part of his continuous service.
[36] Mr Smith worked as a casual employee for Kmart Australia and Coles Group Supply Chain for a period of three years. During this time (apart from periods when he was employed as a limited tenure employee and worked full-time hours at the warehouse) he would often work a full week, although occasionally (but rarely) he would work four to twelve hours. He worked every month of the year except for one period when there was no work offered but he was asked to hold himself ready to come back to work as soon as it became available - which he did.22 His normal commencement time was 7.00am in the morning but on the rare occasions he had a four hour shift he commenced in the middle of the day.23 He could often anticipate his roster.24 There is no evidence that Mr Smith rejected work when it was offered, that he was irregular in the work he accepted or even that the work offered was irregular.
[37] That Mr Smith often checked his roster for the next day prior to finishing work or rang to check his roster for the next day, is not determinative of his employment not being regular and systematic. He at no time indicated to Kmart or Coles Group Supply Chain, nor they to him, that his casual employment was to end.
[38] Mr Smith’s period of casual employment is recognised for ‘recognition of service’ and for long service leave purposes.
[39] I find that Mr Smith was employed as a casual employee on a regular and systematic basis.
[40] This period of employment as a casual employee and as a limited tenure employee were clearly periods of service with Coles Group Supply Chain and its predecessor that contributed to a period of continuous service. This period of continuous service extends back to the commencement of the retail employment with Kmart.
Is Mr Smith’s retail employment period with Kmart relevant employment for the purpose of the redundancy clause in the Agreement?
[41] Just because Mr Smith has been employed continuously, this does not automatically mean that his period of employment with Kmart is permanent employment for the purposes of the redundancy clause in the Agreement. As Coles Group Supply Chain submits, it would be an absurd outcome if employment with any employer counted automatically as employment for the purposes of redundancy under the Agreement.
[42] In deciding if Mr Smith’s employment with Kmart is employment for the purposes of redundancy from Coles Group Supply Chain, it is necessary to determine the relationship between Kmart and Coles Group Supply Chain for redundancy purposes.
[43] Coles Group Supply Chain and Kmart belong to the same group of companies and have done so for the period in question. That they are part of the same group of companies does not make them the same employer nor does it necessarily make Mr Smith’s employment with one synonymous with employment with the other.
[44] Kmart is an employer in its own right. It has the capacity to hire and fire. A perusal of Fair Work Australia’s website shows that Kmart has reached agreements with its employees, it has been subject to unfair dismissal proceedings and is a party to an enterprise award-based transitional instrument.
[45] Similarly Coles Group Supply Chain is an employer in its own right. It has the right to hire and fire and enter into agreements with its employees. It too has been subject to unfair dismissal proceedings before Fair Work Australia and its predecessors.
[46] The actions of Coles Group Supply Chain in this matter do not make the determination of this issue easy. Coles Group Supply Chain says that Mr Smith’s employment with Kmart is not employment for the purposes of the Agreement. I note however that Coles Group Supply Chain has done little to separately identify itself as the employer distinct from Kmart.
[47] A perusal of Fair Work Australia’s files indicates that an application for approval of the Agreement was made by Coles Group Supply Chain. The statutory declaration which is to be completed by an employee or officer of ‘the employer’, accompanying the application, was made by David Matheson, General Manager Coles Group Supply Chain (Kmart Australia Limited).
[48] The Agreement was approved, with undertakings, on 10 August 2010. 25 The decision of Kaufman SDP in that matter states, in part:
Following a request by me, Coles Group Supply Chain Pty Ltd provided an undertaking concerning clause 6 of the agreement, and it is taken to be a term of the agreement. A copy of the undertaking is attached at Annexure A.26
[49] The undertaking at Annexure A is in the form of a letter on Kmart letterhead signed by Mr Judd Young, Senior Employee Relations Advisor, Kmart Human Resources. The undertaking reads in part:
In regard to your direction that his Honour requires that certain matters be resolved before the above application can progress, we respond as follows:
1. Kmart hereby undertakes, in the event that a dispute arises pursuant to...
[50] Coles Group Supply Chain provided a copy of the Kmart Continuity of Service Policy.27 The policy ‘covers continuity of service for the purpose of restoring long service leave entitlement levels and for recognition of service purposes.’28 (The ‘recognition of service purposes’ referred to in the policy relates to eligibility for service awards with the group of companies.) The policy appears to have been distributed in January 2008.
[51] Whilst it is clear that the policy has no application to redundancy, this cannot be taken to mean that the policy acts to stop any recognition of continuous service for redundancy purposes. Nowhere does it say that continuity of service will not be recognised for any other purpose. In fact, this policy refers readers to the redundancy policy for details relating to redundancy. The continuity of service policy is specifically relevant to long service leave and recognition of service only. It provides no assistance in determining if Mr Smith should have his retail period recognised for redundancy purposes.
[52] This policy provided is marked as a Kmart document.
[53] The conflation of Coles Group Supply Chain and Kmart leads me to consider that the retail employment with Kmart should be considered as part of the permanent employment of Mr Smith for the purposes of the redundancy clause in the Agreement. In seeking approval of the Coles Group Supply Chain Agreement, the statutory declaration was completed by the General Manager Coles Group Supply Chain (Kmart Australia). In giving undertakings with respect to the Agreement, Kmart provided the undertaking. The continuous service policy that Coles Group Supply Chain took me to is the Kmart policy. Coles Group Supply Chain may redeploy staff into related companies and their service will be maintained (see the redundancy provisions of the Agreement). There is no clarity as to where Coles Group Supply Chain starts and Kmart ends such that it would assist my deliberations on this matter. To now say Kmart employment has no relevance to Mr Smith’s current employment, where Kmart clearly remains relevant with respect to actions of Coles Group Supply Chain as an employer, makes little objective sense.
Consideration
[54] Kmart and Coles Group Supply Chain are related companies and have been for the total period in question. Mr Smith started with Kmart in retail, moved with Kmart to the warehouse and continued in the warehouse when it changed its name. Mr Smith clearly considered that he was employed continuously by the one company. He was employed in retail by Kmart, he ‘transferred’ (in his words), and without resignation, to the warehouse where he worked as a casual employee on a regular and systematic basis until he was offered a permanent position. For all intents and purposes, and to an outside observer, Mr Smith’s employment has been in effect with the one employer, albeit in two different roles.
[55] Mr Smith was engaged as a casual employee at the time Coles Myer Logistics took over the running of the warehouse from Kmart. At this time, permanent employees of Kmart had their employment transferred to Coles Myer Logistics (now Coles Group Supply Chain). It can reasonably be inferred that at the time of the transfer of employees from Kmart to Coles Myer Logistics, employees were advised as to the conditions of the transfer of their employment including the extent to which service and accrued entitlements with Kmart would be recognised by Coles Myer Logistics. Mr Smith was not a permanent employee with Kmart at this time. Mr Smith, it is inferred, was seen by his employer as a casual employee with Kmart one day and a casual employee with Coles Myer Logistics the next with little thought as to the effect of the transfer on his previous employment with Kmart.
[56] If Mr Smith had been a permanent employee at the time of the transfer, there would be no doubt as to his current situation and the recognition of his Kmart service. The question is whether he should be disadvantaged because he had a period of causal employment. If the warehouse had remained part of Kmart and Mr Smith gone through the same pattern of employment (permanent to casual to permanent) within Kmart, there is little doubt his period of retail employment would be recognised for redundancy purposes (given my decision above with respect to the period of casual employment).
[57] That Mr Smith moved from on-going retail employment to casual warehousing with Kmart; that there was a transmission of business to Coles Myer Logistics (now Coles Group Supply Chain); and that he then moved from causal to on-going employment with Coles Group Supply Chain cannot be ignored.
Mr Smith should not in my opinion be disadvantaged by the transmission of business during his period as a casual employee. He had continuous service with Kmart and, following the transmission continuous service with Coles Group Supply Chain.
[58] Looked at in this light, Mr Smith’s period of employment with Kmart must be considered employment for the purposes of the redundancy clause.
[59] The recognition of Mr Smith’s retail employment with Kmart as permanent employment for the purposes of the redundancy clause in the Agreement is particular to the facts of this case, the continuity of his employment and the fact that a transmission of business occurred. This decision should not be taken to imply that any previous service is ‘permanent employment’ for the purposes of the redundancy clause. As Coles Group Supply Chain put it, such an outcome would be absurd.
[60] Whilst I accept the argument of Coles Group Supply Chain that, absent any deeming, Mr Smith’s retail employment with Kmart cannot be recognised, it appears to me that the transmission of business and transfer of employees from Kmart warehouse to Coles Myer Logistics in effect provides that deeming. It was open to Coles Group Supply Chain to put evidence before me that the transfer from Kmart to Coles Myer Logistics did not include any transfer of service for non-casual employees but it did not. In such circumstances, the inference I have drawn on this matter is reasonably open to me.
[61] Coles Group Supply Chain says that at the time Mr Smith was offered permanent employment with Coles Group Supply Chain in September 2000, no representations were made to him that prior service with related companies (ie Kmart) would be treated as ‘continuous permanent employment for the purpose of Appendix A’29 (of the Agreement). The absence of a positive statement that some entitlement might be due does not mean that the entitlement is not due. If the proposition put forward by Coles Group Supply Chain was correct, all an employer would need do to avoid some employment obligation is not advise an employee of their entitlements to be relieved of the obligation. Such a proposition is plainly absurd.
[62] Coles Group Supply Chain submits that to recognise Mr Smith’s retail employment with Kmart for the purpose of severance pay ‘would be contrary to the accepted justification for the payment of severance pay.’ As outlined above, the purpose of redundancy pay is well settled. Given no other purpose in the Agreement, it is reasonable to assume that those who drafted the Agreement considered that the redundancy pay to be made under the Agreement would be for the ‘inconvenience and hardship’ which goes to matters such as loss of security of employment, seniority etc but is not to compensate for periods of unemployment. It is unclear how the recognition of Mr Smith’s retail employment would be contrary to this purpose and I find that it would not be so contrary.
Conclusion
[63] I have considered all of the submissions and witness evidence in this matter.
[64] In all of the circumstances of this case, I find that Mr Smith’s retail employment with Kmart is permanent employment for the purposes of the redundancy provisions of Appendix A of the Coles Group Supply Chain Pty Ltd (Hoppers Crossing) and National Union of Workers Enterprise Agreement 2010-2012.
[65] There is no claim that Mr Smith is entitled to or should be paid redundancy for the period August 1997 - September 2000 when he was employed as a casual employee. Rather this matter relates in particular to whether or not Mr Smith is entitled to have the period October 1989 - August 1997 considered as part of his permanent employment for the purposes of determining his redundancy entitlement under the Agreement.
[66] I have found that ‘permanent employment’ as used in the redundancy clause of the Agreement refers to continuous employment with the employer and that Mr Smith’s period of casual employment did not break his continuous service.
[67] I have found that the period of Mr Smith’s employment in retail with Kmart from 1989 - 1997 is relevant employment for the purposes of the redundancy provisions in the Agreement.
[68] I therefore find that Mr Smith’s period of permanent employment for redundancy purposes in the Agreement is October 1989 - August 1997 and September 2000 - the date of redundancy.
COMMISSIONER
Appearances:
D. Mujkic, for the Applicant.
R. West, solicitor, with J. Young for the Respondent.
Hearing details:
2010.
Melbourne:
21 December.
1 See Exhibit Coles1 and Transcript PN160.
2 Transcript PN161.
3 Kucks v CSR Ltd (1966) 66 IR 182.
4 Amcor v Construction, Forestry, Mining and Energy Union and Ors [2005] 222 CLR 241.
5 Kucks v CSR Ltd (1966) 66 IR 182, 184.
6 Amcor v Construction, Forestry, Mining and Energy Union and Ors [2005] 222 CLR 241, 270.
7 Clause 3.1.
8 Clause 5.1.1.
9 Termination, Change and Redundancy Case (1984) 8 IR 34.
10 Termination, Change and Redundancy Case (1984) 8 IR 34, 46.
11 PR032004 (26 March 2004).
12 PR032004 (26 March 2004) at [133]-[134].
13 Exhibit NUW1, paragraphs 13-14.
14 Exhibit NUW1, paragraph 11.
15 Exhibit NUW1, paragraph 12.
16 PR938639 (25 September 2003) (footnotes omitted).
17 PR938639 (25 September 2003) at [57]-[59] (footnotes omitted).
18 [2010] FWAFB 5709 (16 September 2010) at [12] - [13].
19 [2010] FWA 2078 (15 March 2010) at [64].
20 [2009] AIRC 576 (24 June 2009) at [60].
21 [2009] AIRC 576 (24 June 2009) at [63].
22 Exhibit NUW1, paragraphs 12-13.
23 Transcript PN20-22.
24 Exhibit NUW1, paragraph 14.
25 [2010] FWAA 6089 (10 August 2010).
26 [2010] FWAA 6089 (10 August 2010) at [2].
27 Exhibit Coles2.
28 Exhibit Coles2.
29 Exhibit Coles3.
Printed by authority of the Commonwealth Government Printer
<Price code C, PR505801>
1
3
0