Serco Sodexo Defence Services Pty Ltd (Application from)

[2015] FWC 772

[2015] FWC 772

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120 - Application to vary redundancy pay for other employment or incapacity to pay

Serco Sodexo Defence Services Pty Ltd (SSDS)
(C2014/6410, C2014/6387, C2014/6392 & C2014/6405)

COMMISSIONER ROE MELBOURNE, 3 FEBRUARY 2015

Application to vary redundancy pay for other employment - QLD.

[1] Serco Sodexo Defence Services Pty Ltd (SSDS) has made a number of applications seeking to have the redundancy payments, due to a significant number of SSDS employees who were made redundant as a result of the loss of the defence contracts, reduced to nil, or an amount to be determined by the Commission. SSDS argues that it has obtained other acceptable employment for these employees, primarily with the incoming contractors. SSDS argues that its actions caused the job opportunity to become available to each of the SSDS employees who received a job offer from an incoming contractor and that SSDS was a strong moving force towards the creation of the available opportunities.

[2] The Fair Work Commission is first considering whether or not SSDS has obtained alternative employment with the incoming contractors for its employees and whether or not that employment is on acceptable terms and conditions. If the Commission concludes that SSDS has obtained acceptable alternative employment then the Commission will, in a second stage hearing, ensure that affected employees are notified and have an opportunity to raise the particular circumstances of any employment offer made to them. If the Commission concludes that acceptable alternative employment has been found in the particular circumstances of an employee the Commission will then determine what reduction, if any, should apply to their redundancy payment.

[3] I have heard these matters in three parts:

● The Northern Territory/Kimberly contract ended on 30 September 2014. The Fair Work Commission considered arguments and evidence from SSDS, the relevant unions and the incoming contractors on the 2nd, 8th and 14th of October 2014. I issued a decision on 31 October 2014. 1 I determined that SSDS had not obtained acceptable employment for SSDS employees with the incoming contractors and I dismissed the SSDS applications. SSDS has appealed this decision.

● The NSW/ACT contracts ended on 31 October 2014. I considered evidence in respect to these contracts on the 17th to 19th of November 2014 with further documents from the incoming contractors and the final written submissions being received by 5 December 2014. I issued a decision on 27 January 2015. I determined that SSDS had not obtained acceptable alternative employment with the incoming contractors except for MSS. I have not made a final determination in respect to MSS.

● The Queensland contract ended on 30 November 2014. I heard arguments and evidence in respect to this matter on the 16th to 18th of December 2014.This decision is in respect to the Queensland contracts.

[4] The parties agreed that I should have regard to relevant evidence and submissions from the hearings of the Northern Territory/Kimberly and the NSW/ACT contracts in dealing with the Queensland contracts. The exhibits are therefore common to all the proceedings.

[5] The entitlement to redundancy payments arises from two sources, the NES and the relevant collective agreement. SSDS has applied under Section 120 of the Act in respect to the NES and under Section 739 in respect to each relevant collective agreement. Conciliation of the Section 739 disputes was unsuccessful following the relevant steps of the disputes settlement procedure. I am satisfied, and the parties agree, that in practice the obligations of SSDS under the relevant collective agreements do not displace or substantively alter the obligations under the NES. SSDS has an obligation to pay any redundancy entitlement due to employees under the NES unless SSDS is successful in its Section 120 applications. In some cases employees are entitled to a more generous redundancy scale under the agreement than under the NES. The preliminary questions for determination in respect to the Queensland contracts are therefore those set out at paragraph 14 of my earlier decision 2 varied to specify the relevant incoming contractors and collective agreements applicable to the Queensland contracts.

[6] Section 120 provides:

“(1) This section applies if:

(a) an employee is entitled to be paid an amount of redundancy pay by the employer because of section 119; and
(b) the employer:

(i) obtains other acceptable employment for the employee; or
(ii) cannot pay the amount.

(2) On application by the employer, FWA may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that FWA considers appropriate.

(3) The amount of redundancy pay to which the employee is entitled under section 119 is the reduced amount specified in the determination.”

[7] SSDS relies on paragraph (b)(i), and argues that it has obtained other acceptable employment for the employees concerned.

[8] Nothing raised by the parties in the Queensland proceedings has convinced me to alter the approach I took in my earlier decisions and I adopt that approach for present purposes. 3 SSDS in the NSW/ACT case submitted that the Full Bench in FBIS4 applied Justice Marshall’s interpretation of “obtain” and in doing so was in error. SSDS submitted that Justice Marshall’s interpretation was narrower than that adopted by the Full Bench in Derole Nominees. In the Queensland case SSDS accepted that the Full Bench in FBIS adopted the test in Derole. SSDS continued to distinguish this from the approach of Justice Marshall and argued that the approach of Justice Marshall was in error and was contrary to the approach in Derole. The Full Bench analysed the facts in respect to the actions of FBIS and applied the test in the legislation to those facts. The Full Bench assessed whether or not the actions of FBIS were sufficient to find that FBIS had obtained the employment with ACG. The Full Bench was informed and assisted by recent authorities that utilised the test in Derole Nominees, including the decision of Justice Marshall. The Full Bench expressed its conclusion using the approach of Derole Nominees. It found that the actions of FBIS fell well short of action which “causes acceptable alternative employment to become available to the redundant employee” and that FBIS was not a “strong moving force towards the creation of the available opportunity”.5 I adopt the same approach.

[9] SSDS did not provide evidence of particular employees in respect to whom it had obtained employment with the incoming contractors. In some cases SSDS reached agreement with incoming contractors whereby they provided SSDS with information about the identity of SSDS employees to whom they offered employment. In other cases the information was obtained by the Fair Work Commission issuing orders at the request of SSDS to the incoming contractors to produce relevant information. I have had regard to this information.

[10] The incoming contractors in respect to Queensland are Transfield Services Pty Ltd, MSS Security Pty Ltd, Spotless Facility Services Pty Ltd and Compass Group Trading as ESS Support Services Worldwide. These contractors were also successful in respect to the NSW/ACT contracts and the same representatives gave evidence on behalf of these contractors as in the earlier proceedings. Their evidence was of a similar nature and was in most respects consistent with the evidence given in the earlier proceedings.

[11] SSDS provided detailed evidence of its activities. As in the earlier proceedings evidence was given by Mr Marriott, Ms Phu and Ms Neill. Their evidence was of a similar nature and was in most respects consistent with the evidence given in the earlier proceedings. Evidence was also given by Ms Wilkie and Ms Liebbrandt. Ms Liebbrandt provided a supplementary statement in response to the employee witness statements.

[12] Evidence was given by five employees called by the unions (Mr Gollan, Mr Schneider, Mr Brewer, Ms Constantin and Ms Ninehan). Their evidence was also of a similar nature and was in most respects consistent with the evidence of the employees in earlier proceedings.

[13] Except where the facts are distinguished I rely upon the comments and conclusions about similar fact evidence in my earlier decisions.

Actions taken by SSDS to obtain employment for SSDS employees with the incoming contractors.

SSDS evidence

[14] As in the NSW/ACT proceedings there were a number of examples of individual assistance provided. Ms Phu gave evidence of assistance provided to seven individuals in respect to their resumes. Ms Neill gave evidence of three specific circumstances where assistance was given to individual employees. Ms Liebbrandt gave evidence of assistance provided to three individual employees. The assistance consisted of information about when an interview with Spotless was scheduled, provision of an advertisement for a position not with an incoming contractor, and a response to a person who advised that they had not been successful in getting a job with an incoming contractor. 6 Ms Wilkie gave evidence that she followed up with Spotless as to why a particular employee had not been successful in their application for a job with Spotless with a view to providing that employee with some coaching and support in seeking other jobs not with the incoming contractors. The purpose of the correspondence was not to seek a different decision from Spotless.7

[15] Evidence was given about assistance to a particular apprentice. 8 I am satisfied that these actions were taken after Compass had decided to employ the apprentice. The actions were related to transferring the apprenticeship from SSDS to Compass.

[16] There were further examples in the SSDS notes and communications where I consider that particular expressions are used or actions are generalised or overstated with the prospect of the Section 120 case in mind. Ms Liebbrandt consistently referred to workers transferring from SSDS to the incoming contractor.

[17] Mr Marriott again referred to a report of a meeting with Compass representatives where the SSDS manager reported as follows: “Compass gave a commitment to employ all SSDS hospitality and catering staff that applied for positions - Brad stated “we need them all””. 9 I considered this matter in the NSW/ACT decision.10 In proceedings Mr Marriott agreed that the statement “we need them all” was not a commitment to employ everyone. Mr Marriott said “if you’re an inbound contractor you’re always going to make that sort of statement to keep people encouraged, because you want to choose the pick of the crop if you can.”11

[18] Even where SSDS had credible evidence that an employee had been unsuccessful in obtaining a job with an incoming contractor no action was taken to pay that employee their redundancy entitlement. The only action taken was to encourage the employee in further job seeking efforts outside of the incoming contractors. 12 Following receipt of the information from the incoming contractors, including the information produced at the request of the Fair Work Commission, SSDS has now paid those who were not offered jobs with the incoming contractors.

[19] SSDS included in its material a small number of positive comments from employees about the assistance and information provided by SSDS during the transition process. However, Ms Neill accepted that there were more negative comments posted than positive ones but the negative ones were not included in the material provided. Most of the negative comments related to redundancy entitlements and the Section 120 application. In respect to comments on efforts to assist and inform employees about future employment Ms Neill said that there were about a dozen negative comments and about the same number of positive comments.

MSS

[20] Mr McKinnon gave evidence that 54 SSDS employees were made offers of employment and 53 accepted the offer. 15 non-SSDS employees were engaged. Mr McKinnon said that there were about 80 SSDS applicants. 13 MSS advertised the jobs on Seek and on the MSS jobs board and members of the public were able to apply in addition to SSDS employees. 84% of those interviewed for jobs were SSDS employees. 78% of the jobs were filled by SSDS employees. 68% of SSDS employees who applied for jobs were successful.

[21] In the NSW/ACT process MSS interviewed the SSDS employees first and only went to the external market after that. In the Queensland case MSS advertised generally and interviewed both the internal and external candidates in a single process. MSS anticipated that in the regional labour market of North Queensland they would not be able to get enough people from amongst the SSDS employees. MSS anticipated that there would be a labour shortage in starting the contract. The 68 positions MSS have filled are inadequate for the work requirement in the longer term as the scope of the contract is similar to the SSDS contract. MSS did not consider enough of the candidates, both internal and external, to be suitable to fill the available positions. MSS committed to employ any SSDS candidate who met their criteria and were successful at interview. Except as discussed below, the same criteria were applied to both the internal and external applicants.

[22] Mr McKinnon gave evidence that about 30% of the SSDS candidates initially failed the medical aspect of the selection process but MSS allowed some of them to get a further opinion and a medical plan. Some of these candidates were selected after producing the medical plan. This is not a normal part of MSS process. 14 The reasons why MSS took this action at a local level were to maximise employment of SSDS candidates in line with the MOU, to please defence as they regarded the existing employees highly, and because there was a shortage of available candidates externally with the required defence clearances.15 The action to allow some of these SSDS employees to get a medical plan was not part of the MOU or another agreement with SSDS nor was it requested by SSDS.

[23] Mr McKinnon agreed that there was an additional month available to recruit employees for the Queensland contract compared to the NSW contract.

Transfield

[24] Transfield has employed 13 former SSDS employees. A total of 15 or 16 persons have been employed for the contract. Mr Atkinson said that only a couple of SSDS employee applicants were unsuccessful.

[25] Mr Atkinson for Transfield agreed that in many cases the best candidates for the roles were the SSDS employees because they had been doing the work, had the skills and qualifications and had the defence security clearances.

Spotless

[26] Ms Pianta gave evidence that 220 SSDS employees attended the information sessions, 201 attended interviews and 147 were employed. Between 5 and 10 SSDS employees were offered employment but rejected it. Between 110 and 130 non-SSDS employees were employed. Of the non-SSDS employees about 50 came from the general market and the balance were Spotless employees who wished to transfer from other contracts.

[27] Ms Pianta gave evidence that there was an additional month available to recruit employees for the Queensland contract compared to the NSW contract and Spotless had adequate time for the recruitment process. 16

[28] Expressions of interest were called for and both SSDS employees and members of the public responded to this request. Ms Pianta gave evidence that the commitment to interview all applicants applied to SSDS applicants but not to external applicants. Some of the interviews took place on defence sites and some were off site. The assistance provided by SSDS enabled the interviews to be conducted more efficiently over a shorter period.

[29] Ms Pianta gave evidence that because of the agreement between SSDS and Spotless whereby SSDS provided assistance in Spotless’ recruitment process Spotless decided to consider SSDS employees’ applications before considering external applicants. In response to a question from Mr Snowball Ms Pianta said that: “it was part of the conversation that that was our intent”. 17 This evidence was not sufficient to change the assessments I made about the nature of the cooperation between Spotless and SSDS in the NSW/ACT decision.

Compass

[30] Ms Holmes gave evidence that at least 112 persons have been employed for the North Queensland contract. At least 40 external job applicants have been employed. A number of existing Compass employees from other Compass contracts were also engaged. 72 SSDS applicants have been employed. 27 (27%) of the SSDS applicants were unsuccessful.

[31] External applicants and those from other Compass contracts were considered at the same time as the SSDS applicants. All Compass employees who applied were given an interview and this did not apply to all external applicants. The scope of the Compass contract is somewhat larger than the scope of the SSDS contract. Compass needed to engage more people than had been employed by SSDS.

[32] Ms Holmes gave evidence that Compass intended to take full advantage of the probationary period of the new employees to assess and ensure that they are suitable for ongoing employment. 18 Ms Holmes gave evidence that the reason why Compass was not interested in the proposal for an agreement with SSDS about recognising service was because it might compromise its probation period rights not because of any concern about transfer of business.19

[33] Ms Holmes persisted in her evidence that the cooperation of the sort which existed between SSDS and Compass to access employees in the Compass recruitment process was commonplace in change of contract situations. Ms Holmes denied that there was any direct linkage between the agreement to provide access and Compass’ decision to interview all SSDS applicants who applied. She did not agree that SSDS’s assistance made any material difference to the number of SSDS employees engaged.

Employees

[34] Mr Gollan, a range supervisor, and his colleagues regularly checked Seek and the Spotless website. A work colleague alerted Mr Gollan and all the other employees in his team to the Spotless expression of interest advertisement. Mr Gollan responded on line whilst at work and submitted an expression of interest to Spotless together with his resume. Mr Gollan gave evidence that in some cases information provided by SSDS came after he had accessed the information himself. Mr Gollan signed up to yammer but did not find it useful. Mr Gollan found it difficult to search for jobs on the computer at work because access to key external sites was blocked. Mr Gollan distributed SSDS information bulletins sent to him as part of the transition process to other work colleagues. Mr Gollan attended the information session and job interview in working time.

[35] Ms Constantin, a cleaner, submitted her expression of interest with Spotless on her home computer. She only became aware of the possibility of accessing a computer at work shortly before the end of the contract. She wrote her own resume and only became aware of the offer of resume assistance after she had submitted her resume. She attended the interview in work time. She was not successful in obtaining a job with Spotless. She also attended an SSDS information session in work time two weeks before the end of the contract where assistance was offered with the job search. Ms Constantin did not understand about yammer, did not have an email address and did not try to sign up for one to access yammer.

[36] Mr Schneider, a security officer, became aware of the job opportunities with MSS through SSDS. Mr Schneider went on line to the MSS site and made an application without assistance. Mr Schneider attended an SSDS information session and the MSS interview and medical outside of normal work time. He was aware that if the interview was in work time he would be released if operationally possible. He was advised of the interview time by MSS. He was not aware that he could use a work computer but he was aware of the offer of assistance in respect to resumes.

[37] Mr Brewer, a groundsperson, submitted an expression of interest on line at home to Spotless prior to the official announcement that they had won the contract. Mr Brewer gave evidence that he completed and submitted his expression of interest and resume to Spotless on three occasions. He attended the interview in work time. He was aware of the offer to use a computer. He became aware of the offer to assist with resumes after he had submitted his resume. He attended an information session which included some information about interview techniques but this session was held after his interview with Spotless. SSDS assisted by sending in his application for security clearance.

[38] Ms Nineham, a team leader cleaner, became aware from another employee that expressions of interest were open with Spotless before the official announcement that they had won the contract. She and others applied on seek or the Spotless web site. She did not do this at work. She had submitted her resume prior to receiving an offer of assistance with resume preparation. She also followed up with an email to Linda Stewart a Spotless recruitment manager. Ms Nineham gave evidence that she was not offered an interview with Spotless and has not received any offer or further communication from Spotless. Ms Nineham said that her manager had said that if any assistance was to be provided to employees seeking employment it would be outside normal working hours. As a team leader she was provided with information to print out and distribute concerning the transition and she did so. She was aware that 13 of the 14 members of her team obtained jobs with Spotless and attended Spotless interviews in working time.

Conclusions in respect to “obtain”

[39] Except where stated I do not consider there to be any differences of significance in the evidence of the SSDS witnesses, the incoming contractors or the employees which alters the general observations and conclusions reached in respect to the evidence in the NSW/ACT proceedings. There was nothing in the evidence that changed the assessments I made in the earlier decisions about the credibility of the evidence of the various witnesses

[40] Unlike in the NSW/ACT case, there was no clear evidence of the information employees authorised to be released by signing consent forms actually being passed on to the incoming contractors. 20

[41] There was conflicting evidence about the assistance provided to employees to apply for security clearances in Queensland. Mr Marriott gave evidence that a significant number of employees had been urged to apply for base line clearances and had made such applications. However, Ms Pianta for Spotless said that 97% of those appointed did not have such clearances. 21

[42] The short time period in which to conduct the recruitment process was less of an issue in the case of the Queensland contracts given the later start date. Ms Pianta for Spotless agreed with this. Ms Holmes for Compass maintained that the short time period was still a consideration which made existing employees attractive. Mr McKinnon for MSS considered that the time period was still a significant issue because of the time it would take to get the higher level security clearances needed for the guarding work. He considered that it would be uneconomic for MSS to meet its contract obligations in the time available if it did not hire a substantial proportion of the SSDS employees.

[43] I do not doubt the evidence of Ms Nineham that she applied for a job with Spotless but did not get an interview. However, I am satisfied that it was the stated intention of Spotless to interview all SSDS applicants. I am satisfied that the situation in respect of Ms Nineham was either because the decision to interview all applicants did not apply to supervisors or team leaders or it was due to an error or an oversight.

[44] The level of cooperation with Transfield was much less than that with the other incoming contractors.

[45] The following are rough estimates of the outcomes of the incoming contractors’ selection process:

CONTRACTOR	% OF SSDS CANDIDATES SUCCESSFUL	% OF POSITIONS FILLED BY NON-SSDS EMPLOYEES	DIFFERNCES IN SCOPE OF CONTRACT
TRANSFIELD	81	15	No evidence of change
SPOTLESS	76	45	Labour requirement decreased in some areas 22
COMPASS	73	36	Labour requirement increased somewhat
MSS	68	22	No change

[46] This is quite a different situation from NSW/ACT. A much higher proportion of SSDS candidates for jobs with Compass and MSS were unsuccessful in the Queensland situation. The success rate was in excess of 90% in NSW/ACT. The proportion of positions filled externally was also much higher. In respect to Spotless the proportion of positions filled externally is significantly higher but there does not appear to have been a significant change in the proportion of unsuccessful SSDS applicants.

[47] The issue is not what might have happened but for the actions of SSDS but rather what did happen as a result of the SSDS actions. It is reasonable to assess what were the strong moving forces behind the recruitment actions of the incoming contractors by assessing the outcomes of the recruitment process, the objective situation of the incoming contractors, the evidence of the incoming contractors about the reasons for their selection process and actions, the evidence of the employees about the process and the evidence of SSDS about their actions and those of others. This requires inferences, predictions and estimations to be made from the evidence.

[48] SSDS submitted that skills, experience and demand for labour will always be factors in recruitment situations so they cannot be regarded as moving forces behind obtaining a job. It is true that these factors will generally be present but depending upon the situation they will have a different impact on the recruitment decisions and the relative attractiveness of an employee and of internal and external labour. The particular qualifications and attributes of an employee are generally a moving force behind their selection in a competitive selection process. The efforts of the employee to participate in the selection process will also generally be a moving force. These matters are relevant in assessing what are the strong moving forces behind a decision to offer employment to an employee and whether the actions of the outgoing employer is one these strong forces.

[49] The actions of SSDS to inform employees, to assist employees to participate in the recruitment process of the incoming contractors, and to improve the chances of SSDS employees being successful in that recruitment process, fell well short of action which “causes acceptable alternative employment to become available” to each of the redundant employees and do not establish that SSDS was a “strong moving force towards the creation of the available opportunity” for each of the SSDS employees. I found that the actions of SSDS in this respect were not sufficient in the circumstances of the NT and NSW/ACT contracts and nothing in the evidence in respect to the Queensland contracts alters that conclusion.

[50] In respect to Transfield, the incoming contractor sought employees internally and externally and some SSDS applicants were unsuccessful. The actions to assist and inform employees may have made a difference to the chances of success of some individuals but the evidence does not establish this in particular cases. The cooperation and agreement with the incoming contractor made no material difference to the outcomes.

[51] In respect to Compass the actions to assist and inform employees may have made a difference to the chances of success of some individuals but the evidence does not establish this in particular cases. I am not satisfied that an agreement was reached between SSDS and Compass at the meeting on 1 July 2014 to provide priority to SSDS employees. I am not satisfied that the decision of Compass to interview all SSDS employees who applied for the vacant positions was a result of the actions of SSDS. Compass considered external applicants, Compass transferees and SSDS applicants as part of the same process when deciding who to appoint. I am satisfied that the access provided by SSDS made it more practicable for Compass to consider SSDS employee applications. It is possible that as a result of this more SSDS employees may have applied and been successful than would otherwise have been the case. It was always the intention of Compass to favourably consider SSDS employees and this was because their qualifications, defence experience, industry experience and qualifications and in some cases their security clearance made them more attractive. I am satisfied that most SSDS employees would have been successful with or without the SSDS assistance. I am satisfied that the cooperation between SSDS and Compass and the assistance provided by SSDS to Compass and to SSDS employees made a marginal difference to the proportion of SSDS employees offered employment by Compass. It did not change the likelihood of success for most of the SSDS employee applicants. There is no obvious way of distinguishing the sub-group(s) where the actions of SSDS were a strong moving force behind their success.

[52] In respect to Spotless the actions to assist and inform employees may have made a difference to the chances of success of some individuals but the evidence does not establish this in particular cases. SSDS applicants were considered first and this probably increased their chances of successfully obtaining employment to a small extent. In the end the incoming contractor sourced employees internally and externally and some SSDS applicants were unsuccessful. However, I am satisfied that regardless of the actions of SSDS it was always the intention of Spotless to favourably consider SSDS employees provided they met the incoming contractors’ criteria. The actions of SSDS facilitated this process. I am also satisfied that the SSDS employees were more attractive because of their qualifications, defence experience, industry experience and, in some cases, their security clearances. I am satisfied that most SSDS employees would have been successful with or without the SSDS assistance. I am satisfied that the cooperation between Spotless and SSDS was of a similar character to that with Compass. The level of contact and the exchange of information in both cases were extensive. However, both Compass and Spotless wanted to consider the SSDS employees regardless of any actions by SSDS. I am satisfied that the cooperation between SSDS and Spotless and the assistance provided by SSDS to Spotless and to SSDS employees made a marginal difference to the proportion of SSDS employees offered employment by Spotless. It did not change the likelihood of success for most of the SSDS employee applicants. There is no obvious way of distinguishing the sub-group(s) where the actions of SSDS were a strong moving force behind their success.

[53] I am fortified in this conclusion by the fact that only 55% of those appointed were SSDS employees. Furthermore, a significant proportion of SSDS employees were not successful in gaining employment with Spotless. These outcomes do not suggest a high degree of priority or preference resulted from any actions of SSDS. These outcomes do not suggest that considering SSDS applicants first made a major difference to their chances of success when compared to an external applicant. Comparisons with the rate of appointment for MSS would not be appropriate as the security contractors required higher security clearances and the labour market for qualified guards may be tighter than that for cleaning and grounds work. Comparisons with Transfield may also not be relevant given the different labour market for stores work. However, comparison with Compass is more relevant. Compass covers a number of areas which do not generally require higher level security clearances and where the skill and qualification levels requirements are not generally high. Chefs are an exception to this. 64% of those engaged by Compass were former SSDS employees.

[54] In respect to MSS the actions to assist and inform employees may have made a difference to the chances of success of some individuals but the evidence does not establish this in particular cases. I am satisfied that the majority of SSDS employees would have been successful in obtaining employment with MSS regardless of the actions of SSDS. Applicants obtained their jobs through a merit based selection process conducted by MSS. It was the defence experience, the security clearances and the quality of the resumes and applications in most cases developed and submitted by the employee themselves which made the existing employees attractive for employment.

[55] The preference given to SSDS applicants by MSS was significantly less than in NSW/ACT. Unlike in the NSW/ACT case, MSS considered external applicants at the same time as they considered SSDS applicants in Queensland. SSDS argues that because SSDS candidates were guaranteed an interview and selection if suitable but external candidates were not, this meant that if an internal and an external candidate were otherwise equal the internal candidate had a better chance of getting the job. The criteria that both internal and external candidates had to meet for success were the same merit based factors such as experience, qualifications, character, police check and medical. However, in the Queensland case there were not enough suitable candidates for the vacant positions so it is not possible to infer that this preference made a practical difference.

[56] A much higher proportion of jobs were filled externally than in NSW/ACT and that proportion is likely to rise as MSS still has a number of vacancies. A much higher proportion of SSDS applicants were unsuccessful. 5% were unsuccessful in NSW/ACT and more than 30% were unsuccessful in Queensland. I consider it unlikely that there would be such a significant difference in the quality of the applicants based purely on geographical location.

[57] I am satisfied that SSDS was a strong moving force behind the MOU which provided MSS with an incentive to maximise their engagement of SSDS employees. However, I am not satisfied that in the Queensland situation this led to more SSDS employees obtaining employment than would otherwise have been the case. In respect to the decision to give some of those who failed the medical an opportunity to produce a medical plan, I am satisfied that the strongest moving forces behind this decision were to please defence and because of a shortage of suitable applicants from the external market. The actions of SSDS were a strong moving force behind the MOU, the MOU was a factor, but not the main motivating factor, in the decision to give a small sub-group of the SSDS applicants a further opportunity and some of that small sub-group did get job offers from MSS. The evidence is insufficient for me to conclude that the actions of SSDS were a strong moving force behind the decision to employ those particular individuals. Overall, I am satisfied that the cooperation between SSDS and MSS and the assistance provided by SSDS to MSS and to SSDS employees made a marginal difference to the proportion of MSS employees offered employment by MSS. It did not change the likelihood of success for most of the SSDS employee applicants.

[58] I accept that the significant level of support SSDS offered to its employees in the incoming contractors’ recruitment processes may have improved the chances of some individuals in those processes. However, fundamentally candidates were being selected based upon their qualifications, experience and ability to meet the incoming contractor’s selection criteria. The strong moving forces towards the creation of a job offer in these circumstances were the actions of the candidate and the incoming contractor.

[59] I am satisfied that SSDS was not a strong moving force behind the SSDS employees being offered employment with Transfield, MSS, Spotless or Compass. The actions of SSDS were insufficient to cause acceptable alternative employment to become available to the redundant employees.

Is the alternative employment offered by the incoming contractors “acceptable”?

[60] As noted earlier I adopt the approach to this question in my earlier decision. 23 Given my decision in respect to “obtain” it is not necessary to determine the matter of whether the alternative employment is acceptable at this stage. However, I will make the following observations.

[61] The wages and conditions for those employed by SSDS under the Queensland contracts are close to the minimum award safety net (except for a relatively small group who are employed as range operators). 24 The wages and conditions with the incoming contractors are also close to the minimum award safety net. The evidence of the employees suggest that as with the NSW/ACT contracts the particular offer made to some employees may not be acceptable alternative employment.

[62] Subject to the qualification above, I accept the comparisons of the relevant wages and conditions provided by SSDS.

[63] If an employee, not on an annual salary, received a job offer which was for similar status work, in the same or a comparable location, with similar job security (i.e. full time, part time or casual) and with similar working hours then the only significant disadvantage in the new employment offered would be the loss of non-transferable credits in respect to accrued service, such as unfair dismissal protection, accumulated personal leave, and credit towards long service leave. I would be satisfied, notwithstanding the loss of service, that the employment is acceptable alternative employment.

[64] The factors surrounding the loss of service are an important part of the rationale for redundancy entitlements. It is appropriate that the loss of service be compensated even if the alternative employment is acceptable. This would mean that I would not reduce redundancy entitlements to nil. I would consider further submissions from the parties before making a decision as to what the appropriate reduction should be having regard to the profile in respect to service related entitlements of the relevant employees. I would also have to consider particular individual circumstances including cases where it is argued that the employment offered was not similar status work, in the same or a comparable location, with similar working hours, with similar levels of job security and/or on the basis of other particular circumstances. In such cases I may conclude that SSDS has not obtained acceptable alternative employment. In any case it would not be appropriate to reduce the entitlements of any employee without giving the affected employee an opportunity to be heard in respect to these matters. At this stage of the proceedings it is only the relevant unions who have been involved.

Conclusion

[65] I am not satisfied that SSDS obtained acceptable alternative employment for its employees employed under the Queensland contract with the incoming contractors. This determination is the settlement of the disputes under Section 739 as far as they relate to those who were offered employment with the incoming contractors under the Queensland contract. The applications under Section 120 are dismissed in so far as they relate to the Queensland contract and those who were offered employment with incoming contractors. SSDS are to advise the Fair Work Commission and the other parties within seven days if there are any other employees in respect to whom they are seeking to be heard in respect to their applications in so far as they relate to the Queensland contract.

COMMISSIONER

Appearances:

Mr T Saunders appeared for SSDS.

Mr S Bull appeared for United Voice.

Mr A Snowball appeared for the NUW.

Hearing details:

2014

Sydney

December 16, 17, 18

 1   [2014] FWC 7678.

 2   [2014] FWC 7678.

 3   [2014] FWC 7678, at paras [15]-[20], [53]-[55] and [84]-[90] in particular, and [2015] FWC 64, at para [9]-[19] in particular.

 4   [2014] FWCFB 6737.

 5 [2014]FWCFB 6737, at para [54].

 6   Exhibit Serco 15, at paras 85 to 87, and PN360.

 7   Exhibit Serco 17, at para 28.

 8   Exhibit Serco 15, at para 38.

 9   Exhibit Serco 14, at para 54.

 10   [2015] FWC 641, at para [76].

 11   PN166.

 12   PN252 to PN255 and PN400.

 13   PN792.

 14   PN701 and PN793.

 15   PN794 to PN795.

 16   PN1007.

 17   PN1045.

 18   PN1095 to PN1100.

 19   PN1107 to PN1110.

 20   See for example PN502 to PN503.

 21   PN947 to PN949.

 22   PN998.

 23   [2014] FWC 7678, at paras [84]-[87].

 24   SSDS Submissions of 12 December 2014, Attachment 1.

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