Silcar Pty Ltd v “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU)

[2013] FWC 852

[2013] FWC 852

FAIR WORK COMMISSION

EX TEMPORE DECISION

Fair Work Act 2009
s.739—Dispute resolution

Silcar Pty Ltd
v
“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU); The Australian Workers’ Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
(C2013/2766)

Manufacturing and associated industries
COMMISSIONER GOOLEY	MELBOURNE, 7 FEBRUARY 2013

Alleged dispute concerning renewing the services and redundancy.

[1] The following decision, now edited, was handed down at the conclusion of the hearing on 24 January 2013.

[2] The Applicant made an application pursuant to section 120 of the Fair Work Act 2009 (FW Act) to have the redundancy pay payable to its employees reduced to zero, or alternatively one week per year of service. This matter was brought on at short notice due to the fact that the relevant employees’ employment will end on 26 January 2013. A number of issues were canvassed in the hearing going to the Fair Work Commission’s (the Commission) power to vary the redundancy pay. At its highest, it was submitted that the agreements provided no mechanism for the Commission to vary the redundancy pay that the Applicant is obliged to pay.

[3] I have not considered at this time all the submissions that were put by the three unions in this matter. I have for the purpose of this decision assumed that section 120 of the FW Act permits the Commission to vary the redundancy payment provided for in the BSL Western Port Maintenance Alliance Agreement 2010 - 2013, (the AMWU agreement), and the Western Port Site Services Certified Agreement 2011-2014, (the AWU agreement).

[4] The Commission in these circumstances is required to determine if the Applicant has obtained acceptable employment for the employees. If that has occurred, the Commission has the discretion to reduce the amount of redundancy pay to be paid.

[5] I have also assumed for the purpose of this decision that clause 4.4.6 of the Metal Engineering and Associated Industries Award 1998 as incorporated into the Western Port Electrical Certified Agreement (Silcar) - 2012-2015, (the Electrical Agreement), permits the Commission to vary amount of redundancy pay that is required to be paid to the employees.

[6] The Commission in these circumstances is also required to determine if Silcar has obtained acceptable alternative employment for the employees.

[7] I am not able to be satisfied on the evidence before me that the remuneration and other terms and conditions in the offers of employment made by Chelgrave Contracting Australia Pty Ltd (Chelgrave) will be equivalent to those afforded to the employees under the terms of the current Silcar agreements.

[8] The offer of employment advises employees that by reason of the transfer of business provisions of the FW Act, the employees are covered by the agreement.

[9] The transfer of business provisions of the FW Act provide that a transfer of business occurs in four ways, assuming there are transferring employees. There is

• either an arrangement between the old and new employer relating to the ownership or beneficial use of assets that relate to the work in question (s.311(3) of the FW Act),



• outsourcing of work from the old employer to the new employer, s.311(4) of the FW Act,



• insourcing of work previously outsourced from the new employer to the old employer, s.311(5) of the FW Act,



• the new and old employers being associated entities within the meaning of s.50AAA of the Corporations Act 2001 Commonwealth 311(6) of the Act.

[10] In this case there is no evidence that the requirements of s.311(3) are met, and the other provisions do not apply. Accordingly, I am not able to be satisfied that there is a transfer of business, and that the Silcar agreements will cover the employees as a matter of law.

[11] The employment agreement to be offered to the employees by Chelgrave expressly provides that the Silcar agreements do not form part of the employment agreement and nothing operates so as to incorporate the Silcar agreements into the employment agreement.

[12] Accordingly I am not able to be satisfied that the Silcar agreements would apply as contractual terms in the event that the Silcar agreements do not transmit.

[13] Some employees are being offered full-time limited tenure positions until March 2013. There is no evidence about the current employment status of these employees. I am unable to be satisfied on the evidence before the Commission that these offers of employment are acceptable alternative employment.

[14] Silcar does not press its application in relation to those employees offered casual employment.

[15] There is also insufficient evidence to establish for each individual employee that the positions being offered matches the current positions of the employees.

[16] In any event, I am not satisfied on the evidence before me that the offer of full-time ongoing employment to employees is objectively acceptable alternative employment.

[17] Even assuming the terms of the agreements were incorporated into the contracts of employment, the employees would lose the benefit of the following provisions:

• employees will not qualify for parental leave until they have completed 12 months service with Chelgrave;



• should the employees be made redundant, their service with Silcar will not count as service with Chelgrave;



• employees will lose accrued sick leave;



• employees’ service will not be recognised for the purposes of the qualifying period which means they can be terminated during the first six months of employment without recourse to the Fair Work Commission to determine if that termination is harsh, unjust or unreasonable;



• if there is no transmission of business the employees lose their right to enforce the agreement under the FW Act as well as their right to refer disputes to the Fair Work Commission for resolution.

[18] In addition, employees will be subjected to an unknown number of policies which may or may not impose additional obligations on employees.

[19] On the basis of the evidence before me I am not able to be satisfied that objectively assessed the employment offered by Chelgrave is acceptable alternative employment, and therefore the application is dismissed.

COMMISSIONER

Appearances:

R. West for Silcar Pty Ltd.

B. Terzic for the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU).

K. Reidy for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.

P. Mitchell for The Australian Workers’ Union.

Hearing details:

2013.

Melbourne:

January 24.

Printed by authority of the Commonwealth Government Printer

<Price code A, AE881263  PR533864>