Sodexo Australia Pty Ltd T/A Sodexo

[2016] FWC 4012

[2016] FWC 4012

FAIR WORK COMMISSION

DECISION

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

Sodexo Australia Pty Ltd T/A Sodexo
(C2015/8064)

DEPUTY PRESIDENT SAMS SYDNEY, 20 JUNE 2016

Application to reduce redundancy pay – whether employer obtained acceptable employment – hotel cleaning contracts – employees with long service – loss of accrued entitlements – capacity to request flexible working arrangements – probationary period – employees dismissed during probationary period – parental leave provisions – paid parental leave – redundancy payments to be paid in particular circumstances – parties to agree on determination reflecting Commission’s decision.

BACKGROUND

[1] This decision will determine an application, filed by Sodexo Australia Pty Ltd t/as Sodexo (the ‘applicant’ or ‘Sodexo’), pursuant to s 120 of the Fair Work Act 2009 (the ‘Act’). The application seeks to have the redundancy pay that would be otherwise payable, under s 119 of the Act, to 57 former employees (the ‘respondent employees’), previously engaged under a cleaning contract Sodexo had with two major hotels in Sydney, reduced to nil. The relevant hotels are the Crowne Plaza Coogee and the Crowne Plaza Potts Point (the ‘Hotels’).

[2] All of the respondent employees were either permanent full time or part time employees with various periods of service with Sodexo and its predecessor entity (IHG) of between 2-21 years. Sodexo had held the cleaning contract at the Hotels for two years, when it was advised on 26 October 2015 that its services were no longer required as the contract had been won by Challenger Hospitality Pty Ltd (‘Challenger’) from 9 December 2015. All of the respondent employees (although not all of the affected employees) were subsequently reemployed by Challenger. The issue to be determined in that context is whether Sodexo had obtained other ‘acceptable employment’ for the respondent employees. I note that it was generally acknowledged that this case did not involve a transmission of business from Sodexo to Challenger.

Legislative provisions and jurisdiction

[3] Section 119 of the Act sets out a scale of redundancy pay entitlements under the National Employment Standards (NES) and defines the meaning of redundancy. That clause is as follows:

119 Redundancy pay

Entitlement to redundancy pay
(1) An employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated:

(a) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or

(b) because of the insolvency or bankruptcy of the employer.
Note: Sections 121, 122 and 123 describe situations in which the employee does not have this entitlement.

Amount of redundancy pay
(2) The amount of the redundancy pay equals the total amount payable to the employee for the redundancy pay period worked out using the following table at the employee’s base rate of pay for his or her ordinary hours of work:

Redundancy pay period
Employee’s period of continuous service with the employer on termination	Redundancy pay period
1	At least 1 year but less than 2 years	4 weeks
2	At least 2 years but less than 3 years	6 weeks
3	At least 3 years but less than 4 years	7 weeks
4	At least 4 years but less than 5 years	8 weeks
5	At least 5 years but less than 6 years	10 weeks
6	At least 6 years but less than 7 years	11 weeks
7	At least 7 years but less than 8 years	13 weeks
8	At least 8 years but less than 9 years	14 weeks
9	At least 9 years but less than 10 years	16 weeks
10	At least 10 years	12 weeks

[4] Section 120 of the Act permits an employer to make an application to reduce such a redundancy pay entitlement, including to nil, in two discrete circumstances. In determining such applications, the Commission exercises a discretionary power. The section is expressed as follows:

120 Variation of redundancy pay for other employment or incapacity to pay

(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, the FWC may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that the FWC 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.

[5] It is relevant to observe that an employer which seeks a determination under s 120(1)(b) of the Act, bears the onus of satisfying two tests; firstly, that it ‘obtained’ the alternative employment for the employee/s and, secondly, that the alternative employment was ‘acceptable’. I shall come back to these tests and the authorities which have considered them later in this decision.

[6] As I apprehend it, there are no jurisdictional issues in contest in this case. Sodexo acknowledges that:

(a) the respondent employees were made redundant and have a prima facie entitlement to redundancy pay under s 119 of the Act; and
(b) the industrial instruments covering the employees make reference to the NES redundancy provisions. These instruments are:

(i) the Hospitality Industry (General) Award 2010 [MA000009] (the ‘Award’);
(ii) the Holiday Inn Potts Point Enterprise Agreement 2011-2012 [AE885374]; and
(iii) the Crowne Plaza Coogee Beach Enterprise Agreement 2011-2012 [AE885373].

(c) The Commission has the discretionary power to dismiss the application, reduce the redundancy pay otherwise payable to nil, subject to the conditions precedent under s 120(1)(b) being established or, alternatively, reducing the redundancy pay to an amount the Commission considers appropriate in all of the circumstances.

Other legislative provisions

[7] A number of other provisions of the Act were raised during the proceeding. Having been reemployed by Challenger, many of the respondent employees complained that because their previous service was not recognised by Challenger, they were unable to make a request for flexible working arrangements with less than twelve months’ service. The relevant provisions are found at s 65 of the Act as follows:

65 Requests for flexible working arrangements

Employee may request change in working arrangements
(1) If:

(a) any of the circumstances referred to in subsection (1A) apply to an employee; and

(b) the employee would like to change his or her working arrangements because of those circumstances;

then the employee may request the employer for a change in working arrangements relating to those circumstances.

(1A) The following are the circumstances:

(a) the employee is the parent, or has responsibility for the care, of a child who is of school age or younger;

(b) the employee is a carer (within the meaning of the Carer Recognition Act 2010);

(c) the employee has a disability;

(d) the employee is 55 or older;

(e) the employee is experiencing violence from a member of the employee’s family;

(f) the employee provides care or support to a member of the employee’s immediate family, or a member of the employee’s household, who requires care or support because the member is experiencing violence from the member’s family.

(1B) To avoid doubt, and without limiting subsection (1), an employee who:

(a) is a parent, or has responsibility for the care, of a child; and

(b) is returning to work after taking leave in relation to the birth or adoption of the child;

may request to work part-time to assist the employee to care for the child.

(2) The employee is not entitled to make the request unless:

(a) for an employee other than a casual employee—the employee has completed at least 12 months of continuous service with the employer immediately before making the request; or

(b) for a casual employee—the employee:

(i) is a long term casual employee of the employer immediately before making the request; and

(ii) has a reasonable expectation of continuing employment by the employer on a regular and systematic basis.

Formal requirements
(3) The request must:

(a) be in writing; and

(b) set out details of the change sought and of the reasons for the change.

Agreeing to the request
(4) The employer must give the employee a written response to the request within 21 days, stating whether the employer grants or refuses the request.

(5) The employer may refuse the request only on reasonable business grounds.

(5A) Without limiting what are reasonable business grounds for the purposes of subsection (5), reasonable business grounds include the following:

(a) that the new working arrangements requested by the employee would be too costly for the employer;

(b) that there is no capacity to change the working arrangements of other employees to accommodate the new working arrangements requested by the employee;

(c) that it would be impractical to change the working arrangements of other employees, or recruit new employees, to accommodate the new working arrangements requested by the employee;

(d) that the new working arrangements requested by the employee would be likely to result in a significant loss in efficiency or productivity;

(e) that the new working arrangements requested by the employee would be likely to have a significant negative impact on customer service.

(6) If the employer refuses the request, the written response under subsection (4) must include details of the reasons for the refusal.

[8] Two of the respondent employees were dismissed during a six month probationary period required by Challenger. Accordingly, they could not access the unfair dismissal provisions of the Act due to the requirements for a minimum employment period, arising from ss 383 and 384, which I set out below:

383 Meaning of minimum employment period

The minimum employment period is:

(a) if the employer is not a small business employer—6 months ending at the earlier of the following times:

(i) the time when the person is given notice of the dismissal;

(ii) immediately before the dismissal; or

(b) if the employer is a small business employer—one year ending at that time.

384 Period of employment

(1) An employee’s period of employment with an employer at a particular time is the period of continuous service the employee has completed with the employer at that time as an employee.

(2) However:

(a) a period of service as a casual employee does not count towards the employee’s period of employment unless:

(i) the employment as a casual employee was on a regular and systematic basis; and

(ii) during the period of service as a casual employee, the employee had a reasonable expectation of continuing employment by the employer on a regular and systematic basis; and

(b) if:

(i) the employee is a transferring employee in relation to a transfer of business from an old employer to a new employer; and

(ii) the old employer and the new employer are not associated entities when the employee becomes employed by the new employer; and

(iii) the new employer informed the employee in writing before the new employment started that a period of service with the old employer would not be recognised;

the period of service with the old employer does not count towards the employee’s period of employment with the new employer.

[9] Similarly, two pregnant employees were unable to access unpaid parental leave (s 70) by virtue of the provisions of s 67(1) of the Act. These provisions are in these terms:

67 General rule—employee must have completed at least 12 months of service

Employees other than casual employees
(1) An employee, other than a casual employee, is not entitled to leave under this Division (other than unpaid pre-adoption leave or unpaid no safe job leave)unless the employee has, or will have, completed at least 12 months of continuous service with the employer immediately before the date that applies under subsection (3).

…

70 Entitlement to unpaid parental leave

An employee is entitled to 12 months of unpaid parental leave if:

(a) the leave is associated with:

(i) the birth of a child of the employee or the employee’s spouse or de facto partner; or

(ii) the placement of a child with the employee for adoption; and

(b) the employee has or will have a responsibility for the care of the child.

[10] Two other matters are worth mentioning in the legislative context. Firstly, cleaning contractor employees in New South Wales have the benefit of transferring their long service leave accrual from employer to employer under the Contract Cleaning Industry (Portable Long Service Leave Scheme) Act 2010 (NSW). Accordingly, this is not a non-transferable loss for them. Secondly, in the event of an entitlement to any future redundancy of their position by Challenger, all employees will lose the notional benefit of their past service with Sodexo. This loss is obviously more acute for employees with many years of service with the previous employer.

Industrial instruments

[11] It was said that the terms and conditions of the two enterprise agreements, previously covering the employees were to remain unchanged when the respondent employees were reemployed by Challenger. Two provisions in the relevant enterprise agreements featured as being of particular concern to a number of employees because accrued entitlements had not been paid out by Sodexo or transferred to Challenger. Accrued personal/carers’ leave is provided for at cl 5.2 of the Agreements as follows:

5.2 PERSONAL LEAVE

5.2.1 Permanent Colleagues will be entitled to 10 days Personal Leave each year. Leave will accrue progressively.

5.2.2 Personal Leave may be used when an absence is due to:

(i) Personal illness or injury (Sick Leave); or

(ii) the need to provide care or support to immediate family or household member who is ill or injured, or in the case of an unexpected emergency in relation to that person (Carer's Leave).

5.2.3 Paid Personal Leave is cumulative.

5.2.4 Unused Accrued Personal Leave will not be paid out on termination of employment.

5.2.5 A Colleague who qualifies for paid Personal Leave in accordance with this clause will be paid their ordinary rate of pay for rostered ordinary duty during the period of the absence.

5.2.6 Personal Leave payments will only be made if the Colleague provides reasonable supporting evidence, which may be a medical certificate or if this is not possible a statutory declaration.

5.2.7 Colleagues will not be entitled to paid Sick Leave for any period during which they are entitled to Worker's Compensation payments.
5.2.8 Under normal circumstances, a Colleague is not entitled to take Carer's Leave where another person has taken leave to care for the same person [my emphasis].

[12] Under the Agreements, employees were also able to access a paid parental leave scheme found at cl 5.8.3 as follows:

5.8.3 Paid Parental Leave

(i) Additionally, IHG will provide Colleagues with paid Parental Leave.

(ii) Paid Parental Leave is available to Full-Time and Pan-Time Colleagues and is to be taken as pan of the 52 week Parental Leave entitlement. The entitlement is based on years of service as set out in the table below. To be eligible for a paid Parental Leave payment Colleagues must:

• Provide notice in writing in advance of the expected date of commencement of Parental Leave, notice requirements are at least four weeks of the expected date of confinement (including a cenificate from a registered medical practitioner), and at least four weeks from when the Colleague proposes to commence Parental Leave and the period and type of leave to be taken.



• Have declared an intention to return to work after the binh of their child; and



• Be the primary care giver

Period of Service at Commencement of Leave	Paid Parental Leave entitlement
Greater than 2 years service with IHG	8 weeks paid leave of normal weekly salary
Greater than 3 years service with IHG	10 weeks paid leave of normal weekly salary
Greater than 4 years service with IHG	12 weeks paid leave of normal weekly salary

(i) 50% of the paid Parental Leave payment will be made at the time of commencement of the leave. The balance of the leave will be paid at the time of return to work.

(ii) Colleagues will continue to accrue benefits and superannuation contributions will continue to be made on the Colleagues behalf during the period of paid Parental Leave entitlement.

The proceedings

[13] It is pertinent to note that United Voice (the ‘Union’), which represented 19 of the respondent employees, properly conceded that Sodexo had ‘obtained’ alternative employment for the respondent employees, within the meaning of that word from the relevant authorities. This welcome concession significantly narrowed the issues between the parties and shortened the arbitral proceeding. Thus, the focus in the case was on the second test under s 120(1)(b) – whether the alternative employment was ‘acceptable’. For my own part, I consider that the Union’s concession was appropriate and their involvement in the proceedings was most helpful. Moreover, having reviewed all the evidence in this case, I am comfortably satisfied that the efforts of Sodexo in obtaining employment for the respondent employees were sufficient. Unfortunately, Sodexo’s efforts in ‘doing the right thing’ did not result in outcomes which met its own expectations, or the expectations of the respondent employees, as to their new arrangements working for Challenger. More about that later. For present purposes, and given that the Union did not represent all of the respondent employees, I am prepared to make a general finding that Sodexo ‘obtained’ alternative employment for all of the respondent employees.

[14] As a preliminary step in determining the application, the Commission convened a conference with Sodexo and the 57 respondents in order to determine how many of the employees were contesting the application and whether there was any scope for pursuing a settlement of the matter for any, or all of them. Given that the overwhelming majority of the respondent employees are from non-English speaking backgrounds, it was hardly surprising that very few of them understood the nature of the application, or its implications for them personally; let alone whether they knew how to articulate and prosecute any contradictory case to Sodexo’s application.

[15] Thankfully, the Union had been contacted by a few of the respondent employees and appeared as representing a number of them at the conference. I say ‘thankfully’, because Mr Pararajasingham convened meetings of the employees, which included non-Union members, generally assisted and provided advice to them. He negotiated on their behalf with Sodexo and ultimately advocated his members’ cases. At all times, he acted diligently, compassionately and professionally. His representation was invaluable to the smooth and efficient conduct of the conferences and arbitral proceeding before the Commission. For that, I am grateful and thank him.

[16] Nevertheless, despite a number of conferences, the parties were unable to reach any agreement. Accordingly, the Commission issued directions for the parties to file and serve an outline of submissions and any evidence upon which they relied.

[17] At the arbitration on 19 April 2016, Mr S Edwards appeared with Ms C Greenwood for the applicant and Mr Pararajasingham appeared for 19 of the named respondent employees. At this point, I would wish to make clear that all 57 of the named respondent employees were sent the Directions of the Commission and notified of the hearing. I am satisfied that all of the named respondents were aware of, and had an opportunity to put before the Commission whatever they considered appropriate, in respect to their own discrete interests and circumstances. I note that none of the respondent employees chose to pursue this case independently from the nineteen employees represented by the Union.

[18] Obviously, it was not logistically practical to have each respondent employee’s circumstances dealt with separately by the Commission. In the interests of the efficient conduct of the proceeding, Mr Pararajasingham and Mr Edwards agreed to deal with groups of employees with common circumstances and/or outcomes flowing from their reemployment by Challenger. As a result, Mr Edwards required only eight of the employees, who had filed statements, to be cross examined. Mr Pararajasingham did not require any of the applicant’s five witnesses for cross examination. These were:

• Steven Spurgin, General Manager of Sodexo;



• Sean Edwards, General Manager (Workplace Relations and Employment);



• Cherie Mackay, Assistant Executive Housekeeper;



• Suzan Graze, Executive Housekeeper; and



• Camilla Greenwood, Human Resources/Employee Relations Manager.

THE EVIDENCE

For Sodexo

[19] The majority of evidence in the witness statements filed for Sodexo went to the steps taken by its management to obtain alternative employment for the respondent employees with Challenger. To the extent that that matter has been decided, I will not summarise their evidence on this matter in any great detail.

Mr Steven Spurgin

[20] Mr Spurgin’s evidence dealt with the circumstances surrounding Sodexo’s winning (in 2013) and losing (in 2015) of the cleaning contracts for the Hotels and his communication with members of the Management’s transition team, and his communications with the affected staff, through various memos, emails, meetings and letters.

[21] It was Mr Spurgin’s evidence that on 5 November 2015, Mr Edwards informed him that an agreement had been reached with Challenger, as follows:

‘a. employees would be guaranteed an unconditional offer of employment with Challenger with a commencement date of 9 December 2015;
b. no employee would be subject to a recruitment process or an interview process or a selection process;
c. employees will not be subject to any medical checks; and
d. previous workplace history and/or performance will not be considered in terms of offering employment with Challenger.’

[22] Mr Spurgin deposed that some time prior to 12 November 2015, he reviewed and signed off on an Employee Memorandum and Fact Sheet, which stated:

‘ a. Sodexo has been able to obtain acceptable employment for all hourly paid employees with Challenger.
b. Employment with Sodexo will cease on 8 December 2015;
c. New employment will commence with Challenger on 9 December 2015;
d. Employees will not be subject to a recruitment process or an interview process or a selection process nor will any employees be required to compete with any other person to obtain employment with Challenger;
e. Challenger will be presenting all hourly paid employees with an offer of employment and an employment pack at the scheduled information sessions;
f. Employees should bring their tax file number, bank account details superannuation details, and identification to the scheduled information sessions;
g. Challenger will engage employees on the same industrial instrument that they enjoyed at Sodexo; and
h. Information sessions times where employees will meet with Sodexo and Challenger representatives.’

The memo was distributed to all affected employees and posted on the noticeboards of the two Hotels. It is attached to this decision and marked as Annexure A.

[23] It was Mr Spurgin’s evidence that shortly thereafter, and contrary to his previous understanding, Challenger did not offer employment to all of the affected employees, namely, Housekeepers and 2ICs.

Mr Sean Edwards

[24] Mr Edwards’ evidence dealt with the circumstances surrounding the loss of the cleaning contracts to Challenger and the efforts he undertook as General Manager (Workplace Relations and Employment) in leading its negotiations to ensure that all Sodexo employees gained employment with Challenger from 9 December 2015. He put it this way:

‘In simple terms, it was my intention to seek an agreement with Challenger so that the only difference the transitioning employees would see was the employer’s name on their payslips.’

[25] Mr Edwards’ main point of contact with Challenger was its National Human Resources Manager, Mr David Berlusconi. There were various exchanges between himself and Mr Berlusconi from 30 October 2015. Mr Edwards reluctantly provided Challenger with Sodexo’s hypothetical rosters in the middle of November 2015 and later, under pressure from Challenger, with Sodexo’s actual rosters. During conversations with Mr Berlusconi, Mr Edwards gained an impression that Challenger was having difficulty in identifying the employees’ working hours and arrangements for the purpose of finalising contracts of employment. Challenger also expressed some difficulties it had with employing persons on a visa. It was agreed that part time employees who previously worked a minimum of 25 hours a week would be offered the same hours, which did not include any overtime or flexi-hour arrangements.

[26] Mr Edwards described a number of joint information sessions he and Mr Berlusconi held with the affected employees. Employees were provided with the following documents:

a. Contract of employment with Challenger;
b. Challenger Personal Data Sheet;
c. Challenger New Staff Checklist;
d. Challenger New Starter Handbook;
e. Superannuation (Super) standard choice form;
f. Tax file number declaration; and
g. Fair Work Information Statement.

[27] Mr Edwards said it was agreed that former Sodexo employees were not required to:

a. apply for their position with Challenger;
b. complete an application form;
c. submit a resume;
d. attend an interview process;
e. provide references and receive reference checks;
f. attend a medical check; or
g. compete, in any way with an open market for their positions with Challenger.

[28] Mr Edwards desposed that, with the exception of employees who had rejected offers of reemployment, and two employees on parental leave at the time, all Sodexo employees commenced work with Challenger on the following basis:

a. Commencement of employment with Challenger would be on 9 December 2015;
b. Employment would be covered by the same industrial instrument that employees were covered by whilst employed by Sodexo;
c. Employees would receive the same rate of pay as paid by Sodexo;
d. Employees would be classified at the same position classification that they enjoyed with Sodexo;
e. Employees would work at the same location at which they had previously performed their duties with Sodexo;
f. Employees would perform the same, or similar duties that they had previously performed with Sodexo;
g. Employees would enjoy the same security of employment (part-time or full-time employment) and in some circumstances, a number of employees enjoyed more beneficial arrangements.
h. Employees would work the same, or similar work arrangements and/or working hours.

Ms Cherie Mackay

[29] Ms Mackay believed that she was the ‘driving force’ during the transition process in achieving reemployment for the majority of Sodexo employees with Challenger. On the other hand, the interaction of Mr Berlusconi and Challenger’s management with Sodexo employees was limited to generic emails.

[30] Ms Mackay deposed that Challenger had been quick to withdraw offers previously made to some employees. As a result, she needed to be ‘proactive and somewhat forceful’ to ensure Challenger honoured their offers of employment. She named a number of employees for whom she believed she had successfully secured their reemployment. Ms Mackay also liaised with Challenger, and at least five employees whose documentation or access to email accounts needed correcting. In one case, she secured employment for an employee who was overseas at the time.

[31] An Executive Housekeeper, Ms Suzan Graze also directly assisted a number of employees who did not have email addresses; who had incorrect email addresses; had failed to provide Challenger with the signed employment contract prior to the cut off period (seven employees); who lodged their signed contracts late or incorrectly filled out; or who wished to convert from part time to full time employment.

Ms Camilla Greenwood

[32] Ms Greenwood assisted Mr Edwards throughout the transition process and had often liaised with Mr Berlusconi. She and Mr Berlusconi developed the communication strategy for the affected employees. Mr Berlusconi had raised issues with employees on 457 visas and was particularly concerned with the use of the words ‘ongoing’, ‘guaranteed’ and ‘will be secured’ in the communications to employees. Ms Greenwood was told by Mr Berlusconi that the use of these terms may ‘trigger the transmission of business rules’ or open Challenger to the risk of being contractually bound to meet all previous employee entitlements. He insisted that while employees would be offered employment on no less favourable terms, prior service would not be recognised, including in respect to accrued personal leave.

[33] Ms Greenwood deposed that Mr Berlusconi had told her that the agreement between Sodexo and Challenger was that Challenger would take on staff generally, but that Challenger would still consider an employee’s suitability in regard to visas, work rights, ability to perform the inherent requirements of the job and any employees currently on, or planning long term absences, including parental leave. He reiterated his objection to the words, ‘guarantee of entitlements’. Ms Greenwood escalated these issues to Mr Edwards. After some negotiation, the language in the Employee Information Memo was changed. Ms Greenwood attended on site meetings, in which Mr Berlusconi had told the employees that the only thing that would change for them would be name and ABN of the employer on their payslips. Nevertheless, Ms Greenwood said she had fielded numerous questions from employees about their leave entitlements and accruals. She had confirmed that all accrued entitlements would be paid out by Sodexo (except for personal leave), as Challenger would not recognise prior service. She believed employees clearly understood these arrangements.

[34] Ms Greenwood continued meetings with Mr Berlusconi and representatives of Challenger. Assistance was provided to employees who had difficulty filling in the necessary forms, due to their literacy limitations. At one point, Mr Berlusconi expressed concern about ongoing liabilities arising from a few employees who were then on parental leave. As a result, it was agreed that employees on parental leave would remain as employees of Sodexo until their leave ended. They would then recommence their employment with Challenger.

[35] In late 2015, Ms Greenwood raised concerns with Mr Berlusconi about communicating with employees by email, as many of them worked unusual hours or multiple jobs. Mr Berlusconi had replied that he did not have the time, or the resources to communicate with employees by phone, or face to face.

[36] It was Ms Greenwood’s evidence that she had assisted a number of employees with the difficulties Ms McKay had mentioned in her evidence. Ms Greenwood believed Ms Mackay had been instrumental in ensuring a number of employees were offered employment by Challenger where there had been a reluctance to do so.

[37] Ms Greenwood deposed that throughout their interactions, Mr Berlusconi expressed a ‘strong reluctance’ to employ any employees on parental leave. This was because cl 5.8.3 of the Agreements provide for a 50% payment to be paid when commencing parental leave and a 50% payment when returning to work. She had discussed the general protections/discrimination risks of refusing to offer employment to employees on parental leave, or 457 visas, with Mr Edwards and Mr Berlusconi. Particular concern was raised in respect to two employees, then on parental leave, who were not guaranteed employment by Challenger after returning from leave. Their return was to be based on Challengers’ view as to its ‘operational requirements’ at the time.

[38] Ms Greenwood’s evidence was that Mr Berlusconi had told her that he was ‘not familiar with any agreement about guaranteed employment’. Ms Greenwood said she was astounded by this comment, given the verbal and written communications between the two Companies and Challenger’s conduct during the transition process. It was Ms Greenwood’s belief that visa status or the exercise of workplace rights under the enterprise agreement, would not, and could not be accepted as reasonable grounds for refusing to offer suitable alternative employment. She had highlighted the potential risks in doing so. She had been ‘very direct’ with Mr Berlusconi. Subsequently, there were numerous emails and conversations about this issue with Mr Berlusconi. He insisted that Sodexo be responsible for all parental leave obligations. It was finally resolved by way of an understanding with the two affected employees, that they would commence employment with Challenger on 1 June 2016 and 1 January 2016, respectively.

[39] Ms Greenwood said that after numerous requests to Challenger, she received a spreadsheet on 15 January 2016, which indicated that all affected employees had been engaged on the same rates and classifications and the same part time or full time arrangements as had applied under Sodexo’s previous arrangements.

For the Union

[40] The length of service of the nineteen respondents for whom Mr Pararajasingham appeared is set out below:

• Bunsert Strathern – 15 years;



• Jessie Eilersen – 4 years;



• Purav Patel – 7 years;



• Shaunak Gandhi – 4 years;



• Vipulkumar Gandhi – 7 years;



• Miki Karmacharya – 7 years;



• Bidhya Poudel – 5 years;



• Norman Thorburn – 4 years;



• Rama Shakya – 4 years;



• Irwin Costell – 2 years;



• Lope Tiempo – 21 years;



• Guo Zhan Xie – 13 years;



• Xun Wang – 2 years;



• Anuradha Rimal – 5 years;



• Esperanza McDonald – 2 years;



• Prashanta Shrestha – 2 years;



• Nanette Manalo – 10 years;



• Wei Hua Ding 6 years; and



• Shan Tu – 4 years.

[41] All of the respondent employees who gave evidence, accepted that they had been informed in October 2015 that Sodexo would no longer be providing cleaning services at the Hotels. They were further informed that their underlying terms and conditions would remain the same. In addition, they all understood that Challenger’s offer of employment included a probationary period of six months. Further, Challenger would not be recognising their previous service with Sodexo/IHG. They also understood that Sodexo would not be paying its employees’ accrued personal/carers’ leave. However, the employees did not lose their accruals of long service leave. Eight of the nineteen respondent employees for whom the Union represented, were required for cross examination. I shall firstly set out below the uncontested evidence of the remaining eleven employees.

Ms Wei Hua Ding

[42] Ms Ding’s employment with Challenger is full time. She works every day except Thursdays and Fridays – usually from 5:00am to 1:00pm. Ms Ding said that because her seven years’ service was not recognised, she was not eligible to request flexible working arrangements to care for her two children aged 14 and 16, until twelve months’ service with Challenger was completed.

Mr Shaunak Gandhi

[43] Mr Gandhi commenced working full time on 9 December 2015 on shifts from 7:00am to 3:00pm. He resigned on 14 February 2016. Mr Gandhi said he was forced to resign after five years working at the Crowne Plaza Coogee Beach. During this time, he had received numerous ‘Employee of the Month’ certificates and was promoted to Team Leader for three months.

[44] Mr Gandhi deposed that he had been continually targeted by Challenger management regarding his work performance. He was instructed to perform the same duties repeatedly and remain at work after the end of his shift, without payment. From time to time, he was required to perform lengthy ad hoc duties and then subsequently verbally counselled for failing to perform his duties on schedule. As a result, he had received a written warning. Mr Gandhi said his roster was changed, without appropriate notice, three times in three months and at one point he worked eleven days straight. He had felt upset and disrespected. Despite raising his concerns with representatives of Challenger, nothing changed.

[45] It was Mr Gandhi’s evidence that his forced resignation greatly affected his self-esteem and confidence. Compounded with his wife’s health issues, he was left distressed, anxious and with a low sense of self-worth. Mr Gandhi had considered pursuing unfair dismissal proceedings, but given his short service with Challenger, he could not do so. Since his resignation, Mr Gandhi has actively been seeking housekeeping work, but has been unsuccessful. His forced resignation has had a severe financial impact on him and his family. He is now wholly dependent on his wife for support.

Ms Esperanza Macdonald

[46] Ms Macdonald works 25 hours a week, every day except Tuesdays and Wednesdays. Her hours are generally 8:30am to 1:30pm. Ms Macdonald said that her inability to request flexible working arrangements was an issue for her as she is the primary carer for her two children, one of whom is 6 years old. Her daughter’s father picks her up and takes her to school each morning. This is likely to change when her father returns to work after a long term injury. Ms Macdonald believed that she may need to access flexible work arrangements, so she can take her daughter to school and effectively care for her. She was concerned that her request will not have the same ‘persuasion’ with Challenger.

Ms Bidhya Poudel

[47] Ms Poudel works full time, every day except Wednesdays and Thursdays. Her hours are usually 6:00am to 2:00pm. Ms Poudel is due to give birth to a son on 10 July 2016. Due to her service not being recognised by Challenger, Ms Poudel will be prevented from taking paid parental leave under the Holiday Inn Potts Point Enterprise Agreement. The Agreement provides for paid parental leave at cl 5.8.3 (see para [12] above).

[48] Ms Poudel said that she had planned to take this paid leave entitlement from 10 April 2016 to 3 July 2016. Ms Poudel was also concerned that her previous entitlement to unpaid leave under the NES will not be guaranteed. She had planned to take unpaid leave from 3 July 2016 to 10 October 2016. She fears she may have to resign in order to have her baby and care for him.

[49] Ms Poudel also believes that her ability to request flexible working arrangements will be limited. When she plans to return to work, it may become necessary for flexible work hours to care for her two young children. Her husband is a university student with unpredictable study days. Her parents live in Nepal and obviously cannot assist with child care.

Ms Nanette Manolo

[50] Ms Manolo works 25 hours a week, generally from 8:00am to 3:00pm on Saturdays, Sundays, Mondays and Tuesdays. Ms Manolo also has concerns about access to flexible work arrangements to care for her three children on weekends when they are not at school. The children’s father is currently unwell and cannot manage their care. It fell to her to do so. Working weekends will make this difficult.

Mr Prashanta Shrestha

[51] Mr Shrestha works full time. His hours are generally 3:00pm-11:30pm. Mr Shrestha’s wife is due to have a baby in June 2016. He believes he may have to request flexible work arrangements to assist in caring for his wife and children. He had considered changing his hours to 1:00pm-9:30pm or reducing his weekly hours of 38 hours to 35 hours. Flexible hours would be of great benefit to him and his family.

Ms Anuradha Rimal

[52] Ms Rimal works full time, every day except Mondays and Wednesdays. Her hours are between 7:00am-5:00pm. Ms Rimal and her husband have a three year old son, currently living with her parents in Nepal. He will be returning in July 2016. Ms Rimal will need to alter her hours to have Saturdays and Sundays off to care for her son, as childcare on weekdays is not a viable option for her family. She is concerned that she will be unable to request flexible working arrangements because she lacks the requisite twelve months’ service with Challenger.

Mr Shun Tu

[53] Mr Tu works full time with Wednesdays and Thursdays off, working between the hours of 8:00am-4:00pm. Mr Tu is 58 years of age and hopes to reduce his working hours from 38 to 20 a week, as he finds the work tiring and physically demanding. He is concerned he will not be able to do so because he will be unable to request flexible working arrangements.

Mr Norman Thorburn

[54] Mr Thorburn works full time and has Fridays and Saturdays off. He generally works 3:00pm-11:00pm. Mr Thorburn had accrued 175 hours of personal/carers’ leave. He said that this accrued leave was important to him in the event that he became ill or had to care for a family member. He would have no income to meet his everyday expenses without it. Given his age (55 years) and the risk of physical injury with his cleaning duties, this was a significant loss to him.

Mr Xun Wang

[55] Mr Wang generally works from either 7:00am-3:00pm or 3:30pm. Mr Wang has a five month old son. His wife is on parental leave and is due to return to full time work in May 2016. It is their intention to have their son cared for by his parents or in-laws when he and his wife are at work. However, if this proves unworkable (as both sets of parents may be unable to stay in Australia), childcare would become necessary. On current arrangements, this would prove too costly, so Mr Wang would likely seek flexible work arrangements so as to work 4:00am to 12:00pm in order to collect his son at 12:30pm after his wife has dropped him at 9:00am. He is concerned that he does not have twelve months’ service in order to request flexible work arrangements.

Mr Guo Zhan Xie

[56] Mr Xie is 60 years old and is the sole income earner for his family. He works full time from 8:00am to 4:00pm. Upon ceasing employment with Sodexo, Mr Xiu lost 141.19 hours of accrued personal/carers’ leave. For six years, Mr Xie has suffered from severe lower back pain and for the past two years he has been receiving treatment from a physiotherapist on Tuesdays or Saturdays every fortnight. From time to time, Mr Xie used his personal leave to see his physiotherapist and doctor. He is concerned at the loss of accrual of his leave, if he or his wife require extended periods of leave. Mr Xie was also concerned that as he gets older and, he may need to reduce his hours of work from 38 to 30 in order to reduce stress on his back. However, he would not be able to request flexible working arrangements at this time.

Ms Irwin Costello

[57] Ms Costello is engaged in a full time capacity as Supervisor/Coordinator working 8:00am-4:00pm and 6:00am-2:00pm, depending on her duties at the time. Ms Costello accrued 110.42 hours of personal leave with Sodexo. She is concerned that should she become ill, she would have no income for personal and family expenses. Having recently separated from her husband, this problem would be exacerbated if she fell ill and had no financial support or backup.

Ms Bunsert Strathern

[58] Ms Strathern commenced employment on 9 December 2015, having worked for Sodexo at Crowne Plaza Coogee Beach for sixteen years. On or around 14 January 2016, Ms Strathern was dismissed with the reason given that ‘you are no longer required’. She claims to have received no termination letter or any other documents.

[59] Having always attended to her duties in a professional and diligent manner, Ms Strathern said she was devastated by her dismissal. She had lost self-esteem and confidence and felt distressed and anxious, particularly having been given no reason for her dismissal. She had wanted to pursue unfair dismissal proceedings, but as Challenger did not recognise past service, she did not have the requisite minimum employment period (s 385 of the Act). She also did not receive notice payments in lieu of five weeks’ pay.

[60] Ms Strathern said she has been looking for other housekeeping work, but has been unsuccessful. She is experiencing severe financial hardship and is wholly dependent on her boyfriend. This has put a strain on both their financial circumstances.

[61] In cross examination, Ms Strathern reaffirmed that she was given no reason for her dismissal by Challenger. She was sent to the office and told, ‘I don’t want you be [sic] here tomorrow. If you not mind, give the key back and clear up your locker.’ After her dismissal, she sought advice from the Union, but no application was made to pursue any legal action against Challenger.

Ms Jessica Eilersen

[62] Ms Eilersen commenced employment on 9 December 2015. She was dismissed on 6 January 2016. She claimed that at the time, representatives of Challenger had told her, ‘We are going to terminate your contract. Today is your last day.’ She was told to clean out her locker and return her keys and uniform. She received no termination letter or any other document.

[63] Ms Eilersen said she was devastated by her dismissal. After four years working at Crowne Plaza Coogee, she had attended to her duties in a reliable, trustworthy and hardworking manner. She has a passion for hospitality and is proud of her work. Ms Eilersen had received numerous Employee of the Week certificates and gift vouchers in recognition of her work performance. Ms Eilersen believed her dismissal, without any reason given, to be extremely unfair. It had affected her self-esteem and confidence. She was left distressed and anxious and with a low sense of self-worth.

[64] Ms Eilersen had wanted to pursue unfair dismissal proceedings, but was barred from doing so, because her previous service was not recognised by Challenger. This also meant that she received no payment in lieu of notice. Ms Eilersen had quickly obtained alternative housekeeping work and is working part time at the Primus Hotel in the CBD, which demonstrated her work ethic. Nevertheless, this position has reduced her income. As her husband works part time and they have two children, the family’s finances have been greatly constrained.

[65] In cross examination, Ms Eilersen reaffirmed that she had been given no reason for her dismissal. She denied her dismissal was for low productivity or conflicts in the workplace. Nothing had been said to her at all. Around 13 January 2016, Ms Eilersen had sought advice from the Commission and was told there was nothing she could do (to pursue an unfair dismissal application). She had not sought any legal advice, because she was confused and distressed.

Mr Puwar Patel

[66] Mr Patel commenced work in a full time capacity until he was told by Challenger that full time workers were not desired on the site and because of his probationary period, Challenger could do whatever they wanted. He was also told that all full time workers would have to convert to part time employment.

[67] It was Mr Patel’s evidence that Challenger had required him to work extra hours and duties, without payment or notice. Mr Patel described the workplace as a ‘toxic’ environment. He was forced to resign on 12 January 2016. After eight years of service performing his duties diligently, this was a particularly difficult decision. However, he found the work situation impossible. Mr Patel said his forced resignation caused great stress for his wife and children, but he was able to quickly secure alternative employment in school cleaning.

[68] It was Mr Patel’s evidence that he had considered pursuing unfair dismissal proceedings for his constructive dismissal, but had been prevented from doing so, because of his short service with Challenger.

[69] In cross examination, Mr Patel accepted that while it was his decision to resign, he felt he was pressured into doing so, because of extra work. It seemed that nobody cared. He said he secured school cleaning work one week after his resignation. He was working 25-30 hours per week, whereas as a full time employee of Challenger, he had worked 38 hours per week.

Mr Vipulkumar Ranodiya

[70] Mr Ranodiya works full time from 6:00am-2:00pm on weekdays and 8:00am-4:00pm on weekends. Mr Ranodiya left Sodexo with 19.6 hours of accrued personal/carers’ leave. It was important to him to have a few days of accrual to care for his young daughter. If she was sick and required his care or required being taken to the hospital or the doctor, he is the only driver in the family. Mr Ranodiya was concerned that if he was required to care for his daughter, he would have to take unpaid leave.

[71] Mr Ranodiya took paid parental leave from 9 October 2015 – 31 December 2015 to care for his daughter after her birth on 26 May 2015. Under the Agreement, he received six weeks (50%) of his paid parental leave entitlement. However, due to the timing of his reemployment with Challenger, he was no longer entitled to the remaining 50% of paid leave, which he would have otherwise received.

[72] Mr Ranodiya was further concerned that he could not make a request for flexible work arrangements as his wife had returned to work and it was not feasible to have his daughter in child care for eight hours. If he could request it, he would split his shifts, so his wife could drop his daughter to occasional day care at 7:30am and he could collect her at 12:30pm.

[73] In cross examination, Mr Ranodiya claimed he was unaware of what Sodexo had done to secure his employment with Challenger, although he was aware that Challenger did not want to reemploy him because he was on parental leave at the time. Mr Ranodiya agreed that he commenced work for Challenger on 2 January 2016 after returning from parental leave. He believed he had received his full entitlement to twelve weeks’ parental leave. Mr Ranodiya was unclear as to whether he had reached an agreement with Challenger to move his entitlements under the Agreement to the Hospitality Industry (General) Award 2010 [MA000009]and accept an annualised salary (Mr Edwards explained that it was his understanding that Mr Ranodiya did not receive the remaining 50% of his paid parental leave, as he accepted a trade-off to move to an annualised salary with a base rate increase of 25%).

[74] Mr Ranodiya was asked to confirm from Sodexo’s sick leave records that he took five days’ personal leave in 2015 and three days personal leave in 2015. This meant that he did not take his full entitlement of ten days in the last two years.

[75] Mr Ranodiya agreed he had not asked Challenger to change his roster in respect to his carer’s responsibilities.

Ms Rama Shakya

[76] Ms Shakya works full time either from 8:00am-4:00pm or 9:00am-5:00pm. She had accrued 124.61 hours of personal/carers’ leave and was concerned that if she became ill and required extended leave, she would be unable to meet her personal and family commitments with no income.

[77] Ms Shakya has suffered from menstrual cramps arising from an iron deficiency over the last two years. She recently had to leave work early because of this condition and had not been paid, because she had lost her accrued entitlements to paid personal leave. She was concerned that this might happen again and result in her being unpaid again.

[78] In cross examination, Ms Shakya acknowledged that her doctor had prescribed iron tablet medication for her condition. This had relieved, but not eliminated her symptoms. She said that she had experienced this problem for some years, until her doctor diagnosed the problem. Ms Shakya’s sick leave record shows that she took four days personal leave in 2014 and ten days personal leave in 2015.

Mr Lope Tiempo

[79] Mr Tempo works full time except Wednesdays and Thursdays. His hours are generally between 12:30pm-8:30pm. Mr Tiempo had 412 hours of accrued personal/carers’ leave. He was concerned that if he became ill or had to care for someone, that he would have no income for family and personal commitments.

[80] Mr Tiempo has cared for a disabled friend who lived with him and his wife (‘Andrew’) from 2015. Having separated from his wife in 2013, he is now the sole carer for Andrew. Mr Tiempo valued his accrued personal leave, because he would not lose income in the event of his own illness or the need to attend to Andrew.

[81] Mr Tiempo had not worked on Fridays or Saturdays when working for Sodexo, in order to take Andrew to his general practitioner every second Friday and to his psychologist every Saturday. He is not able to request flexible hours to maintain this arrangement, because his service with Sodexo was not recognised by Challenger.

[82] In cross examination, Mr Tiempo agreed he had taken four days personal leave in 2014 and five days in 2015. Mr Tiempo said he had asked Challenger’s Executive Housekeeper, Suzan Graze (now dismissed) to restore his Fridays and Saturdays off, but this was refused. While Ms Graze was the person who arranged the roster, she had told him that Challenger’s direction was clear.

Ms Miki Karmacharya

[83] Ms Karmacharya works full time 9:00am-5:00pm. When she left Sodexo, she had 202.68 accrued hours of personal/carers’ leave. She said it was important for her to have a significant accrual, should she become ill or need to care for someone.

[84] Ms Karmacharya became pregnant with her first child in November 2015. She has since developed gestational diabetes. She is concerned with the health risk for herself and her unborn child. At the time, her days off were Monday and Tuesday. As her dietician only works Wednesdays, she had taken two days of annual leave to consult her dietician, because she had no accrued personal leave. In late December 2015, she requested access to her personal leave for a specialist’s appointment, but it was processed as unpaid leave.

[85] Ms Karmacharya is due to give birth around July 2016. This means she will not have sufficient service to qualify for twelve weeks’ paid parental leave under the Agreement or access to the NES provisions for unpaid leave which she had hoped to take from 21 August 2016 to 30 May 2017. She believes that she may have to resign in order to give birth to her child and effectively care for her baby.

[86] As her pregnancy advanced, Ms Karmacharya was also concerned about access to flexible work arrangements. One option was to alter her hours so that she could perform administrative duties, rather than bending and looking under beds. When she provided Challenger with a doctor’s certificate regarding her pregnancy, a representative of the Company had said:

‘Because you have not completed twelve months’ service with us, you will be required to resign from your employment. If you wish to return to work, you may not be hired in the same position at the same site.’

[87] In cross examination, Ms Karmacharya confirmed that she had taken three days’ sick leave in 2014 and four days in 2015. Ms Karmacharya agreed that Challenger had changed her days off, at her request, to Wednesdays and Thursdays. Ms Karmacharya elaborated on her evidence about what she was told by Challenger about her pregnancy. She conceded that she was not directly told that she had to resign, but she was told if she came back, it might not be to the same position and she would not receive any paid maternity leave. When she had asked, ‘That means I have to resign?’, the Challenger representative had said, ‘Yes’. Ms Karmacharya said she had told her supervisor that she cannot bend, but has had no reply. She acknowledged that she had not been performance managed for not bending to look under beds.

SUBMISSIONS

For the applicant

[88] In written submissions, Mr Edwards agreed that the onus rested on Sodexo to prove the acceptability of the employment with Challenger. However, he put that where the respondent employees had accepted alternative employment and there is an absence of evidence going to its unacceptability, it was open to the Commission to find in Sodexo’s favour.

[89] Mr Edwards relied on the principles set out in Australian Chamber of Manufactures v Derole Nominees Pty Ltd (1990) 140 IR 123 (‘Derole Nominees’), DRW Investments Pty Ltd t/as Wettenhalls v Richards & Others[2016] FWC 461 (‘DRW Investments’), Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia, 21 November 2006 [PR974699] (‘Feltex’), Von Bibra Robina Autovillage Pty Ltd [2007] AIRC 397 and Datacom Systems Vic Pty Ltd v Khan and anor[2013] FWC 1327 (‘Datacom’) as to the matters to be considered in respect to the Commission determining applications of this kind. Mr Pararajasingham also relied on these decisions in his submissions on behalf of the respondent employees.

[90] Mr Edwards submitted that the employment was ‘acceptable’ because it was on terms and conditions that were substantially similar to, and no less favourable than those which the respondent employees had previously enjoyed. These matters included:

• A commencement date with Challenger from 9 December 2015 (the day following the date Sodexo’s cleaning services contract was terminated);



• The nature of the work remained unchanged;



• The work location remained unchanged;



• The industrial instrument governing the terms and conditions of the respondent employees’ employment remained unchanged;



• Pay arrangements remained unchanged;



• Ordinary hours of work were substantially similar to the previous hours of work;



• Seniority remained unchanged;



• The workload and speed of work requirements were substantially similar to the previous workload and speed of work requirements;



• Leave accruals were not transferred or recognised; and



• A probationary period was applied.

[91] Mr Edwards further observed that as there was no break in employment, there was therefore no financial loss for the respondent employees.

[92] In addressing, the two main issues in this case, the probationary period and non-transferable credits. Mr Edwards put that the probationary period was ‘no more than a mere inconvenience to the employees’, although subject to an employee’s performance and behaviour being sustained to the expected standards. In any event, no single factor can be determinative, but the Commission must have regard to the totality of the circumstances; See: Derole Nominees and Ryans Freight Trust T/A Ryans Freighters v Campbell [2014] FWC 8901 (‘Ryans Freighters’).

[93] Mr Edwards relied on the 2004 Redundancy Case PR062004, in which the Full Bench held it was not appropriate to fully compensate redundant employees for the loss of non-transferable credits. This was particularly so in respect to sick leave (personal leave) credits.

[94] Mr Edwards noted that the Contract Cleaning Industry (Portable Long Service Leave Scheme) Act 2010 (NSW) permits an employee in the contract cleaning industry to transfer their accrued long service leave entitlements from employer to employer in the industry. As nine of the employees were not eligible to be covered by the scheme, they were paid their full long service leave accrued entitlements.

For the respondent employees

[95] Mr Pararajasingham did not repeat the well-known principles applicable in cases of this kind. Nevertheless, he emphasised that each case will be determined on its own facts and circumstances; See: Forster Tuncurry Golf Club Ltd t/as Forster Tuncurry Golf Club v Crew[2016] FWC 170. However, in the present case, the 19 respondent employees, represented by the Union, fell into six broad categories; some of which were common to more than one employee. These were:

1. Two respondent employees terminated by Challenger.
2. Two respondent employees constructively dismissed by Challenger.
3. Seven respondent employees with an accrued personal/carer’s leave entitlement of over 100 hours with Sodexo, including one who had accrued 412 hours.
4. Two respondent employees are currently pregnant.
5. Many respondent employees with carer’s and family responsibilities.
6. Ten respondent employees with over five years of continuous service.

[96] Under the following headings, Mr Pararajasingham argued that the employment with Challenger was not ‘acceptable’.

The probationary period

[97] Mr Pararajasingham submitted that the imposition of a probationary period resulted in all of the respondent employees being put in a vulnerable position in that their employment could be terminated arbitrarily, without recourse to the unfair dismissal jurisdiction under the Act. In fact, two employees found themselves in precisely this situation – Ms Strathern (15 years’ service) and Ms Eilersen (4 years’ service). No reasons were given for their dismissals and prima facie their dismissals were unjust. Two other employees (Mr Patel and Mr Gandhi) were constructively dismissed as they were forced to resign when their conditions of employment were drastically altered to their detriment.

However, instead of simply refusing the request, Michael’s employer discusses the situation with him. They agree to an arrangement where Michael will start work at 10am four days a week and participate in the teleconference by phone hook-up before he leaves home, while attending in person for the most important weekly agenda-setting meeting.
Michael’s employer gives Michael a written response, setting out details of the reasons for the refusal of the initial request as well as a statement of the revised arrangements they have agreed.

[152] Of course, whether the request is accepted or not is an entirely different matter. Moreover, in the event of a refusal for flexible work arrangements, there would be nothing preventing an aggrieved employee filing a dispute under the Award or the Agreement’s Dispute Settlement Procedure to have their grievance dealt with by the Commission under s 739 of the Act. In respect to Ms Karmacharya’s understandable concern that as her pregnancy advances, she may need to change her work arrangements, so as to avoid the risks associated with bending and physical work, the provisions of s 81 of the Act – Transfer to a safe job, seemingly would cater for her circumstances. These provisions do not require twelve months’ service before being accessible.

Loss of accrued personal leave

[153] It is likely that all employees who were reemployed by Challenger experienced some loss of accrued personal/carers’ leave with Sodexo. Obviously, the entitlement will vary from individual to individual. In the more extreme cases, a number of employees had over 100 hours (one had 412) of accrued leave, while others may have had a nil balance (I have no evidence of the latter).

[154] The evidence of a number of the respondent employees was that they were concerned at becoming ill or injured and being without income for an extended period. This concern was exacerbated for older employees, given the physicality of their employment. The cumulative effect of the provisions in their Agreements created, in effect, a ‘bank’ of leave which they could draw on in these circumstances. While I accept these concerns are legitimate and are reasonably held, a number of observations can be made about this issue.

[155] Firstly, unlike the probation period argument, Challenger’s precondition as to not recognising accrued personal leave was known to the employees early on in the negotiations with Challenger. It could not be said that they were confused or uncertain about this condition when considering employment with Challenger, as Ms Greenwood’s evidence was that this was a ‘hot’ topic in questions from the employees.

[156] Secondly, the Agreements covering the employees make it plain that while personal leave is cumulative, it is not paid out on termination of employment. Such a provision is not unusual.

[157] Thirdly, some older employees expressed concern at their risk of injury at work. There is no doubt that hotel cleaning is arduous, physical work. However, it must be appreciated that an injury at work, would in the usual case, be covered by Workers’ Compensation legislation.

[158] Fourthly, while I understand why an employee would be comforted by a ‘bank’ of accrued leave in the event of a future injury or illness requiring extended leave, these circumstances are obviously speculative. A number of the employees predicted that they might need resort to their personal leave accrual for future circumstances (Ms Shakya with her iron deficiency, Mr Tiempo caring for a disabled friend and Mr Shresta concerned with caring for a new baby).

[159] During the course of argument, Mr Edwards relied on the sick leave records of a number of the employees for 2014 and 2015 to demonstrate that not only did their circumstances not require extended personal leave, but they had not exhausted their previous annual entitlements in any event. I do not accept that the good fortune of employees in not being sick or injured or being required to access their accruals in 2014 and 2015, advances Sodexo’s case very far. I accept that past experience does not answer employee concern for future events. That said, I would expect a reasonable employer to show some compassion, understanding and flexibility in the event of any long term injury or illness where existing accruals may have been exhausted. I note that in this case, all of the respondent employees will have accrued at least half of their annual entitlements to personal leave of four or five days by the time of this decision.

[160] Fifthly, I respectfully agree with observations of Gregory C in Ryans Freighters that the payment of accrued annual leave should be weighed against the detriment of losing accrued personal leave, although I accept unreservedly, that annual leave and personal leave are premised on different beneficial objectives.

[161] Sixthly, it is my strong view, that sick leave is for sick leave purposes. It should not be viewed as a ‘bank’ of accrual to be accumulated and paid out on termination of employment, unless there are express provisions to the contrary. A person should feel blessed that he/she has the good fortune not to be ill or injured or someone close to them requires their care. Personal leave is for the purpose it was originally intended. It does not have the same beneficial purpose as annual leave or long service leave.

[162] For these reasons, I have decided that where respondent employees have relied on the loss of accrual of personal leave as the sole basis for opposing Sodexo’s application, that this factor is not of such weight as to justify a conclusion of ‘unacceptable employment’. Redundancy pay entitlements to these employees’ should be reduced to nil.

Loss of parental leave

[163] However, two employees who were pregnant at the time and would have been eligible for paid parental leave under the Agreements, are in a much more unstable and precarious position. They will suffer a real loss of paid parental leave, unpaid leave and guarantees of return to work because of the twelve month conditional requirements for accessing such leave. In my opinion, these losses are of such significance and magnitude (even, in one case, the concern of one employee of being forced to resign), that for these employees, their reemployment by Challenger could not be objectively considered as ‘acceptable’ employment. I would determine that respondent employees, Ms Karmacharya and Ms Poudel should receive 80% of their prima facie entitlement to redundancy pay under s 119 of the Act.

[164] Mr Ranodiya was said to have entered into an arrangement with Challenger to move to salaried employment in lieu of receiving the remaining 50% of his paid parental leave under the Agreement. Unfortunately, the evidence is not clear on this arrangement. I note that Mr Edwards described this arrangement as Mr Ranodiya being ‘cheated’ out of his paid parental leave. If it turns out that no such arrangement was agreed to, Mr Ranodiya should also receive 80% of his redundancy entitlement.

[165] Finally, I direct the parties to prepare within fourteen days, a draft determination giving effect to my findings and conclusions in this matter. In the event of any disagreement, or any dispute as to which category each of the respondent employee fits, recourse shall be available to the Commission for final determination.

DEPUTY PRESIDENT

Appearances:

Mr S Edwards for the applicant.

Mr H Pararajasingham for nineteen of the respondent employees.

Hearing details:

2016:

Sydney

19 April

Printed by authority of the Commonwealth Government Printer

<Price code J, PR581844>