Spotless Services Australia Limited T/A Alliance Catering v Jonathon Lucas

[2014] FWC 6938

[2014] FWC 6938

FAIR WORK COMMISSION

DECISION

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

Spotless Services Australia Limited T/A Alliance Catering
v
Jonathon Lucas
(C2014/796)

Joanna Jamieson
(C2014/797)

David Chambers
(C2014/1134)

COMMISSIONER HAMPTON ADELAIDE, 5 NOVEMBER 2014

Applications to vary redundancy pay on the basis of other acceptable employment being obtained by the applicant employer - whether employer obtained or facilitated that employment - whether redeployment options relevant as alternative employment - whether positions with incoming contractor obtained by applicant employer and acceptable alternative employment - redeployment options not made available with any certainty and not relevantly obtained - positions with incoming contractor not obtained by employer within the meaning of the Act - applications dismissed.

1. Introduction and case outline

[1] Spotless Services Australia Limited T/A Alliance Catering (Spotless) has made three related applications to vary the redundancy pay otherwise due to its former employees, Mr Jonathon Lucas, Ms Joanna Jamieson and Mr David Chambers (collectively - the employees).

[2] Spotless is the supplier of contract services, including in this case, catering services. It had for many years held the contract to supply such services to the Westminster School (Westminster) in Adelaide and each of the employees had undertaken work in relation to that contract. In late 2013, Spotless lost the Westminster contract to another contractor, Cater Care, and each employee was made redundant. In due course, each of the employees also came to be employed by Cater Care in connection with the new Westminster contract.

[3] Spotless claims to have found acceptable alternative employment for the employees with Cater Care and/or within its other business operations and in that light is seeking to have the redundancy payments reduced to zero pursuant s.120 of the Fair Work Act 2009 (the Act).

[4] The employees oppose the applications on various grounds including that the alternative work was not obtained by Spotless, and in effect, that any options that were proposed for other potential employment within the Spotless group were not sufficiently certain or reasonable.

2. The statutory framework

[5] Section 119 of the Act provides 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

[6] Section 120 of the Act provides 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.”

[7] It is common ground that the employees are entitled to redundancy pay by virtue of s.119 of the Act. The redundancy pay due to the employees is as follows:

● Ms Jamieson 8 weeks pay
● Mr Lucas 10 weeks pay
● Mr Chambers 10 weeks pay

3. The basis of the applications

[8] Spotless contends that it obtained other acceptable employment for each of the employees and that as a result, the redundancy obligations should be reduced to zero in each case. It relies on two alternatives.

[9] Firstly, its primary position 1 is that it offered (obtained) other positions within its broader catering operations that were in the same line of work (catering in the education sector). Further, it asserts that these positions were within a reasonable proximity of Westminster and were consistent with the employees’ contracts of employment that permitted Spotless to move them between locations.

[10] The Spotless positions said to have been offered to each employee vary and include the following:

● In the case of Mr Lucas - a role in the operations of Spotless based at the Regency TAFE;
● In the case of Ms Jamieson - a position involving the development of customer service in relation to the various “super schools” where Spotless had catering contracts; and
● In the case of Mr Chambers - a position as a Second Chef at St Peter’s College.

[11] In addition, the Spotless positions would have ensured a continuity of employment on terms and conditions no less favourable than the work at Westminster. As a result, Spotless contends that the alternative positions should be considered to be acceptable employment for present purposes.

[12] It further contends that the details of the alternative Spotless positions were provided to each of the employees and that in each case this option was unreasonably refused on the basis that the employees preferred instead to move to the new contractor.

[13] Spotless also contended in final submissions as follows:

“12. There is no issue raised by the applicant that the positions of the respondents were made redundant. They were all offered redeployment within the business of the applicant in accordance with the terms of their contract of employment. None of those offers crystallised into alternative employment. The reason for that is that all of the applicants exercised their option of remaining in employment at Westminster School with the incoming contractor, Cater Care. If, as contended on behalf of the respondents, nothing certain was offered to them by the respondent, which is not admitted, if subsequently they were correct and no positions were available, it would only be at that point the respondents may be entitled to severance pay. But not in circumstances where they reject offers of redeployment or even fail to participate in the redeployment process in accordance with the terms of their contract of employment. Offers of employment, which would have resulted in them being employed by the same employer, thereby retaining continuity of employment.” 2

[14] In the alternative, Spotless also contends that it obtained, within the meaning of the authorities, the employment for each of the employees with Cater Care at Westminster. That is, it arranged for Cater Care to attend the workplace and provide information about the positions at Westminster, permitted each of the employees to attend follow-up discussions with Cater Care that ultimately led to the “new” employment, and facilitated a smooth transition of that employment.

[15] It further contends that it provided a letter, outlining the details of the redundancies and the process to facilitate employment with Cater Care and in other positions with Spotless, to each of the employees.

[16] Spotless also contends that the employment at Westminster was on the same terms and conditions, involved recognition of previous service for long service leave purposes, and should objectively be considered to be acceptable.

[17] As a result, Spotless asserts that on either basis, there was objectively acceptable employment obtained by it for each of the employees and accordingly, the redundancy entitlements should be reduced to zero.

[18] Spotless relies upon evidence from the following:

● Ms Julie McNamara - Director of Corporate Services with Westminster;
● Ms Jane Govey - South Australian State Manager, Education and Business and Industry Sectors with Spotless Management Services Pty Limited;
● Mr Ray Paley, Site Manager with Spotless Management Services Pty Limited and the Manager of the employees at the time; and
● Mr Michael Adams, State Manager with Cater Care.

[19] I note that Spotless initially included submissions and some evidence to the effect that Mr Chambers and potentially the other two employees may have resigned, and not been dismissed. However, Spotless confirmed at the outset of proceedings that it accepted that in each case the employees had been made redundant. 3

4. The positions advanced by the employees

[20] Mr Lucas and Ms Jamieson were in similar circumstances and generally presented a joint position. They each gave evidence in the matter. Mr Chambers’ factual circumstances where somewhat different and he presented an independent submission; albeit on a consistent basis and with the same contended end result, being that the applications should be dismissed.

[21] The employees generally accept that Spotless raised potential ongoing job opportunities with them. However, each contends that there was no job offer, no position descriptions or other details provided, and no assurances given that an actual job existed. In that light, they had to ensure continued financial security by accepting the Cater Care positions.

[22] The employees all deny that they received any written advice of the redundancies and related arrangements from Spotless at any time.

[23] In relation to the Cater Care positions, the employees accept that they were subsequently employed by the new contractor but reject the notion that these jobs were obtained by Spotless.

[24] They contend that Spotless did not create the opportunity for redeployment with the incoming contractor but rather, the incoming contractor advertised the roles at Westminster and encouraged the employees to apply for these positions by completing application forms and attending interviews. Further, they contend that Spotless had no influence in the creation of these roles as the incoming contractor was an experienced caterer and would have based its requirements for staffing during their tendering stage.

[25] Mr Lucas and Ms Jamieson also contend that the discussions between Spotless and Cater Care were initiated by Mr Adams of Cater Care and Spotless failed to supply employee information to Cater Care despite agreeing to do that.

[26] In relation to the Cater Care positions themselves, Mr Lucas and Ms Jamieson contend that outstanding leave balances were paid by Spotless but the entitlement to pay in lieu of notice was paid only after the initial application to the Fair Work Ombudsman. Further, the recognition of Long Service Leave (LSL) was not settled until June 2014 and did not involve Spotless.

[27] Mr Lucas and Ms Jamieson also indicated that each forfeited an amount of sick pay; which financially disadvantaged Ms Jamieson in February 2014 and resulted in her having to take time off work without pay. It is the employees’ position that they were financially impacted during this process.

[28] Mr Chambers contends that he was not aware of the proposed Spotless role at St Peters until advised as part of these proceedings and that it was not offered to him. He further asserts that the St Peter’s role was in any event a “Second Chef” position which would entail a higher position with more responsibilities than the role he occupied at Westminster. There was no discussion of any detail that would be necessary given the nature of the role, its higher responsibilities and need to consider wage rates.

[29] Mr Chambers further contends that he was on personal leave from Monday 16 December 2013 and had no contact with Mr Paley other than to drop off a further sick certificate, which was handed to Mr Paley on 23 December 2013.

[30] In relation to the position at Cater Care, Mr Chambers contends that is not the same position as he held with Spotless. In particular, he contends that he works additional hours with the new employer.

5. The events leading to the redundancies and the ‘new’ employment with Cater Care

[31] There is some dispute in the evidence about the events connected with this application and as a result it is necessary to make findings of relevant facts.

[32] The factual disputes include the number and nature of discussions involving Ms Govey (and others from Spotless) and the employees, the degree to which the detail of the alternative positions within the employer’s organisation were made clear to the employees, and whether a letter confirming the notice of termination and consequential arrangements was provided to each of the employees in mid December 2013. There is also a dispute about whether there were any discussions between Mr Paley and Mr Chambers about an alternative position at St Peters College.

[33] I have resolved these factual disputes having regard to the consistency and nature of the evidence. I have noted that some of the evidence was in my view subject to re-creation, not in the sense of an attempt to mislead the Commission, but more in the nature of filling in some gaps in the context of an incomplete recall of the events.

[34] In relation to the disputes about meeting dates and attendances, the evidence of Ms Govey and Mr Paley about a meeting on 9 December 2013 is generally supported by Ms Adams and Ms McNamara and on balance I accept that a meeting took place at that time. However, it is also evident to me that there were additional meetings involving only the respondent employees, Ms McNamara and others from Westminster. There were also some meetings mainly involving the cleaning staff employed at Westminster and all of these have been conflated by the parties to some degree.

[35] The employees were each employed by Spotless on a full-time basis on terms and condition no less than the Hospitality Industry (General) Award 2010, which applied to their employment. They were each located at Westminster and their respective contracts of employment provided that:

“3. LOCATION & TRAVEL

This position is located at Westminster School, Alison Avenue, Marion, S.A..

The location of your employment may change in accordance with the Company’s business needs. Any proposed changes will occur in full consultation with you.

If relocation requires you to move to a new region, interstate or overseas then you will be reimbursed reasonable relocation expenses in accordance with the applicable company policy.”

[36] Ms Jamieson was performing work as a Catering Assistant at the Westminster Boarding House and Mr Lucas was the Head Chef at the same facility.

[37] Mr Lucas commenced employment with Spotless in November 2008. Ms Jamieson commenced employment within the Spotless group some time in 2009.

[38] Mr Chambers commenced employment with Spotless in November 2008 and in January 2010 he was appointed to the position of Chef at Westminster.

[39] On 2 December 2013, Ms McNamara met with the employees and Mr Paley in the context of the decision made by Westminster to award the catering contract to Cater Care. Ms McNamara confirmed that the change in contract was not a reflection upon the performance of the employees concerned and encouraged them to apply for employment with Cater Care.

[40] On 6 December 2013, Mr Adams from Cater Care contacted Ms Govey and they discussed and agreed a process for Cater Care to interview the Spotless staff at Westminster. Ms Govey assured Cater Care that there would be a smooth contract handover.

[41] A meeting involving the respondent employees and other Spotless workers took place at Westminster on 9 December 2013 during working hours. This was organised with the knowledge and support of Spotless. At that meeting, representatives of Cater Care handed out relevant documentation in relation to the company and the employment opportunities.

[42] There were also subsequent individual meetings on 9 December 2013 between representatives of Cater Care with Ms Jamieson and Mr Lucas. It is not clear on the evidence whether Mr Chambers also met Cater Care on that day however he did do so at around that time.

[43] On 10 December 2013, Ms Govey agreed with Mr Adams that Cater Care could interview its Westminster staff (except Mr Paley) and could conduct discussions about employment opportunities with the employees during normal business hours.

[44] Some of these discussions did take place and occurred during working hours, however there were ongoing negotiations between the employees and Cater Care conducted largely in their own time. Mr Adams advised Ms Govey in the following week that Cater Care was still in discussions with Mr Lucas, Mr Chambers and Ms Jamieson about their potential employment.

[45] On 13 December 2013, Spotless conducted a meeting with its employees at Westminster and the staff were advised that Spotless would seek to offer them further employment and that they should check the employer’s website for details.

[46] It is apparent that Spotless had prepared pro forma letters 4 for each of the Westminster based employees confirming the loss of the contract and that termination of employment on 31 December 2013. The letters also indentified that Spotless would seek alternative employment within the Spotless group, noted that the employees may wish to seek employment with the new contractor, and advised that Spotless would facilitate the interview process. The letters further advised that that if no alterative employment was identified with either Spotless or the incoming contractor, employment would cease on 31 December 2013.

[47] There is a dispute as to whether these letters were supplied to the respondent employees on 13 December 2013, or at any time ahead of this application. On balance, I find that the letters were not supplied to the employees. Each of the employees convincingly denied having received the letters and Ms Govey’s evidence was more in the nature of what must have happened or was intended, rather than direct recall. In any event, I find that the substance of the letters, at least in terms of the loss of the contract, the termination of employment on 31 December 2013 and the fact that alternative employment opportunities (both within Spotless and with Cater Care) would be explored, was communicated in very broad terms during the meeting.

[48] Also on 13 December 2013, a meeting was held involving representatives from Westminster and the employees. The meeting discussed concerns held by the employees about the details of the apparent job offers being foreshadowed by Cater Care and Westminster’s encouragement for each of the employees to stay at the School.

[49] Informal discussions were conducted at some point between Ms Govey, Mr Paley and Mr Lucas about a proposal to have Mr Lucas stay with Spotless and perform a Chef role as part of its Private Public Partnership Schools (PPPS) program, based at the Regency TAFE facility. Mr Lucas was advised that a position had not been advertised and that if he was interested, the necessary management discussions and approvals would be sought for this role. Mr Lucas expressed interest in the concept and sought details but also expressed some concerns about the increased travel time associated with that role. A further potential role as part of an anticipated new contract (which did not ultimately eventuate) was also discussed with Mr Lucas at some point.

[50] Similar discussions were also held with Ms Jamieson in relation to the possibility to be redeployed within the school canteens of certain schools as part of a program to improve the general service skills of employees in the PPPS program. This position was not advertised or displayed on the company’s intranet. Ms Govey expected vacancies to occur in the New Year however it is not clear that this fact was advised to Ms Jamieson.

[51] Both Ms Jamieson and Mr Lucas sought further written details from Spotless about the potential job opportunities. These details were not subsequently provided. It is also evident that these were conceptual discussions and no actual detailed job proposals or formal offers were made by Spotless to Ms Jamieson or Mr Lucas at any time.

[52] On balance, I find that there were some very brief initial discussions between Ms Govey and Mr Chambers on 13 December 2013, however no detailed proposals for an alternative role were put to him at that time.

[53] On or around 17 December 2013, Mr Chambers advised that he needed to take personal leave to undertake scheduled surgery, which commenced at that time. I find that there were no subsequent discussions about alternative positions with Spotless. Mr Chambers was absent from the workplace after that time and the only subsequent contact took place in the context of the supply of an ongoing medical certificate on 23 December 2013.

[54] On 17 December 2013, Cater Care made a formal job offer to Mr Chambers for the position of Chef.

[55] In the case of Mr Lucas, there had been a number of proposals from Cater Care and discussions continued. An offer that ultimately formed the basis of his employment was made by Cater Care on 20 December 2013 and confirmed in a contract in early 2014. On or around 20 December 2013, Mr Lucas advised Spotless that he was not interested in the options discussed to date.

[56] On 19 December 2013, Ms Jamieson accepted a position with Cater Care and advised Spotless of that development.

[57] On 20 December 2013, Mr Adams had another telephone discussion with Ms Govey at which time she agreed to forward the files for Mr Lucas and Ms Jamieson. Cater Care did not subsequently receive those files.

[58] The employment of the employees with Spotless effectively concluded on 31 December 2013. At around that date, Mr Chambers advised Spotless that he had taken up a job offer with Cater Care.

[59] Cater Care commenced the Westminster contract on 1 January 2014 and each of the employees commenced with the new employer shortly after that time.

[60] Outstanding annual leave balances were paid out by Spotless to each of the employees.

[61] Subject to the issues below, the basis and conditions of the new employment with Cater Care are substantively the same as those applying when the employees were engaged by Spotless.

[62] In general terms, service with Spotless was not recognised by Cater Care.

[63] In terms of LSL, it is likely that the service with Spotless transmitted to Cater Care under the terms of the relevant State Act. 5 Some months after the change in contract, Westminster agreed to underwrite the costs of the accrued LSL in the event that the employees became entitled to such leave.

[64] Sick leave accruals for each of the employees were lost upon the cessation of employment with Spotless. The sick leave accruals at the date of termination of the employees by Spotless were as follows:

● J. Lucas: 236 hours
● J. Jamieson: 155 hours
● D. Chambers: 2 hours

[65] I note that in the case of Mr Chambers, his working hours are marginally higher and differently configured with Cater Care. He is also receiving a higher wage than when engaged by Spotless.

[66] Each of the relevant employment contracts with Cater Care make reference to the potential for the employees to be stood down during the school holiday periods. Although this was not expressly stated as part of the employment contracts with Spotless, each of the employees were covered by the Hospitality Industry (General) Award 2010 and this award applied to their employment. Similar stand down arrangements applied under that award. 6

[67] I also note that the employment contracts for each of the employees contained a probationary period. This was a potentially significant change in their employment security; albeit minimum employment periods for unfair dismissal protection under the Act apply in any event. 7 All of the employees are still employed by Cater Care in roles very similar to those occupied during their employment with Spotless at Westminster.

6. Consideration

6.1 Has the employer obtained other employment for the employees?

[68] The historical context for the nature of provisions that are now found in s.120 of the Act, is set by the summary provided by the Full Bench of the Australian Industrial Relations Commission in Australian Chamber of Manufacturers and Derole Nominees Pty Ltd - Clothing Trades Award 1982 8 (Derole) in the following terms:

“We do not wish to prevent an employer making an application to be exempted from the general prescription pursuant to this decision in cases where an employer obtains acceptable alternative employment for an employee but we would point out that, in our decision, severance payments are not made for the purpose of assisting employees to find alternative employment. Where such an application was made it would be important to consider whether previous service with the previous employer was recognized as service with the new employer.

The word "obtains" does not appear in its context to mean actually obtain in the fullest sense possible. In circumstances like those occurring at the company one employer is incapable in law of effecting a contract of employment between his employee and another employer whether by assignment or otherwise; the creation of the legal relationship of master and servant depends on a mutuality being arrived at between the individual and the incoming employer. Therefore, the pursuit of alternative employment by the outgoing employer cannot be expected, by reason of itself alone, to produce new employment; there will usually and perhaps always remain the opportunity for the incoming employer, and the employee, to disagree as to matters such as terms of employment, suitability of the job to the employee and vice versa so that alternative employment may not eventuate.

It follows that "obtain" must be given some lesser meaning. The Shorter Oxford Dictionary (third edition, revised) provides as its relevant meaning, the definition of "obtain" as "to procure or gain, as the result of purpose and effort". It seems to us that meaning is of assistance here; that is, the employer by purpose and effort may establish an opportunity which suits the employee and which crystallises as alternative employment of an acceptable kind.

This approach is supported if the passages quoted above from the Termination, Change and Redundancy Case are read in conjunction with what was said under the heading “assistance in seeking alternative employment”. There the Commission records the ACTU objective of achieving award provisions “designed to ensure that the employer assists the employee to find alternative employment”.

Reliance was placed by the ACTU on a decision of the South Australian Industrial Commission in the Milk Processing and Cheese Etc Manufacturing Case:

“where it was decided that there should be included in any detailed prescription on redundancy an obligation on the employer actively to offer, or to make reasonable endeavours to procure, suitable alternative employment for redundant employees.”

Dealing with the circumstances in which the general prescription the Full Bench was awarding might be departed from, the decision in the Termination, Change and Redundancy Case indicates that particular regard was paid to, inter alia, the S.A. Milk Processing and Cheese Etc. Manufacturing decision. Viewed in this way it will be seen that the intention is not to impose an absolute test on the employer’s ability to “obtain” alternative employment but rather it refers to action which causes acceptable alternative employment to become available to the redundant employee. The employer must be a strong, moving force towards the creation of the available opportunity.”  9

[69] On that basis, it is necessary to initially consider whether Spotless was the strong, moving force behind the creation of the available opportunities for the employees. That is, it is necessary to consider whose actions caused acceptable alternative employment to become available. This is not an absolute test but rather one that needs to be realistically assessed in the particular circumstances of each case.

[70] In a matter 10 referred to by Spotless in submissions, I made the following observations and findings about the operation of these principles:

“[17] At its highest, Hunt Energy contacted Harness, confirmed that redundancies would be occurring, advised that this may include Mr Thomas and provided a reference for him. Further, in advising Mr Thomas of his redundancy, it also referred to the possibility of employment with Harness. These elements assisted with the alternative employment ultimately found by Mr Thomas.

[18] Hunt Energy did not however make any arrangements for contact between Mr Thomas and Harness, arrange for an interview or the supply of his résumé, or have any apparent role in the formation of the new employment contract. There is also no evidence that any transitional arrangements were made or proposed by Hunt Energy in relation to the new employment. Although not all of these would need to be present to meet the criteria of obtaining the new employment, they are indicative of the kind of role envisaged by the s.120(1)(b)(i) of the Act.

[19] The background was certainly set by Hunt Energy. However, based upon the evidence before the Tribunal, in the end, Mr Thomas made the direct approach to Harness, supplied his résumé and in effect, obtained the new employment.”

[71] After hearing this matter, a Full Bench of the Commission dealt comprehensively with the proper application of s.120(1) of the Act, and in particular the requirements of ss.(1)(b)(i). In The Maritime Union of Australia v FBIS International Protective Services (Aust) Pty Ltd 11 (FBIS) the Full Bench cited Derole and other authorities and found as follows:

“[49] The provision of the lists of employees did not obtain employment with ACG for employees, rather it simply facilitated an invitation by ACG to the Respondent’s employees to apply for a position and undertake an interview. That action by the Respondent did not have the impact of securing employment for the employees, as is evident from the 25 October 2013 advice to Mr Christmas by four employees that they had been interviewed by ACG but had been unsuccessful in obtaining positions. The action by the Respondent to facilitate contact between its employees and ACG did no more than to secure the employees an opportunity to enter the recruitment process of ACG which may or may not have resulted in an offer of employment. The evidence of Mr Christmas concerning the four employees was consistent with the written submissions to Commissioner Gregory by Brisbane based employees:

“. . . the applicant did not obtain acceptable employment on our behalf. To obtain employment with the new provider we were all required to submit applications and attend interviews. These interviews were not facilitated by FBIS and at any time the new provider could have replaced all staff with other staff of their own.”

[50] The limited role of the Respondent in the employment of the employees by ACG is confirmed by Mr Christmas’ evidence of approaches by the Respondent to ACG on 23, 30 and 31 October 2013 in which it sought information from ACG as to which employees had been offered employment and, when ACG declined to provide it, the Respondent’s 31 October 2013 request to employees asking them, as a matter of priority, to advise if they had been offered employment with ACG and to provide a copy of the letter of offer. It is plain on this evidence that the Respondent had no knowledge of which employees had been offered employment by ACG or of the terms and conditions of employment contained in any offer. There was no basis to suggest, in these circumstances, that the Respondent had “obtained” employment for its employees. At the time the employment with the Respondent came to an end, the Respondent was unaware as to whether their employees had obtained employment with ACG and, if so, on what terms. The Respondent’s action in providing contact details of employees to ACG did no more than facilitate contact in order that the employees could engage in the recruitment process undertaken by ACG.

[51] A further action undertaken by the Respondent, reflected in the evidence of Mr Christmas, was to request that ACG make arrangements for ACG to meet the Respondent’s employees through the Respondent, in order that the Respondent could manage its obligations under the FBIS Agreement, a request not acceded to by ACG, which made its own arrangements to contact employees and offer (or decline to offer) employment to the employees. Whilst the Respondent sought to play a role in arranging contact between ACG and its employees, it in fact played no role other than the provision of contact details to ACG.

[52] The only other additional actions taken by the Respondent, as reflected in the evidence of Mr Christmas were:

•its unsuccessful attempt to engage ACG in discussions directed to a commercial agreement between the two companies in relation to the employees’ accrued leave and accrued service with the Respondent, on the basis of its view that “[f]or an offer from ACG to constitute acceptable alternative employment, the employee’s continuity of service needs to be recognised by ACG, including all leave liabilities”; and

•its provision to ACG of a copy of the FBIS Agreement which ACG had already obtained from the Commission’s web-site.

[53] Each action was directed to ACG offering employment which met the requirement of “acceptable employment” for the purposes of s.120 of the Act and did not constitute action to obtain the employment, acceptable or otherwise.

[54] In our view, the limited actions of the Respondent, which did no more than establish contact between its employees and ACG, with the effect that employees were able to participate in the recruitment processes of ACG falls well short of action which “causes acceptable alternative employment to become available to the redundant employee” and the Respondent was not a “strong, moving force towards the creation of the available opportunity”.”

[72] Given the importance of this decision I provided all parties with an opportunity to make further submissions on the issue. I have now considered the import of the Full Bench decision and the submissions subsequently made by the parties.

[73] In response, Spotless sought to distinguish the facts of this matter from the outcome in FBIS on the basis that the employees here were not required to go through a competitive selection process. Further it contended that it provided all relevant information to Cater Care, had discussions with the incoming contractor, and facilitated the new employment including by arranging and permitting meetings and interviews during working hours.

[74] Ms Jamieson and Mr Lucas relied upon the approach in FBIS and contend that Cater Care encouraged them to apply but they each went through the normal selection process for advertised positions. In that light, they suggest that Spotless played no real role in obtaining the new work and this was consistent with the recent Full Bench decision.

[75] Mr Chambers did not make any further submissions.

[76] Given the basis upon which Spotless finally contended its case, it is necessary to initially consider the impact of its redeployment proposition. That is, although the employees’ position became redundant, they did not participate in and accept reasonable (acceptable) redeployment options that were consistent with their contracts of employment. In that regard, Spotless contends that the alternative positions did not crystallise because the employees took the alternative positions with Cater Care.

[77] In effect, Spotless is contending that the absence of clarity around their potential redeployment positions does not matter because if the employees had accepted them, and subsequently learnt that the positions were not real or were very different in nature, they would have at that point, potentially become entitled to redundancy payments.

[78] The difficulty with this proposition in the present context is that in order to determine whether these Spotless positions were acceptable alternative positions so as to trigger a variation to the redundancy pay, some substance and clarity around those positions would be needed. In this case, the evidence reveals that there were conceptual discussions but no actual firm or reliable job offers were made to any of the employees. The employees were sceptical about those roles and elected not to further explore the options. At no point were actual detailed proposals made to the employees.

[79] In addition, if the employees had accepted the redeployment positions it is not clear upon what basis they could subsequently claim to have been made redundant and seek a redundancy payment. If misled into a position, the employees may be able to claim a constructive dismissal but that does not assist the employer’s proposition in this case.

[80] I can understand that Spotless found itself in a position where its employees were electing to move to the new contractor. However, if it intended to rely upon the redeployment options for present purposes it was necessary for the detail and substance of actual positions to be put to the employees in a clear manner. This is particularly so where it implies that these redeployment options were consistent with the existing contract of employment. In this case, it did not do so and speculation as to whether the options would have been acceptable alternative employment for present purposes is not to the point.

[81] I also add that if the redeployment positions were actually offered to the employees on terms and conditions that were no less favourable to the existing positions, and were consistent with their particular contracts of employment evident here, it is conceivable that the employees may not have been dismissed at all from their employment with Spotless.

[82] I turn to consider the alternative proposition made by Spotless. That is, the Cater Care positions were relevantly obtained for the employees (and represented acceptable alternative employment) within the meaning of s.120(1) of the Act.

[83] The employees have argued in effect that the positions were not obtained by Spotless, in part because the actual positions were provided by Cater Care as part of its tender and normal operations. For reasons outlined above, this is not the appropriate test. “Obtains” in this context has a less literal meaning. Rather, the test is whether the employer by purpose and effort establishes the context in which an employment opportunity, which suits the employee and which crystallises as alternative employment of an acceptable kind, became available to the employee.

[84] Did Spotless establish the opportunity for the employees to secure the Cater Care positions so as to have “obtained” those positions within the meaning of s.120(1)(b)(i) of the Act?

[85] The actions that Spotless undertook in that regard include the following:

● Having been approached by Cater Care seeking its assistance, Spotless reached an understanding with Cater Care about access to the employees;
● It organised a meeting and permitted Cater Care to meet the employees, provide them with information about the new company and to distribute application for employment forms; and
● It gave permission for Cater Care to conduct interviews with the employees during working hours.

[86] I note that Spotless did not perhaps lay out the welcome mat for Cater Care when it first visited and there were at least mixed signals as to whether the employees should follow that path. In my view, this is not significant in the scheme of things. More importantly given the approach of the Full Bench evident in FBIS, Spotless did not apparently provide the employment files or details for Mr Lucas and Ms Jamieson to Cater Care (either initially or later when promised) and did little if anything to practically assist in any provision of information that it held about the employees or other arrangements that might have assisted the transition.

[87] It is evident that Spotless was (understandably) concerned at the loss of the Westminster contract and at least initially was keen to have the employees remain with the Spotless group. As outlined earlier, there were some conceptual discussions but actual proposals and job offers were not made. Further, this led to a scenario where Spotless did not recommend the employees to Cater Care or make available information that would have facilitated preferential consideration of their employment and any necessary transition.

[88] It is also the case that to some extent Westminster played a role in the continuity of the employees’ role at the School through its meetings with the employees and its approach to facilitate the underwriting of their LSL entitlements.

[89] The employees concerned had to and did apply for their positions and negotiated their new terms with Cater Care.

[90] Although the steps taken by Spotless went further than the employer in FBIS, in reality it did not do significantly more than facilitate an entry into the recruitment process conducted by Cater Care.

[91] In reality, Spotless sought to potentially facilitate opportunities within the Spotless group and with the incoming contractor. For reasons outlined earlier, in this case that dual approach meant that it did not do either in such a manner to demonstrate to the Commission that it relevantly obtained the alternative employment.

[92] On the evidence provided, and given the circumstances evident here, I am on balance not persuaded that Spotless obtained alternative employment for the employees within the meaning of s.120(1) of the Act.

6.2 Where the other positions acceptable alternative employment?

[93] This issue does not arise given my findings above.

6.3 Should there be a variation to the redundancy entitlements and if so, to what level?

[94] Given that alternative positions were not relevantly obtained by Spotless for the employees, there is no basis for any discretion to be exercised.

7. Conclusions

[95] The applications are dismissed.

Appearances:

J Douglas on behalf of Spotless Services Australia Limited T/A Alliance Catering.

J Lucas, J Jamieson and D Chambers on their own behalf.

Hearing details:

2014

Adelaide

August 8.

Final written submissions:

Applicant: 19, 29 September, 24 October 2014.

Respondent employees: 23, 26 September, 27 October 2014.

 1   This became clear in final submissions.

 2   Final submissions filed 19 September 2014.

 3   Transcript PN19 to PN25.

 4   Exhibit A9.

 5   Long Service Leave Act 1987 (SA) s.3(3)(a).

 6   Clause 34.4 of the relevant modern award.

 7   S.383 of the Act.

 8   Australian Chamber of Manufacturers and Derole Nominees Pty Ltd - Clothing Trades Award 1982 (1), (1990) 140 IR 123 per Peterson J, Marsh DP and Oldmeadow C.

 9   Ibid.

 10   Hunt Energy &Mineral Company Australia Pty Ltd v Thomas[2012] FWA 7845.

 11   [2014] FWCFB 6737.

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