Sutherland Division of General Practice Incorporated
[2012] FWA 5615
•5 JULY 2012
[2012] FWA 5615 |
|
DECISION |
Fair Work Act 2009
s.120—Redundancy pay
s.576 - Application to exercise a function conferred by a law of the Commonwealth
Sutherland Division of General Practice Incorporated(C2012/4235)
Health and welfare services
DEPUTY PRESIDENT BOOTH | SYDNEY, 5 JULY 2012 |
Variation of redundancy pay.
[1] At the conclusion of the hearing of this matter on 29 June 2012 I delivered an ex tempore decision. I set out below that decision.
[2] In this matter The Sutherland Division of General Practice Incorporated (the Applicant) has applied for relief from the obligation to pay redundancy pay to nine employees named in the application, pursuant to s.120 of the Fair Work Act 2009 (the Act), whose employment is ceasing with the Sutherland Division of General Practice and commencing with the South Eastern Sydney Medicare Local. Ms Helen Winklemann and Ms Yvonne Rowling appeared on behalf of the Applicant and made submissions in this matter. The nine employees, although advised of the hearing, did not appear and no objection to the hearing or application was received from them.
[3] The relief sought is pursuant to, firstly, clause 12(e) of the Divisions of General Practice (State) Award (the State Award). This clause applies by virtue of the transitional provisions of the relevant modern award and the transitional provisions of the Act. Relief is also sought pursuant to s.120 (1 ) (a) and (b) of the Act. Section 120 reads:
“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, FWA may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that FWA considers appropriate.
(3) The amount of redundancy pay to which the employee is entitled under section 119 is the reduced amount specified in the determination.”
[4] The third aspect that is sought to be addressed in the application before me by submission is in relation to a finding in regard to clause 12(h)(iii) of the State Award that reads:
“(h) Transmission of Business:
In the event that the Division transmits any part of the business to another employer, an employee who was employed at the time of the transmission:
(i) shall be deemed to have continuous service, ie, service shall not be
deemed to have been broken due to the transmission; and
(ii) the period of employment which the employee has had with the
Division will be deemed to be in the service of the new employer.
(iii) In this subclause, “transmission” includes transfer, conveyance,
assignment or succession whether by agreement or by operation of
law and “transmitted” has a corresponding meaning.”
[5] The background to this matter finds its origin in National Health Reform, whereby the Commonwealth government has instigated the creation of a network of Medicare Locals and in this case, as in similar cases throughout Australia, Divisions of General Practice that have been in operation for some considerable period, either individually or in consortia, have made application and have been funded by the Commonwealth to form and operate Medicare Locals. In this case, the Applicant will combine with another division, the St George Division, to form the South Eastern Sydney Medicare Local.
[6] The facts of this matter are significant in determining the three legs of the application. The Applicant has entered into a deed of transfer with the South Eastern Sydney Medicare Local and pursuant to that deed, assets, liabilities and business functions transfer to the new Medicare Local. Also, pursuant to the deed and other instruments, employees who are transferring are doing so with continuity of service. This is further evidenced by signed employment contracts, uncontested submissions that have been made by the Applicant and by the fact that no objections were received from the transferring employees.
[7] The principles that I believe the tribunal is required to apply in relation to the first two provisions that relief is sought pursuant to - that is, clause 12(e) of the State Award and s.120 of the Act - go to the question of whether the employer has obtained, in the case of the State Award, "suitable alternative employment", and in the case of the Act, "acceptable alternative employment".
[8] It is a well established principle of Fair Work Australia (FWA) and its predecessor institutions that the test to be applied by the tribunal is an objective one, and I am assisted by a decision of Asbury C 1 where she considered the longstanding principles that emanate from the early provisions of the termination, change and redundancy case. She sets out tests that have been laid down in the case of Derole Nominees Pty Ltd v Australian Chamber of Manufacturers (the Derole case)2 which was referred to by the Applicant and also the case of the Clothing and Allied Trades Union v Hot Tuna (the Hot Tuna case)3. The Derole case makes it very clear that the test is an objective one, meaning that the facts of the alternative employment need to be considered by the tribunal. The Hot Tuna case identifies the factors to be considered by the tribunal. Asbury C says:
“In Clothing and Allied Trades Union v Hot Tuna a Full Bench of the AIRC held that the onus lies on an employer seeking exemption from redundancy provisions to establish the acceptability of alternative employment ,and that the test is an objective one, involving a consideration of such matters as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and other matters.”
[9] In this case, the submissions have made reference to the characteristics of the employment. I am particularly taking into account the continuity of service that is being ensured for transferring employees. I have also had regard to submissions that were made on matters such as those referred to in both the Derole and the Hot Tuna cases, such as the positions being similar, if not identical; the terms and conditions of employment being no less favourable, in fact being consistent with the transferor organisation; and location not being an issue. Reference was made to one employee who decided to increase their hours but that has certainly not emerged in the submissions as something that would make the alternative employment either unsuitable or unacceptable.
[10] Having considered both the principles that I am required to take into account and the facts that have been presented to me, I find that pursuant to both the State Award, which becomes a federal instrument through the transitional provisions of both its own modern award and the Act, and s. 120 of the Act, that the employer has obtained suitable and acceptable employment for the employees and I grant the application in that respect for redundancy pay to be reduced to nil.
[11] I am also asked to turn my mind to the provisions of the State Award in relation to transmission of business, and I have done so. A signed deed of transfer was handed up in proceedings in lieu of the draft that was included in the application. I have read that deed of transfer and I have listened carefully to the submissions in relation to the character of the business of the Divisions of General Practice and its similarity, if not identical nature, to the character of the business of the South Eastern Medicare Local. I am particularly paying attention to the transfer of assets and liabilities, including the transfer of employees. I believe that in the light of the provision relating to transmission of business, in particular clause 12(h)(iii) and in particular the subclause that defines the word "transmission" to include -
“transfer, conveyance, assignment or succession whether by agreement or by operation of law and "transmitted" has a corresponding meaning”
the factual circumstances presented in this case are of a kind that meet that description and the transfer from the Applicant to the South Eastern Sydney Medicare Local is indeed a transmission of the kind that was contemplated by the clause of the State Award. Therefore, to the extent that there is also an application before me to so find, I do so find.
[12] In addition to the matters dealt with in paragraph [11] above the Applicant in submissions asked me to conclude as a consequence of my finding that no entitlement to redundancy pay arises under the terms of the State Award. The Applicant could not point to a provision in the State Award or the Industrial Relations Act 1996 (NSW) (the State Act) that on the face of it would unambiguously require such a conclusion. The Applicant relies upon authorities in Amcor Limited v Construction, Forestry, Mining and Energy Union (Amcor) 4 and Svitzer Australia Pty Ltd v Maritime Union of Australia (Svitzer)5 and further suggests that the particular wording ought to be interpreted within the context of the legislation, which in this case is the State Act.
[13] The relief sought by the Applicant in its application has been granted. This third leg of submissions was neither contained in the written application nor is it necessary to dispose of the application. I have decided that I am not able to draw the conclusion urged upon me at this time and refuse to make the finding sought.
[14] An order issued on 29 June 2012 [PR525782] reflecting my decision.
DEPUTY PRESIDENT
Appearances:
H Winklemann, Fisher Cartwright Berriman Pty Limited T/A FCB Workplace Lawand Y Rowling for The Sutherland Division of General Practice Incorporated
Hearing details:
2012.
Sydney:
June 29.
1 [2012] FWA 3901
2 (1990)140 IR 123
3 (1988) 27 IR 226
4 [2005] HCA 10
5 [2011] FWAFB 7947
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