Tallwoods International Golf Resort Pty Ltd
[2012] FWA 3009
•10 MAY 2012
[2012] FWA 3009 |
|
DECISION |
Fair Work Act 2009
s.122 - Transfer of employment situations that affect the obligation to pay redundancy pay
Tallwoods International Golf Resort Pty Ltd
(C2012/2573)
COMMISSIONER MCKENNA | SYDNEY, 10 MAY 2012 |
Transfer of employment situations that affect the obligation to pay redundancy pay.
[1] Tallwoods International Golf Resort Pty Ltd (“TIGR”) has commenced proceedings concerning redundancy payments to six former employees, namely, Cameron Crisp, Jeff Mendham, Andrew Gorton, Paul Wright, Cheryl Wright and Boyd Crittenden (“the employees”). The application is opposed by the Australian Workers’ Union (“AWU”), which appeared on behalf of its five members affected by the application. The other employee who was not represented by the AWU did not appear and was not represented in the proceedings.
[2] The initiating process filed by TIGR expressed matters in the following terms:
“The Applicant applies
1. Provision(s) under which the application is made:
Application is made under Fair Work Act 2009 subsection 22(5) & 22(7) subsection 122(2), and subsection 311(1) & 311(2)
2. Order or relief sought:
Relief for the Applicant (TIGR) from paying redundancy entitlements for the staff listed in Attachment “A”
3. What is the industry of the employer?
Golf Club Management
4. Relevant industrial instrument(s) (if any):
Registered and Licensed Clubs Award 2010 MA000058
5. Grounds
Relief from redundancy payments to employees listed in Attachment “A” is sort [sic] on the following grounds:
1. In accordance with section 122 of the Fair Work Act 2009, subsection 2, that subsection 22(5) applies to the employees in question in that there has been a transfer of employment (ref 22(7)) of staff in question from the first employer (Tallwoods International Golf Resort (TIGR)) to the new employer (Club Care Golf (CCG)) and as such the employees in question are not entitled to redundancy payments from the first employer (TIGR).
2. Subsection 122(2) further provides that with a transfer of employment service with the first employer (TIGR) counts as service with the second employer. The second employer (CCG) has recognised this fact.
3. Subsection 122(3b) [sic] also applies in that the employees in question accepted the offers of employment with the new employer (CCG) constituting a Transfer of Employment, which further absolves the applicant (TIGR) from making redundancy payments to the relevant employees.
4. Subsection 311(1) indicates that Transfer of Business criteria also applies in this instance and more specifically that the required criteria from subsection 311(1)(c) that the relevant employees are carrying out substantially similar work (duties) for the new employer, which in the case, provides further grounds for this application.
5. Additional relevant material supplied:
a. Attachment “A” List of relevant employees
b. Attachment “B” Payouts for relevant employees
c. Attachment “C” Current pay slips for relevant employees”
[Bold in original]
[3] I have outlined the text of the initiating process in detail because this was the material on which TIGR relied in conjunction with other material that was filed pursuant to the directions for hearing, to which I will turn later in the decision.
[4] By way of short background, the AWU’s submissions outlined the following history of matters. TIGR formerly operated the Tallwoods International Golf Resort (“the resort”), although there have been at least two previous changes in the past five years in the employing entity for employees working at the resort. Prior to 18 September 2007, employees were employed by Tallwoods Country Club Pty Ltd (“TCC”). In correspondence dated 29 August 2007, employees received notice of the sale of the golf course and surrounding buildings, and the transfer of their employment to TIGR, which is a wholly-owned subsidiary of Trafalgar Corporate Group Limited (“TCGL”). Subsequently, in correspondence from TCGL dated 3 February 2010, employees received notice of the sale of the resort from TCGL to Pacific Oceanic Pty Ltd, which is part of the Pacific Oceanic Group. In each of the previous situations, all the employees’ employment terms and conditions were maintained and preserved as a result of arrangements between the outgoing and incoming companies in question, and this was confirmed in writing to the employees.
[5] In correspondence dated 25 May 2011, TIGR gave notice in the following terms to some 17 the employees about impending terminations of their employment:
“25 May, 2011
Dear [Name of employee],
I am writing to inform you that commencing June 15th 2011 Tallwoods International Golf Resort will be managed by Club Care Golf Pty Ltd.
Club Care provides specialised golf club and golf resort management services and we have entered into an agreement with Club Care to manage the Tallwoods operation.
The agreement includes:
- maintenance of the golf course,
- management of pro shop operations,
- general estate maintenance,
- overview of food and beverage.
This decision has been made to secure the long term viability of the Tallwoods International Golf Resort and in the best interests of providing a consistently superior quality golfing experience for members and guests.
This decision should in no way be taken as a reflection of the performance of the on-site team rather, this decision is necessary due to a challenging market, increasing costs and a cornerstone requirement to protect the long term integrity of golf at Tallwoods.
Please accept this letter as written notice that as of June 14, 2011, your employment with Tallwoods International Golf Resort Pty Ltd will cease. All entitlements such as Long Service Leave, Superannuation etc will be adjusted as at that date. Club Care will officially commence operations as of this date.
The Club Care Company will be offering first option to existing staff for all required positions, as assessed by Club Care, and as such will quickly move to commence interviews with subsequent offers of employment.
Club Care will also be carrying out a full property report, including stock take, condition and asset report.
All enquires relating to the Club Care management of Tallwoods should be made to the Managing director of Club Care, Wayne Sewell on [telephone number] or email to [email address]. Wayne Sewell will be on site at Tallwoods from Monday.
I would like to thank you for your efforts at Tallwoods and trust you will assist with this transition process.
Kind regards,
Lisa Lin
Managing Director”
[6] On 14 June 2011, TIGR terminated the employees’ employment. A company named Club Care Golf Limited (“CCG”) had been engaged to manage the resort instead of TIGR, although it is unclear who or what entity engaged CCG. Around this time, CCG interviewed some TIGR employees and offered employment to a number of them, who then commenced employment with CCG on 15 June 2011. The former employees of TIGR were, the AWU submitted (together with supporting information), engaged by CCG on terms and conditions less favourable than in their previous employment with TIGR.
[7] On 21 July 2011, the AWU sent correspondence to TIGR seeking redundancy payments for its members. That correspondence read:
“Dear Ms Lin
TALLWOODS INTERNATIONAL GOLF RESORT
We write on behalf of our members that were formerly employed at Tallwoods International Golf Resort (the ‘Resort’) by Tallwoods International Golf Resort Pty Ltd (‘Tallwoods’).
We note that pursuant to Tallwood’s letter dated 25 May 2011, the employment of Tallwood’s employees was terminated as of 14 June 2011 due to the engagement of Club Care Golf Pty Ltd (‘Club Care’) to manage the resort.
We note your comments in that letter that all employee entitlements would be paid, however, the letter does not refer to the employees’ entitlement to redundancy payments.
We advise that Club Care has not engaged all former of [sic] employees of Tallwoods. A number of employees are still currently seeking employment. Further, Tallwoods did not facilitate the employment of these employees who have been employed by Club Care. It was left to the employees to apply for employment with Club Care. Those employees who have secured employment with Club Care have been employed on terms and conditions less favourable than those that previously applied at Tallwoods, and Club Care has not recognised their length of service.
It is for these reasons that Tallwoods is liable to pay its former employees redundancy payments.
We suggest you obtain legal advice in this matter and revert [sic] to us by no later than close of business on 5 August 2011. Should you not provide confirmation that Tallwoods will pay redundancy payments or should we not hear from you, the AWU will consider its options in this matter which may include commencing legal proceedings or referring the matter to the Fair Work Ombudsman for investigation.
Yours Sincerely
Daniel Rampling
Legal Officer
[8] On 16 August 2011, TIGR paid its former employees amounts with respect to all their accrued annual leave and long service leave entitlements. On 23 August 2011, the AWU sent further correspondence to TIGR regarding payment of outstanding monies as to notice on termination, leave loading and redundancy payments.
[9] The AWU submitted that in contrast with the situations in 2007 and 2010, under the most recent employment developments TIGR did not obtain employment for the employees; the employees’ pay rates were reduced and hours increased; the employees’ accrued entitlements to annual leave and long service leave were paid-out; and the employees’ prior service with TIGR was not recognised by CCG. The AWU submitted that, in these circumstances, the employees should be entitled to redundancy payments from TIGR and, in so submitting, the AWU drew attention to relevant provisions of the Fair Work Act 2009 (“the Act”).
[10] It also may be noted by way of background that, on 14 December 2011, TIGR filed an earlier application numbered C2011/6905 (“the first application”) concerning redundancy payments in relation to the employees, which was also allocated to me. In both the first application and in the present application, TIGR was represented by Mr W Sewall. Mr Sewell is the Managing Director/Chief Executive Officer of CCG, the company which now employs the six former employees of TIGR whose redundancy payments are the subject of the application by TIGR.
[11] For reasons that are unnecessary to outline in this decision, TIGR determined to discontinue the first application. On 1 February 2012, TIGR filed this second application in terms similar to the first application.
TIGR’s case
[12] On 13 February 2012, I gave directions for hearing. TIGR subsequently advanced very little by way of evidence or submissions pursuant to the directions in support of its application. Mr Sewall submitted that TIGR relied on the application form and the documents attached to the application form. I have reproduced the relevant content of the application form earlier in the decision. The documents attached to the application form comprised correspondence dated 1 August 2011 to each of the employees, details of the post-taxation payments, banking transfer receipts and CCG payroll advices. The correspondence dated 1 August 2011 was in relevantly similar terms to each employee, that is:
“Dear [Name of employee]
I write to confirm your entitlement of annual leave and long services [sic] leave with TIGR, detailed as followed [sic]:
Name: | [Name of employee] |
Annual entitlement: | [Number of hours and money amount] |
Long services [sic] leave: | [Number of weeks and money amount] |
Total [Money amount] |
Your entitlement will source from the sale of equipment and vehicles, are currently on the market for sales, managed by new manager (Club care), the process expected to complete by 31st August 2011
Advised by fair work [sic], this money should be keep [sic] in solicitor trust account for direct disbursement to staff entitlement, your entitlement will be transfer [sic] to solicitor trust account by 31st August 2011.
Please get back to me if the figure is not right.
Kind regards
Lisa Lin
Managing Director 1/8/2011”
[13] In the hearing, Mr Sewall tendered correspondence he personally, in his capacity of Chief Executive Officer of CCG, had provided to the employees. The correspondence, which was dated 27 January 2012 and provided to employees after the first application had been filed, read:
“To: [Name of employee]
From: Wayne Sewell
Chief Executive Officer
Club Care Golf
Date: 27 January 2012
Dear [Name of employee]
RE: Transfer of Employment / Recognition of Service
As you are aware I have become involved in the redundancy matter currently before Fair Work Australia.
Clearly we all have different opinions regarding this situation and whilst I certainly have a duty to be a fair and responsible employer I also have a responsibility to consider my client’s interests.
The position of both Club Care Golf Pty Ltd (CCG) and Tallwoods International Golf Resort Pty Ltd (TIGR) is that in relation to your employment at the Tallwoods contract [sic] that there has been a transfer of employment and transfer of business from TIGR to Club Care Golf.
These definitions are set out in the Fair Work Act 2009 and seem to apply to this situation.
By definition this also means that service with the first employer (TIGR) counts as service with the second employer (CCG) and as such CCG has recognised your previous service with TIGR.
Assuming that this is correct in law then there is no case for redundancy.
On a personal note I will also add that CCG has done the right thing on this occasion. Essentially your right to redundancy has not been taken from you, rather transferred to CCG. In advent [sic] that you are truly made redundant from your position at Tallwoods then you shall receive redundancy.
In accordance with Commission [sic] requirements this letter has been sent to you and the other staff at Tallwoods involved in this matter.
Also please also see a copy of the application to Fair Work Australia.
Please don’t hesitate to contact me if you wish to discuss this matter.
Sincerely yours,
Wayne Sewell
Chief Executive Officer” 1
[Underlining in original]
[14] The material filed by TIGR pursuant to the directions for hearing comprised a cover sheet, together with correspondence dated 27 February 2012 on letterhead paper bearing a company name of “Pacific Oceanic Pty Ltd”, a company described as the sole shareholder of TIGR. That correspondence read:
“Date: 27/2/2012
Fairwork [sic] Australia
Dear Sir
As the sole shareholder of Tallwoods International Golf Resort Pty Ltd (“TIGR”) we wish to confirm that Pacific Oceanic Pty Ltd (“Oceanic”) had taken the decision in July 2011 that due to the ongoing operating losses that had been occurring at Tallwoods International Golf Resort, that Oceanic could no longer provide any future financial support to TIGR in relation to the ongoing operation of Tallwoods.
In the advent [sic] that Club Care Golf Pty Ltd had not taken over management of Tallwoods International Golf Resort, as the major shareholder of TIGR, Oceanic would have been forced to consider alternatives, such as voluntary administration or receivership of TIGR.
Yours sincerely,
Lisa Lin
Director”
[15] Mr Sewall submitted there had always been a clear intention to transfer the employment of the employees from TIGR to CCG and this had been communicated to the employees. Mr Sewell submitted TIGR relies on the correspondence dated 27 January 2012 concerning the intentions in relation to recognition of service as between TIGR and CCG. Mr Sewell also explained there was a “somewhat fraught situation” in that he was representing TIGR as he has an interest in TIGR’s financial success, but he has to “walk a fine line” in relation to the employees because they know that in these proceedings he is assisting his client, namely, TIGR.
[16] Mr Sewall made various other submissions, including, but not limited to, the following:
- the initiating process outlines the matters on which TIGR relies as to the factual events, being a clear transfer of employment/transfer of business;
- the “key argument” is the firm belief that such a transfer has occurred;
- there is a legal imperative or legal situation where the employees’ service must be recognised as between TIGR and CCG;
- at “this point in time”, there has been a transfer of employment of the employees from TIGR to CCG and, therefore, the employees are not entitled to redundancy payments from TIGR;
- the employees are now employed by CCG at the same workplace undertaking substantially the same duties under the same award, and there has been no significant or fundamental change to their employment.
[17] Mr Sewall submitted that although TIGR has paid the employees amounts with respect to accrued but untaken annual leave and long service leave, TIGR was not required to make these payments to the employees as there was a transfer of employment from TIGR to CCG. Mr Sewall submitted that if the employees are made redundant at some stage in the future it will be at that point in time the full redundancy payments would be made available to them by CCG, which would include service with TIGR. The fact TIGR chose to pay the employees their accrued leave and long service leave entitlements in 2011 was, Mr Sewall submitted, “simply an act of generosity” and “an act of goodwill” designed to “smooth the waters during the transition”. Mr Sewall further submitted that the payments “should not compromise or take away any rights that [TIGR] has under the Act by that act of generosity”. It had been a very important part of the initial negotiations between TIGR and CCG, Mr Sewall submitted, to retain or transfer as many of the existing employees as possible, and this had been confirmed to the employees in the correspondence dated 25 May 2011. Mr Sewall submitted the payments made with respect to annual leave and long service leave should not remove TIGR’s rights not to make redundancy payments; and that the Act is designed to stop double-dipping by employees in relation to entitlements on transfer from one employer to another employer. Mr Sewall submitted the AWU’s submissions should not be accepted and the payments already made by TIGR to the employees did not alter the position.
AWU’s case
[18] The AWU filed a detailed submission, with supporting documentary materials, in opposing the application brought by TIGR concerning redundancy payments to the employees. Ms Z Angus, for the AWU, submitted a principal difficulty is that TIGR had advanced very little by way of evidence and submissions before Fair Work Australia in support of its application. The AWU submitted TIGR’s approach to the proceedings before Fair Work Australia had been characteristic of the type of approach adopted by TIGR more generally in relation to its employees. In this respect, the AWU submitted, among other matters, there had been almost no consultation or advice to the employees about employment-related matters.
[19] The AWU submitted TIGR advised the employees that it no longer required the jobs undertaken by those notified employees to be performed by anyone. The employees therefore prima facie had an entitlement to redundancy payments from TIGR. Despite the submissions of TIGR in seeking relief from making redundancy payments, TIGR has not adduced any evidence as to a transfer of business. Even if a transfer of business had occurred, continuous service was broken and the exemption from the obligation to provide redundancy pay at s.122(2) of the Act does not apply if service is not recognised by TIGR. In relation to its contention that CCG did not recognise the employees' service, the AWU drew attention to matters including, but not limited to, the following:
- accrued annual leave and long service leave entitlements were paid to the employees in connection with the terminations of employment by TIGR and no such accrued entitlements transferred to CCG;
- employees’ accrued personal/carer’s leave was not transferred to CCG, as evidenced by the amount of sick leave available to an employee who had been absent from work in his employment with CCG;
- employees received notice of termination in relation to the period of service with TIGR and, in accordance with s.22(6) of the Act, that period of service is not counted again in calculating the amount of notice of termination to which the employees are entitled as employees of CCG - with the result the employees will be entitled only to a lesser period of notice based on their periods of service with the CCG in the event of any future termination of employment at the initiative of CCG;
- section 91(2) of the Act provides that an employee is not entitled to be paid untaken paid annual leave if the service with a first employer counts as service with a second employer. The payment to the employees by TIGR of amounts with respect to their untaken leave is evidence of, and gives effect to, the break in continuous service and this is evidence that s.22(5) does not arise.
[20] Given that all accrued leave (long service, annual and personal/carer’s leave) has not transferred and given also the notice on termination of employment with TIGR (which cannot be duplicated), the AWU submitted it cannot be said the employees’ service has been recognised by CCG. Indeed, the claim by CCG that service is recognised is, the AWU submitted, a recent claim that initially arose only after the filing by TIGR of the first application before Fair Work Australia. Further, the employees were led to believe their offers of employment with CCG on terms less favourable than with TIGR were because there was no transfer.
[21] The AWU submitted it was relevant to have regard to two further features of the application. First, in the now-discontinued first application, TIGR failed on multiple occasions to comply with directions to serve the affected employees or AWU with a copy of the application that had been filed with Fair Work Australia. In circumstances where TIGR demonstrated multiple instances of non-compliance with directions, Fair Work Australia should be particularly cautious in accepting any unsubstantiated claims by TIGR. Second, in both the first application and the present application, TIGR has been represented by Mr Sewell of CCG. The AWU submitted Fair Work Australia should be mindful that submissions made on behalf of TIGR are likely to be submissions which “conflate the interests” of TIGR and CCG. Where a claim is asserted by TIGR, evidence for which is available to Mr Sewall, evidence for the claim should be brought before Fair Work Australia. It is TIGR which has to make-out its application concerning the redundancy payment application, but TIGR has only just recently asserted in these proceedings that CCG has recognised the employees' service. It was only since the commencement of proceedings before Fair Work Australia that the AWU and the employees had been made aware that CCG claims to recognise the employees’ service with TIGR; however, the evidence is contrary to that claim.
[22] The AWU referred to a number of cases concerning redundancy payments, submitting the relevant case law demonstrated that in similar circumstances of transfer of business and transfer of employment, employees retained an entitlement to redundancy payments: EHI Australia Pty Ltd v Harris; Aratzis [2011] FWA 56; Affinity Risk Partners (Brokers) Pty Ltd [2011] FWA 295; Fresh Food Industries [2010] FWA 8533; Aztec Steel Pty Ltd T/A KGT Freight Management v Gaden et al [2011] FWA 42. On an extrapolation of some of the principles derived from these cases, the AWU submitted, in conclusion, that: (a) the employees prima facie are entitled to redundancy payments; (b) the onus is on TIGR to provide evidence in support of the grounds for any relief; (c) the employees did not have their accrued entitlements transferred from TIGR to CCG; (d) where accrued service is not transferred there is a break in service and the second employer cannot be said to recognise prior service; (e) in accordance with s.122(1) of the Act, where a second employer does not recognise service with a first employer, the right to redundancy payment is not affected. The AWU submitted the employees are, therefore, entitled to redundancy payments and TIGR’s application should be rejected.
Consideration
[23] Absent any other considerations, the employees who were formerly employed by TIGR had a presumptive entitlement to redundancy payments in accordance with the relevant modern award/National Employment Standards in connection with the terminations of their employment with TIGR on 14 June 2011. That is, as between TIGR and the employees, the employees’ positions with TIGR became redundant and TIGR retrenched the employees. In connection with the terminations of employment, TIGR paid the employees their accrued entitlements to untaken annual leave and long service leave; and personal/carer’s leave accruals were not transferred from TIGR to CCG. Section 119 of the Act specifies the National Employment Standard for redundancy pay scales. Section 121 specifies certain exclusions from the obligation to pay redundancy pay and s.122 deals with transfer of employment situations that affect the obligation to pay redundancy pay.
[24] TIGR has initiated these proceedings before Fair Work Australia, the effect of which is to make an application seeking that it be relieved from making redundancy payments to the employees. The initiating process cited, and relied upon, the following sections of the Act in making such application: ss.22(5), 22(7), 122(2), 311(1) and 311(2). It is relevant to reproduce the sections of the Act to which reference was made in the initiating process.
[25] The application referred to the definition provided by s.22 of the Act as to the meanings of “service” and “continuous service”, specifically at ss.22(5) and 22(7) - which are underlined in the following extract. Section 22 reads as follows:
“22 Meanings of service and continuous service
General meaning
(1) A period of service by a national system employee with his or her national system employer is a period during which the employee is employed by the employer, but does not include any period (an excluded period) that does not count as service because of subsection (2).
(2) The following periods do not count as service:
(a) any period of unauthorised absence;
(b) any period of unpaid leave or unpaid authorised absence, other than:
(i) a period of absence under Division 8 of Part 2-2 (which deals with community service leave); or
(ii) a period of stand down underPart 3-5, under an enterprise agreement that applies to the employee, or under the employee’s contract of employment; or
(iii) a period of leave or absence of a kind prescribed by the regulations;
(c) any other period of a kind prescribed by the regulations.
(3) An excluded period does not break a national system employee’s continuous service with his or her national system employer, but does not count towards the length of the employee’s continuous service.
(3A) Regulations made for the purposes of paragraph (2)(c) may prescribe different kinds of periods for the purposes of different provisions of this Act (other than provisions to which subsection (4) applies). If they do so, subsection (3) applies accordingly.
Meaning for Divisions 4 and 5, and Subdivision A of Division 11, of Part 2-2
(4) For the purposes of Divisions 4 and 5, and Subdivision A of Division 11, of Part 2-2:
(a) a period of service by a national system employee with his or her national system employer is a period during which the employee is employed by the employer, but does not include:
(i) any period of unauthorised absence; or
(ii) any other period of a kind prescribed by the regulations; and
(b) a period referred to in subparagraph (a)(i) or (ii) does not break a national system employee’s continuous service with his or her national system employer, but does not count towards the length of the employee’s continuous service; and
(c) subsections (1), (2) and (3) do not apply.
Note: Divisions 4 and 5, and Subdivision A of Division 11, of Part 2-2 deal, respectively, with requests for flexible working arrangements, parental leave and related entitlements, and notice of termination or payment in lieu of notice.
(4A) Regulations made for the purposes of subparagraph (4)(a)(ii) may prescribe different kinds of periods for the purposes of different provisions to which subsection (4) applies. If they do so, paragraph (4)(b) applies accordingly.
When service with one employer counts as service with another employer
(5) If there is a transfer of employment (see subsection (7)) in relation to a national system employee:
(a) any period of service of the employee with the first employer counts as service of the employee with the second employer; and
(b) the period between the termination of the employment with the first employer and the start of the employment with the second employer does not break the employee’s continuous service with the second employer(taking account of the effect of paragraph (a)), but does not count towards the length of the employee’s continuous service with the second employer.
Note: This subsection does not apply to a transfer of employment between non-associated entities, for the purpose of Division 6 of Part 2-2 (which deals with annual leave) or Subdivision B of Division 11 of Part 2-2 (which deals with redundancy pay), if the second employer decides not to recognise the employee’s service with the first employer for the purpose of that Division or Subdivision (see subsections 91(1) and 122(1)).
(6) If the national system employee has already had the benefit of an entitlement the amount of which was calculated by reference to a period of service with the first employer, subsection (5) does not result in that period of service with the first employer being counted again when calculating the employee’s entitlements of that kind as an employee of the second employer.
Note: For example:
(a) the accrued paid annual leave to which the employee is entitled as an employee of the second employer does not include any period of paid annual leave that the employee has already taken as an employee of the first employer; and
(b) if an employee receives notice of termination or payment in lieu of notice in relation to a period of service with the first employer, that period of service is not counted again in calculating the amount of notice of termination, or payment in lieu, to which the employee is entitled as an employee of the second employer.
Meaning of transfer of employment etc.
(7) There is a transfer of employment of a national system employee from one national system employer (the first employer) to another national system employer (the second employer) if:
(a) the following conditions are satisfied:
(i) the employee becomes employed by the second employer not more than 3 months after the termination of the employee’s employment with the first employer;
(ii) the first employer and the second employer are associated entities when the employee becomes employed by the second employer; or
(b) the following conditions are satisfied:
(i) the employee is a transferring employee in relation to a transfer of business from the first employer to the second employer;
(ii) the first employer and the second employer are not associated entities when the employee becomes employed by the second employer.
Note: Paragraph (a) applies whether or not there is a transfer of business from the first employer to the second employer.
(8) A transfer of employment:
(a) is a transfer of employment between associated entities if paragraph (7)(a) applies; and
(b) is a transfer of employment between non-associated entities if paragraph (7)(b) applies.”
[Emphasis added]
[26] Section 122 of the Act provides as follows as to transfer of employment situations that affect the obligation to pay redundancy pay. I have again underlined the provisions to which TIGR referred in the legislative extract that follows:
“122 Transfer of employment situations that affect the obligation to pay redundancy pay
Transfer of employment situation in which employer may decide not to recognise employee’s service with first employer
(1) Subsection 22(5) does not apply (for the purpose of this Subdivision) to a transfer of employment between non-associated entities in relation to an employee if the second employer decides not to recognise the employee’s service with the first employer (for the purpose of this Subdivision).
Employee is not entitled to redundancy pay if service with first employer counts as service with second employer
(2) If subsection 22(5) applies (for the purpose of this Subdivision) to a transfer of employment in relation to an employee, the employee is not entitled to redundancy pay under section 119 in relation to the termination of his or her employment with the first employer.
Note: Subsection 22(5) provides that, generally, if there is a transfer of employment, service with the first employer counts as service with the second employer.
Employee not entitled to redundancy pay if refuses employment in certain circumstances
(3) An employee is not entitled to redundancy pay under section 119 in relation to the termination of his or her employment with an employer (the first employer) if:
(a) the employee rejects an offer of employment made by another employer (the second employer) that:
(i) is on terms and conditions substantially similar to, and, considered on an overall basis, no less favourable than, the employee’s terms and conditions of employment with the first employer immediately before the termination; and
(ii) recognises the employee’s service with the first employer, for the purpose of this Subdivision; and
(b) had the employee accepted the offer, there would have been a transfer of employment in relation to the employee.
(4) If FWA is satisfied that subsection (3) operates unfairly to the employee, FWA may order the first employer to pay the employee a specified amount of redundancy pay (not exceeding the amount that would be payable but for subsection (3)) that FWA considers appropriate. The first employer must pay the employee that amount of redundancy pay.”
[Emphasis added]
[27] In addition to the references to s.122 and s.22 of the Act, the application refers also to s.311. In this respect, I note that the application form identified the Registered and Licensed Clubs Award 2010 as the relevant industrial instrument applicable to the employees’ employment. However, Part 2-8 of the Act, in which s.311 is contained, provides for the transfer of enterprise agreements, certain types of modern awards and certain other instruments if there is a transfer of business from one national system employer to another national system employer. It relevantly deals with the circumstances in which enterprise agreements, certain types of modern awards and certain other instruments that covered the old employer and the transferring employees cover the new employer, the transferring employees and certain non-transferring employees and organisations; and also provides for making orders in relation to a transfer of business. Section 311 reads as follows, once again with my underlining to highlight the particular provisions to which reference was made by TIGR in its application:
“311 When does a transfer of business occur
Meanings of transfer of business, old employer, new employer and transferring work
(1) There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:
(a) the employment of an employee of the old employer has terminated;
(b) within 3 months after the termination, the employee becomes employed by the new employer;
(c) the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;
(d) there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).
Meaning of transferring employee
(2) An employee in relation to whom the requirements in paragraphs (1)(a), (b) and (c) are satisfied is a transferring employee in relation to the transfer of business.
Transfer of assets from old employer to new employer
(3) There is a connection between the old employer and the new employer if, in accordance with an arrangement between:
(a) the old employer or an associated entity of the old employer; and
(b) the new employer or an associated entity of the new employer;
the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):
(c) that the old employer, or the associated entity of the old employer, owned or had the beneficial use of; and
(d) that relate to, or are used in connection with, the transferring work.
Old employer outsources work to new employer
(4) There is a connection between the old employer and the new employer if the transferring work is performed by one or more transferring employees, as employees of the new employer, because the old employer, or an associated entity of the old employer, has outsourced the transferring work to the new employer or an associated entity of the new employer.
New employer ceases to outsource work to old employer
(5) There is a connection between the old employer and the new employer if:
(a) the transferring work had been performed by one or more transferring employees, as employees of the old employer, because the new employer, or an associated entity of the new employer, had outsourced the transferring work to the old employer or an associated entity of the old employer; and
(b) the transferring work is performed by those transferring employees, as employees of the new employer, because the new employer, or the associated entity of the new employer, has ceased to outsource the work to the old employer or the associated entity of the old employer.
New employer is associated entity of old employer
(6) There is a connection between the old employer and the new employer if the new employer is an associated entity of the old employer when the transferring employee becomes employed by the new employer.”
[28] The basis for making an application pursuant to the particular sections of the Act cited in the application in the manner advanced by TIGR is not immediately apparent. The sections do not, either individually or read collectively, contain any reference to making an application to Fair Work Australia of the type advanced by TIGR in its application for relief from making redundancy payments, although proceedings traversing similar ground have been dealt with under different provisions of the Act (see, for example, Svitzer Australia Pty Ltd v Maritime Union of Australia[2011] FWAFB 7947). In this respect, it also may be noted that s.120(2) of the Act makes specific reference to the making of an application to Fair Work Australia concerning the reduction of redundancy payments in circumstances where an applicant employer contends it has obtained other acceptable employment for redundant employees or where it is contended there is an incapacity to pay redundancy payments.
[29] There was a paucity of evidence and submissions in support of the application advanced by TIGR. Moreover, few matters advanced by the AWU by way of evidence or submissions were addressed, let alone challenged, in TIGR’s evidence and submissions. On what little was advanced in the proceedings, TIGR and CCG are not associated entities and nor was there any evidence, for example, to indicate that TIGR had sold its operations to CCG; it seems, however, from the correspondence dated 25 May 2011 that TIGR and CCG entered into an agreement with CCG to manage the Tallwoods operations. In 2011, TIGR made payments to the employees with respect to accrued annual leave and long service leave entitlements and gave certain notice of termination of employment, albeit it appears that in some cases the period of notice of termination may have been inadequate. The employees’ accrued personal/carer’s leave entitlements arising from their periods of employment with TIGR have not been recognised by CCG, as evidenced by an email dated 22 February 2012 concerning one of the employee’s paid leave entitlements. The employees also receive wages and conditions in their employment with CCG that are inferior to those that applied in their employment with TIGR.
[30] The employees’ service-related entitlements arising from their former employment with TIGR were not carried-over into their employment with CCG and have not otherwise been recognised by CCG, except as to the position first advanced in correspondence dated 27 January 2012 that CCG will recognise the employees’ prior service with TIGR in the event of future redundancies by CCG.
[31] The AWU submitted that Fair Work Australia should be mindful about accepting submissions which “conflate” the interests of TIGR and CCG. In this respect, I note Mr Sewell submitted that one of the reasons he had structured the CCG correspondence dated 27 January 2012 in the way it reads is because he is representing Lisa Lin, the Managing Director of TIGR, as he had an “interest” in her financial success at the Tallwoods site - although Mr Sewall also otherwise referred to TIGR as his “client”. There was no evidence as to the nature of any such “interest” and, of course, TIGR is plainly entitled to have the representative of its choice in the proceedings - who in this case is the Managing Director/Chief Executive Officer of CCG, the company that has employed the employees since their terminations of employment by TIGR. Nonetheless, the sole or principal evidence that has been advanced by TIGR in support of its contentions concerning matters such as transfer of business and transfer of employment is the correspondence dated 27 January 2012 from Mr Sewell to the employees. As I have noted, that correspondence advised that CCG recognises the employees’ service with TIGR and it would make redundancy payments should redundancies with CCG eventuate in the future. The correspondence dated 27 January 2012 is not sufficient to establish TIGR’s case with respect to its contentions concerning transfer of employment and transfer of business. In any event, matters such as the evidence as to payments made to the employees by TIGR in 2011 and the evidence as to the lack of recognition concerning personal/carer’s leave militate against accepting TIGR’s submissions as to transfer of business and transfer of employment such as would disentitle the employees to redundancy payments from TIGR.
[32] Assuming, but without so concluding, that there is a properly-based application before Fair Work Australia which could result in the type of relief sought by TIGR, I have not been satisfied a case has been established by TIGR to grant any such relief even if I were empowered to do so. If I had considered there was, in a general sense, substance to the application made by TIGR as to there having been relevant transfers and continuity as contemplated within the Act, I would have invited further submissions concerning whether the application itself was properly grounded. However, given my consideration of the matters that were advanced by TIGR and the AWU, it is not necessary to adopt that course because I have concluded the application should be dismissed.
COMMISSIONER
Appearances:
W Sewell, Managing Director/Chief Executive Officer - Club Care Golf Pty Ltd, for Tallwoods International Golf Resort Pty Ltd.
Z Angus, Australian Workers’ Union, for Ms Wright and Messrs C Crisp, A Gorton, P Wright and B Crittenden.
J Mendham - no appearance.
Hearing details:
2012.
Sydney:
March 23.
Final written submissions: 26 March 2012.
1 I did not make any directions that any such letter be provided in these terms to the employees, but did require service of the first application on employees named in that application.
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