FEDERAL COURT OF AUSTRALIA

FBIS International Protective Services (Aust) Pty Ltd v Maritime Union of Australia [2015] FCAFC 90

THE COURT ORDERS THAT:

1.    The application be dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

The Court

1    The applicant in this proceeding, FBIS International Protective Services (Aust) Pty Ltd, seeks mandamus and certiorari in relation to a decision of a Full Bench of the second respondent, the Fair Work Commission (“the Commission”), by which it upheld an appeal from an earlier order made by a Commissioner under s 120 of the Fair Work Act 2009 (Cth) (“the FW Act”). That decision was made on 21 October 2014. The issue before the Commission, both at first instance and before the Full Bench, was whether the applicant had obtained other acceptable employment for employees whom it had retrenched in consequence of the loss of a contract. The Full Bench held not.

2    A statutory right to redundancy pay, in amounts calculated conformably with a table of entitlements, is given by s 119 of the FW Act. The operation of s 119 is, however, affected by s 120, which provides as follows:

(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.

It is subpara (i) of s 120(1)(b), and specifically the meaning of “obtains” in this provision, which is controversial in this proceeding. The applicant submits that the Full Bench was wrong in the meaning which it gave to this word and that, as a result, it was likewise wrong in holding that the condition specified in subs (1) – on any view a jurisdictional fact apropos the determination which the Commission was empowered to make under subs (2) – was not satisfied in the circumstances of the case.

3    The facts of the case set out below are taken from the decision of the Full Bench.

4    Until 31 October 2013, the applicant held the contract with Asciano Executive Services Pty Ltd (“Asciano”) for the provision of security services in several locations within Australia, principally at stevedoring facilities. It was unsuccessful in its tender to secure a further contract beyond that time. A different contractor, ACG National Pty Ltd (“ACG”) was successful in securing the contract, effective from 1 November 2013. Of those who had been employed by the applicant, 49 employees (“the 49 employees”) were offered, and accepted, employment with ACG. For 48 of them, their employment with ACG was in the same position, and on the same terms and conditions, as had applied to them in the employ of the applicant. The other one was offered, and accepted, employment with ACG in a lesser position than that which she had occupied in the employ of the applicant. In all cases, ACG did not recognise these employees’ previous service with the applicant.

5    On the findings of the Commissioner at first instance, the applicant had taken a number of steps to facilitate the 49 employees securing employment with ACG in anticipation of it replacing the applicant as contractor to Asciano, namely, having discussions with representatives of ACG about the 49 employees’ future engagement by ACG, providing ACG with the contact details of the employees who agreed to allow that to be done, providing ACG with (as the Full Bench put it) “information about the arrangements within” the enterprise agreement by which the 49 employees were covered in the employ of the applicant and providing advice to ACG that it (the applicant) had paid the 49 employees their wages up to and including 31 October 2013, together with all accrued leave entitlements.

6    In its reasons of 21 October 2014, the Full Bench itself set out, in detail, the steps that had been taken by the applicant in this regard. It referred to the evidence of the applicant in the following terms:

Mr Christmas’ witness statement discloses that the action taken by [the applicant] to obtain employment with ACG for its soon to be redundant employees was to provide a list of employees and their contact details to ACG in respect of those employees who gave permission to do so, with the two main communications in evidence of employee details occurring on 9 October 2013 in respect of 32 of the employees subject to the orders made and 21 October 2013 in respect of an additional 15 employees subject to the orders made. Two employees subject to the orders – Mr S Clancy and Mr N Giffen – were not identified in either of the emails.

According to the Full Bench, a further action undertaken by the applicant was to request ACG to make arrangements to meet those of its employees who were about to be retrenched through the applicant, so that the applicant might manage its obligations under its enterprise agreement. The Full Bench noted that this request was not acceded to by ACG, which made its own arrangements to contact those employees. The Full Bench said:

Whilst [the applicant] 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.

The Full Bench added that the only other actions taken by the applicant were its unsuccessful attempts 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 applicant, and the provision of a copy of the enterprise agreement, which ACG already had from another source.

7    In the course of dealing with this evidence, the Full Bench noted that there were four of the applicant’s employees who had been interviewed by ACG, but were not offered positions.

8    On these facts, the question for the Full Bench was whether the Commissioner at first instance had been in error to conclude that the applicant had obtained acceptable alternative employment for the 49 employees within the meaning of s 120(1)(b)(i) of the FW Act. It held that he had been. In reaching an understanding of the meaning of “obtains”, the Full Bench referred to earlier decided cases, both in this court and in the Commission’s predecessor tribunals, under analogous provisions. Those provisions were not, however, statutory ones, and the decision-making context in which the cases arose was somewhat different from that which now exists under s 120 of the FW Act. Before referring to the cases, it is convenient to consider some of that context.

9    The origins of the provision now under consideration are to be found in the decision of the Full Bench of the Australian Conciliation and Arbitration Commission in the Termination, Change and Redundancy Case (1984) 8 IR 34. It was then that it was decided to introduce a general severance pay entitlement under federal awards for employees whose employment was terminated on account of redundancy. An argument had been advanced on behalf of employers that such an entitlement would not be appropriate where the employee concerned had secured alternative employment. Of this argument, that Commission said (8 IR at 75):

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. However, we would make it clear that we do not envisage severance payments being made in cases of succession, assignment or transmission of a business.

10    Subsequently, the Full Bench in the Termination, Change and Redundancy Case sat again to consider the terms of an amendment to the Metal Industry Award 1984 that should be made to reflect its decision: (1984) 9 IR 115. After hearing further argument, the Full Bench ruled that the following provision should be included in the amendment to that award (9 IR at 135):

…    An employer, in a particular redundancy case, may make application to the Commission to have the general severance pay prescription varied if he/she obtains acceptable alternative employment for an employee.

This provision did not prescribe an objective state of affairs the existence of which would disentitle an employee from his or her severance pay under the award as amended. Rather, it stated a ground upon which the Australian Conciliation and Arbitration Commission might vary the entitling provision in a particular case. It would have been for that Commission to decide whether the employer had obtained acceptable alternative employment, and if so, using its industrial judgment, what should be done about it. What was involved in the notion of “obtains” would, in effect, have been rolled up into the merits of the case.

11    A provision in terms similar to those referred to above came before a Full Bench of the Industrial Relations Commission in Re Clothing Trades Award 1982(1) (1990) 140 IR 123. In that matter, an employer had applied for relief from the operation of the standard severance pay provision upon the ground that it had taken steps to obtain acceptable alternative employment for employees whose jobs had become redundant. A single Commissioner had, it seems, taken the view that “the failure of the employees to accept the employment meant that necessarily the alternative employment was unacceptable” (140 IR at 126). The Full Bench held that this was in error. It proceeded to deal with the issues arising itself. It considered what was meant both by “obtains” and by “acceptable alternative employment”. In the present case, we are concerned only with the first of these terms.

12    In Clothing Trades, the Full Bench said (140 IR at 127-128):

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 (3rd ed, 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 & Cheese Etc Manufacturing Case (1980) 47 SAIR (Pt 1) 939 Print 1.97/1990:

… 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 SA Milk Processing & 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.

(Footnotes omitted)

13    Notwithstanding this treatment of what was meant by “obtains”, the outcome in Clothing Trades itself turned not upon whether alternative employment which had been accepted by a particular employee had been obtained by his or her former employer. This was, it seems, treated as a given. The case was concerned only with “the 18 employees who did not take up any offer available to them from the other employers” (140 IR at 125). The outcome turned on whether the availability of offers from other employers had been clearly communicated to each affected employee and, if so, whether the employee concerned had been reasonably justified in rejecting it. In the result, the outcome was not the same for each of these 18 individuals.

14    An analogous, although not identical, provision came before the court in Allman v Teletech International Pty Ltd (2008) 178 IR 415. The employees whose jobs became redundant in the facts of that case were parties to Australian Workplace Agreements made under the Workplace Relations Act 1996 (Cth). The severance pay provisions in those agreements contained provisos that they would not apply where the employer was “able to arrange alternative employment with another employer that is comparable in wages, terms and conditions of current employment” (178 IR at 417 [6]). As Marshall J pointed out (178 IR at 417 [9]), “[r]ather than providing that [the employer] must approach an industrial tribunal to be exempted from paying severance pay, the relevant AWAs provide inbuilt exemptions to the severance pay clause ….”

15    Having referred to Clothing Trades, Marshall J said (178 IR at 418 [14]):

In the relevant AWAs of the employee applicants, the applicable sub-clause refers to the employer being “able to arrange alternative employment.” There is no material difference between obtaining alternative employment and being able to arrange it. If an employer who is about to make an employee redundant said to the employee, “I have obtained alternative employment for you” or said “I have been able to arrange alternative employment for you”, the employee would understand the employer on each occasion to be saying that it has found another job for the employee. The employee may not choose to take up the job, but it must be one that is there for the taking if the employee chooses to take it.

16    His Honour then turned to the facts of the case before him, and said (where the previous employer was “Teletech” and the new employer was “Telstra”) (178 IR at 418-419 [15]):

Teletech assisted its soon to be redundant employees to apply for jobs with Telstra. Teletech had active involvement in the transition of the employee applicants from work with Teletech to work with Telstra. Immediately after Telstra advised Teletech that it would not renew its contract with Teletech for the provision of services at Moe, representatives of each company met to discuss the possible employment of the call centre employees by Telstra. Teletech secured a commitment from Telstra that Telstra would give all Teletech’s employees at the Moe call centre the opportunity to apply for employment with Telstra and be available to be recruited by Telstra. Teletech was not, however, a strong moving force towards the creation of the available opportunity. The available opportunity arose because Telstra was to perform functions formerly performed for it by Teletech. Telstra required staff. It made sense for it to approach Teletech staff. Teletech did not secure the offer of a job for Teletech staff with Telstra. As counsel for the applicants submitted, Teletech arranged an opportunity for the employee applicants to participate in a recruitment process undertaken by Telstra.

His Honour’s reference to the previous employer not having been “a strong moving force towards the creation of the available opportunity” was, of course, based upon what the Full Bench had said in Clothing Trades.

17    Later in his reasons, Marshall J said (178 IR at 419 [18]) that “[a]rranging alternative employment means bringing about that employment should the employee choose to accept it.”

18    Returning to Clothing Trades, the actual outcome in that case demonstrated that there could be cases in which an exemption was granted from the operation of the standard award provision notwithstanding that an alternative employment relationship did not come into existence at all. In its reasons, the Full Bench characterised an outcome of this kind as implying a particular connotation of the word “obtains”. However, we would regard such an outcome as an instance of the reality that any new state of employment could only come about by the agreement of the new employer and the employee concerned. In this respect, we agree with Marshall J, in Allman, that to obtain employment for an individual means to procure another employer to make an offer of employment, which the individual may or may not accept as a matter of his or her choice. If the employment is not accepted, the question whether that employment was “acceptable” will then arise.

19    With respect to the Full Bench in Clothing Trades, we consider it to be a distraction to introduce the issue of whether the previous employer was “a strong moving force towards the creation of the available opportunity”. To proceed in that way would be to introduce unnecessary complications into the connotation of an ordinary word in the English language. If someone comes into possession of something, either literally in the case of a chattel or figuratively in the case of a new legal relationship or other incorporeal benefit, we cannot understand how the question whether he or she “obtained” that thing would be answered differently depending on whether he or she, or someone else on his or her behalf, had been a “strong moving force” in the events which led to that possession.

20    With respect to the Full Bench’s reliance on the Shorter Oxford, the present might be one of those rare occasions on which it is useful to refer to the corresponding full entry in the Oxford English Dictionary itself. Relevantly, that reads:

To come into the possession or enjoyment of (something) by one’s own effort, or by request; to procure or gain, as the result of purpose and effort; hence, generally, to acquire, get.

We would not regard the references to “effort”, and to “purpose and effort” in this meaning as implying the existence of some kind, much less a strong kind, of “moving force” in bringing about the new state of possession referred to. They imply, rather, that the possession must be the result of the conscious, intended, acts of the person concerned, as distinct from, for example, coming into possession of something by gift or inheritance. Moreover, we cannot perceive any reason why what is described as the “general” connotation of the word – “to acquire, get” – should not be regarded as a perfect fit for the purposes sought to be achieved by the relevant provision in the standard award clause before this provision became the subject of legislation.

21    It did become the subject of legislation with the enactment of the FW Act in 2009. In the way that s 120 is drafted, the matters set out in subs (1) are, as the Full Bench in the present case recognised, jurisdictional facts for the exercise of the discretion arising under subs (2). As such, whether the applicant obtained acceptable alternative employment is now directly justiciable in this court in an application of the present kind. It is alleged that the Full Bench wrongly declined jurisdiction under s 120. If that allegation were a good one, mandamus would be the appropriate remedy. In our view, however, the allegation should not be accepted.

22    The 49 employees did obtain employment with ACG. It seems to be uncontentious that this employment was acceptable. But, on the facts referred to earlier in these reasons, we would not find that the applicant obtained that employment for those employees. It may have facilitated the opportunity for them to apply for employment with ACG, but what it obtained for them was something less than offers of employment which they could accept or decline as a matter of choice.

23    It was submitted on behalf of the applicant that, if it were not held that it had done enough to “obtain” the employment of the 49 employees with ACG, employers could, in effect, forget about having recourse to s 120 in any “change of contractor” situation. This submission should not be accepted. While the resolution of any future disputes in this area cannot be anticipated, it is clear from the facts of the present case as set out by the Full Bench that there was more that the applicant might have done to advance the prospects of any application which it proposed to make under the section. Likewise, any future outgoing contractor would, in our view, see ample scope for the operation of the section notwithstanding the unsuccessful outcome of the applicant’s own case before the Full Bench. The applicant failed because of the limited nature of what it had been able to obtain for the 49 employees, not because the bar set by s 120 was too high for the section to be of practical utility in a change of contractor situation.

24    For the above reasons, we would dismiss the application.

Associate:

Dated:    26 June 2015