TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act1984
s.29 application for the hearing of an industrial dispute

Federation of Industrial, Manufacturing and
Engineering Employees, Tasmania Branch
(T.4044 of 1992)

and

Nipper Cleaning Service Pty Ltd

Termination of employment - redundancy payments

REASONS FOR DECISION

This was an application for the hearing of a dispute made under Section 29 of the Act by the Federation of Industrial, Manufacturing and Engineering Employees, Tasmania Branch (the Union). The Union claimed redundancy payments on behalf of some of its members previously employed as cleaners by Nipper Cleaning Service Pty Ltd (the Company) at the Comalco aluminium works at Bell Bay.

The Company terminated the employment of the cleaners when it lost the cleaning contract for the Comalco works. Some other cleaners had been re-employed by the successful tenderer, Berkley Challenge Pty Ltd.

Historically some of the cleaners who had their employment terminated had been employed continuously as cleaners at Comalco by a succession of companies under a succession of contracts.

During the hearings on this application the Company, which operated out of Queensland, was represented by a local agent.

The Tasmanian Confederation of Industries (the Confederation) sought and was granted leave to intervene in proceedings on the grounds that redundancy payments were unusual or unknown in the contract cleaning industry and consequently any decision in this matter could well affect other contract cleaning companies.

Later, in the course of the proceedings, all parties reached agreement as to the precedence any decision arising out of this application ought to have: the Commission accepted the following statement signed on behalf of each of the parties.

"The parties are agreed that arguments advanced in this case are put with respect to the unique circumstances that exist between Nipper Cleaning Services (Employer) and its employees being members of FIMEE and accordingly any outcome in these proceedings is not intended by the parties to establish any precedent or standard in the contract cleaning industry."

At this juncture the Confederation left the proceedings.

The Commission, as constituted in this matter, acknowledged the statement as quite reasonable in the circumstances.

The Union brought as a witness one of the cleaners involved who had been employed at Comalco for almost seventeen years, ten of which were as an employee of the Company. Her employment had been terminated in October 1992.

Amongst a number of other items the witness gave evidence that:

• She was aware that the Company was a contract cleaner at Comalco and that the loss of the contract by the Company could well mean loss of work for her.

• From her experience her employment just carried on from contractor to contractor as contracts were made over the years: she had been employed by three different contractors during her period of employment as a cleaner at Comalco. She said there had been no word passed as to employment ending and resuming at the changeover of contracts.

• When the Company took over originally long service leave and sick leave entitlements were carried over.

The Union submitted that this redundancy claim was different in that:

• When the Company first took over the cleaning contract Comalco had agreed to pay the cost of carrying over the annual leave and sick leave entitlements accrued during the life of the previous contract by those employees transferring to the Company's employment and continuing to do the same work.

• The contract was open-ended in nature, by mutual agreement, and therefore the ongoing employment was continuous.

• The agreement between Comalco and the Union to carry over certain over-award payments at the time of the original contract takeover by the Company also reflected the continuing nature of the employment from contract to contract.

• The Company's management policies, as reflected in exhibit FIMEE 8, were aligned with those of Comalco and this further supported the submission that the nature of the employment of the cleaners was on-going.

• The matter should be tested on its merits on the basis of the Commission's "test-case" Redundancy and Technological Change decision in 19851.

In response to the Union's submissions the Company argued that proper notice of termination had been given to the employees concerned. The nature of the employment was short term because of the break from contract to contract and hence it ought not to be regarded as continuous, the Company submitted.

The Company also pointed out that the major union involved in the contract cleaning industry, the Australia Liquor, Hospitality and Miscellaneous Workers Union - Tasmanian Branch (the ALHMWU), had not appeared or sought to intervene in this dispute which indicated that it accepted that redundancy payments were not appropriate in this case.

As to the carrying over of some accrued benefits referred to by the Union, the Company said that was true originally, but after 1988 Comalco's connection with the employment of the cleaners had been withdrawn completely and the Company had a free hand as to whom it could employ or not employ during the term of any given contract.

In reply the Union submitted that the non-participation of the ALHMWU was irrelevant, the case rested on the facts and the merits. The Union also submitted that the matter of the two weeks notice was irrelevant.

I am satisfied that the employment of the cleaners at Comalco by the Company, or any other similar or replacement company, ceased at the end of each contract and hence redundancy payments for cleaners employed continuously over a period of a number of contracts (whether with the Company or not) are not appropriate.

On the evidence before me, particularly that of the Union's witness, there was no doubt at any time as to the Company's status as a contract cleaner: it was the employer only so long as it held the relevant contract with Comalco for cleaning.

One of the key elements in the concept of redundancy is the expectation of continued, long-term employment that is dashed when employment is terminated: in the case of the Comalco cleaning contract such expectation was non-existent nor should it have been.

It is true that, for some earlier period, Comalco's involvement ensured that continued employment, but even that situation was subject to review at the time any new contract was negotiated. I do not accept that this factor changed the fixed-term contract nature of the employment concerned.

I therefore decline to order any redundancy payments as a result of this application.

P A Imlach
COMMISSIONER

Appearances:
T Frost with J Glisson for the Federation of Industrial, Manufacturing and Engineering Employees, Tasmania Branch.
D Collings for Nipper Cleaning Service Pty Ltd.
M Sertori with T Wilson for the Tasmanian Confederation of Industries.

Date and place of hearing:
1992.
Launceston:
December 14.

1 T.125 of 1985