T12168 and T12169
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Liquor, Hospitality and Miscellaneous Union - Tasmanian Branch and Adrian Gray & Associates (Cleaning) Pty Ltd ACN 005 452 988
Industrial dispute - alleged non payment of redundancy, annual leave and long service leave - Hobart College and Don College - Order issued REASONS FOR DECISION [1] On 12 July 2005, the Liquor, Hospitality and Miscellaneous Union - Tasmanian Branch (the union) applied to the President, pursuant to Section 29(1) of the Industrial Relations Act 1984 (the Act), for a hearing before a Commissioner in respect of two industrial disputes with Adrian Gray & Associates (Cleaning) Pty Ltd ACN 005 452 988 (the respondent) arising out of the alleged non payment of redundancy, annual leave and long service leave - Hobart College and Don College. [2] The matter was listed for hearing (Conciliation Conference) at the Commonwealth Law Courts, 39-41 Davey Street, Hobart, Tasmania on Tuesday, 2 August 2005 at 11.00 am; and hearing on Tuesday, 6 December 2005 at 10.30 am. [3] On both occasions Mr P Tullgren entered an appearance for the Liquor, Hospitality and Miscellaneous Union - Tasmanian Branch and Mr A Gray for Adrian Gray & Associates (Cleaning) Pty Ltd ACN 005 452 988. [4] On or around the 17 June 2005, the respondent formally informed the employees, by way of letter or by written inclusion on their wage slips, of the loss of the cleaning contract for both the Don and Hobart Colleges. The loss of contract for some resulted in their employment being terminated. [5] On 21 June 2005, the union, on behalf of displaced employees, wrote to the respondent asking it to confirm its agreement to pay entitlements to those who were affected by the contract loss. In that correspondence the respondent was also requested to provide specific details of the payments that could be expected by each individual in question. No response was forthcoming. As a result, the union applied to this Commission for the matter to be heard. The Commission convened a hearing (conciliation conference) on 2 August 2005. As an outcome of the conciliation conference, both parties agreed to exchange pertinent information relating to the dispute. [6] The information to be provided by the respondent was to include proof of payment of outstanding superannuation, proof of partial payments of long service leave already made and, a record of the annual leave already taken by the employees. The union undertook to provide an analysis of its claim and all other pertinent information. [7] The union attested it did not receive any of the required information from the respondent. The union applied to this Commission on the 19 September 2005 for Directions to the parties with reference to disclosure of pertinent information. Pursuant to s21[2][n] of the Act the Commission issued Directions on the 20 September 2005. The directions clearly evinced the information to be exchanged:
[8] The union provided the respondent with the required information by way of letter around 25 October 2005. The respondent failed to comply with the Directions of this Commission. The union further asserted, it corresponded with the respondent, by way of letter around the 7 November 2005, seeking compliance with the Commission's Directions. Again there was no response and, as a consequence, a hearing was set down for the 6 December 2005. [9] Those employees of the respondent represented by the union are listed below: Anderson, Kaye [10] Witness for the union: Ms Miranda Alexis Jamieson. BACKGROUND [11] There was no dispute the named employees ceased to be employed by the respondent at the two colleges on the 30 June 2005. An excerpt from a letter written to the employees, at PN.10 of transcript "Unfortunately as we were unsuccessful in retaining the contracts ... I must terminate your services at the respective colleges." [12] The union asserted the named employees were due full payment of all accrued entitlements, as well as some form of redundancy payment to compensate for loss of non-transferable entitlements, including long service leave. The union cited a number of authorities in support of the claim. [13] As a result of the failure of the respondent to provide information to the union, or to comply with the Commission's Directions, the union, through Ms Jamieson in evidence, confirmed all the data used to calculate the alleged amounts owed to the employees came from the employees themselves. [14] At the initial conciliation conference on the 2 August 2005, the union provided to the respondent a detailed breakdown of the claim (Exhibit A.4). At that same conciliation conference the respondent submitted an untitled paper, asserting it indicated leave, leave loading and long service leave payments for staff already paid. The data was unqualified and could not be verified. It showed three different dates of issue further reducing its value as reliable evidence. [15] The respondent argued there was no requirement to pay redundancy in the Tasmanian Cleaning and Property Services Award (the award). The union accepted the wording of the award, but argued redundancy in some form was due and cited numerous precedents both in this state and nationally of redundancy payments, both complete and partial being paid. [16] The union asserted, pro rata long service leave should be paid to the named employees as part of their severance pay. [17] The respondent asserted all outstanding long service leave payments had been paid to all employees in July 2003. It further attested, it was prepared to pay out that proportion of long service leave accrued from 31 July 2003 to 30 June 2005, which covered the period of the respondent's involvement. The respondent argued those employees with less than seven years' service were not entitled to any long service leave payments. No evidence was presented to verify the respondent's claim of alleged long service leave payments. [18] The union argued any employee service towards long service leave should be considered as non-transferable accruals and be compensated for. [19] The union also asserted the respondent made no attempt to assist the employees to find other work. The respondent attested the tender document for the work at the colleges stipulated the successful tenderer, where practicable, had to engage the current workforce. It provided no proof of this. [20] The union asserted, the employees were disadvantaged by only receiving minimal notice of the loss of their jobs. The respondent asserted all employees were aware of the impending re-tendering process in April or early May 2005, and therefore had general notice of the possibility of losing employment. It also asserted the employees enjoyed an extra month's employment in June 2005, beyond the end of the contract ceasing at the end of May, effectively a further month's notice. [21] The respondent challenged the accuracy of a number of aspects of the evidence given by Ms Jamieson, mainly to do with service, long service leave entitlements, sick leave entitlements and employment status. [22] At the initial conciliation conference, held on 2 August 2005, the respondent asserted the following, at PN.100 of transcript, with regard to employees:
[23] The union did not challenge the above assertions put by the respondent. [24] , The respondent also attested Ms Mullett had 14 years' service, not 18 as asserted by the union. No evidence was provided in support of the respondent's claim. Indeed, Exhibit R.1 denotes Ms Mullett's engagement as 7 May 1994, some 11 years and 1 month before termination. Mr Gray, at PN.317 of transcript, asserted she had 14 years. All quite contradictory. [25] The union asserted the named employees had not been credited with superannuation from October 2004 through to their termination in June 2005. The respondent claimed it had paid the required amount to the Australian Tax Office and had been subsequently fined for late payment. The union refuted the respondent's claim citing an investigation it had carried out at the Australian Taxation Office showed that no payment had been made. AUTHORITIES [26] The following authorities were referred to by Mr Tullgren, for the union: · Government Cleaning Service (Privatisation) Award (No. 2) (Schmidt J), Industrial Relations Commission of New South Wales 55 IR 199. · T125 of 1985, Tasmanian Industrial Commission, Tasmanian Trades and Labor Council, Retail Trades Award. · T6674-76 of 1996 and T6691 of 1997, Australian Liquor, Hospitality and Miscellaneous Workers Union - Tasmanian Branch v Fosseys (Australia) Pty Ltd Westwood P, 18 July 1977. · Briginshaw v Briginshaw and Another [1938] HCA 34; (1938) 60 CLR 336 (30 June 1938), High Court of Australia. · Proceedings Under the Coal Industry Act 1946-1957, Coal Industry Tribunal, Industrial Information Bulletin, 1160, Vol 16. · Termination, Change and Redundancy Case [Australian Conciliation and Arbitration Commission], Moore, Maddern and Brown, 2 August 1984. · The Queen v The Industrial Commission of South Australia; Ex Parte Adelaide Milk Supply Co-operative Limited and others, Bray, Bright and Mitchell, Supreme Court 1977. · Qantas Airways v Gubbins and others, Court of Appeal, Gleeson, Kirby and Handley, Supreme Court, 1992. · T8170 and T8171 of 1998, Tasmanian Industrial Commission, Corrigan v Kelair Pumps Australia Pty Ltd ACN 001 308 381, Appeals - Westwood, Watling and Leary, 3 November 1999 FINDINGS [27] The union argued this case on the basis of information gleaned from those named employees it represented. [28] The Commission, by way of Directions, and the union, by way of letters and telephone calls, made efforts to have the respondent supply verifiable information from which a position could be argued. The respondent failed to comply with the Commission's Directions or respond to the union's requests for information. The progress of this application was severely hampered by the respondent's abject failure to supply any verifiable data. [29] Mr Gray, in reaction to Directions issued by the Commission, stated in writing on or about the 28 October 2005: "I shall attend on Wed 2/11/05 with all my paperwork". He failed to table any verifiable documentation. [30] Provided at the first hearing (conciliation conference), the respondent had in its possession the union's breakdown of claims. All aspects of the claims were put before it at that time. As the transcript of the initial conciliation conference shows, the Commission asked the respondent if it could produce proof of assertions it made in rebuttal of each of the union's claims. At each question Mr Gray, for the respondent, replied in the affirmative, that he could produce documentary evidence to support his counter assertions. The respondent could have been in no doubt what was required of it to argue the case. [31] It has been left to the Commission to educe findings from the best evidence available. [32] I turn now to the issue of this Commission's power to award severance payments. It is a matter of fact that no redundancy clause appears in the Cleaning and property Services Award. [33] The Act, however, is quite clear as to the powers of this Commission. Section 29.(1) states:
[34] The definition of "industrial dispute":
[35] The definition of "industrial matter:
[36] In T125 of 1985, an application by the Tasmanian Trades and Labor Council, to vary the Retail Trades Award, the matter of incorporating severance payments in awards was an issue. The Commission, at page 36 of its decision states:
[37] It is a well-established fact that this Commission has awarded redundancy payments to employees on a case-by-case basis. Decision T4207 and T4223 of 1994, Shop, Distributive and Allied Employees Association, Tasmanian Branch v Fosseys, well illustrates this practice. [38] I find this Commission has the power to award redundancy payments. [39] On the issue of qualification for long service leave, the Long Service Leave Act 1976 (the LSL Act) clearly outlines the conditions required to be eligible. [40] Section 8.(2) states:
[41] And further at 8.(2)(b):
[42] At s.8.(3)(d) it states that subsection (2)(b) applies to:
[43] I find that those employees who have seven or more years of service at their place of employment are entitled to long service leave, or pro rata long service leave commensurate with their years of service, in accordance with s.5(4)(a) and (b). I do not accept the respondent's assertion that partial long service leave payments to named employees had been made. No plausible evidence was tendered to substantiate the assertion, even though there is a reference to such payments in Exhibit A.2. [44] There is no allowance for those employees who have less than seven years of service to access any long service leave payment. It has been established, however, where there is deemed transmission of business, as indeed in this case, those employees with less than seven years of service who continue on with the new employer, enjoy continuity of service. [45] Section 5(4) of the LSL Act:
[46] In accordance with the LSL Act, an employee's service is not forfeited provided they take up employment with the new employer within two calendar months. [47] Section 2(2) of the LSL Act:
[48] I find those employees whose employment continued with the new employer at the same place of business and who have less than seven years of service are not entitled to have loss of long service leave entitlements factored in any severance pay consideration as stated in the LSL Act, this service is deem unbroken for LSL purposes. [49] I turn now to consideration of the loss of accrued sick leave in any severance payment consideration. The award is clear with respect to sick leave credits: at Clause 28 - Sick Leave, subclause (iv), it states:
[50] Prima facie sick leave entitlements are not paid out at the cessation of employment. Sick leave is just that, leave to be used as required to cater for sickness. I accept however, that in a redundancy situation a tangible benefit is lost and consideration should be given to it. However, I do not accept accumulated sick leave per se should be cashed out. [51] I now consider the notice period given to the employees. By nature of the contract cleaning business that depends on winning contracts, there is a limited amount of notice an employer can afford its employees. In the instant case, it was not challenged that the employees were aware of the impending tender process. It can be reasonably assumed the employees were aware of the consequence of the respondent losing the contract. The outcome of the process was beyond the respondent's influence. It is understood the respondent notified the employees on becoming aware of the contract loss. [52] I find the respondent had little leeway in making the employees aware of the potential of losing their employment more than it did. I do not take this element of the claim into consideration when evaluating the quantum of any redundancy payment. [53] Although unsubstantiated, I accept the respondent's assertion that a consideration for the tenderers for the work lost was to engage the incumbent workforce where practicable. This requirement has been witnessed in tenders prepared by other state government entities. The respondent's unchallenged assertion of placement of various employees in alternative positions is noted. [54] Four of the named employees have asserted they are owed annual leave. The respondent failed to demonstrate in any verifiable way annual leave had been paid. In the absence of any other evidence I accept the amount claimed by the union to be that owed to the employees for annual leave. [55] The respondent failed to substantiate its assertion that all outstanding superannuation payments had been made. I find the named employees, where applicable, are owed superannuation payments from October 2004 until 30 June 2005. [56] I now address the issue of partial redundancy. The union argued strongly those who continued working, either with the new contractor at the same workplace or in a different capacity with the respondent, are entitled to partial redundancy in recompense for non-transferable accruals such as sick leave. It cited the case of Government Cleaning Service (Privatisation) Award (No. 2) (Schmidt J), Industrial Relations Commission of New South Wales 55 IR 199. It also cited the local case of T6674-76 of 1996 and T6691 of 1997, Australian Liquor, Hospitality and Miscellaneous Workers Union - Tasmanian Branch v Fosseys (Australia) Pty Ltd Westwood P, 18 July 1977. [57] It is my view the two situations depicted in the authorities differ considerably from the instant case. Both cases referred to a transition from a long term, stable and, for all intents and purposes, permanent employment situation into a completely different scenario. The employees rightly had expectations of ongoing employment. The employment environment was predictable and when it changed it did so after months of open activity. In the instant application, the business was dependent on winning and holding contracts that had a finite term, at which time the employment future was out of the hands of the employer. The employees would have been aware of their ongoing employment being dependent on the employer winning contracts. Unfortunately this is the business environment within which this industry operates. [58] For those employees who did gain immediate employment with the new employer, with or without the assistance of the respondent, any significant loss was mitigated. [59] I now consider the position of each of the named employees. [60] Kaye Anderson, 14 years' service. There is no evidence she was re-employed by the new business. I find she is entitled to: redundancy payment, accrued long service leave and superannuation payments from October 2004 until June 2005. [61] Herman Anderson, 5 years' service. There is no evidence he was re-employed by the new business. I find he is entitled to: redundancy payment and superannuation payments from October 2004 until June 2005. He is not entitled to long service leave payment. [62] Christine Webb, 4 years' service. Unchallenged assertion she was offered re-employment at her place of work. I find she is not entitled to a redundancy payment. Her service will be deemed to be unbroken with the new employer. She is not entitled to long service leave payment. I find she is entitled to: superannuation payments from October 2004 until June 2005 [63] Rhonda Welsh, 15 years' service. Unchallenged assertion she was offered re-employment at her place of work. I find she is not entitled to a redundancy payment. I find she is entitled to: accrued long service leave and superannuation payments from October 2004 until June 2005. [64] Joyce Goss, 10 years' service. Unchallenged assertion she was offered alternative employment. Although unspecified, I understand the re-employment to be at the same place of business where she had worked previously. I find she is not entitled to a redundancy payment. I find she is entitled to: accrued long service leave and superannuation payments from October 2004 until June 2005. [65] Narelle Cooper 10 months' service. I find she is not entitled to redundancy or accrued long service leave. I find she is entitled to: superannuation payments from October 2004 until June 2005. [66] Grace Mullett, 18 years' service. Respondent argued her service was 14 years: unsubstantiated. There is no evidence she was re-employed by the new business. I find she is entitled to: redundancy payment, accrued long service leave and superannuation payments from October 2004 until June 2005. [67] Linda Despard, 9 years' service. Unchallenged assertion she retained her employment at her place of work. I find she is not entitled to redundancy payment. I find she is entitled to: accrued long service leave and superannuation payments from October 2004 until June 2005. I find she is also entitled to outstanding holiday pay. [68] Diane Burton, 4 months' service. I find she is not entitled to redundancy or accrued long service leave. I find she is entitled to: superannuation payments from her date of engagement until June 2005. [69] Joanne Prestage, 1 year of service. Unchallenged assertion she was offered re-employment at her place of work. I find she is not entitled to redundancy payment. Her service will be deemed to be unbroken; therefore no consideration is given to long service leave payment. I find she is entitled to: superannuation payments from October 2004 until June 2005. I also find she is entitled to outstanding holiday pay. [70] Betty Hope, 2 years' service. Unchallenged assertion she was offered re-employment at her place of work. I find she is not entitled to redundancy payment. Her service will be deemed to be unbroken with the new employer; therefore no consideration is given to long service leave payment. I find she is entitled to: superannuation payments from October 2004 until June 2005. I also find she is entitled to outstanding holiday pay. [71] Pamela Geltner, 3 years' service. Unchallenged assertion she was offered re-employment at her place of work. I find she is not entitled to redundancy payment. Her service will be deemed to be unbroken with the new employer; therefore no consideration is given to long service leave payment. I find she is entitled to: superannuation payments from October 2004 until June 2005. I also find she is entitled to outstanding holiday pay. [72] For those named employees who are entitled to redundancy, I find the payment of two weeks wages per year of service to be appropriate. ORDER I hereby Order, pursuant to s.31 of the Industrial Relations Act 1984, that Adrian Gray & Associates (Cleaning) Pty Ltd ACN 005 452 988 pay to: Kaye Anderson the sum of $5266.80 for redundancy; $326.04 for Long Service Leave accrual; and $660.23 in outstanding superannuation payments. Herman Anderson the sum of $1881.00 for redundancy; and $660.23 for outstanding superannuation payments. Christine Webb the sum of $806.95 for outstanding superannuation payments. Rhonda Welsh the sum of $806.95 for outstanding superannuation payments. Joyce Goss the sum of $398.40 for long service leave accrual and the sum of $733.59 for outstanding superannuation payments. Narelle Cooper the sum of $586.87 for outstanding superannuation payments. Grace Mullett the sum of $7524.00 for redundancy; $362.27 for Long Service Leave accrual; and $733.59 for outstanding superannuation payments. Linda Despard the sum of $1956.24 for long service leave accrual and the sum of $880.31 for outstanding superannuation payments and $242.44 for accrued annual leave. Diane Burton the sum of $391.25 for outstanding superannuation payments. Joanne Prestage the sum of $880.31 for outstanding superannuation payments and $240.13 for accrued annual leave. Betty Hope the sum of $1370.46 for outstanding superannuation payments and $1191.13 for accrued annual leave. Pamela Geltner the sum of $880.31 for outstanding superannuation payments and $356.64 for accrued annual leave. The above amounts to be paid to each of the named employees by the close of business on Wednesday, 15 February 2006.
James P McAlpine Appearances: Date and Place of Hearing:
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