IN THE TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984

This long service leave dispute was referred to the Commission by the Secretary for Labour (the Secretary) pursuant to Section 13(2) of the Long Service Leave Act 1976 (the Act).

The matter was then referred to me by the President of the Commission in accordance with Section 15(1)(e) of the Industrial Relations Act 1984.

The dispute arises consequential to the employer in this matter, Croucher Pty Ltd (Crouchers) declining to apply Section 2(2) of the Act thereby preventing the payment of pro rata long service leave to Mrs Marney when her employment ended with Crouchers in October 1987.

Section 2(2) of the Act is as follows -

"(2) Where an employee is employed in or about any place in the business of an employer and the employment of the employee with that employer is terminated, and, not later than the expiration of a period of 2 months from the date on which that employment was so terminated, the employee becomes employed in or about that place in the business of some other employer, the business of the employer by whom his employment has been terminated shall, for the purposes of this Act, be deemed to have been transmitted to the employer by whom he so becomes employed if the business in which he so becomes employed is of the same, or substantially the same, kind as the business in which he was employed in the employment that has terminated."

Underlining mine

Central to the dispute is whether or not Mrs Marney's prior employment with two other cleaning contractors could be recognised as accruing service for the purpose of long service leave on the basis that on each occasion there had been a deemed transmission of business.

The key factor in Mrs Marney's employment was that she was continuously employed to do cleaning work at Anglesea Barracks from July 1979 to the date of her termination by Crouchers in October 1987.

The precise employment details are as follows -

Whilst the above employment details are not in dispute Mr Abey, for Crouchers, contends that for the purposes of Section 2(2) of the Act "place in the business of some other employer" is the registered office of Crouchers, not the building, Anglesea Barracks, where Mrs Marney was continuously employed from July 1979.

On the other hand, Mr O'Brien, for Mrs Marney, advanced submissions to demonstrate that the employment of Mrs Marney at Anglesea Barracks satisfies the requirements of Section 2(2) insofar as the location of her employment was "in or about that place in the business of some other employer" on each occasion that the cleaning contract changed.

Mr O'Brien, supported by Mr Evans for the Secretary, submitted in essence that the place of business extends beyond the headquarters or the main office of a Cleaning Contractor to the actual location or place of work where the business of the contractor, i.e. cleaning is carried out. Therefore reading Section 2(2) in its entirety and as the employee was employed by subsequent employers in or about the place in the business of successive new employers, essentially conducting the same kind of business, deemed transmissions of business has occurred in accord with the Section in question.

From what the parties indicated in the proceedings the application of Section 2(2) to the particular circumstances in this dispute has not been determined previously.

Submission for the Secretary

In this matter the Secretary for Labour was represented by Mr Evans who in a helpful submission outlined the intent of Section 2(2). He referred the Commission to the "Second Reading Notes Long Service Leave Bill No 87 of 1960" delivered in the Legislative Council, which were said to encapsulate the reasons why the Act was amended to overcome the kind of problem identified in this case.

The Reading Notes state -

"It is sought to extend the definition `continuous employment' so that an employee who continues to be employed in or about any premises by successive employers will be entitled to such employment as a qualifying employment whether or not there is a transmission of business."

Underlining mine Transcript p15/16

Later the sub-section was further amended to delete the word "premises" and substitute "place" because "premises" was considered to be a restrictive description of what was intended.

This is confirmed in the Second Reading Speech made in support of the Long Service Leave Amendment Act No 61 of 1982, by the then Minister for Industrial Relations who said -

"The first of the proposed changes seeks to clarify the application of section 2 of the Act which provides for a worker to retain continuity of employment for long service leave purposes where his services are terminated and, within 2 months, he is employed in the same premises - and I emphasise "premises" - as previously and substantially the same kind of business.

In practice the term "premises has proved rather restrictive in its precise dictionary definition - that is, "a house or building with its grounds or other appurtenances" - and it is proposed that the subsection be amended to refer to employment "... in or about any premises or place in the business of an employer."

This particular amendment is designed to make it quite clear that the provision can be applied in the case of a person employed in an identifiable work place, other than premises in that strict sense."

Underlining mine Exhibit DLI 1

According to Mr Evans the essential elements for Section 2(2) to operate are as follows -

(i) That an employee may be employed in a place other than the employeer establishment premises. In the opinion of the Secretary that aspect was satisfied in this case because the employee, Mrs Marney was from 1979 continuously employed at Anglesea Barracks that being a place in the business of subsequent employers, and

(ii) the termination of employment in each case was for reasons other than those which would preclude payment of pro rata long service leave, and

(iii) re-employment was within 2 months as required by Section 2(2) by another employer who employed Mrs Marney at the same place in substantially the same kind of business.

Submissions of Mr O'Brien

Mr O'Brien supported and elaborated on the submissions of Mr Evans.

He submitted that reference to place of business in the Section is broad enough in meaning to encompass the location where the work is carried out because the legislation is "in or about any place" and is not specifically confined to a particular place.

In extrapolation, Mr O'Brien contended that as all other relevant provisions of the Act are satisfied i.e. continuity of employment on the basis that re-employment took place within a period of 2 months; that each termination was not of a nature which would prevent the payment of pro rata long service leave; then given that Mrs Marney was employed in or about the place of business of respective cleaning contractors, that place being Anglesea Barracks, then a deemed transmission of business had occurred in each case.

Mr O'Brien said -

"We don't assume transmission of business; we say that the Act assumes transmission of business, deems transmission of business, in fact, under subsection (2).

There doesn't need to be in the legal sense, in the ordinary sense, a sale of a business or a succession in the business in the way that it might ordinarily be understood.

The replacement of one business operation with an other which involves the employment of the same person in or about a particular place in the business of one employer and that same particular place of the succeeding or next following employer, is sufficient to satisfy the transmission provisions.

Underlining mine Transcript p.31

Whilst Mr O'Brien thoroughly canvassed te submissions of Mr Abey in right of reply, the thrust of his argument is I believe encapsulated as above.

Submissions of Mr Abey

Mr Abey submitted that the words "any place in the business of the employer" should be read as the registered address of the cleaning contractor.

He said

"That is the nub of the argument. That we say that Mrs Marney was employed by Croucher Proprietary Limited at their registered address and not in a building at Anglesea Barracks."

Underlining mine Transcript p.34

Ample evidence was adduced by Mr Abey from Mr Croucher that the business of Crouchers is conducted from its registered premises including the hiring of employees.

The whole thrust of Mr Abey's argument was that when a cleaning contract is won, there is no deemed transmission of business from the previous cleaning contractor to the "new" contractor.

The evidence of Mr Croucher included that when a contract is won, no equipment, gear or supplies is taken over from the previous contractor.

In the circumstances here, the previous cleaning contractors involved, All Round Office Cleaners and Coppleman Cleaners, continued on in business.

In response to the submission of Mr Evans going to the intent of the provisions now contained in Section 2(2) of the Act, Mr Abey said that it was -

"...to cover a situation whereby a business was being conducted on a particular location, but the premises were not, in fact, owned by the proprietor of that particular business."

Transcript p.49

To illustrate the point further Mr Abey used as an example where an Oil Company leases a service station site to a person who is an employer of employees necessarily employed for the operation of the business.

In the event that lease arrangements change to the extent that a new lessee takes over the lease, then said Mr Abey, the provisions of Section 2(2) would apply in that existing employee would be considered to be in continuous employment on the basis that there had been a deemed transmission of business.

The difference according to Mr Abey is that in the given example there is an identifiable business operating at an identifiable site.

Mr Abey submitted that in this case Crouchers cleaning service is not static or confined to any one building.

Mr Abey said -

"It is a continually changing pattern and the employer is in the business of providing a service which for any given period of time, may be in one building but that is certainly not static."

Transcript p.50

The thrust of Mr Abey`s submission was that those buildings for which Crouchers provide a cleaning service "could not be perceived as being the place of the business of that employer".

Mr Abey urged that the only sensible conclusion that could be reached is that employees are employed at the registered business address of the employer and it was only in those circumstances that an entitlement to long service leave could arise.

Decision

I am persuaded by the submissions of Mr Evans and Mr O'Brien that in this case deemed transmissions of business from one contract cleaner to the other has occurred as contemplated by Section 2(2) of the Act.

I am satisfied, notwithstanding the submissions of Mr Abey, that in respect of the particular circumstances of this case, that "any place in the business of an employer" extends to where the work of that business is undertaken.

In this case the employee satisfied the criteria in Section 2(2) because she remained employed, as the Section contemplates -

"...in or about that place in the business of some other employer ..."

I have underlined the word "that", above, because in this case that place is Anglesea Barracks. The "place" of employment is the factor which is a constant in Mrs Marney`s employment history.

The fact that Mrs Marney was terminated by successive contractors does not change the fact that she continued on "in or about that place (Anglesea Barracks) in the business of some other employer".

There is no doubt of course that the business of all of the other employers was "of the same kind, or substantially the same kind as the business in which (she) was employed." [Section 2(2)].

In reaching my conclusions in this matter I have had regard to the Second Reading Speech in support of the amendment to the legislation contained in the Long Service Leave Amendment Act No 61 of 1982. This makes it clear that a person employed in an identifiable work place other than premises, in the strict sense of that word can access Section 2(2).

There is no doubt in my mind that in every aspect of Section 2(2) Mrs Marney's claim succeeds.

In my opinion the type of lease example referred to by Mr Abey is too restrictive an application of the Section in question.

That type of example would not have necessitated the amendment of Section 2(2) to include "place" in lieu of "premises".

In Mrs Marney's case there is an identifiable work place, which in my view is, for the term of the cleaning contract, a place in the business of the employer.

Clearly Section 2(2) operates to provide continuity of employment under certain circumstances, which in my opinion have been met in this case.

Other Matters

At this point it is appropriate to comment on that part of Mr Abey's submission where he contended that if Mrs Marney had accepted an offer of re-employment made by Crouchers, which would have been continuous employment in accordance with Section 5(h) of the Act in that the offer was within a period of 6 months after her termination, then the action currently before the Commission would not have arisen.

I can see no merit in that proposition at all. It is true the President did in his decision1 recommend that Mrs Marney be re-employed, however there was and indeed could not be any compulsion on Mrs Marney to accept that offer.

The fact is that Mrs Marney was terminated and she chose not to accept an offer of re-employment when it came.

It is commendable that Mr Croucher did offer re-employment as recommended by the President. However by Mrs Marney declining that offer she in no way forfeited her rights to make a claim for pro rata long service leave on the basis that she was terminated by the employer for reasons other than serious and wilful misconduct.

There is also one further aspect of the submissions of Mr Evans that warrants some observations to be made by the Commission.

It relates to that part of his submission where he said -

"...the Tasmanian Industrial Commission is not the appropriate forum to argue the merit of existing provisions of the Long Service Leave Act 1976.

"That if Section 2(2) of the Act is considered by the Confederation to be "unnecessary or is unduly harsh, the appropriate course of action is to lobby Government and members of Parliament in general to have the matter rectified in another entirely appropriate place"."

Transcript p.15

Whilst I understand the thrust of that submission I have decided to respond to it in the following manner.

When a dispute is brought to the Commission the settlement of dispute provisions in the Act require a determination to be made as per Section 13(2). However, it is not unusual for the Commission to investigate avenues of conciliation in the first instance.

In the event that a determination is necessary this may have the effect of establishing "new" parameters of operation of the particular Section of the Act in dispute.

Often, as in this case, determinations are required to be made because the parties themselves have reached a point where the application of the legislation to a particular set of circumstances is in dispute.

Of course, any determination by the Commission recognising certain circumstances to come within the province of the legislation, or not, may be appealed.

In determining whether or not a particular provision has application to a given set of circumstances merit considerations are necessary as an interpretation is not envisaged by Section 13(2).

Conclusion

Having regard to all that has been put before me and for the reasons stated I conclude that Mrs Marney is entitled to a pro rata long service leave payment of $844.19.

That amount is to be paid to Mrs Marney within seven days from the date of this decision.

R K. Gozzi
COMMISSIONER

1 T.1023 of 1987