Leave to appeal granted in Amcor

THE High Court has granted Amcor special leave to appeal earlier decisions of the Federal Court in which it was found that the company was liable to pay severance payments to some 800 employees where their employment had been transferred to a related company in a business restructure.

The appeal will allow the court to consider the meaning of "redundancy" and the right of employees to severance payments on a sale or transmission of a business where, for practical purposes, employment and all related benefits are retained.

The Federal Court (at first instance and on appeal) has previously decided that the employees were entitled to redundancy pay as the result of a demerger, despite no loss of employment and retention of all service related benefits.

The court found that the redundancy provisions in the Amcor certified agreement were triggered by the demerger, regardless of the fact that, in the circumstances, none of the employees had been disadvantaged.

The previous decisions have caused some uncertainty in employment law circles and it is hoped that a decision in the High Court will clarify the issues involved.

If a company is considering selling a business or a business restructure that will involve the transfer of employees to alternative employing entities, it is import that advice is sought before concluding transactional details.

Similarly, it is important to ensure that the subject is properly addressed in employment arrangements, particularly in certified agreements and Australian Workplace Agreements.

Alan Drake-Brockman, partner

9220 4912

Union rights of entry: the impact of AWAs and certified agreements

IN two important decisions handed down on February 23, the Australian Industrial Relations Commission has considered the relationship between the union right of entry provisions in Part IX of the Commonwealth Workplace Relations Act and the provisions in the act relating to the operation of Australia Workplace Agreements and certified agreements.

Relevantly, the act provides that the effect of an AWA, while in operation, is to exclude any award that would otherwise apply to an employee’s employment.

The act also empowers unions to enter workplaces, for the purposes of "holding discussions" with employees working in them were:

Work is being carried on to which an award applies that is binding on the union; and

There are employees who are members, or eligible to be members, of that union.

In Aldi’s case – National Union of Workers v Aldi Foods Pty Ltd – the central issue was whether "work was being carried on to which an award applies".

Because every employee was covered by an AWA, the AIRC construed the AWA provisions to operate to exclude the union’s right of entry into the workplace on the basis that there was no applicable award that covered the work  being carried on by Aldi’s employees.

Aldi only achieved this result because every employee thought by the NUW to be covered by the relevant award was employed under an AWA.

The effect of this decision is that if every employee at a workplace is not employed under an AWA, then a union will still have a right of entry where there is an applicable award.

In the other important decision, Construction Forestry Mining and Energy Union v Ensham Resources Pty Ltd, the AIRC considered whether a certified agreement purporting to exclude the operation of an award prevented the union from exercising its right of entry.

The act provides that when a certified agreement is in operation it prevails over an award or order of the commission to the extent of any inconsistency between the award and the order.

Like the decision in Aldi’s case, the central issue considered was whether "work was being carried on to which an award applies".

The AIRC determined that the provisions in the act relating to