Outsourcing case goes to high court

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Outsourcing case goes to high court

In HR Link 112/99we reported the decision of the Full Court of the Federal Court in Finance Sector Union of Australia v PP Consultants Pty Ltd [1999] FCA 1251 (10 September 1999).

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In HR Link 112/99we reported the decision of the Full Court of the Federal Court in Finance Sector Union of Australia v PP Consultants Pty Ltd [1999] FCA 1251 (10 September 1999). In that decision the Court determined that in transmission of a business, the term "part of a business" may be broadly considered to denote a set of activities that made up an identifiable portion of the total activities of a business. It was also determined that in identifying the existence of a transmission of business, it is not important to consider the nature of the transaction between the "old" and "new" employer, rather what is important is the degree of identity between the activities carried out by the two employers. On 14 April 2000, PP Consultants sought special leave of the High Court to appeal the Full Court decision.

Background

Central to this matter is the question of whether s149(1)(d) of the Workplace Relations Act 1996, binds PP Consultants to an award in respect of the employment of an employee. In September 1997 a Bank closed its branch in Byron Bay. To service customers, the Bank entered into an agreement with a local pharmacy (PP Consultants). The pharmacy was to collect deposits on behalf of the Bank; open accounts; make loan referrals; transact withdrawals and monitor the operation of an ATM.

Special Leave to Appeal

In the application for leave to appeal, PP Consultants argued that leave ought to be granted on a number of fronts:

 

  • The approach adopted by the Full Court was limited to a consideration of the identity of activities or work carried out by the two employers. PP Consultants submitted that the Full Court should have gone beyond the identity of work and examined issues relating to the nature of the transaction between the old and new employer, the nature of the commercial arrangement and the legal identity of the two entities.

  • The approach of the Full Court was largely founded upon the decision of the High Court in Re Australian Industrial Relations Commission; Ex parte Australian Transport Officers Federation (1990) 171 CLR 216 F.C. 90/049(the ATOF case). ATOFexamined the interpretation and application of union eligibility rules and as such focused upon whether there was a substantial identity between the old activities and the new activities. PP Consultants submitted that the ATOFcase ought to be distinguished from the present matter in that this matter did not concern union eligibility rules, but related to the notion of whether the identity of a business remained the same.

In response, the Finance Sector Union (the union) submitted that:

  • This was a matter that concerned the construction of s149(1)(d).

  • The ATOF case was based upon s61(d) of the old Conciliation and Arbitration Act 1904, which must be distinguished from its successor s149(1)(d).

  • The benefit derived under s149(1)(d) is greater than s61(d) in that it relates to "parts" of a business and in that it is a provision that is "Subject to any order of the Commission...".

The High Court (Gleeson CJ and Callinan J) believed there to be merit in PP Consultant's submission and accordingly granted special leave to appeal.

 

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