'Acceptable alternative' to avoid redundancy not met by AWA

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'Acceptable alternative' to avoid redundancy not met by AWA

After a close examination of the terms of the previously applicable collective agreement with the terms of the new AWAs, the AIRC concluded that the employment offered in the AWAs, when considered as a whole, did not constitute acceptable alternative employment within the meaning of the Federal Workplace Relations Act 1996.

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After a close examination of the terms of the previously applicable collective agreement with the terms of the new AWAs, the AIRC concluded that the employment offered in the AWAs, when considered as a whole, did not constitute acceptable alternative employment within the meaning of the Federal Workplace Relations Act 1996.

The content of the AWA offered to the employees of a failed carpet manufacturer by a prospective new employer was in issue.
Failure to find new employment would result in the employees being made redundant.

Senior Deputy President Watson noted that the form of industrial regulation applicable to the relevant employees, in itself, was not a material consideration in determining whether the employment proposed constituted acceptable alternative employment.

Comparison of different conditions

The Senior Deputy President carried out a detailed comparative exercise involving the old agreement and the new AWAs and found:

' … there are factors which support a finding that the employment offered does constitute acceptable alternative employment:

  • the wage rates proposed in the AWA are no less than those currently paid to each employee, both immediately and as at 1 June 2007
  • enhanced job security might be a relevant favourable factor in relation to the employment proposed with Feltex Carpets for some employees
  • the alternative employment offered is subject to a Deed to protect employees' entitlements, signed by the TCFUA, through a guarantee by the parent company of the proposed employer
  • the AWA recognises prior service with Feltex Australia for the purpose of calculating service based entitlements within the AWA, and
  • the terms of employment within the AWA, like those within the current instruments, are legally enforceable ... '

[factors against 'acceptable alternative']

'Against this, there are factors which do support a finding that the employment offered does not constitute acceptable alternative employment:

  • inclusion of a range of specific company policies and a general incorporation of company policies, both current and future, within the AWA, making any breach susceptible to civil penalty, creates less favourable terms and conditions than apply within the Feltex Agreement
  • the terms of the AWA in respect of the National Building Code and the provision for termination of the Deed of Confirmation of Employee Representation does constitute a material detriment to employees, when measured against existing terms and conditions
  • the proposed employment terms involve some diminution of existing terms and conditions in respect of rostered days off
  • the absence in the AWA of currently operative incorporated award provisions in relation to a range of matters, including seven day shifts, casual employment, trainees and apprentices, payment by results, 12 hour shifts, outdoor work, supported wage provisions and part-time employment, although of no immediate effect, removes the certainty of what terms and conditions would apply, under present arrangements, if such arrangements were introduced
  • overall, the proposed leave arrangements appear less beneficial to employees than those prescribed in current instruments
  • overall, the AWA provisions in relation to shift transfers lessen the terms and conditions of employees
  • the AWA removes a current Feltex Agreement entitlement to five days leave on the death of a sibling
  • the AWA requirement for consent to deduct paid maternity leave from accrued entitlements in the event that an employee on paid maternity leave does not return to work results in a lesser position for affected employees
  • in respect of redundancy, the removal within the AWA of the Feltex Agreement requirements for notification of change, other than when a redundancy dispute arises, and the removal of the requirement to provide TCFUA information sessions, diminishes the purpose and effect of the redundancy provisions of the Capital Agreement incorporated into the Feltex Agreement. The limitation introduced by the AWA on the pay out of sick leave diminishes entitlements
  • for a period of time a material detrimental change in the terms and conditions is proposed in respect of union representation provisions, when compared to the operation of the current instruments
  • the terms of the AWA do remove some entitlements within the current Feltex Agreement/Award in respect of payment of wages
  • the AWA does provide for a reduction in the current Feltex Agreement entitlement to a ten hour break (down to eight), with specified conditions
  • removal of termination provisions within the Feltex Agreement diminishes the current award protection against unfair termination
  • the AWA, in clause 22, expands the circumstances in which stand-downs can be effected, when compared with subclause 22(d) of the 1994 Award
  • the AWA removes Feltex Agreement provisions guaranteeing the provision of specified facilities, and
  • the AWA replaces the taking of meal breaks at a mutually convenient time with determination by Feltex Carpets and allows for two paid 20-minute and two paid 10-minute breaks to be replaced by two 30-minute breaks …'

Modification may be possible

The Commission concluded that the parties should be afforded an opportunity to themselves consider and negotiate an alternative basis of employment which might be acceptable to them and which might be found to constitute acceptable alternative employment.

Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia - AIRC - Watson SDP - PR974699 - 21 November 2006

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