NUW fails to prove labour hire company 'simply a paymaster'

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NUW fails to prove labour hire company 'simply a paymaster'

The NUW has failed to secure redundancy payments for 12 labour hire employees assigned to George Weston Foods after the AIRC rejected the union’s contention that the agency was only a 'paymaster' and that an 'implied' contract meant the 12 were in fact GWF employees.

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The NUW has failed to secure redundancy payments for 12 labour hire employees assigned to George Weston Foods after the AIRC rejected the union’s contention that the agency was only a 'paymaster' and that an 'implied' contract meant the 12 were in fact GWF employees.

Background

The National Union of Workers lodged a s170LW application on behalf of 12 NUW members engaged as storeworkers at a George Weston Foods' warehouse.

The12 employees were employees of labour hire company Ready Workforce (a subdivision of the Chandler Macleod Group Limited) who had been working at GWF on long-term assignments. The union claimed they were covered by the terms of the relevant GWF agreement and as such were entitled to redundancy payments.

GWF argued that the NUW was not a party to the agreement - which was drawn up between the company and the Transport Workers Union - nor was it representing individuals bound by the agreement. The company said this meant the union had no standing to bring a s170LW application, nor to access the agreement’s dispute resolution procedures, either in its own right or as an agent of the relevant employees.

The company said the 12 members were not employed by GWF, but by the labour hire company RWF.

Findings

Deputy President Ives began by saying he did not believe the 12 employees could make a s170LW application, either in their own right or with the NUW as an agent, because they were not employees of GWF and so could not be parties to the agreement.

In coming to this conclusion, the deputy president said there was no clear contractual relationship between GWF and the employees. He then went on to refute the NUW’s claim that there was an 'implied' contractual relationship and that RWF was simply a 'paymaster'.

To reach this conclusion he looked at the following indicia:

  • Awareness of employer - As held in Australian Workplace Solutions v Kangan Batman Tafe an individual's understanding of their employment arrangement or contract of employment can be a matter of significant weight in the determination of that employee's employer. Evidence from one of the employees showed he acknowledged that he was employed by RWF, not GWF.
  • Day-to-day control - As in many labour hire arrangements, it was a term of the contract between the employee and the agency, that the employee was to work at the direction of the client company upon being placed at the client's worksite. 'The level of control exhibited by GWF was consistent with such arrangements.'
  • Length of service - Long placements, sometimes through several labour-hire agencies, did not necessarily equate to GWF being the employer.
  • Wages and related activities - The employees were paid at a level based on the rate set out in the agreement. This did not mean that GWF had control of the relevant employees or was necessarily their employer. 'It is not unusual in labour hire relationships to afford the terms and conditions that exist at the customer's workplace or site, due to industrial circumstances.'
  • Contact - RWF had relatively little contact with the employees, however, evidence showed that control over when employees worked was handled by RWF and they reported to the agency if they were unavailable for work due to illness or otherwise.
  • Discipline - Evidence suggesting GWF had the power to discipline or terminate employees was dismissed as being insufficient.

Deputy President Ives went on to say that in the instance he was wrong about the requirement of the relevant employees to be 'parties bound' by the agreement, he found that the agreement did not apply to them. He said the agreement indicated it applied to 'all employees employed in classifications or occupations listed in the Transport Workers (Mixed Industries) Award 1984 and successor awards whether these employees were members of a union or not'.

'At no time did the NUW go to that award and provide evidence that the relevant employees fell within its classifications or occupations.'

He also rejected the NUW’s other two alternatives - that GWF and RWF should be considered joint employers or that RWF be bound by the terms and conditions of the agreement and as such should be obliged to follow its redundancy procedures.

See: National Union of Workers and George Weston Foods & Anor, AIRC PR944285, (March 5, 2004).

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