Federal Court bench goes with PP decision on Stellar

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Federal Court bench goes with PP decision on Stellar

A full bench of the Federal Court has relied on a recent High Court decision and rejected the notion that the nature of work should be considered when determining transmission of business, saying a call centre which handles Telstra overflow does not have to abide by Telstra awards and agreements.

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A full bench of the Federal Court has relied on a recent High Court decision and rejected the notion that the nature of work should be considered when determining transmission of business, saying a call centre which handles Telstra overflow does not have to abide by Telstra awards and agreements.

The full bench, headed by Justice Donnell Ryan, was considering an appeal by Stellar Call Centres against an earlier decision (see HR Link 108/99) in which Justice Murray Wilcox relied on a previous full bench decision of the Court, North Western Health Care Network v Health Services Union of Australia, and said if the work done was substantially the same a transmission had occurred (Stellar Call Centres Pty Ltd v CEPU [2001] FCA 106 (21 February 2001)).

While Justice Wilcox said the Stellar Call Centre in Robina, on the Gold Coast, was ‘a commercially viable, free standing business’, using the nature of work argument he ruled the ‘outsourcing’ arrangement may fall within s149(1)(d) of the Workplace Relations Act 1996—which binds transmittees—or s170MB(1)—which binds employers to existing agreements where part of a business has been transmitted.

Stellar was formed as a joint venture between Telstra and another company to provide a call centre interface for Telstra customers when Telstra was experiencing too high a volume of calls. The matter originally came to the courts when the Community and Public Sector Union was denied access to the Stellar workplace, with the company saying Telstra awards and agreements didn’t bind Stellar. The Communications, Electrical and Plumbing Union later joined the application.

In the appeal to the full bench, Stellar argued Justice Wilcox erred in his application of s149(1)(d) and s170MB(1), and that he should not have applied the North Western Health Care decision.

The bench said it had left its decision for nearly a year after the hearing so it could consider the recent High Court case (see previous story) which ruled that PP Consultants was not the successor of the St George Bank when the bank’s agency had been transferred into a Byron Bay chemist’s shop.

In that case, the full bench of the High Court said it was not possible to have a general test on transmission of business, but that the characteristic of the original business must be compared with the activities of the new owner.

The full bench, in the Stellar case, said it was obvious the High Court had rejected the ‘nature of work’ argument:

As we understand it, even if there be complete identity between the duties and working conditions of the relevant employees of both employers, that will not attract the application of s149(1) unless the business in which those duties are performed for the new employer is in substance identical in character with the business, or a distinct part of the business, of the presumptive transmittor.

In the same way as the St George agency was only facilitating general bank business, in answering calls, the Stellar Call Centre was only facilitating the conduct of Telstra business, the bench said. Stellar’s business was the provision of telephone answering services. ‘It is not Telstra’s business or part of Telstra’s business.’

The bench said it thus found the answering of telephone calls was not a distinct part of Telstra’s business. In any event, it said, Justice Wilcox had not found Telstra had shifted that service from itself to Stellar.

‘Telstra continues to operate its own call centres. It has not withdrawn from this activity or contracted out its own call centre operations.’ No person had been transferred to Stellar from Telstra, neither had any facilities been transferred from Telstra to Stellar.

Justice Wilcox’s findings, the full bench said, supported the conclusion that Telstra had entered the arrangement with Stellar to cope with overflow. ‘It cannot realistically be said, in our view, that the appellant has ‘taken over’ any commercial activities of Telstra.’

CPSU communications section secretary Adrian O’Connell told WorkplaceInfo the decision was a bad one for the Stellar workers, who were doing the same work as Telstra call centre employees but getting paid $7000 (20%) less a year.

‘For those workers who are working 40 hours a week trying to raise a family on $28,000 a year when people doing the same work at Telstra are getting paid $35,000 is scandalous’, he said.

O’Connell said while the union was taking advice on an appeal to the High Court, it would probably focus its attentions on campaigning around the issue, and was trying to make an award for the Stellar workers, who he said were on Australian Workplace Agreements, to bring their wages up to par.

He said the Stellar situation was ‘a Patrick-type scenario’, with employers able to use ‘whatever corporate structures or fictions’ they chose to drive down workers’ wages.

Stellar’s employee relations director John Zisis welcomed the decision, saying it provided ‘much greater certainty and clarity’ to the call centre industry.

‘In a practical sense it would have been impossible to be bound by old, inefficient Telstra awards when employees can perform services for a range of clients across industries including energy, transport, logistics and E-commerce’, he said.

He said the decision would allow Stellar to ‘continue to pay above average salaries [and] bonuses’.

A spokesperson for federal Workplace Relations Minister Tony Abbott told WorkplaceInfo the Minister felt the decision applied the Workplace Relations Act in the way it was intended, and ‘more sensibly’ than it had been in the past.

In regards to legislation, she said the Minister was still considering which way to go in relation to submissions from interested parties in relation to discussion papers released last year by former Minister Peter Reith (see previous story).

 
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