Industrial Relations Commission New South Wales Medium Neutral Citation: Applications by Snowy Monaro Regional Council (Yallambee Lodge Redundancy Payments) [2024] NSWIRComm 1027 Hearing dates: Determined on the papers Date of orders: 26 April 2024 Decision date: 26 April 2024 Jurisdiction: Industrial Relations Commission Before: Commissioner Sloan Decision: In matter 2024/00142884 – The Snowy Monaro Regional Council is exempt from paying severance pay in accordance with cl 43(xii) of the Local Government (State) Award 2023 to Alison Male and Teena Robinson. In matter 2024/00145189 – The Snowy Monaro Regional Council is exempt from paying severance pay in accordance with cl 43(iv)(c) of the Nurses' (Local Government) Residential Aged Care Consolidated (State) Award 2021 to Caroline Lucas and Emeliha Jermyn. In matter 2024/00146796 – The Snowy Monaro Regional Council is exempt from paying retrenchment pay in accordance with cl 40(vii) of the Local Government, Aged, Disability and Home Care (State) Award to Suzanne Cook, Narissa Robinson, Teresa Jones, Kathleen Goodwin, Julie Holgate, Shusma Lamichhane, Julie Crowe, Elissana Finocchiaro, Liyu Coss, Petra Sidebottom, Geeta Phuyal, Roshani Khatiwada, Jessica Gatens, Rebecca Phelps, Troy Abbott and Oravan Frece. Catchwords: EMPLOYMENT AND INDUSTRIAL LAW – Awards and enterprise agreements – Termination – applications for exemption from paying severance pay to employees on the basis of the employer having obtained acceptable alternative employment for them Legislation Cited: None Cases Cited: United FM Group Services Pty Limited trading as United KFPW v National Union of Workers, New South Wales Branch [2006] NSWIRComm 391 Texts Cited: None Category: Principal judgment Parties: In all matters: Snowy Monaro Regional Council (Applicant) In 2024/00142884: New South Wales Local Government, Clerical, Administrative, Energy, Airlines & Utilities Union (Respondent) The Development and Environmental Professionals' Association (Respondent) The Local Government Engineers' Association of New South Wales (Respondent) In 2024/00145189: New South Wales Nurses and Midwives' Association (Respondent) Aged & Community Care Providers Association Ltd (Respondent) Unions NSW (Respondent) In 2024/00146796: Health Services Union NSW (Respondent) Aged & Community Care Providers Association Ltd (Respondent) Unions NSW (Respondent) Representation: M Lopez, Local Government NSW (Applicant) S Geddes, USU (Respondents in 2024/00142884) A Andrews, NSWNMA (Respondent in 2024/00145189) E Fry, HSU (Respondent in 2024/00146796) File Number(s): 2024/00142884, 2024/00145189 and 2024/00146796 Publication restriction: No DECISION 1. On 20 July 2023, Snowy Monaro Regional Council ("Council") passed a resolution to divest itself of Yallambee Lodge Aged Care facility ("Yallambee Lodge") to Respect Aged Care. One of the results of the divestment was that certain employees of the Council, who had been employed at Yallambee Lodge, would no longer have positions. 2. Negotiations ensued between the Council and Respect Aged Care as to the terms on which the affected employees would be offered employment with Respect Aged Care. The result was that employees were offered, and accepted, employment with Respect Aged Care. 3. In their employment with the Council, the relevant employees were covered by one of the following awards (collectively, "Awards"): 1. Local Government (State) Award 2023; 2. Local Government, Aged, Disability and Home Care (State) Award; and 3. Nurses' (Local Government) Residential Aged Care Consolidated (State) Award 2021. 1. Each of the Awards contains a provision entitling an employee to "severance pay" (or "retrenchment pay") if their employment is terminated on the basis of redundancy. However, the employer may apply to the Commission to be excused from making such a payment on the basis that it has obtained "acceptable alternative employment" for the employee. There is no controversy that those provisions are enacted as a result of the divestment by the Council of Yallambee Lodge. 2. On 17 April 2024, the Council filed three applications with the Industrial Registry seeking, respectively, exemptions from the requirement to pay severance pay to: 1. two employees covered by the Local Government (State) Award 2023, who had been offered and accepted employment with Respect Aged Care. That application was assigned matter number 2024/00142884; 2. two employees covered by the Nurses' (Local Government) Residential Aged Care Consolidated (State) Award 2021, who had been offered and accepted employment with Respect Aged Care. That application was assigned matter number 2024/00145189; and 3. sixteen employees covered by the Local Government, Aged, Disability and Home Care (State) Award, who had been offered and accepted employment with Respect Aged Care. That application was assigned matter number 2024/00146796. 1. I listed the three applications for mention together on 24 April 2024. At that time, the Council announced an appearance in each matter. In matter 2024/00142884, the New South Wales Local Government, Clerical, Administrative, Energy, Airlines & Utilities Union ("USU") appeared and mentioned appearances on behalf The Development and Environmental Professionals' Association and The Local Government Engineers' Association of New South Wales. In matter 2024/00145189, the New South Wales Nurses and Midwives' Association ("NSWNMA") appeared. The Health Services Union NSW ("HSU") appeared in matter 2024/00146796. 2. At the mention, the USU raised concerns as to the basis on which the applications were brought, which were echoed by the NSWNMA. It is not necessary to traverse the nature of those concerns. They were resolved, by consent, on the basis that the Council be granted leave to amend each of its applications, with those amendments being made by me in manuscript changes to the documents on the Commission's files. 3. With those matters resolved, the USU, the NSWNMA and the HSU confirmed that they did not oppose the orders sought by the Council in its applications. The matters were stood over on the basis that I would determine the applications "on the papers" in Chambers. 4. The applications arise from the same set of circumstances and the evidence on which the Council relies in respect of each application is essentially the same. In the circumstances, it is both convenient and appropriate to deal with all of the applications in this decision. Consideration 1. As already stated, each of the Awards entitles an employee who is dismissed on the basis of redundancy to receive a severance (or retrenchment) payment. However, each Award contains an avenue for the employer to apply to the Commission for relief from paying a severance payment. For example, cl 43 of the Local Government (State) Award 2023 provides: (xii) Subject to an application by the employer and further order of the Industrial Relations Commission of New South Wales, the employer may pay a lesser amount (or no amount) of severance pay than that contained in subclause (iii) above if the employer obtains acceptable alternative employment for an employee. 1. Clause 40(vii) of the Local Government, Aged, Disability and Home Care (State) Award and cl 43(iv)(c) of the Nurses' (Local Government) Residential Aged Care Consolidated (State) Award 2021 are in relevantly the same terms. 2. In United FM Group Services Pty Limited trading as United KFPW v National Union of Workers, New South Wales Branch [2006] NSWIRComm 391 the Full Bench observed: "78. The purpose, then, of severance pay is to compensate for 'non-transferable credits and the inconvenience and hardship imposed on employees'. See also Westfield Holdings v Adams (2001) 114 IR 241 at [144] and the cases referred to therein. However, under the test case standard, which is reflected in cl 34 of the Award, it is open to an employer to seek relief from the general obligation to pay severance pay if it is able to show it has obtained acceptable alternative employment for an employee. In considering an application for relief it will be important for the tribunal to have regard to whether 'previous service with the previous employer was recognised as service with the new employer'. 79. Thus, it seems to us that where an employer, through its efforts, has obtained alternative employment involving minimal dislocation for employees, no loss of accumulated employment benefits such as sick leave and long service leave, where there is continuity of service and the employees are not disadvantaged by the terms offered in the new employment (as would be the case in a succession, assignment or transmission of business), the employer would have a prima facie case for the exercise of discretion in its favour for the granting of an exemption, either in whole or in part, from the award obligation to make severance payments. We elaborate on this view in the following paragraphs. 80. For the reasons expressed by the Full Bench in Re Clothing Trades Award we do not consider that the word 'obtains' should be given a narrow, literal interpretation. As the Full Bench determined in that case, where the employer is a 'strong moving force' in causing the employment to become available, that will be an important consideration for a tribunal of fact in exercising its discretion as to whether an exemption from the requirement to make severance payments should be granted. However, there is the additional consideration, that cannot be ignored or overlooked, of whether the employment was acceptable. There will be circumstances, as is the case here, where the incoming employer intends to employ the employees of the outgoing employer, regardless of any overtures or effort of the outgoing employer to secure that employment. In those circumstances it is necessary for the tribunal to consider what role the outgoing employer has played in causing the new employment to be available on acceptable terms. 81. In other words, the tribunal will have regard to the full extent of the role of the outgoing employer in the placement of its employees, not simply in alternative employment, but in acceptable alternative employment. That is to say, even though the outgoing employer did not 'obtain' employment for the employees in the fullest sense of that word, when regard is had to the employer's overall role, including the part played in bringing about new terms of employment that were acceptable when viewed objectively, it may be concluded that in the absence of the employer's effort or request, acceptable alternative employment would not have become available to the employees. 82. To express the notion differently, if the outgoing employer is a strong moving force in causing acceptable alternative employment to become available to employees or, in circumstances where employment becomes available regardless of the outgoing employer's efforts or overtures, but the outgoing employer is a strong moving force in causing the employment to become available on acceptable terms, we consider the employer would have an arguable case for the exercise of the tribunal's discretion in favour of granting an appropriate exemption, whether in whole or in part. 83. We take the view that the primary objective should be maintaining employees in acceptable employment and thus, where an employer is a strong moving force, to use the words of the Full Bench in Re Clothing Trades Award, in causing to have made available acceptable alternative employment for employees, the employer should, prima facie, be entitled to the exercise of discretion in its favour granting an exemption from having to make severance payments, either in whole or in part. To take a different approach is likely to have the effect of removing the incentive for employers to make the necessary effort to maintain employees in acceptable employment." (Italics in original) 1. Each application was accompanied by an affidavit of Stephanie Sellar-Peam, the Chief Workforce Officer of the Council, affirmed on 11 April 2024 and an affidavit of Peter Bell, a Senior Industrial Officer with Local Government NSW, affirmed on 16 April 2024. In all but one respect, the affidavits of Ms Sellar-Peam and Mr Bell, respectively, filed in connection with each application were identical. The exception was that Annexure B to each of Ms Sellar-Peam's affidavits identified the employees covered by the Award to which the particular application related. Those annexures indicated that the relevant employees had accepted employment with Respect Aged Care. 2. In her affidavit, Ms Sellar-Peam deposed as to the negotiations between the Council and Respect Aged Care regarding the divestment of Yallambee Lodge. She described efforts by the Council to consult with the affected employees and their union representatives to explain the agreed arrangements between the Council and Respect Aged Care, and to address any questions or concerns the employees may have had. In addition, Ms Sellar-Peam deposed: "5. Snowy Monaro Regional Council entered discussions with Respect Aged Care with regards to the negotiation to ensure parity in rates for all transferring staff in mid/late 2023. These negotiations were guided by a principle of fairness and the objective to ensure no employee would be disadvantaged in terms of their compensation and conditions. Comparative analyses of current compensation structures versus those proposed by Respect Aged Care were conducted by myself and the Chief People Officer of Respect Aged Care to identify and rectify and discrepancies. 6. Snowy Monaro Regional Council worked to ensure that all leave - including annual, sick and long service leave - would be honoured and transferred to the employees' new contracts with Respect Aged Care. This included an audit of existing entitlements and coordination with Respect Human Resources to integrate these entitlements. 7. The sixteen employees who are covered by the Local Government Aged Disability and Home Care (State) Award are primarily Care Service employees. Other employees include a Physiotherapist, and Assistant Catering Officer. In each case, the rate of pay for the affected employees has either been maintained or increased. 8. The two employees covered by the Local Government (State) Award are Administration Support employees. In both cases, their rate of pay has been maintained. These employees are paid significantly above what Administration Support employees are ordinarily paid under the Hudson House Agreement. I played a part in assisting Respect in reaching a conclusion that maintaining these employees and their rate of pay was an appropriate outcome. 9. The two employees covered by the Nurses' (Local Government) Residential Aged Care Consolidated (State) Award are a Registered Nurse Year 5 and a Clinical Nurse Consultant. In one case, the employee's rate of pay has been maintained. In another, it has been increased. … 12. Final employment contracts were issued to staff on Monday 4 March 2024. … All employees are guaranteed the same or better conditions upon signing these contracts." 1. In his affidavit, Mr Bell deposed that he had been informed by Respect Aged Care that the instrument that would apply to the affected employees, if they were to accept employment with Respect Aged Care, is the Sir William Hudson Memorial Centre, NSWNMA, ANMF, NSW Branch and HSU New South Wales Branch Enterprise Agreement 2020 ("Enterprise Agreement"). He stated that he had compared the provisions of the Awards with those of the Enterprise Agreement. The results of that comparison were contained in a spreadsheet attached to the affidavit. 2. Mr Bell further deposed that: 1. he was satisfied that the Enterprise Agreement "provides more beneficial terms and conditions" than the Awards "when considered holistically"; 2. he was further satisfied that employees transferring from the Council to Respect Aged Care "will experience the same or better conditions of employment when considered holistically"; and 3. in the "limited circumstances" where the Awards provide more beneficial rates of pay, he understood that Respect Aged Care would maintain those rates for transferring employees. 1. Having regard to this evidence, and in light of the observations of the Full Bench in United FM Group Services, I am satisfied that the Council obtained alternative employment for the affected employees and that it was acceptable. I am fortified in this view by the fact that the USU, the NSWNMA and the HSU supported the Commission granting the relief sought by the Council. Orders 1. I order as follows: 1. In matter 2024/00142884 – The Snowy Monaro Regional Council is exempt from paying severance pay in accordance with cl 43(xii) of the Local Government (State) Award 2023 to Alison Male and Teena Robinson. 2. In matter 2024/00145189 – The Snowy Monaro Regional Council is exempt from paying severance pay in accordance with cl 43(iv)(c) of the Nurses' (Local Government) Residential Aged Care Consolidated (State) Award 2021 to Caroline Lucas and Emeliha Jermyn. 3. In matter 2024/00146796 – The Snowy Monaro Regional Council is exempt from paying retrenchment pay in accordance with cl 40(vii) of the Local Government, Aged, Disability and Home Care (State) Award to Suzanne Cook, Narissa Robinson, Teresa Jones, Kathleen Goodwin, Julie Holgate, Shusma Lamichhane, Julie Crowe, Elissana Finocchiaro, Liyu Coss, Petra Sidebottom, Geeta Phuyal, Roshani Khatiwada, Jessica Gatens, Rebecca Phelps, Troy Abbott and Oravan Frece. Damian Sloan Commissioner ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 April 2024