Most employers will by now be aware that specified categories of
persons, commonly known as "vulnerable workers", have a
right to elect to transfer to a new employer on the same terms and
conditions in the event of a restructuring. In this context
restructuring includes anything from a sale of a business to
Schedule 1A of the Employment Relations Act defines who is
"vulnerable". A decision from the Employment Court last
year, Matsuoka v LSG Sky Chefs NZ and Service and Food Workers
Association  NZ EmpC 44, tells us that an employee does
not actually have to be vulnerable in order to be entitled to
statutory protection. Mr Matsuoka's remuneration and other
benefits, his senior status, and his management responsibilities
were not relevant.
The services in question in Mr Matsuoka's case were food
catering services provided to Singapore Airlines. Employees who
provide "food catering services" are one of the groups
entitled to transfer in the event of restructuring. The Employment
Court held that food catering is not limited to food preparation.
It also includes: delivery of prepared food; organising food
supplies; organising supplies and delivery of associated equipment,
water, soft drink beverages, and dry ice; and managing stock. Even
arranging trucks and running messages may have contributed to the
servicing of Singapore Airlines under the catering contract.
Because Mr Matsuoka did these things a few hours a day, he was
someone who provided food catering services.
If a person's job is affected by a restructuring then it
does not matter who the actual employer is. In Mr Matsuoka's
case the Singapore Airlines catering contract was held by Pacific
Flight Catering, not by his employer PRI. PRI was not even a
subcontractor to Pacific Flight Catering. But because PRI ran the
operation of Pacific Flight Catering, Mr Matsuoka's job was
affected when Singapore Airlines decided to contract LSG to do the
catering instead of Pacific Flight Catering.
Mr Matsuoka was made redundant by PRI even though his job
included work on catering contracts for other airlines, not just
Singapore Airlines. Because he lost his job he was entitled to
transfer employment to Singapore Airlines' new catering
contractor LSG as a full time employee, not just to the extent that
he had worked for PRI only on the Singapore Airlines contract.
Mr Matsuoka was a minor shareholder of PRI's parent company
and a personal friend of the managing director of PRI. LSG and PRI
were direct competitors. LSG's concerns about Mr Matsuoka's
conflict of interest did not affect LSG's legal obligation to
The effect of this decision is that after losing the Singapore
Airlines catering contract to LSG, PRI was able to pass to LSG full
responsibility for Mr Matsuoka's significant redundancy
compensation, unless LSG could find suitable full time work for him
to do. A good result for PRI, not so good for LSG.
Many Pacific Flight Catering staff were also affected by this
restructuring. Because they all worked for Singapore Airlines and
for other airlines, Pacific Flight Catering was able to pick and
choose which of its staff it retained and which it transferred to
For employers buying a business or tendering for services which
include Schedule 1A employees, it is essential for planning and
budgeting purposes to get accurate information about which
employees are currently engaged in all aspects of providing the
services and what their terms of employment are.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
This WHS decision clarified the interpretation of s 19 of the Work Health and Safety Act 2011 (NSW).
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