Factual Background. This decision was an appeal in relation to the Unilever Australia Trading Limited Tatura Site-Enterprise Agreement 2015 ("Agreement"), concerning an interpretation of the redundancy provisions contained within that Agreement.
In particular, the Agreement contained clause 2.6 of Attachment 4 stating that "each employee to be made redundant shall receive four weeks payment at normal rates provided that the employee has at least 12 months' continuous service". The Agreement also contained clause 2.7 of Attachment 4 of the Agreement which provided that redundancy payments are to be paid at four weeks' pay per year of service and pro-rata for incomplete years of service with a cap of 104 weeks in redundancy payments. Clause 1 of Attachment 4 stated, "This Redundancy Agreement does not apply to casual or seasonal employees".
The issue for the Commission on appeal was whether the reference to "service" under clause 2.7 included service as a casual or seasonal employee. The AMWU submitted that the effect of clause 1 was that those who happened to be engaged as casual or seasonal workers at the time of redundancy are not entitled to the benefits of the redundancy agreement. The AMWU construed the exclusion in clause 1 to relate only to the entitlement to payment itself, not to the calculation of service under the Agreement.
Decision. At first instance, the Deputy President agreed with the AMWU's construction and found that the exclusion in clause 1 of Attachment 4 meant that the employee had to be a permanent employee at the time of the redundancy. However, the Full Bench of the Commission found that this interpretation was incorrect.
The Full Bench found that periods of service as a casual or seasonal employee could not be counted as periods of service for the purposes of redundancy. The Full Bench concluded that clause 1 meant that the entire redundancy agreement did not apply to casuals and considered that the reference to years of service and incomplete years of service is an indication that the provision does not contemplate service rendered through casual engagements. The Full Bench also noted that casual employees are not ordinarily entitled to redundancy benefits.
Lessons for Employers. Although this decision is confined to its facts, employers should note that in some circumstances, casual service and seasonal work will not be counted toward calculation of redundancy pay. However, whether or not casual service will be counted will ultimately depend on the terms of the applicable industrial instrument.
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