Unions lose out in Australian decisions

CANBERRA - Unions today lost out in two High Court cases which found employees were not eligible for redundancy or severance pay in company restructures.
In both cases the minister for workplace relations intervened on the side of the companies.

In the first case, the court ruled 4-1 that medical company Gribbles Radiology was not the successor to the Melbourne Diagnostic Imaging Group (MDIG) and wasn't therefore liable to pay employees severance pay when it went out of business.

The case was fought by the Health Services Union of Australia which argued that Gribbles owed staff severance pay based on their years of service with MDIG and its predecessor.

The other case involved transfer of employees of paper company Amcor to a subsidiary.

The Construction, Forestry, Mining and Energy Union (CFMEU) claimed workers were entitled to redundancy payments under their certified agreement, regardless of whether they were offered immediate work with another company.

The High Court unanimously ruled that none of the positions had actually become redundant.

The Gribbles case related to its move to contract former MDIG staff at Moorabbin, Victoria, who agreed to its offer of continued employment on the same award conditions.

But in 2000 Gribbles closed its practice at Moorabbin and terminated the radiographers' employment.

The Health Services Union claimed Gribbles owed severance pay and brought proceedings against Gribbles in the Federal Court which ordered Gribbles to pay the severance pay plus interest and a A$50 ($54.49) penalty to the union.

The Full Court of the Federal Court then dismissed the appeal.

Gribbles and the minister, who had intervened in the Federal Court proceedings, each appealed to the High Court.

By a majority, the High Court today allowed the appeals, holding that Gribbles was not a successor to any part of the MDIG business so was not bound by the award.

It said no assets, tangible or intangible, were sold or transferred from MDIG to Gribbles and the company did not negotiate with MDIG to take over the practice at Moorabbin but negotiated with another firm about a licence agreement.

The Amcor case related to transfer of employees from Amcor to one of its subsidiaries in a corporate restructure.

Until 1998, Amcor owned four paper mills, with the employees covered by a 1997 certified agreement between Amcor and the CFMEU.

Amcor subsequently transferred the mills to a wholly owned subsidiary, Paper Australia Pty Ltd, but Amcor continued to employ the workers.

Then in 2000 Amcor went through a demerger with its paper manufacturing business transferred to another subsidiary PaperlinX Ltd which was floated as a public company.

Amcor then gave notice terminating employment from March 31, 2000 in all Paper Australia businesses.

Paper Australia, which was to become a wholly owned subsidiary of PaperlinX, wrote to all employees offering employment on the same conditions with all benefits carried over from Amcor.

The CFMEU claimed the workers were entitled to redundancy payments and the Federal Court and the Full Court of the Federal Court agreed.

Amcor and the minister then turned to the High Court which unanimously allowed their appeals.

- AAP