Case: Stellar Call Centres Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal Plumbing and Allied Services Union [2001] FCA 106 ; (2001) 106 FCR 302
Outcome: referred to
In substance, Mr Urquhart's case was that: (a) When Powercor contracted out its meter reading function to AMRS in 2002 and 2004, part of Powercor's business (namely, meter reading) was transmitted to AMRS. For Mr Urquhart, counsel argued that meter reading was part of Powercor's business prior to the VMM contract. He argued that Powercor took back this part of its business when the VMM contract terminated and, again, when the Marshmans contract ended. Counsel contended that the Electricity Industry Act 2000 (Vic) ("the Electricity Industry Act "), the Electricity Distribution Licence, and the numerous regulatory Codes illustrated "both the essential part metering play[ed] in the distribution of electricity as well as the ongoing obligations of the distributor, regardless of whether or not the task [had] been outsourced". Counsel argued that, "[b]y reason of the ... obligations imposed on distributors and conditions of licence meter reading and the related activities undertaken by meter readers [meter reading] was more than an ancillary part of the business of a distributor and [was] in fact a necessary part of the business". He submitted that whether or not Powercor performed meter reading between the contracts was irrelevant. For the duration of the contract between Powercor and AMRS, AMRS had "what ... Powercor has within its power to give". Counsel for Mr Urquhart relied on PP Consultants Pty Ltd v Finance Sector Union of Australia [2000] HCA 59 ; (2000) 201 CLR 648 (" PP Consultants "), Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd [2005] HCA 9 ; (2005) 222 CLR 194 (" Gribbles ") and Stellar Call Centres Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal Plumbing and Allied Services Union [2001] FCA 106 ; (2001) 106 FCR 302 (" Stellar Call Centres "). He also relied on Construction Forestry Mining &amp; Energy Union v Henry Walker Eltin Contracting Pty Ltd (2001) 108 IR 409 (" CFMEU v Henry Walker Eltin "), Minister of State for Employment, Workplace Relations and Small Business v Community and Public Sector Union [2001] FCA 316 ; (2001) 109 FCR 303 and North Western Health Care Network v Health Services Union of Australia [1999] FCA 897 ; (1999) 92 FCR 477 (" North Western Health Care "). (b) In these circumstances, by operation of ss 149(1)(d) and 170MB(2) of the Workplace Relations Act , the 1998 Award, the 1999 Agreement and the 2002 Agreement were binding on AMRS. Counsel for Mr Urquhart referred to the 1965 Award, 1969 Variations, the National Wage Cases , the 1998 Award, the 1999 Agreement and the 2002 Agreement in support of his submission that, whilst employed by AMRS, Mr Urquhart was entitled to be paid wages and superannuation at the rate for which the 1999 Agreement and the 2002 Agreement provided, and not at the rate he was in fact paid by AMRS, but with the loading prescribed by the 1998 Award. He referred to the principles for interpreting awards in various cases, including in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426. He contended that, properly construed, the underpayment that Mr Urquhart claimed in his relief (see [4]) included the loading for which the 1998 Award provided calculated by reference to the 1999 and 2002 certified agreement rates (as well as the difference between the amounts for which these certified agreements provided and that which he was actually paid). 39 AMRS responded that: (a) Powercor's contracting out of the meter reading function did not constitute a transmission of business as meter reading was not Powercor's business, or part of its business. Rather, meter reading was an ancillary function that supported the core business of Powercor, which was to distribute electricity. AMRS also relied on PP Consultants , Gribbles and Stellar Call Centres . AMRS submitted that meter reading was not an essential, or even significant, part of the business of distributing electricity. Nor was it part of the development or maintenance of the assets used to generate electricity, the use of which enabled a fee to be charged to the retailers. AMRS contended that there was a material difference between the metering of electricity use and the reading of meters. This distinction was apparent in each of the outsourcing contracts and in Powercor's distribution licence. (b) If it were wrong in the above submission, then there was no transmission of business to AMRS in 2002 and 2004 as it had already been transmitted to VMM in 1997. Powercor had not, since that time, "contracted in" the meter reading function. Hence, at the time of contracting out meter reading to AMRS, Powercor had no meter reading business left to transmit. Alternatively, there was no transmission because, under Powercor's distribution licence and the relevant Codes, Powercor retained the obligations with respect to meters and meter-reading. Further, there was no transfer of assets from Powercor to AMRS. (c) If Powercor's meter reading function constituted its business or part of its business and such business was transmitted to AMRS, then neither the 1998 Award, nor the 1999 Agreement and the 2002 Agreement applied to meter readers (such as Mr Urquhart). Therefore, Mr Urquhart was not entitled to be paid in accordance with those instruments. AMRS argued that, even if a generous approach was adopted to the interpretation of the 1998 Award, there was nothing in the 1998 Award that imposed a legal obligation on Powercor to classify, or pay, meter readers under the 1998 Award. Moreover, the history did not disclose that that there was any previous agreement or award relevant to the 1998 Award showing that meter readers were to be covered by the award. Neither the 1999 Agreement nor the 2002 Agreement expressly sets out which Powercor employees were to be covered by these agreements. Rather, by reference to Appendix C in the case of the 1999 Agreement and Appendix D in the case of the 2002 Agreement, each instrument sets out rates of pay within the structure of a 30-point pay scale. In the absence of express provision, AMRS contended that it was proper to consider the industrial and statutory context surrounding the Agreements. This required attention to the objective facts. AMRS argued that the translation exercise undertaken within Powercor after the 1997 Agreement was not relevant to the construction question. Even if this exercise could be taken into account in construing the 1999 Agreement, at the time of certification of the 1999 Agreement (and the 2002 Agreement), Powercor did not employ any standard meter readers. AMRS submitted that, in the circumstances, it could not be said that, viewed objectively, the pay point classification scheme in the two agreements was intended to cover standard meter readers. AMRS further argued that its approach was supported by the statutory context surrounding the certification of enterprise agreements. AMRS submitted that clause 8.2.2 of the 1998 Award made it clear that the loading of 25% attached to the rates of pay prescribed in the Award and not the rates in the 1999 or 2002 Agreements. 46 In the course of this judgment, their Honours touched on the meaning of the word "business" in this context. As their Honours said, to be a "successor" (or assignee or transmittee), it is not enough that the new employer pursues the same kind of business as the old: Gribbles at 211. What was meant by the word "business" in this context depends on s 149(1)(d) , which "focuses upon succession, assignment and transmission to or of a business which is identified as the business of an employer", which "necessarily directs attention to what it is that the former employer had which is to be described as the 'business' of that employer": Gribbles at 211. Their Honours went on to say (at 212): The 'business' of an employer may be constituted by a number of different assets, both tangible and intangible, that are used in the particular pursuit, whether of profit (if the 'business' is a commercial enterprise) or other ends ... In the case of a commercial enterprise, identifying the employer's 'business' will usually require identification both of the particular activity that is pursued and of the tangible and intangible assets that are used in that pursuit. The 'business' of an employer will be identified as the assets that the employer uses in the pursuit of the particular activity. It is the assets used in that way that can be assigned or transmitted and it is to the assets used in that way that an employer can be a successor. The new employer may be a successor, assignee or transmittee to or of the business, or part of the business, of an employer who was a party to the relevant industrial dispute if the new employer, having the beneficial use of assets which the former employer used in the relevant pursuit, uses those assets in the same or a similar pursuit. ... Whether the new employer is a successor, assignee or transmittee, will require examination of whether what the new employer has can be described as a part of the former employer's business. In s 149(1)(d) of the Workplace Relations Act , "the business or part of the business" of the former employer which in the present case is Powercor is thus to be characterised by reference to the particular activity that it pursued and the assets that it used in that pursuit. As Stellar Call Centres shows, whether a new employer "becomes the ... transmittee ... of the whole or a part of the business concerned", for the purposes of subs 170MB(2) depends on much the same inquiry. 47 Stellar Call Centres applied the reasoning in PP Consultants to an inquiry under ss 149(1)(d) and 170MB(1) (which, for present purposes, is in relevantly the same terms as s 170MB(2)). In the Full Court of this Court, Stellar Call Centres challenged the decision of the judge at first instance that, pursuant to ss 149(1)(d) and 170MB(1) of the Workplace Relations Act , it was bound by awards and certified agreements binding on Telstra Corporation Ltd ("Telstra"). The question was whether a part of Telstra's business that involved the taking and responding to telephone calls from Telstra's customers had been transmitted to Stellar Call Centres. The Full Court held that there was no such transmission, chiefly because the receiving of the calls from customers were "activities in support of Telstra's businesses in the telecommunication industry" but were "not themselves ... the business or part of the business of Telstra": see Stellar Call Centres at 311. The Full Court said (at 311): That business can appropriately be characterised as providing telecommunications services to its customers. In the course of conducting that business, Telstra is called upon to respond to enquiries, requests for services and complaints from its customers, including those made by telephone. However, the making of those responses is not a distinct 'part' of Telstra's business within the meaning of s 149(1) , as explained by the High Court, any more than, for example, cleaning undertaken as a necessary aspect of the conduct of a restaurant is a 'part' of the business of the restauranteur. The business of Stellar Call Centres was the provision of telephone answering services. The answering of calls was not, however, a part of Telstra's business; and, accordingly, there was no transmission of that part of Telstra's business.