Application of Awards After a Transmission of Business.

By Belinda Peacocke

The concept of "joint employment" might be making its way into Australian IR jurisdictions , with implications for labour hire, following a full bench decision by the AIRC.

An employee claimed unfair dismissal against an employer and it was initially rejected on the basis she wasn't a federal award employee. The doubt about the status of the worker was because the employer who terminated her was not named as a respondent or in the transmission of the business, with whom the employee had been employed since 1995. The business had changed hands in 1999, but the terms and conditions of the employee's employment had not changed.

The employee appealed on the basis that the employer respondents was intended to mean the legal entity, carrying on the pharmacy business from time to time. The employee submitted various reasons why the person terminating her should be bound by the award, and the full bench ruled in her favour on the basis of its interpretation of s149(1)(d).

Perhaps the most interesting sidelight of this is the brief canvassing by the AIRC of the notion of "joint employment".

This concept is well established in the USA as a means of preventing employer attempts to avoid their obligations in labour hire situations. It has received little or no attention in Australian courts. Joint employer situations may be established where, despite the absence of common ownership, one entity effectively and actively participates in the control of employees of another entity. The test fro determining whether two employers, constituting entirely separate legal entities, are in fact joint employers was stated in the case NLRB v Browning-Ferris Inus 691 F2d 1117 (wd Cir 1982):

"Where two or more employers exert significant control over the same employees - where from the evidence it can be shown that they share or co-determine those matters governing essential terms and conditions of employment they constitute "joint employers" within the meaning of the NLRA."

The AIRC noted that if it was required to make a finding, it would be inclined to accept a joint employment relationship. So the decision might be the opening for the use of this concept in Australia and could have implications in cases and policies on labour hire companies.

Morgan v Kittochside Nominees Pty Ltd (U2001/5953, 13 June 2002, PR 918793)

(Employment Law Bulletin; vol. 8, no. 6)