United Workers Union v Compass Group Healthcare Hospitality Services Pty Ltd [2023] FCAFC 92

United Workers Union v Compass Group Healthcare Hospitality Services Pty Ltd [2023] FCAFC 92

The termination of the employees was not due to the ordinary and customary turnover of labour. A reasonable person in the position of both employer and employees would not have understood or expected the jobs were not of a permanent or ongoing nature, especially as the duration of the client contract was neither communicated nor part of the employment context. Consequently, the exception in s 119(1)(a) did not apply and redundancy pay was owed to eligible employees.

Parties
Appellant: United Workers Union; First Respondent: Compass Group Healthcare Hospitality Services Pty Ltd; Second Respondent: Compass Group (Australia) Pty Ltd
Jurisdiction
Australia
Judgment Date
16 June 2023
Procedural Posture
Appeal / Judgment on Appeal
Outcome
Appeal allowed
Legal Topics
Redundancy Pay, Ordinary and Customary Turnover of Labour, Termination of Employment, National Employment Standards, Interpretation of Fair Work Act 2009
Industrial Law Employment Law Redundancy Pay Ordinary and Customary Turnover of Labour Termination of Employment National Employment Standards Interpretation of Fair Work Act 2009

Case Brief

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Parties

United Workers Union

Appellant

Compass Group Healthcare Hospitality Services Pty Ltd

First Respondent

Compass Group (Australia) Pty Ltd

Second Respondent

Procedural Posture

Appeal / Judgment on Appeal

Legal Issues

  1. 1 Whether employees were entitled to redundancy pay under s 119(1)(a) of the Fair Work Act 2009 (Cth) on termination resulting from the loss of contract between the employer and its client.
  2. 2 Whether the terminations were due to the 'ordinary and customary turnover of labour' as an exception to the obligation to pay redundancy.

Ratio Decidendi

The termination of the employees was not due to the ordinary and customary turnover of labour. A reasonable person in the position of both employer and employees would not have understood or expected the jobs were not of a permanent or ongoing nature, especially as the duration of the client contract was neither communicated nor part of the employment context. Consequently, the exception in s 119(1)(a) did not apply and redundancy pay was owed to eligible employees.

Court Disposition

Appeal allowed

Orders

  • Parties to confer and file draft orders to give effect to the Court's reasons, or if disagreement, file competing draft orders and brief written submissions.