The Federal Government’s Jobs Network has been dealt another blow, with Justice Marcus Einfeld of the Federal Court finding that employees of the government’s Employment National were eligible for the same pay and conditions as public sector employees.
Justice Einfeld found that workers who had formerly been employed by the old Commonwealth Employment Service (CES), but were now employed by the privatised employment agency Employment National, were entitled to the same awards as those covering the public sector.
This is a potential blow to the Federal Government’s plan to allow outsourcing in other areas, such as Telstra and the Australian Defence Department.
The Community and Public Sector Union (CPSU) had asked the Federal Court to rule on whether or not employees in the newly privatised Employment National were entitled to the same wages and conditions that they had previously enjoyed in the public service.
The government argued that these workers should not receive the same pay and conditions because they were now working in a different market place. It said they were not entitled to the same conditions as public servants covered by the Public Service Act. The court found otherwise.
When outsourcing occurs, the test concerning the transfer of an award hinges on whether there is “substantial identity” between the service performed by the new employer and that of the former employer.
In the light of this decision, the CPSU announced that it would be preparing a case to have the Federal Court’s decision apply to all 260 private employment agencies. The union believes that the court’s ruling should now be extended to all private employment agencies.
Some of these are run by charitable organisations that will find it difficult, if not impossible, to match Employment National in terms of claims for back pay and improved conditions.
The Chief Executive Officer of Jobs Australia, Mr David Thompson, commented that if the claim for public service awards across the Jobs Network was accepted by the courts, “it would have serious consequences for many of our member providers who have been bound by, and have been adhering to, another Federal award.”
In another related case, the High Court is soon to decide whether pay and conditions reached through enterprise agreements are supposed to carry over into businesses that have been outsourced. PPS Consultants is appealing against a Federal Court decision. The Court found that a chemist shop in Byron Bay, which had taken over banking facilities from a St. George Bank branch after it had closed down, was bound to pay St. George Bank award rates.
PPS Consultants intends to argue that the Federal Court judges erred in law when they found that awards were transferable to the outsourced business. With no transfer of property or assets between St. George Bank and the pharmacy, it claims that there can be no transfer of wages and conditions either.
The Employment National decision is the latest in a series of decisions that have prevented the erosion of outsourced workers’ pay and conditions, following the implementation of the Workplace Relations Act.