Application by Serco Sodexo Defence Services Pty Ltd (SSDS) [2015] FWC 641 (28 January 2015) [2015] FWC 641 FAIR WORK COMMISSION DECISION Fair Work Act 2009 s.120 - Application to vary redundancy pay for other employment or incapacity to pay Serco Sodexo Defence Services Pty Ltd (SSDS) (C2014/6408, C2014/6409, C2014/6412, C2014/6384, C2014/6386, C2014/6388, C2014/6389, C2014/6390, C2014/6395, C2014/6397, C2014/6402 & C2014/6406) COMMISSIONER ROE MELBOURNE, 28 JANUARY 2015 Application to vary redundancy pay for other employment - NSW & ACT. [1] Serco Sodexo Defence Services Pty Ltd (SSDS) has made a number of applications seeking to have the redundancy payments, due to a significant number of SSDS employees who were made redundant as a result of the loss of the defence contracts, reduced to nil, or an amount to be determined by the Fair Work Commission (the Commission). SSDS argues that it has obtained other acceptable employment for these employees, primarily with the incoming contractors. SSDS argues that its actions caused the job opportunity to become available to each of the SSDS employees who received a job offer from an incoming contractor and that SSDS was a strong moving force towards the creation of the available opportunities. [2] The Fair Work Commission is first considering whether or not SSDS has obtained alternative employment with the incoming contractors for its employees and whether or not that employment is on acceptable terms and conditions. If the Commission concludes that SSDS has obtained acceptable alternative employment then the Commission will, in a second stage hearing, ensure that affected employees are notified and have an opportunity to raise the particular circumstances of any employment offer made to them. If the Commission concludes that acceptable alternative employment has been found in the particular circumstances of an employee the Commission will then determine what reduction, if any, should apply to their redundancy payment. [3] I have heard these matters in three parts. ● The Northern Territory/Kimberly contract ended on 30 September 2014. The Fair Work Commission considered arguments and evidence from SSDS, the relevant unions and the incoming contractors on the 2nd, 8th and 14th of October 2014. I issued a decision on 31 October 2014. 1 I determined that SSDS had not obtained acceptable employment for SSDS employees with the incoming contractors and I dismissed the SSDS applications. SSDS has appealed this decision. ● The NSW/ACT contracts ended on 31 October 2014. I considered evidence in respect to these contracts on the 17th to 19th of November 2014 with further documents from the incoming contractors and the final written submissions being received by 5 December 2014. This decision is in respect to the NSW/ACT contracts. ● The Queensland contract ended on 30 November 2014. I heard arguments and evidence in respect to this matter on the 16th to 18th of December 2014. A decision in respect to the Queensland contracts will be issued separately. [4] The parties agreed that I should have regard to relevant evidence and submissions from the hearing of the Northern Territory/Kimberly contract proceedings in dealing with the NSW/ACT and Queensland contracts. Similarly in dealing with the Queensland contracts I should have regard to relevant evidence and submissions from the hearing in respect to the NSW/ACT contracts. The exhibits are therefore common to all the proceedings. [5] The entitlement to redundancy payments arises from two sources, the NES and the relevant collective agreement. SSDS has applied under Section 120 of the Fair Work Act 2009 (cth) (the Act) in respect to the NES and under Section 739 in respect to each relevant collective agreement. Conciliation of the Section 739 disputes was unsuccessful following the relevant steps of the disputes settlement procedure. I am satisfied, and the parties agree, that in practice the obligations of SSDS under the relevant collective agreements do not displace or substantively alter the obligations under the NES. SSDS has an obligation to pay any redundancy entitlement due to employees under the NES unless SSDS is successful in its Section 120 applications. In some cases employees are entitled to a more generous redundancy scale under the agreement than under the NES. The preliminary questions for determination in respect to the NSW/ACT contracts are therefore those set out at paragraph 14 of my earlier decision 2 varied to specify the relevant incoming contractors and collective agreements applicable to the NSW/ACT contracts. [6] Section 120 provides: “(1) This section applies if: (a) an employee is entitled to be paid an amount of redundancy pay by the employer because of section 119 ; and (b) the employer: (i) obtains other acceptable employment for the employee; or (ii) cannot pay the amount. (2) On application by the employer, FWA may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that FWA considers appropriate. (3) The amount of redundancy pay to which the employee is entitled under section 119 is the reduced amount specified in the determination.” [7] SSDS relies on paragraph (b)(i), and argues that it has obtained other acceptable employment for the employees concerned. [8] Nothing raised by the parties in the NSW/ACT proceedings has convinced me to alter the approach I took in my earlier decision and I adopt that approach for present purposes. 3 SSDS submits that the Full Bench in FBIS 4 applied Justice Marshall’s interpretation of “obtain” and in doing so was in error. SSDS submit that Justice Marshall’s interpretation was narrower than that adopted by the Full Bench in Derole Nominees. As I identified at paragraph 17 of my earlier decision the Full Bench analysed the facts in respect to the actions of FBIS and applied the test in the legislation to those facts. The Full Bench assessed whether or not the actions of FBIS were sufficient to find that FBIS had obtained the employment with ACG. The Full Bench was informed and assisted by recent authorities that utilised the test in Derole Nominees, including the decision of Justice Marshall. The Full Bench expressed its conclusion using the approach of Derole Nominees. It found that the actions of FBIS fell well short of action which “causes acceptable alternative employment to become available to the redundant employee” and that FBIS was not a “strong moving force towards the creation of the available opportunity”. 5 I adopt the same approach. [9] There must be a casual connection between the purpose and effort of the employer and the gaining of employment or an offer of employment, by the employee. The actions required to establish the necessary degree of causation will vary depending on the circumstances. SSDS submitted that the appropriate inquiry in considering what action caused the employment to become available to the redundant employee is as follows: “That is, what steps, if any, did the current employer take to identify an opportunity of alternative employment, bring it to the attention of the redundant employees and maximise the prospect of the redundant employees gaining such employment? Further, did any of those steps have a material influence on the redundant employees being offered a job? .... the focus is on whether the outgoing employer has deployed “ purpose and effort ” and such “ purpose and effort ” has assisted, in a material way, the employees to gain such employment. Such “ purpose and effort ” may fall into one of the following categories: (a) First, the outgoing employer can communicate and co-operate with, and provide information to, the incoming contractor; (b) Secondly, the outgoing employer may enter into an arrangement or agreement with the incoming contractor, the effect of which may be to assist the outgoing employer’s employees to be successful in receiving a job offer from the incoming contractor; and (c) Thirdly, the outgoing employer can communicate with its employees about the available opportunities and assist the employees to apply for and succeed in procuring an offer of employment from the incoming contractor.” 6 [10] I agree that it is necessary and relevant to consider the steps that the employer took to identify the opportunity of alternative employment, bring it to the attention of the employee and maximise the prospect of the redundant employee gaining employment. I agree that there could not be a casual connection between the efforts of the employer and the outcome unless it is established that the actions of the employer had a material influence on the redundant employee being offered a job. It is necessary that the actions have a material influence on the outcome. However, the test is that the actions must be “a strong moving force” towards the job offer being made not that the actions had a material influence on the job offer being made. I also agree that the categories of actions listed by SSDS are relevant and I have examined the evidence in respect to those categories of action and the impact of those actions. The SSDS submission shifts the focus from actions which have a material influence on an employee getting a job offer to actions which have a material influence on the group of employees getting a job offer. This enables SSDS to effectively argue that if the actions of SSDS result in SSDS employees having some priority or advantage in the selection process of the incoming contractor which made a material difference to the chances of SSDS employees being selected then SSDS will have obtained employment for that group of employees. For reasons which I now examine there are problems with this approach. [11] Previous Section 120 applications before the Commission and its predecessors have related to a limited number of employees and considered evidence about their specific circumstances. This is not surprising given that Section 120 requires a finding that the employment was obtained for “the employee” . When considering a group of employees the finding must be that the employer obtained the employment for each of the employees . This is the first case to deal with a very large number of employees and where the Commission is being asked to determine if the efforts of the former employer in respect to a class of employees is sufficient to determine that the former employer obtained employment for that class of employees with the incoming contractors. The evidence shows that there were differing levels of cooperation between SSDS and each incoming contractor. The actions of SSDS and the impact of those actions were therefore different for each contractor. Therefore what I am asked to determine is whether or not the actions of SSDS in respect to the group of employees who were offered work with each of the incoming contractors were sufficient to determine that SSDS obtained employment for that group of employees with that incoming contractor. This issue has become more relevant when considering the NSW/ACT contracts than it did when considering the NT contract because the relationship between SSDS and the incoming contractors was more diverse. [12] There would be no utility in making a decision about whether or not the actions of SSDS in respect to a group of employees who were offered work with an incoming contractor were sufficient if the whole case about “obtain” was able to be run again in respect to a particular employee. In the second stage SSDS does not envisage that it would be open to a particular employee to argue that SSDS did not obtain employment for them, nor would it be open to a particular employee to argue that the general conditions of employment offered to the group of employees were not acceptable. I am satisfied that it is only open to SSDS and/or an individual employee to pursue a second round case where I make a finding that employment has been “obtained” in respect to the group of employees. The first round decision must be a decision about whether employment has been “obtained” in respect to each of the employees in a particular group and whether or not the conditions of employment offered to the group of employees is acceptable. The second round case would determine if, after considering the particular circumstances of an employee, the employment is acceptable and if so what the level of reduction in redundancy should be having regard to the particular circumstances. [13] Earlier Section 120 cases have shown that there are a variety of ways in which an employer might demonstrate that they have “obtained” employment. For example, the outgoing employer approaches the incoming employer and secures an agreement to employ a particular employee without the need for a selection process; or the outgoing employer provides information about the job opportunity which the employee would not otherwise have obtained; or the outgoing employer provides assistance to an employee and/or reaches agreement with the incoming employer which causes the job offer to be made or was a strong moving force towards the job offer. These examples are not exhaustive and whether or not they meet the legislative test depends upon the circumstances. [14] The actions of the outgoing employer may be such that the Commission could find that they caused the job offer to become available to a group of employees and that the actions of the outgoing employer were a strong moving force behind the creation of the job offers. For example, this might occur where an outgoing employer was to reach an agreement with an incoming contractor to employ all of the employees without the need for a selection process. The outgoing employer may be found to have obtained employment for the group of employees in this type of situation depending upon the circumstances of the agreement. [15] The situation where applicants have to compete for a job offer must be distinguished from situations where direct appointment occurs. Where an employer decides to employ an employee(s) without a selection process then it might be said that the decision to not have a selection process is the decision which obtains the employment. If the actions of the outgoing employer led to the decision not to have a selection process this may be sufficient to establish that the outgoing employer was a strong moving force behind the offer of employment for all the employees. [16] Where the incoming contractor runs a competitive selection process it will be difficult to decide if the actions of the outgoing employer had a material influence on the making of a job offer to each of those who received an offer, let alone if the actions were a strong moving force leading to that outcome. In a situation where outgoing employees have to compete, that is, the outcome of the process is that some of the applicant employees are unsuccessful and/or some of those appointed are not the outgoing employees, it will generally be relevant to ask the question: is it likely that the applicant(s) would have been successful regardless of the actions of the outgoing employer? This will help identify what were the strong moving forces behind the job offer(s). If the attributes and actions of the employee(s) and the needs and actions of the incoming contractor are such that the existing employee(s) would probably have been successful in obtaining employment in the incoming employer’s selection process, then the actions of the outgoing employer are less likely to be found to be a strong moving force behind the job offer being made. [17] If the actions of the outgoing employer meant that internal applicants got some priority or preference and as a consequence instead of 75% of the employees of the outgoing contractor getting a job offer, 80% of the employees got a job offer, on what basis should the 75% who would have got a job offer anyway be denied their redundancy entitlement? In a situation where many of the employees of the outgoing contractor are attractive to the incoming contractor regardless of the actions of the outgoing contractor, it might be found that the actions of the outgoing contractor may have marginally increased the chances of each of the employees getting a job offer. If this were the case then the actions are unlikely to be a strong moving force behind each of those employees getting a job offer. Alternatively, it might be that the actions of the outgoing contractor had no real impact on the chances of those who would have participated in the selection process of the incoming contractor regardless of the actions of the outgoing contractor and who would have performed well in that selection process because of their actions and attributes. In that circumstance the actions of the outgoing contractor may have had a real impact on the chances of the lesser performers getting a job offer. The outgoing employer might be found to be a strong moving force behind the small group who were poorer performers in the selection process getting a job offer. In the absence of evidence which enables that small group of employees to be identified and distinguished, it would be difficult to make a finding that employment was obtained for the group of employees or any sub-group. If however there was a proper basis to distinguish the sub-group a finding could be made. Examples of factors which might define such a sub-group, depending upon the circumstances, could include those who received a particular ranking in the incoming contractors selection process or those with a particular level of experience or those whose resumes were improved by the outgoing employer or those who were assisted to get a security clearance. [18] I raise these considerations not to suggest a new or different test. The test I am using is the words of the legislation assisted by the guidance of the decisions in Derole and FBIS. I raise these considerations to illustrate the issues raised by a group application as opposed to an individual application. The test is not what would have happened but for the actions of the employer. The test is about the relationship between the actions of the outgoing employer and the job offer being made. In the circumstances of this case it is necessary and relevant to examine what were the moving forces behind the incoming contractor making a job offer and to evaluate the importance of the outgoing contractors actions in that context. [19] SSDS did not provide evidence of particular employees in respect to whom it had obtained employment with the incoming contractors. In some cases SSDS reached agreement with incoming contractors whereby they provided SSDS with information about the identity of SSDS employees to whom they offered employment. In other cases the information was obtained by the Commission issuing orders at the request of SSDS to the incoming contractors to produce relevant information. I have had regard to this information. Evidence concerning the assistance provided by SSDS to employees to obtain employment with the incoming contractors. SSDS evidence [20] SSDS provided detailed evidence of its activities. This evidence was of a similar nature to that provided in respect to the NT contracts. Except where the facts are distinguished I rely upon the comments and conclusions about that similar fact evidence in my earlier decision. 7 [21] The evidence of the SSDS witnesses concerning the assistance provided to employees to participate in the recruitment process of the incoming contractors had a number of aspects including: ● There was detailed evidence of the communications by SSDS to its employees about the loss of contracts, the incoming contractors, the positions available with the incoming contractors, and the recruitment process being utilised by the incoming contractors. In some cases the distribution of this material was at the request of or by agreement with the incoming contractor. ● In some cases the incoming contractors held information sessions and SSDS facilitated communication with employees about those sessions. SSDS had a policy to provide employees with time off to attend those sessions if they were in working time. In some cases SSDS assisted to locate the sessions on site. ● In some cases SSDS assisted with the scheduling of job interviews and medical assessments, with the release of employees to attend interviews and medical assessments when in working time and with facilitation of interviews to be held on site where this was sought by the incoming contractor. In some cases SSDS assisted the incoming contractor by distributing forms and in collecting completed applications and forwarding them to the incoming contractor. SSDS did not assist with the scheduling of the interviews and their conduct on site or with the return of applications in respect to the NT contracts. ● SSDS encouraged employees to apply for relevant positions. ● SSDS provided general information and links to other supportive information in respect to completing applications, resume writing and interview techniques. In a few cases training sessions were offered. ● In some cases SSDS offered to assist employees with the submission of applications online. In some cases individuals who requested assistance in completing applications and resumes were provided with that assistance. ● SSDS also provided assistance to some incoming contractors in the recruitment processes after offers of employment had been made (e.g. return of acceptance letters, release for inductions, information about uniform fittings and release for training). ● Some SSDS employees completed forms allowing for release of information about their employment to the incoming contractors. In some cases SSDS provided this information to incoming contractors when authorised to do so. ● In some cases SSDS provided information about security clearances to incoming contractors and provided application forms to a significant number of employees to upgrade their security clearances to meet the expected requirements of the new contracts. Mr Marriott estimated that 145 employees did not have the required higher level security clearances and SSDS provided 70 of those employees with the necessary paperwork and encouragement to enable them to complete and submit their applications. ● In some cases SSDS provided information to incoming contractors about their employee profile and rosters including the number of employees, the distribution of classifications, security clearance and length of service. ● SSDS offered employees access to SSDS computers to submit and draft applications and resumes. However, access to some key external sites such as hotmail, were blocked and special arrangements or an SSDS email address were required in some cases. [22] There was somewhat more evidence of the use of the People Resource Centre in respect to the NSW/ACT contracts than there was in respect to the NT contracts. A circular was mailed out to employees about the assistance which could be accessed ten days prior to the contract end date. There was also more evidence about the extent to which Yammer was accessible and used. Ms Neill gave evidence that in the end 427 out of approximately 3000 employees nationally signed up for yammer accounts. 8 Most of the employees covered by this case would not have had SSDS email addresses and they had to apply for an address if they wanted to sign up for yammer. Ms Neill said that yammer was one of the main channels for communication but it was only one of many channels. 9 Some information was only circulated through yammer although it was expected that some users would print out the information and distribute it. 10 I am satisfied that Yammer was accessed by a relatively small proportion of employees other than supervisors and team leaders. The general comments I made in the NT decision about the limitations of cascading information through managers to notice boards and the use of intranet and internet based communication methods are applicable to NSW/ACT. The profile of employees, the limits on access to particular internet sites on the SSDS computer system, and the limited access to computers reduced the success of intranet and internet based communication methods. 11 [23] I am not satisfied that support and training for SSDS employees in interview techniques was widespread. However, it was more widespread than in the case of the NT. I am satisfied that the security clearances assisted employees. Although SSDS encouraged and facilitated applications it was the employees who applied for and gained these qualifications. Many employees already had base level or higher security clearances and had had this for a significant period of their employment with SSDS. [24] Ms Phu provided evidence about direct assistance provided to a small number of individual employees in drafting resumes and applications. 12 Mr Castles and Ms Lipsys also gave evidence of the actions of other SSDS supervisors and HR personnel who assisted some employees in having their resumes prepared and typed. I am not satisfied that a large proportion of employees received individual as opposed to general assistance in the drafting of their applications and resumes. Ms Phu also gave evidence of a few examples where employees had been provided with direct assistance to forward their application to an incoming contractor. [25] I am satisfied that SSDS’s offer to provide information to the incoming contractor if a consent to release form is signed may have provided some employees and the relevant incoming contractors with assistance. Unlike in the NT case there are a number of examples in respect to NSW/ACT where there is evidence that information authorised for release was provided to some of the incoming contractors. However, I consider that this is analogous to an employer agreeing to provide a statement of service. The information released was about a particular employee’s characteristics and it was confirmation of the sort of information that an employee might otherwise provide in their resume or application form. The agreement to provide this sort of factual background information consented to by an employee is not action which is generally significant towards the creation of an employment opportunity. [26] Mr Castles for SSDS raised some doubts about the significance of SSDS facilitating access to the defence bases for various purposes including information sessions and interviews. Access to the sites is fundamentally controlled by defence not by contractors such as SSDS. Mr Castles gave evidence, which I accept, that if an incoming contractor had difficulty with access then it could have sought and obtained permission from defence. 13 [27] In a number of cases incoming contractors were provided with information about the number of employees, the profile of employees and staffing levels. As I concluded in the NT case I am satisfied that this information may have assisted the incoming contractor to better plan how to commence the new contract and it may have been useful in considering whether or not they wished to enter into to an arrangement with SSDS about recognition of service. In a couple of specific cases (MSS, AFL and Broadlex in particular) SSDS witnesses believed that this led to the incoming contractor varying its anticipated staffing levels. However, except in the case of MSS which took the initiative to request the information for the express purposes of adjusting staffing levels, I am not satisfied that it was the actions of SSDS in providing this information that led to the creation of a specific number of additional job opportunities and/or that the provision of the information made it more likely that SSDS employees (in general or in particular) would be employed by the incoming contractors. In the case of MSS the actions of SSDS may have affected the timing of when additional positions became available in a manner that assisted SSDS employees. Evidence of the employees [28] Evidence was given by a number of employees most of whom had obtained work with an incoming contractor. The employee witnesses were generally aware of the information bulletins provided by SSDS. Some of the employee witnesses were union delegates and as such were in a good position to know about the situation of their work colleagues. [29] Mr Wesley Inglis, security guard, was unaware of any person in the workplace being offered assistance by SSDS to complete a resume. Mr Inglis received a letter on the last day of his employment offering to provide assistance with resume writing. The letter was dated 24 October 2014. 14 Mr Inglis gave evidence that he had difficulties attending the interview and medical for the position with MSS as SSDS would not allow him time off until there was someone to relieve him. This resulted in him being anxious because he arrived a few minutes late for the appointment. 15 Mr Inglis gave evidence that he was also told that he could not attend the interview and medical in work time as there were not enough staff to relieve him so it had to be scheduled in his own time. 16 This is to some extent consistent with the evidence provided by SSDS which showed that MSS reached agreement with SSDS to schedule interviews and medicals outside of normal working hours to assist SSDS. Mr Inglis gave evidence that he generally relied on work colleagues and other external sources to get information about the change of contract and the process for applying for work with MSS. Mr Inglis said that his supervisor did not generally provide such information. Mr Inglis was not aware of any information session being conducted by MSS prior to the job interview. [30] Ms Ray, a cleaner, gave evidence that she was refused paid time off to attend the aptitude test as part of the selection process for the job with Spotless. Ms Ray said that two and a half hours was deducted from her pay when she attended. Ms Ray also gave evidence that the offer for assistance with resume writing came after she, and most of the others in her work group, had already made applications. Ms Ray put in an expression of interest when Spotless advertised for positions on the Spotless web site and Seek. Ms Ray was not aware of any offer to use the computer at work. [31] Ms Ross, a cleaner, gave evidence that SSDS informed her and other employees that they would have to attend interviews and tests in their own time. If the interview was in work time then they would be required to make up the time or take annual leave. 17 Ms Ross also completed an expression of interest with Spotless when jobs were advertised to the public on the Spotless web site. Ms Ross had heard rumours that Spotless may be the incoming contractor and was monitoring their site. Ms Ross completed and submitted her own resume prior to the offer of resume assistance. Ms Ross did however subsequently attend a session on resume writing run by SSDS. Ms Ross gave evidence that the Spotless information session was on site but outside of normal working hours. [32] Mr Pearson, an aircraft refeuller and TWU delegate, gave evidence that SSDS told him about the jobs advertised on the Transfield website. Mr Pearson was aware that he could get assistance from SSDS but he completed his application and resume himself on his computer at home. Mr Pearson was interviewed and attended a medical for his job with Transfield outside of work hours. Mr Pearson did not have the required security clearance for his new job with Transfield but he only recently became aware of this. He was not aware of SSDS assistance to assist him to upgrade his security clearance. [33] Mr Wyness, a security guard, also gave evidence that he was denied paid time off to attend a medical assessment for his job application with MSS. His manager told him he would have to organise it in his own time. 18 Mr Wyness gave evidence that he had already prepared his resume and applied for work with MSS on their website prior to receiving advice about how to apply and the tips in respect to resume preparation from SSDS. Mr Wyness gave evidence that he was told that you could use the work computer but he had already done his application from home. Mr Wyness was not aware of any MSS information session but he did attend a group interview off site and was advised of the interview time by MSS. [34] Mr Vandermeut, a security guard, gave evidence that he found out from defence personnel that SSDS was losing the contract and then later that MSS would be the incoming contractor prior to being told by SSDS. He then regularly checked the MSS website and applied as soon as he saw positions advertised. The SSDS notice about the MSS positions came out about two weeks after the applications opened. Mr Vandermeut was aware of the range of SSDS bulletins about the transition process and as a leading hand he made sure that they were available to other employees. Mr Vandermeut gave evidence that MSS did not run an information session and that he attended the interview off site and outside of his working hours. [35] Mr Dukes, a driver, gave evidence that he regularly checked the Spotless website once he knew that they were the incoming contractor. He completed his application and submitted it without any assistance from SSDS. The information sessions he attended were off the base and were unpaid as they were outside of ordinary working hours. Mr Dukes received information about the loss of the contract and that Spotless was the incoming contractor from SSDS. Mr Dukes made an application for base line security clearance following encouragement of SSDS prior to the end of the SSDS contract. Mr Dukes attended the Spotless interview outside of working hours. [36] Mr Gudan was employed as a chef. He gave evidence that employees were not able to use the workplace computers and he was not aware that he could have used it to submit his job application and resume. Mr Gudan became aware that Compass was the incoming contractor from the local newspaper. Mr Gudan gave evidence that once word got around the employees they applied online with Compass and read that Compass would be considering SSDS employees first. Mr Gudan prepared and submitted his own application and resume from home. The Compass information meeting was in work time but the interview was after his normal working hours. [37] Mr Rigoni, a firefighter, gave evidence that the SSDS firefighters had their own facebook page and they used this to keep each other informed of developments in respect to the end of the SSDS contract including how to apply for jobs with Transfield. 19 Mr Rigoni and at least some of his work colleagues therefore obtained the information that Transfield were seeking applications prior to being advised by SSDS. Mr Rigoni was aware of the offer to assist with resume writing and interview training but he didn’t need that assistance as he already had the necessary information and was able to complete the material himself. Mr Rigoni, like some other employee witnesses, reported that he did not use the work computer as access to critical external websites such as hotmail was blocked. Mr Rigoni considered accessing Yammer but was told by a colleague that it was too difficult to access and so he did not proceed. Mr Rigoni attended the various steps of the interview selection process with Transfield in his own time. He did not ask for time off but was aware that work pressures would make it difficult to get time off. [38] Mr Barry, a groundsman and bargaining representative, gave evidence that he drafted his resume and requested Julie Zuzic from SSDS HR to check his resume. She agreed to check the resume and get back to Mr Barry but Mr Barry says that she never got back to him. Mr Barry rang Spotless on four separate occasions to check if he had been successful in his application to Spotless and he asked two SSDS managers to follow up but they told him he should ring Spotless himself. Spotless offered Mr Barry a job on 31 October 2014. Mr Barry gave evidence that a SSDS supervisor assisted him to lodge his expression of interest with Spotless. Mr Barry attended the Spotless information session in working hours. Mr Barry was told he had to make up the hours used to attend the Spotless interview. SSDS assisted Mr Barry to apply for a baseline security clearance. [39] Ms Barrington was employed as a food and beverage attendant and was also a union delegate. Ms Barrington gave evidence that she found out about the job opportunities with Compass (ESS) by searching their website from home. She became aware of Compass as the incoming contractor by word of mouth from other employees and subsequently she saw the information in an SSDS communication. Ms Barrington was aware of offers from SSDS to assist with completing and submitting applications and to use computers at work but she did not need to access this assistance. SSDS provided Ms Barrington with the application form to apply for the security clearance required for work with Compass shortly before the end of the contract date. Ms Barrington confirmed that SSDS was involved in arranging the interview times and location and also in distributing the job offer letters from Compass. Ms Barrington rejected the job offer from Compass as she was successful in getting a job with Australia Post. Ms Barrington was provided with paid time off to attend the interview and medical examination with Compass and was also granted time off to attend the Australia Post interview. [40] Ms Fitzgerald, food and beverage attendant, gave evidence that in the period before September 2014 there was limited paperwork provided to her work area about the transition. She gave evidence that there was no notice board and that she never received a notice from SSDS about jobs with Compass, or that Compass was the incoming contractor. She raised the issue with SSDS and SSDS then mailed material directly to her from September 2014 onwards. Ms Fitzgerald did not understand what an intranet site was. Ms Fitzgerald rang the helpline to ask about yammer and was told she needed an SSDS email address to access it. As she did not have an SSDS email address she did not pursue the matter further. Ms Fitzgerald did confirm that she was advised that assistance was available about resume writing and interview techniques but she did not access this. An SSDS supervisor did ask her if she had applied for a job with Compass. Ms Fitzgerald read some of the information provided by SSDS about the transition. Ms Fitzgerald applied for the Compass job online and was told how to do this by a colleague. The interview with Compass occurred in working time. [41] Mr Blunt, a driver, gave evidence that he initially found out that Brookfield was the incoming contractor by word of mouth from other employees. He completed the application for the job with Brookfield online and submitted it from his home computer. Up until the last two weeks of the SSDS contract Mr Blunt and his colleagues were uncertain as to whether or not the work would be performed directly by Brookfield or would be sub-contracted. Mr Blunt attended the job interview during working time. Mr Blunt had a higher level security clearance and knowledge of the bases and he advised Brookfield of that in his interview. Mr Blunt gave evidence that two or three of his driver colleagues were not offered employment with Brookfield. [42] Ms Walker, a hospitality worker, gave evidence that SSDS told her that she should go onto the Compass website to apply for a job and she had to submit her application and resume online and did not receive assistance in preparing her application or resume. The offer to assist with applications was made two weeks after she had made the application. Ms Walker gave evidence that SSDS told her about the need for a baseline security clearance and that she should apply for that online and she did that. [43] Mr Wilson, a chef, gave evidence that SSDS told him he should go on the Compass website to apply for a job which he did. He submitted his application and resume online outside of working hours. Mr Wilson was aware that SSDS offered help with resumes but he did not request any assistance. Mr Wilson attended the interview outside his normal working hours. He attended SSDS information sessions and the Compass introduction meeting in working hours. [44] Mr Backhouse, a security guard and union delegate, gave evidence that he applied for a job with Wilson but was not successful in obtaining employment. At the time he submitted his application he was not aware of the offer of assistance from SSDS. He attended the interview in his own time. Mr Backhouse had a high level security clearance. Mr Backhouse was aware of some of the information circulated by SSDS but he gave evidence that some of it arrived after his employment with SSDS came to an end. [45] Mr Christoffelsz, a cleaner and union delegate, gave evidence that SSDS told him to apply for work with Spotless on the Seek website. He was not successful in obtaining employment with Spotless. He drafted his own application and resume and submitted it online through his phone and he did not receive assistance from SSDS in doing so. He was aware of the offer to assist with resumes but he did not take up that offer. He attended the interview outside his normal working hours. He attended both SSDS and Spotless information sessions in working hours. He had a baseline security clearance during the time of his employment with SSDS. [46] Mr Lupeski, a cleaner, gave evidence for SSDS that SSDS provided a lot of information about the loss of the contract and how to apply for work with the incoming contractors. Assistance with applications was offered and SSDS also helped him with printing his resume and scanning documents. Initially Spotless offered him a part time cleaning role and he was upset about this because he was engaged full time by SSDS. SSDS assisted him to apply for his security clearance and he believed this assisted him in obtaining the job with Spotless. Mr Lupeski has now been offered a full time role with Spotless. In cross examination it became clear that Mr Lupeski had only been employed by SSDS since August 2014 and was therefore only employed by SSDS for a total of less than three months and had no entitlement to redundancy. [47] Two union organisers, Ms Cresshull and Mr Keenh, gave evidence, of their interaction with the transition process and about what employees had told them about the support given by SSDS. I do not doubt their evidence that employees generally told them that they obtained jobs with the incoming contractors due to their own efforts and not due to the efforts of SSDS. However, the details of what assistance was provided by SSDS are important in this case and those details are better exposed by the evidence which was available to be tested by cross examination including the documentary evidence, the evidence of the SSDS witnesses, the incoming contractor witnesses and the individual employee witnesses. I also do not doubt the evidence of Mr Keenh that employees were particularly concerned at the uncertainty around payment of their redundancy pay. Conclusions [48] I am satisfied by the evidence of the incoming contractors, the employees and SSDS that many employees were concerned about their future employment prospects when they heard that SSDS was not going to retain the contracts. I am also satisfied that information about the loss of contracts, the identity of the incoming contractor(s), the existence of job opportunities with the incoming contractor(s) and the avenues to apply for jobs with the incoming contractor(s) was keenly sought by affected employees. The information about these matters was obtained, often informally, from a variety of sources including personnel in the host organisation (Department of Defence in this case), from incoming contractor web-sites, and from workmates. Information was also circulated in various forms by SSDS including through supervisors and managers. The evidence of the employee witnesses demonstrates that in many cases employees did not rely on SSDS for information. For example, in the case of Spotless, a significant number of employees responded to the general expression of interest ads on the Spotless website in June 2014, prior to Spotless being publicly announced as the successful tenderer. Information spread rapidly but there were some employees, particularly those in isolated situations or who were absent on various forms of leave, who were more difficult to reach. [49] In some cases SSDS distributed information which was provided by SSDS employees. 20 In other cases employee witnesses gave evidence of SSDS material arriving after the event. It was common for employees to have completed applications and resumes prior to receiving notices about offers of assistance. Ms Phu accepted that in one case the notice advising of an incoming contractor information session went out the day after the session had been held. 21 SSDS distributed information about the times and dates for group interviews. In one case the information was obtained from employees and, by the time it was distributed, the employees had received revised information from the incoming contractors creating some confusion. 22 [50] SSDS could provide little evidence of the success or failure of their communication efforts. The employee witnesses provided direct evidence that employees were aware of a variety of information having been provided but were not necessarily across the detail and it was not necessarily the primary source of information or the information that produced the necessary actions towards participation in the incoming contractors recruitment process. Ms Neill accepted that the communications did not obtain employment for SSDS employees but she said that some of the communications may have assisted SSDS employees to obtain employment. 23 [51] I am satisfied by the employee evidence that access to computers at work was significantly less liberal than suggested by the SSDS witnesses. I am also satisfied by the employee evidence that although there were instances when employees had time off to attend interviews and information sessions there were also instances where employees were required to attend in their own time. It is clear from the employee evidence that there was no general practice to ensure that employees were able to attend interviews, medicals and information sessions in paid time. If instructions were issued to allow employees to participate in the incoming contractors selection process in working time they were not particularly effective. [52] It is my assessment that individual assistance with resume writing and individual assistance with obtaining security clearances are the actions which would be most likely to have a material impact on the chances of successfully obtaining employment. [53] As discussed earlier there was limited evidence from SSDS about the extent to which the assistance with job applications and related processes was taken up by SSDS employees. Most of the employees who gave evidence received limited assistance and a number of them gave evidence that this also applied to their workmates. There was also no evidence that this assistance when it was accessed materially influenced the decision making of the incoming contractors or increased the likelihood that SSDS employees obtained a job offer. It is reasonable to infer that where an employee accessed this assistance or the online materials it may have improved the quality of their application or approach to the interviews and this might have had some positive effect on the chances that an SSDS employee would get a job offer. In some cases the lodging of materials and reminders about lodging materials was done in cooperation with an incoming contractor. However, the assistance which may have affected the quality of an application or an employee’s performance in an interview was not done as part of an agreement with the incoming contractors. [54] As discussed earlier, I am satisfied that the security clearances assisted employees but although SSDS encouraged and facilitated applications it was the employees who applied for and gained these qualifications. To the extent that security clearances were significant in successfully gaining employment in many cases employees already had the required security clearances. In the case of Broadlex the concern of the incoming contractor was about higher level security clearances and those who had such clearances were attractive to Broadlex. In the case of security work SSDS did not take action as security clearances were already required and held. Generally the security contractors sought applicants with these clearances. The incoming contractors required employees with a variety of security clearance levels and there were some existing SSDS employees who already had clearances at those levels. The evidence of the employees and incoming contractors shows that Compass and Spotless did employ some applicants who did not yet have base line security clearances. The absence of a base line security clearance did not prevent the applicant being hired. The security clearances, including those which were obtained in the lead up to the contract changeover, are qualifications held by the employee which made that employee more attractive to the incoming contractor. I am satisfied that the actions of SSDS in assisting some employees to apply for security clearances made them more attractive to incoming contractors. However, I am unable to conclude that the SSDS assistance was a strong moving force behind the decision to offer jobs to SSDS employees. [55] I am satisfied that it is reasonable to infer that: ● The actions of SSDS assisted and encouraged some SSDS employees to participate in the recruitment process of the incoming contractors. ● The actions of SSDS also made it easier in some cases for some of the incoming contractors to access SSDS employees by providing information about the employee profile, distributing information about the recruitment process, arranging venues, assisting with the scheduling of interviews and other related events. ● The actions of SSDS also may have enabled some employees to participate more effectively in the recruitment process of the incoming contractors. ● A relatively small proportion of the employees may have received information about the job opportunities and the necessary steps in the process which they might not otherwise have received. ● A relatively small proportion of the employees may have completed applications and resumes which might otherwise have been less attractive. ● Some employees may have been more likely to be successful in their applications because they had the relevant security clearances and in some cases the actions of SSDS assisted in this. [56] It is conceivable that a specific employee or specific employees might be able to be identified who: ● Were unaware of the job opportunity with an incoming contractor and the procedures necessary to effectively participate in the recruitment process and where it could be demonstrated they would not have become aware and/or be able to effectively participate were it not for SSDS’s information and assistance; or ● Were unable to produce an effective resume or application and SSDS directly assisted them to produce a quality application and this had a direct impact on the success of their application; or ● Were unaware of the desirability of applying for an upgraded security clearance and would not have done so without the encouragement of SSDS and this had a direct impact on the success of their application. [57] In such a case, or in other similar scenarios, it might be possible to reach a conclusion that SSDS was a strong moving force behind the creation of the job opportunity for that employee. However, this is not the way in which SSDS has run their case. Their case is about the group not the individual and there is no evidence that establishes any of these scenarios in respect to a particular named individual nor has it been established that this activity was so widespread and effective to enable a conclusion of this sort to be reached about a group of employees collectively. [58] SSDS expended considerable resources to assist its employees. This went considerably beyond what they were obliged to do under the consultation provisions of the relevant agreements and their obligations to provide time off during the notice period for job search. However, the actions of SSDS to inform employees, to assist employees to participate in the recruitment process of the incoming contractors, and to improve the chances of SSDS employees being successful in that recruitment process, fell well short of action which “causes acceptable alternative employment to become available” to each of the redundant employees and do not establish that SSDS was a “strong moving force towards the creation of the available opportunity” for each of the SSDS employees. Some of these factors may be relevant in considering the nature of cooperation and agreement with the incoming contractors to provide priority or preference to SSDS employees. Evidence and conclusions concerning the cooperation with the incoming contractors [59] I reached the following general conclusions from the evidence of the SSDS witnesses and the incoming contractors which are largely consistent with those reached in respect to the NT contracts. ● Incoming contractors generally viewed the existing workforce as an attractive source of potential workers and they wanted to ensure that the existing workforce were informed about job opportunities and were encouraged to apply for those job opportunities. A number of the major incoming contractors gave evidence that it was normal in change of contract situations to seek to recruit a significant number of the outgoing contractor employees. There are some exceptional circumstances where witnesses said that this would not be the case particularly where the host organisation does not want the existing workforce considered or where the incoming contractor already had qualified surplus labour. ● In the current case the Department of Defence did not tell incoming contractors that they should not consider the existing workforce. The work required of the incoming contractors was of the same general nature as in the SSDS contract, for example security, cleaning, gardening, and catering. However, in some cases the scope of work was different and this had some impact on the total labour requirement. The change in the number and types of employees required by the incoming contractors was not large when compared to the total quantum of the work contracted. ● Incoming contractors generally viewed the existing workforce as an attractive source of potential workers because they would tend to have the relevant skills and qualifications, relevant experience in the work that is required to be done and relevant local knowledge about the facilities and interaction with the host organisation. In the defence context, in some cases the existing workforce had relevant security clearances which made recruitment of the existing workers attractive as more time and resources would be required to ensure that an external candidate obtained these clearances for the first time. This was particularly the case for jobs, such as security workers, where a higher level security clearance was required. ● The recruitment process itself required significant planning and resources for the incoming contractors. Focusing on the existing labour pool could achieve economies of scale and reduce recruitment costs. ● In respect to the NSW/ACT contracts the incoming contractors had no more than three months in which to organise themselves for the new contracts and in which to recruit labour. In some cases the period of time was much shorter than this. Mr Castles for SSDS gave evidence that the incoming contractors had only four to six weeks which he considered to be a reduced time frame. 24 Incoming contractor witnesses generally agreed that this made it more attractive for them to consider the existing workforce. SSDS did not reach an agreement with any of the incoming contractors that any SSDS employee or any group of SSDS employees would be guaranteed a position with the incoming contractor. Each of the incoming contractors ran their own recruitment process. Generally this meant that some SSDS employees who sought employment with a particular incoming contractor were successful and some were unsuccessful. 25 Generally this also meant that some successful applicants were not former SSDS employees. 26 Internal and external applicants were considered on merit using the same selection criteria and the same process. 27 [60] SSDS witnesses agreed that former employees were desirable to incoming contractors by virtue of their skills and experience and in some cases security clearances. 28 They also conceded that the application by each employee would succeed or fail on its own merits as part of the incoming contractors own selection processes. 29 They agreed it made good business sense to employ as many of the outgoing employees as possible and that this was not uncommon in change of contract situations. 30 Ms Lipsys for SSDS agreed that SSDS could not guarantee a job for any employee with an incoming contractor and that all SSDS could do was to facilitate or assist an employee in securing employment with the incoming contractor. 31 Ms Lipsys believed that SSDS employees got preference with the incoming contractors because SSDS made it easy for them. 32 However, she accepted that regardless of anything SSDS did it would be the intention of the incoming contractors to employ as many SSDS employees as they possibly could. She agreed that what gave them preference with the incoming contractors was their skills, qualifications, clearances and knowledge of the work. 33 She agreed that the short time period available to the incoming contractors was also a factor. [61] The nature of the relationship between SSDS and the incoming contractors varied and I will now evaluate the evidence in respect to each of the incoming contractors. Transfield [62] Mr Atkinson, Strategic HR Manager for Transfield Services Australia Pty Ltd (Transfield) gave evidence. It was not disputed that the level of cooperation between SSDS and Transfield in respect to the NSW contracts was less than that which applied to the NT contracts. There was no cooperation after August 2014 and most of the recruitment activity was during the period of no cooperation. The conclusions I reached in respect to the NT contracts are therefore applicable to the NSW contracts. [63] All roles were advertised on Seek and on the Transfield website. Information sessions and interviews were conducted independently of SSDS. The number of applications received was many times the number of vacant positions. A number of SSDS applicants were unsuccessful in obtaining positions. Transfield filled 50 stores positions and 37 of those appointed were formerly SSDS employees. Transfield filled 56 positions within firefighting and associated roles and 37 of those appointed were former SSDS employees. 70% of positions were filled by SSDS applicants. [64] Mr Atkinson gave evidence that nothing SSDS did influenced its recruitment decisions. 34 Mr Atkinson gave evidence that Transfield had not requested SSDS to distribute flyers about information sessions and interviews and SSDS witnesses were unable to confirm how SSDS obtained the information. 35 I accept the evidence of Mr Atkinson that SSDS did not arrange on site meetings for Transfield. [65] Mr Marriott gave evidence about arrangements entered into with the Department of Defence to extend the employment of certain SSDS employees involved in field deployment after 1 November 2014. I am satisfied that Transfield was not involved with the employees in respect to this arrangement and that the decisions about employment of these persons with Transfield was not affected by the arrangement entered into to extend their employment with SSDS. Not all of those who were subject to the arrangement were successful in obtaining employment with Transfield. [66] John Rigoni, a firefighter who was employed by SSDS and secured work with Transfield, confirmed that Transfield wanted information direct from employee applicants and that Transfield and SSDS were not communicating. 36 [67] Nothing in the evidence presented in the NSW/ACT proceedings leads me to alter the conclusions reached in respect to Transfield in the NT proceedings. Compass [68] Ms Holmes, National Workplace Relations Manager, for Compass Group (Australia) Pty Ltd (Compass) gave evidence. Compass was successful in winning the contract for hospitality and catering services in Northern NSW and Southern NSW including the ACT. Ms Holmes gave evidence that Compass has a well developed and standard procedure which must be followed when recruiting new employees to its business. Ms Holmes gave evidence that it was usual practice for Compass to want to offer employment to many of the outgoing service provider’s employees providing those persons met Compass’ requirements. In the circumstances of the defence contracts Compass decided for “mobilisation and operational efficiency” it was desirable to offer employment to a substantial number of the SSDS employees. All interested persons were required to apply online via the Compass Careers web site. [69] Compass requested SSDS to distribute information about Compass, job opportunities with Compass and the process for applying for a job with Compass to SSDS employees and SSDS assisted in this process. Compass conducted on site briefings to SSDS employees and SSDS assisted in facilitating SSDS employees’ participation in this process. [70] All applicants were required to participate in a structured interview, functional assessment, qualifications confirmation, police check and, in the case of senior managers, reference checking. Job interviews were generally conducted at the relevant defence sites. SSDS assisted by providing time off for those who were otherwise rostered for duty at the time of the interviews. SSDS assisted with the scheduling of interviews, advising employees of the interview times and the arrangement of interview facilities. In some cases employees signed consent to release information forms and SSDS may have provided that information to Compass. That information included defence security clearance status, citizenship status, work location, current position, period of employment, accrued entitlements and wage rate. [71] There was regular contact between Compass and SSDS during the transition period. [72] Ms Neill for SSDS gave evidence that Compass gave SSDS information that the number of applications received from some bases had been low and SSDS followed this up and encouraged more employees to complete applications. 37 Ms Holmes agreed that this occurred and that it was helpful. [73] SSDS provided assistance to Compass after the offers of employment were made including with distribution of employment packs, release for inductions, and uniform distribution. In some cases SSDS assisted employees with the return of offer acceptance forms. However, it is difficult to see how actions taken after the decision to employ has been made are actions which “obtain” employment. Compass provided information to SSDS on employees who had been made offers. [74] SSDS provided Compass with sample work rosters. This may have been of assistance to Compass in planning for the transition but I am not satisfied that it assisted any particular SSDS employee(s) to obtain employment with Compass. [75] On 27 October, a few days before the expiration of the contract Compass advised SSDS that it was looking for 3-4 additional cleaners and requested resumes and stated that Compass “would like to consider you people first.” 38 SSDS provided Compass with the names of some employees who had not yet got employment with Compass and provided their resumes. The evidence does not establish if SSDS employees gained employment as a result of this initiative by Compass and if so which employees. [76] Ms Lipsys and Mr Marriott referred to notes prepared by Mr Wilson, an SSDS manager who did not give evidence in proceedings, of a meeting on 6 September 2014 with Mr Rasmussen, a Compass (Eurest) manager, in respect to the 3 ACT cafe sites. Mr Wilson’s note is as follows: “Brad gave his and Compass commitment to employ all SSDS H&C staff that applied for positions- “we need them all””. 39 However, an email from Simon Francis of Compass to Ms Phu of SSDS on 11 September 2014 says: “interviews will be conducted for the cafes in the next 2 weeks”. 40 I am not satisfied that Compass committed to employ all SSDS cafe staff as those who applied were required to go through the interview selection process. I prefer the direct evidence of Ms Holmes as to the recruitment policy and practice of Compass to the untested and indirect evidence of Mr Wilson. I am satisfied that if Mr Rasmussen made the comment “we need them all” it was not a commitment or agreement to employ all SSDS employees but rather a statement that there are sufficient vacancies and there is capacity for SSDS applicants to be hired if they are successful through the selection process. Ms Holmes gave evidence that Compass (Eurest) engaged 33 SSDS employees in the cafes. There is also no evidence that the decision to consider the caf� employees resulted from the actions of SSDS. [77] Offers of employment were made to 147 former SSDS employees and to 18 external applicants in the Southern NSW region (including ACT) and to 148 former SSDS employees and 13 external applicants in the Northern NSW region. In aggregate 90% of the successful applicants were former SSDS employees. A related company Compass (Eurest) made offers to 33 former SSDS employees at 3 ACT cafes. Some 28 SSDS applicants were not offered positions with Compass. 41 [78] Mr Marriott gave evidence of a meeting with Ms Holmes and others on 1 July 2014 prior to the formal announcement and finalisation of the contract. Mr Marriott’s notes include that Compass “recognise that there will be some benefit in recruiting current employees to lock in some knowledge and secure continuity” and that Compass was: “Very happy to work with SSDS to make employees aware of the opportunity to take up employment with Compass and use SSDS assistance to get people across to Compass employment so long as people are clear that it is not transfer of business. Will commence advertising in local market places but happy to receive information directly from SSDS on current employees provided people understand that there will be a selection process.” 42 The notes also record that: “Compass intends making at least some employee changes - believe an unchanged employee group would not achieve the best outcome.” The notes record that the SSDS actions from the meeting include: “internally develop a clear strategy around... understand the principles surrounding “ordinary and customary turnover of labour” and whether it applies to any of the SSDS service lines and ...clear position on provision of “acceptable alternative employment” and use of the FWA and FW Commission in determining an outcome.” 43 [79] Ms Holmes gave the following evidence: “Did you understand or believe that SSDS were genuine in their desire to get as many jobs for people as they could?---I believe they were genuine. I also would add that it became apparent during our discussions with SSDS that it was also evident that they did want to reduce their liability to pay redundancy pay.” 44 [80] Ms Holmes confirmed that the matter of the prospect of a Section 120 application was raised by SSDS in the initial meeting on 1 July 2014. 45 [81] I am not satisfied that the notes support the SSDS submission that Compass and SSDS entered into an agreement at the meeting to cooperate in the recruitment process and provide priority to SSDS employees. I prefer the evidence of Ms Holmes to the evidence of Mr Marriott as to the nature of the relationship between SSDS and Compass. The observations about the SSDS evidence made in the NT decision were also applicable to the evidence in the NSW/ACT proceedings. 46 Ms Holmes readily acknowledged the assistance provided by SSDS and did not seek to downplay it. Although at times Ms Holmes wanted to provide more fulsome information than sought by the questions asked of her I found her to be a convincing witness. Where there is conflict between the evidence of Ms Holmes and the evidence of Mr Marriott I prefer the evidence of Ms Holmes. [82] Ms Holmes agreed that at the meeting on 1 July 2014: ● Compass told SSDS that they would be happy to work with SSDS to ensure employees were aware of job opportunities with Compass. ● Discussed how Compass might access employees and distribute information with SSDS’s assistance. She agreed that access was in fact provided. ● SSDS offered to make information about employees and its operations available to Compass. Compass was willing to consider such information. She agreed that information about types and numbers of employees was in fact provided. De-identified information about qualifications and security clearances was also provided. She denied that there was any agreement about mutual exchange of information about operations. ● SSDS offered to cooperate with Compass in its recruitment process. Compass accepted this to the extent of SSDS facilitating access to employees but Compass insisted on running its own recruitment and selection process. [83] Ms Holmes did not recall the words in the SSDS meeting note, particularly the word “agreement.” 47 Ms Holmes strongly disagreed with the proposition that as a result of SSDS’s offer and Compass’s acceptance of the offer to provide access to employees, Compass agreed to give priority and preference to SSDS employees in getting a job at Compass. Ms Holmes gave evidence that: “Whether or not we had assistance it was our intention to consider the incumbent workforce. We do that with every mobilisation that we do. But I accept that Serco Sodexo's assistance, particularly in giving us access to employees on base in some cases during work hours, that enabled us to access employees over a short period of time at the times we would be there. That was very, very helpful and we really appreciated that but without their help we would have found a way to access the incumbent workforce, with or without their help.” 48 [84] Ms Holmes gave the following evidence: “MR SNOWBALL: I'll rephrase the question. Regardless of any actions that SSDS took was it always your intention to employ as many SSDS employees as possible?---Yes and I've said as much. And that intention existed prior to any assistance being offered by SSDS?---Yes.” 49 [85] Ms Holmes said that the reason why priority was given to the incumbent workforce was because of their defence experience, experience in the occupational field and their qualifications. In her view without SSDS assistance employees would still have applied for the jobs and been selected. The short time frame for mobilisation also made it sensible to consider the existing workforce. The fact that SSDS employees in many cases had security clearance also made it attractive to consider the existing workforce first. [86] In the initial information package to SSDS employees Compass advised that: “it is our intention to employ as many of the existing hospitality professionals already providing services as we can.” 50 After considering the evidence of Ms Holmes as a whole I am satisfied that this statement was aimed at encouraging as many SSDS employees as possible to apply for roles. Compass selected suitable applicants through its merit based process and there was no guarantee that SSDS applicants would be successful in obtaining employment, or that external candidates would not be considered. [87] Ms Holmes said that the roles were advertised on the Compass web site and so it was open to non-SSDS employees to apply and a small number of external people did apply in response. Compass advertised on Seek later in the process after those who had responded to the web site adds had been initially considered. 51 [88] Ms Holmes gave evidence that the assistance of SSDS did not substantially alter the recruitment process used and it had no effect on the decisions which were made. 52 Ms Holmes accepted that without the access provided by SSDS it would have been harder to recruit the employees it needed in the time available. Compass could have accessed the SSDS workforce through public advertising and other means but the most effective means was with SSDS’s assistance. 53 [89] I am not satisfied that an agreement was reached between SSDS and Compass at the meeting on 1 July 2014 to provide priority to SSDS employees. I am not satisfied that the decision of Compass to interview all SSDS applicants was a result of the actions of SSDS. I am satisfied that the access provided by SSDS made it more practicable for Compass to consider SSDS employee applications. It is possible that as a result of this more SSDS employees may have applied and been successful than would otherwise have been the case. It was always the intention of Compass to favourably consider SSDS employees and this was because their qualifications, defence experience, industry experience and in some cases their security clearance and the short period of time for mobilisation made them more attractive. I am satisfied that most SSDS employees would have been successful with or without the SSDS assistance. I am satisfied that the cooperation between SSDS and Compass and the assistance provided by SSDS to Compass and to SSDS employees made a marginal difference to the proportion of SSDS employees offered employment by Compass. It did not change the likelihood of success for most of the SSDS employee applicants. Spotless [90] Ms Pianta, National Workforce Planning Manager, for Spotless Management Services Pty Ltd (Spotless) gave evidence. Spotless won the contract for cleaning, grounds and associated services in Shoalhaven and ACT. [91] Spotless advised SSDS of its recruitment process at a meeting in July 2014. SSDS offered to facilitate access to SSDS employees, distribute Spotless communications and release employees to attend information sessions and interviews. There was weekly contact between SSDS and Spotless from July to early September 2014 and fortnightly contact after that time. SSDS also provided Spotless with information about employment conditions and distributed information about interview times and presentations. Spotless provided SSDS with information on the number of SSDS employees being made offers of employment. SSDS provided information to Spotless about rosters and staffing levels. Ms Pianta gave evidence of cooperation with SSDS to follow up on matters such as individuals who had not received an interview or were unable to respond to letters. SSDS also assisted with returning forms accepting offers of employment. [92] Ms Pianta gave evidence that Spotless planned its recruitment activities in advance of the public announcement that they were a successful incoming contractor. Spotless ran a number of expression of interest advertisements on the Spotless site and on Seek in June for work in southern NSW and Queensland. In response they received a significant number of applications from members of the public and a significant number of SSDS employees. Ms Pianta said that Spotless had decided that depending upon the relationship which was developed with SSDS it was their preference to employ existing employees. 54 At the meeting on 15 July 2014 with SSDS an agreement was reached about communication and access to existing staff and Ms Pianta gave evidence that it was at some time after this meeting that Spotless decided they “would in the first instance prioritise the SSDS employee pool.” 55 [93] Ms Pianta gave evidence that after the relationship was established with SSDS, Spotless screened candidates according to whether or not they were currently engaged by SSDS within Defence. Existing Spotless employees and SSDS candidates were considered first and then other general applicants. Spotless indicated that it intended to engage as many incumbent staff that met their recruitment criteria as possible. The notes of SSDS discussions with Spotless of 22 September 2014 record that Spotless explained their employment priority was first redeploying their own staff, then offering roles to SSDS employees and finally other sources of employees. 56 The recruitment process was a merit based process run by Spotless. 57 The information provided by Spotless to SSDS employees made no promise of employment. [94] Ms Pianta gave evidence in response to questions from Mr Snowball for the NUW that the fact that some SSDS employees already had the required security clearance was not a great advantage to Spotless as the administrative work for Spotless to transfer the clearance was similar to that required for gaining a new clearance. 58 The exception to this was a small proportion of roles for which higher level security clearance was required and incumbent employees with such a clearance would have an advantage for such roles. 59 However, in response to questions from Mr Saunders for SSDS Ms Pianta agreed that SSDS assisting employees to obtain security clearances would have contributed positively to those staff being recruited by Spotless. 60 [95] Ms Pianta also gave evidence that experience of working in defence establishments and knowledge of the local geography and practices was also of limited advantage because the amount of cleaning required in the new contract was different to the old contract and this meant that some retraining of existing employees would be required. 61 I did not find this evidence credible. Ms Pianta was unable to give direct evidence about the usual practice of Spotless when taking over a contract as she had not been involved in a previous contract transition. 62 [96] Ms Pianta said that the reason why Spotless decided to interview SSDS employees first was because it made the selection process easier and more efficient given that SSDS was facilitating access to staff and releasing them for attendance at group interviews in the context of a relatively short mobilisation period. 63 Ms Pianta also said that SSDS’s preparedness to facilitate the induction process once employees were engaged was a reason why it was attractive to consider SSDS employees first. However, after further questioning it became clear that in fact Spotless normally conducted inductions online and arrangements for some on site inductions were only made later in the transition process. Ms Pianta then said that what was discussed at the initial meetings with SSDS was that they would facilitate employee access to computers to do online induction if necessary. [97] Ms Pianta gave evidence that information provided by SSDS about pay and conditions helped Spotless to offer competitive rates to staff. 64 I did not find this evidence convincing given that the necessary information about rates and conditions offered by SSDS is publicly available and the rates and conditions are not significantly in excess of the minimum award standards. [98] I did not find Ms Pianta’s evidence convincing. Ms Pianta’s evidence was generally inconsistent with that of the SSDS witnesses and the other incoming contractor witnesses who generally agreed that: ● Unless there were particular circumstances which dictated otherwise incoming contractors will seek to engage a substantial proportion of the existing workforce. ● The existing workforce will be more attractive where there are time constraints in mobilisation. ● The holding of the necessary defence security clearance was an important reason to favour internal candidates as the obtaining of new clearances took more time than the incoming contractors had, was resource intensive and the time frame uncertain. Transferring passes took less effort and involved less risk. ● The local knowledge of the layout of the defence base and the established relationships with defence made existing employees attractive. ● The existing workers had the relevant work experience and qualifications and this also made them attractive. [99] I am satisfied that Ms Pianta sought to assist the SSDS case through her evidence. This was illustrated by the difference in responses when questioned by the unions and when questioned by Mr Saunders for SSDS. Ms Pianta was clear and unequivocal when being questioned by Mr Saunders for SSDS but was evasive when questioned by Mr Snowball for the NUW. 65 [100] Ms Pianta gave evidence that 340 individuals attended the information sessions arranged for SSDS employees in NSW/ACT and 382 attended job interviews for EMOS contracts. I do not rely on the number 382 as it is possible that it includes Queensland. [101] 182 former SSDS employees were employed by Spotless. 233 roles were available in NSW/ACT, so 78% of those roles were filled by SSDS employees. Ms La Penna says that SSDS had 335 relevant employees in ACT (i.e. not including Shoalhaven). 66 The offers list was for both ACT and Shoalhaven. 67 Having regard to the number who attended the NSW/ACT Spotless information sessions and to the number employed by SSDS it is apparent that a significant proportion of the SSDS employees were not offered employment with Spotless. [102] SSDS provided assistance to Spotless after the offers of employment were made including with release for inductions, uniform distribution and release for training. However, it is difficult to see how actions taken after the decision to employ has been made are actions which “obtain” employment. SSDS provided information to Spotless on employees who had returned offer acceptance letters and provided advice to employees on how to return acceptance letters. In one case SSDS advised Spotless that a particular employee wanted to accept his part time position was but was awaiting a revised offer letter which changed the offer from full time to part time. 68 [103] It was suggested that the expectation that such assistance may be provided may act as an incentive to select SSDS employees. In some cases the details of the assistance to be provided by SSDS in these areas was not known at the time the selection was undertaken. I am not satisfied that there is sufficient basis to draw an inference that the likelihood of such post appointment assistance affected the selection decision. I am fortified in this conclusion by the significant number of unsuccessful SSDS applicants. I am not satisfied that the likelihood of post offer assistance led Spotless to engage anyone that they would not otherwise have engaged. [104] There was no formal agreement between SSDS and Spotless to provide priority to SSDS employees. Mr Marriott describes it as an informal arrangement. 69 [105] The Section 120 application by SSDS was a consideration in the discussions between Spotless and SSDS. 70 In respect to transfer of entitlements the SSDS file note of the initial teleconference with Spotless on 8 July 2014 records that Spotless “would prefer clean position; not aware of recent FWA case on acceptable alternative employment”. The SSDS notes record the actions from the meeting as including sending to Spotless the recent FWA case and SSDS to develop a “clear position on the provision of “acceptable alternative employment and use of the FWA and the FW Commission in determining an outcome”. 71 [106] Mr Marriott advised Spotless as early as 10 July 2014 (more than two months prior to the Section 120 applications being made by SSDS) that: “SSDS has also been evaluating redundancy in situations where acceptable alternative employment has been found for employees (see in particular FBIS International Protective Services (Aust) Pty Ltd (C2013/7271)). SSDS remains keen to maximise employment opportunities for our highly experienced employees, particularly when the baseline clearances issue may restrict staff availability.” 72 [107] The meeting note for 11 August 2014 records that the FBIS decision is under appeal. 73 The meeting note from Mr Marriott of 12 September 2014 records: “Nicole (Pianta) understood we will be applying to FWC re S120 and I indicated a willingness to speak with Spotless if it would benefit both parties.” 74 [108] Mr Marriott strongly asserted that the main motivation of SSDS during the transition period was to get SSDS employees a job and that the possible Section 120 application was not a driving issue. 75 I did not find this evidence convincing. I am satisfied that the notes suggest that the potential Section 120 application was a significant consideration in the actions of SSDS during the transition period. It was a motivation, but not the sole motivation, for the assistance measures and contact with the incoming contractors and the detailed documentation of those activities. The conclusions I reached in respect to the NT contracts are applicable and relevant to this situation. 76 [109] The SSDS notes of the meeting of 15 July 2014 include the following matters: “application via page up”; “transition as many of the existing staff as possible”; “visiting each of the sites for transition in first two weeks”; “run presentations by site/rosters”; “2 page flyers, FAQs, apply online”; “group interview sessions for frontline”; base line security - seeking clarification”; “no induction, no start, 3 hours induction online, induction labs”; “subject to privacy consent de-identified info 1st indentified info 2nd”; “exchange of lists - unsuccessful/ successful”; “weekly meetings in project plan”; and “Spotless will share comms docs, available by the end of next wk”. 77 [110] I am satisfied that the SSDS notes generally seek to record any detail which might assist in demonstrating that SSDS obtained alternative employment for its workers. In some cases SSDS perceptions about cooperation and agreements are not shared by the incoming contractors. The notes of the 15 July 2014 meeting do not include any mention of an agreement being reached between SSDS and Spotless to provide preference in employment to SSDS employees. The notes do include agreement by SSDS to assist Spotless with the logistics of its recruitment process including through the sharing of communications. I am satisfied that the note “transition as many of the existing staff as possible”; considered in the context of the evidence as a whole, means that existing staff will be encouraged to apply for jobs and will be considered through the Spotless process for those jobs. [111] SSDS submitted that Ms Pianta confirmed that an agreement was reached at the July 2014 meeting to give priority to SSDS employees. However, as discussed earlier Ms Pianta did not give evidence that an agreement to prioritise SSDS employees was reached between Spotless and SSDS at the 15 July 2014 meeting. Ms Pianta says that Spotless made the decision to consider the SSDS applicants before considering the external applicants some time after SSDS offered to facilitate communication with and access to SSDS employees. 78 I am satisfied that it was always Spotless’ intention to consider SSDS employees and the actions of SSDS assisted Spotless but were not a strong moving force behind the decision of Spotless to seek to recruit a substantial number of the SSDS employees who met their selection criteria. [112] The letter of introduction dated 8 August 2014 provided by Spotless for SSDS to distribute to employees makes no promise of preference to SSDS employees but rather says that: “we are hopeful that many of you will wish to be considered for employment with Spotless”; and that: “everyone who applies for a position will go through a standardised recruitment and selection process” so that “all eligible candidates have an equal opportunity to demonstrate their skills and capabilities for the roles”. 79 [113] A notice provided by Spotless to SSDS to distribute on 18 August 2014 included the following statement about the closing date for applications: “we intend to speak to all current interested employees before advertising externally”. It also includes the following question: “if I have a friend who would like to apply for a job, can I refer them?” The answer to that question is in part: “Yes, we would love to have your referrals.” 80 I am satisfied that Spotless was indicating that it was considering external applicants in addition to the SSDS employees and existing Spotless employees and the evidence of the outcomes of the selection process suggests that this is in fact what happened. [114] It is possible that as a result of the decision by Spotless to interview all SSDS applicants and to do so prior to considering external applicants, more SSDS employees may have been successful than would otherwise have been the case. The actions of SSDS were a factor in that decision. However, I am satisfied that regardless of the actions of SSDS it was always the intention of Spotless to favourably consider SSDS employees. I am also satisfied that the SSDS employees were more attractive because of their qualifications, defence experience, industry experience and, in some cases, their security clearances. I am satisfied that most SSDS employees would have been successful with or without the SSDS assistance. I am therefore satisfied that the cooperation between Spotless and SSDS was of a similar character to that with Compass. The level of contact and the exchange of information in both cases were extensive. However, both Compass and Spotless wanted to consider the SSDS employees regardless of any actions by SSDS. I am satisfied that the cooperation between SSDS and Spotless and the assistance provided by SSDS to Spotless and to SSDS employees made a marginal difference to the proportion of SSDS employees offered employment by Spotless. It did not change the likelihood of success for most of the SSDS employee applicants. [115] I am fortified in this conclusion by the fact that only 78% of those appointed were SSDS employees. This is despite the case that Spotless required fewer workers in total than SSDS required to meet the contract. A significant number of SSDS employees were not successful in gaining employment with Spotless. Comparisons with the rate of appointment for Wilson and MSS would not be appropriate as the security contractors required higher security clearances and the labour market for qualified guards may be tighter than that for cleaning and grounds work. Comparisons with Transfield should also be treated with some caution given the different qualifications and labour market for firefighting work. However, comparison with Compass is more relevant. Compass covers a number of areas which do not generally require higher level security clearances and where the skill and qualification levels requirements are not generally high. Chefs are an exception to this. 90% of those engaged by Compass were former SSDS employees. Brookfield [116] The only evidence given by Brookfield Johnson Controls (Brookfield) was the statement it provided in response to the order to produce that it had employed 91 persons for the defence contract work it had taken over from SSDS and of those persons 41 were former SSDS employees. 45% of those directly engaged were former SSDS employees. Brookfield sub-contracted work to Broadlex Services Pty Ltd, Australian Facilities Landscapes Pty Ltd and Menzies International, and evidence in respect to those incoming contractors is considered later. I earlier referred to the fact that an employee, Mr Blunt, gave evidence which I accept that two or three of his driver colleagues were unsuccessful in obtaining work with Brookfield. [117] The meeting notes and other documents provided by Mr Castles concerning the interaction with Brookfield do not support a conclusion that there was a focus on employment or recruitment issues in the discussions between Brookfield and SSDS. Mr Marriott gave evidence that Brookfield agreed to provide SSDS with its recruitment advertisements so that SSDS could make them available to its employees. Employees were required to apply online through the Brookfield web site. Brookfield also advertised on an external agency web site. 81 SSDS offered to arrange interviews on site but Mr Castles gave evidence Brookfield decided to conduct telephone interviews. SSDS provided information to Brookfield about its employee profile. This information was not requested by Brookfield. Brookfield sought potential employees from the market and this is evidenced by the statement of Mr Marriott that he was told by Brookfield that about 50% of its applications had been from SSDS employees. 82 [118] Mr Castles agreed that SSDS became aware of what elements of work were being retained by Brookfield when told by SSDS employee applicants. [119] I am not satisfied that there was an agreement reached between SSDS and Brookfield to provide priority or preference to SSDS employees. The proportion of SSDS employees engaged is much less than other contractors in the cleaning area such as Spotless. The low proportion of positions filled by SSDS employees does not support a conclusion that the actions of SSDS obtained employment with Brookfield. I do not consider that there is adequate basis to draw an inference that the particular actions taken by SSDS to assist Brookfield in its recruitment process and to inform SSDS employees of job opportunities with Brookfield made a material difference to their chances of obtaining employment. The actions of SSDS made no material difference to the outcomes. Broadlex [120] Broadlex obtained a cleaning services sub-contract in the Hunter Region. Mr Vargas, Area Manager, Broadlex Services Pty Ltd (Broadlex) gave evidence that Broadlex became aware that it had the sub-contract at the end of August 2014. 35 SSDS employees applied for employment with Broadlex and 25 were successful in obtaining employment. Mr Vargas gave evidence that he had no choice but to recruit from amongst the existing employees because they were the ones that had defence security clearances. 83 He gave evidence that he would have selected from a wider pool of potential employees, including from those Broadlex already employed at other locations, if it were not for the defence security clearance issue. 84 Some of the areas covered by the Broadlex sub-contract required high security clearances which Mr Vargas understood would take six months to twelve months to obtain. 85 Mr Vargas said that the reason that SSDS cleaners had priority in the Broadlex selection process was because they had the security clearances. 86 [121] Mr Vargas gave evidence that he decided who to employ amongst those who applied on the basis of his observations of the standard of cleaning in particular locations and on the recommendations of Ms McNamara who was formerly a SSDS cleaning supervisor. Prior to making offers of employment to other cleaners Mr Vargas offered Ms McNamara a job as cleaning supervisor for Broadlex. Mr Vargas offered employment to Ms McNamara on 29 September 2014 and she accepted the offer within a couple of days. She commenced employment with Broadlex at the beginning of the new contract on 1 November 2014. Mr Vargas inspected some of the work areas on 29 September 2014 and asked Ms McNamara who were the cleaners involved in those areas. There was a further inspection on 7 October 2014 and Ms McNamara provided further recommendations on that day. Offers of employment were made to 25 cleaners on 9 October 2014. A further 3 positions became available after 5 November 2014. [122] I am satisfied that Ms McNamara made her recommendations to assist Broadlex in her role as the incoming supervisor for Broadlex. 87 Mr Castles who was Ms McNamara’s superior at SSDS did not direct Ms McNamara to provide recommendations on individuals to Broadlex and was unaware that this had occurred. 88 [123] Broadlex asked SSDS if they could see the relevant sites and SSDS facilitated this. Broadlex asked SSDS to distribute job application forms to the employees which they did. 89 SSDS provided an overview of staffing levels, depersonalised rosters and some information on employees with the consent of those employees. 90 At one of the sites Ms Carugno for Broadlex asked Ms Parker, an SSDS supervisor, for the names of employees who cleaned particular areas where Ms Carugno considered the standard of cleaning was high and Ms Parker provided those names. [124] I am satisfied that SSDS assisted and facilitated the Broadlex recruitment process. Access to inspect the relevant work areas and access to information about which cleaners worked in particular areas was important to that recruitment process. Data about rosters may have assisted Broadlex in planning its labour requirements. However, the reason why SSDS employees as a group were favoured was because of their security clearances and the reason why particular employees were selected from within that group was because of the perception of the quality of the work of that cleaner as identified by the observations of Mr Vargas or Ms Carugno for Broadlex or based on the recommendation of Ms McNamara who had been offered a supervisor job with Broadlex. [125] I am not satisfied that there was an agreement reached between SSDS and Broadlex to provide priority or preference to SSDS employees. I do not consider that there is adequate basis to draw an inference that the particular actions taken by SSDS to assist Broadlex in its recruitment process and to inform SSDS employees of job opportunities with Broadlex were a strong moving force behind the offers of employment to SSDS employees. Although external applicants were not considered I am not satisfied that the assistance provided by SSDS was a material influence on the outcome for particular SSDS employees. The cooperation of SSDS made it easier for Broadlex to implement its decision to consider the group of SSDS employees. However, Broadlex intended to focus on the SSDS employees regardless of the actions of SSDS. The actions of SSDS were a material factor but not a strong moving force behind the decision to focus on the SSDS employees. It is possible that if SSDS had not provided access and assistance it would have made a marginal difference to the number of SSDS employees who were offered employment. The actions of SSDS did not change the likelihood of success for most of the SSDS employee applicants. Australian Facilities Landscapes (AFL) [126] Australian Facilities Landscapes Pty Ltd (AFL), which was an incoming sub-contractor for ground maintenance work, provided a list of employees engaged and indicated which of those employees were former SSDS employees. That list reveals that 52 employees were engaged and of those 30 were former SSDS employees. 91 [127] Mr Castles for SSDS gave evidence that Mr McDonnell for AFL told him that: “AFL would be looking at employing as many SSDS’ existing employees as possible because the AFL structure would be very similar to the SSDS structure.” 92 Mr Castles gave evidence that SSDS provided information about the size and scope of the work and also distributed information to SSDS employees about information sessions to be conducted by AFL. SSDS also assisted with distribution of recruitment information. Mr Castles gave evidence that interested candidates were required to fill in application forms. Mr Castles was unsure as to whether or not interviews were conducted. Mr Castles confirmed that some SSDS employees were unsuccessful in their application for work with AFL and he considered that AFL discriminated on the basis of the quality of the employee’s application and length of service. [128] I am satisfied that there is no basis to conclude that AFL chose to consider SSDS employees because of the actions of SSDS nor that it selected particular SSDS employees or additional SSDS employees because of the actions of SSDS. [129] Mr Castles gave the following evidence: “Now, in paragraph 22 and following you deal with AFL, Australian Facilities Landscaping. Can you tell the commission whether they advertised for positions?---No, the directly engaged our current workforce across all of our bases and utilised that as their workforce. There were no employees employed by any other means, to the best of my knowledge.” 93 [130] This evidence is directly contrary to the information produced on summons from AFL which reveals that only 58% of those engaged were former SSDS employees. Although it is not necessary to determine this matter given the conclusion reached earlier, I do not accept Mr Castles’ evidence on this point. [131] The evidence does not support a conclusion that the limited actions taken by SSDS to assist AFL with its recruitment process made any material difference to the chances of any particular SSDS employee or the employees as a group obtaining employment with AFL. I am satisfied that the actions of SSDS made no material difference to the outcomes. Menzies [132] Mr Leiva, Senior Contracts Manager, gave evidence on behalf of Menzies International (Menzies) who have been sub-contracted by Brookfield to provide cleaning services at various NSW defence sites. SSDS asked some employees to fill in consent to release information forms. Some employees completed the forms and this information was provided to Menzies. It included basic data including name, work status, location, security clearance status, and length of service. SSDS organised meetings at various sites where Menzies attended for the purpose of introducing them to SSDS employees. Menzies advised interested employees to complete application forms and attach supporting documentation. The documentation could be returned directly to Menzies or through SSDS human resources. SSDS assisted with the collation and return of application documentation. Some documentation was directly returned to Menzies by SSDS employees. In some cases SSDS assisted employees to complete and return forms. Ms Neill gave evidence that information about pay rates was provided to Menzies but Mr Leiva was not aware of pay rate information. [133] One of the management contact points between SSDS and Menzies, Ms Carter, was the first person hired by Menzies. Mr Leiva gave evidence that they had a total of 11 weeks in which to gear up for the contract and he regarded this as a very tight time frame. He confirmed that it was always Menzies’ intention to take on as many SSDS staff as possible given that “we needed the knowledge within the base given the time to prepare for the contract.” 94 Defence clearances were also an important consideration and preference was given to those who already had defence clearances. 95 Mr Leiva gave evidence that all but two of the SSDS employees engaged by Menzies had the required security clearance level. 96 Mr Leiva gave evidence that it would have been difficult to successfully meet contract obligations if Menzies did not seek to hire many of the existing employees. Mr Leiva agreed that it was in Menzies’ best interest to employ SSDS employees. 97 [134] Applicants for jobs were required to participate in a merit based selection process and a number of SSDS applicants were not successful in obtaining employment. Mr Leiva estimated that between 10 and 15 SSDS applicants were unsuccessful. 98 Mr Leiva said that interviews were not generally conducted given the tight time constraints but qualifications, length of experience and feedback from Ms Moir and Ms Carter were utilised in making the selections. Ms Moir and Ms Carter were familiar with the bases and the individuals given they had been managers at the bases. They were offered work at an early stage by Menzies although they were still employed by SSDS at the time that they provided feedback on individual employees. I am not satisfied that they made recommendations about individuals on instruction from SSDS senior management. To the extent that the recommendations were influential they may have made it less likely that certain SSDS employees would obtain employment with Menzies and more likely that some others would obtain employment with Menzies. Mr Leiva gave evidence that the recommendations of Ms Moir and Ms Carter were not very important in the selection, the main emphasis was on the material provided in the applications. Mr Leiva gave evidence that the length of work experience and knowledge of the base was an important consideration in selection. Mr Leiva went through all of the candidates and the candidates were given a score to create an order of merit for selection. 99 [135] Mr Leiva gave evidence that he had been involved in other contract change situations and that it was normal practice for the incoming contractor to seek to hire a lot of the existing employees. 100 Menzies made offers to 141 people in relation to the defence contracts and 127 persons have been actually employed. There was some uncertainty in the evidence about whether 70 of the offers were made to former SSDS employees or whether 70 former SSDS employees had been engaged. Mr Leiva gave evidence that apart from 2 or 3 people who came from the general labour market, the other 57 workers who successfully applied for the jobs came from a company named ServiceCorp, who recently lost their contract to provide cleaning services at other Defence sites around Sydney. 101 Mr Leiva gave evidence that the number of employees they required for some of the areas of work formerly covered by SSDS was less than that which had been required by SSDS due to differences in the contract. He said that this was the main reason why some SSDS applicants were unsuccessful. 102 However, it appears likely that the decision to use a merit based process and to employ a significant number of the applicants from ServiceCorp would also have influenced the outcomes. [136] Mr Leiva gave evidence that the cooperative relationship with SSDS which enabled easier access to SSDS employees made the recruitment process easier. Mr Leiva agreed in cross examination that without the cooperation with SSDS it would have been more difficult for Menzies to recruit as many SSDS employees as it in fact did. 103 [137] I am satisfied that Menzies focused on the SSDS employees as a source of labour for the areas of work formerly covered by the SSDS contract. I am satisfied that Menzies took this approach primarily because of the short time frame, the qualifications and experience of the SSDS employees, the knowledge of the defence bases of the SSDS employees and the security clearances held by the SSDS employees. It was the intention of Menzies to focus on the SSDS employees regardless of any supportive actions by SSDS. I am satisfied that it would have been more difficult for Menzies to recruit from the SSDS employee pool were it not for the cooperation of SSDS in providing access to SSDS employees. However, given the natural desire of SSDS employees to retain employment I am unable to conclude that they would not have applied for the available jobs regardless of SSDS cooperation. Not all SSDS applicants were successful in obtaining employment. I am not satisfied that it was the actions of SSDS which determined which SSDS employees got jobs. This was primarily a function of the skills, qualifications and experience of the SSDS employees as demonstrated through the selection process conducted by Menzies. [138] SSDS provided assistance to Menzies in the conduct of its recruitment process. I am satisfied that the actions of SSDS to assist Menzies in its recruitment process and to inform SSDS employees of job opportunities with Menzies made a marginal difference to the proportion of SSDS employees offered employment. It did not change the likelihood of success for most of the SSDS employee applicants. Wilson Security [139] Ms Donnini, General Manager Human Resources, for Wilson Security (Wilson) gave evidence. Wilson won security contracts for ACT/Southern NSW. It was not disputed that the level of cooperation between SSDS and Wilson in respect to the NSW/ACT contracts was less than that which applied to the NT contracts. There was no cooperation after August 2014 and most of the recruitment activity was after that time. The conclusions I reached in respect to the nature and level of cooperation in the NT contracts are therefore applicable to the NSW contracts. [140] Ms Donnini gave evidence that as at 10 November 2014 in respect to the ACT; 147 offers of employment were made, of which 119 were made to former SSDS employees. In respect to NSW; there were 71 offers of employment made, of which 48 were made to former SSDS employees. 77% of the total offers of employment were made to former SSDS employees. Most SSDS employees who applied were successful. In respect to NSW; there were 57 SSDS applicants, 48 of whom were successful. Almost all ACT applicants were successful. Approximately 95% of SSDS employees in NSW/ACT who applied for jobs with Wilson were successful. A small number of external and internal applicants refused offers of employment. 203 people were actually employed of whom 160 were former SSDS employees. [141] Mr Backhouse, a former SSDS security guard, gave evidence that his SSDS manager strongly encouraged him to apply for a job with Wilson and sought to facilitate his application. Mr Backhouse applied for work with Wilson but was not successful. [142] There was no evidence that the scope of the Wilson contract was significantly different in respect to security services to the former SSDS contract. Wilson needed to fill 230 positions (203 directly and the balance through sub-contracting to Blackhawk). It is not clear how many employees were engaged by SSDS in these roles at the time of the contract changeover. There was conflicting evidence as to whether or not some employees had left and had not been replaced. Less than 170 SSDS employees applied for jobs with Wilson which was insufficient to fill the available positions. [143] Ms Donnini gave evidence that SSDS did not have any significant role in Wilson’s recruitment process or any influence on Wilson’s recruitment decisions. 104 Positions were advertised generally and information sessions and interviews were conducted without SSDS involvement. [144] I am satisfied that the reason why a high proportion of the SSDS employees who applied were successful was because they had defence clearances and relevant experience. It was easier to transfer defence security clearances than to apply for new ones. 105 I accept the evidence of Ms Donnini that Wilson would not have been able to fulfil the contract requirements at the commencement date if they had not employed a significant number of SSDS employees. 106 [145] Nothing in the evidence presented in the NSW/ACT proceedings leads me to alter the conclusions reached in respect to Wilson in the NT proceedings. SSDS employees obtained their positions through their own efforts and based upon their qualifications and experience. I am satisfied that the actions of SSDS did not influence the outcomes of the Wilson recruitment process. Blackhawk [146] Blackhawk Logistics Pty Ltd (Blackhawk) were sub-contracted by Wilson to provide some security services in the ACT. Blackhawk employed 15 former SSDS employees. 107 Mr Marriott gave evidence that Blackhawk did not advertise externally for employees for the former SSDS work and that he was told this by a Blackhawk manager. 108 Mr Marriott says that SSDS asked Blackhawk if they would need additional guards for the former SSDS work and Blackhawk said yes and that they were interested in interviewing the SSDS employees. Blackhawk did interview the SSDS employees. 109 [147] The initial approach from SSDS to Blackhawk occurred on 1 October 2014, just one month prior to the end of the contract and after many of the SSDS security guards would already have gone through the selection process for Wilson. Confirmation that Blackhawk had in fact obtained the sub-contract and were looking for people was not obtained until a couple of weeks later. Blackhawk already had security personnel and were an existing sub-contractor to SSDS for security work. It is unclear how many existing Blackhawk staff were continuing to be utilised to meet defence sub-contract work, however, in an email of 2 October 2014 Blackhawk confirmed that they had been asked to fill at least 25 NV1 security level positions. 110 [148] Mr Marriott gave evidence that SSDS offered to provide Blackhawk with de-identified data regarding employees and to facilitate contact with employees on site. Mr Marriott gave evidence that SSDS advised employees that Blackhawk were looking for people and encouraged those interested to apply to Blackhawk. 111 Ms Lipsys gave evidence that after being informed by Mr Marriott that Blackhawk may be looking for people she emailed a list of employees who had completed consent to release forms to Blackhawk on 14 October 2014 and that list included the security clearance details of the employees. Blackhawk requested contact details for these employees but SSDS could not provide that information without further consent and instead offered to arrange an information session. An information session did not occur but later on October 14 Ms Lipsys provided contact details for some employees and indicated that some of these employees had indicated that they were already in contact with Blackhawk. [149] On 24 October 2014 Mr Tranda emailed SSDS as follows: “As discussed please find below a list of SSDS guards that have come on board with Blackhawk for a 1st July start. Can you please advise your CEO as he was also enquiring about the numbers and names.....Hopefully these help with limiting your redundancy requirements.” 112 [150] This email was part of a chain which included an invoice from Blackhawk to SSDS for recent security services provided by Blackhawk to SSDS. The SSDS manager warmly thanks Blackhawk for their assistance. [151] It is reasonable to draw an inference that the activity of SSDS in respect to Blackhawk was, at least in part directed at limiting redundancy requirements or in other words assisting the Section 120 case. I am also satisfied that the contact between SSDS and Blackhawk was in the context of an existing commercial relationship. [152] I am satisfied that as the positions to be filled required a defence security clearance at a high level and that the time frame to the commencement of the contract was very short, it would have been difficult for Blackhawk to obtain the necessary employees other than from amongst the former SSDS employees. [153] SSDS did facilitate contact between some of the SSDS employees and Blackhawk. However, I am not satisfied that the evidence supports a conclusion that contact would not have occurred without SSDS assistance. Ms Lipsys acknowledged that some of the employees were already in contact with Blackhawk. [154] SSDS provided assistance to Blackhawk in the conduct of its recruitment process. I am satisfied that the actions of SSDS to assist Blackhawk in its recruitment process, to inform SSDS employees of job opportunities with Blackhawk and to inform Blackhawk of interested SSDS employees, made a marginal difference to the proportion of SSDS employees offered employment with Blackhawk. It did not change the likelihood of success for most of the SSDS employee applicants. MSS [155] Mr McKinnon, Managing Director of MSS Security Pty Ltd (MSS) gave evidence. MSS along with Wilson were the successful incoming contractors to provide security services. Wilson won contacts for Southern NSW and ACT. MSS won the contracts for Northern NSW. [156] All applicants were required to go through MSS’s merit based selection process before being offered employment. They were required to apply via the MSS website where the jobs were advertised to the general public, 113 and be shortlisted for interview, attend an interview, pass a medical exam, license check and be selected by MSS as suitable for employment. MSS prioritised the SSDS employees in the interview process. Most of the interviews were at MSS offices but in two cases they were done at SSDS sites. 114 [157] SSDS and MSS were in discussions from June 2014 onwards. The public announcement that MSS was a successful contractor occurred on 6 August 2014. MSS considered that it was highly desirable to engage as many SSDS employees as possible given that the existing workers had the necessary qualifications, experience and the required security clearances. Mr McKinnon gave evidence that: “MSS needed a substantial proportion of the SSDS employees to take up employment with MSS such that we would be in a position to fulfil all contractual obligations on the transition date of November 1. Recruitment of a new workforce was not a viable alternative.” 115 [158] SSDS made facilities on site available for interviews, distributed MSS flyers to all sites, advised SSDS employees of the MSS online Jobs Board where applications had to be made, encouraged employees to apply and provided those who requested it with assistance in doing so, provided information about current rosters and provided de-identified information about the workforce including years of service, pay rates and security clearance levels. SSDS and MSS liaised concerning interview times. Through these actions I am satisfied that SSDS assisted and facilitated SSDS employees’ participation in the MSS recruitment process. [159] MSS agreed to alter the schedule of interviews so that the interviews were on employees’ days off rather than in work time so as to reduce the impact on SSDS’s operations. 116 This may have been a disincentive to SSDS employees to participate but I doubt it was a significant disincentive. [160] MSS requested roster information “to ensure we are in a position to employ the maximum number of SSDS staff in the new contract”. 117 In this particular circumstance I am satisfied that the request for roster information was designed to align the current SSDS staffing levels with the staffing levels of the incoming contractor. In this circumstance I am satisfied that it did create some additional employment opportunities for SSDS employees. As discussed earlier it is likely that the work requirements would have become evident at a later stage, however, the MSS request meant that adjustments could be made at a stage when MSS had reached an agreement with SSDS to maximise the engagement of SSDS employees. [161] There were 154 SSDS employees in Northern NSW who worked in security roles. 7 did not apply for jobs with MSS. 140 of the 147, or 95% who applied, were offered roles with MSS. 138 accepted the employment offers. Mr McKinnon confirmed that 154 roles were filled and about 16 were filled by the external market or transfers of other MSS employees. 89.6% of roles were filled by former SSDS employees. [162] On 25 September 2014 SSDS and MSS entered into a formal agreement through a MOU. The MOU applies to both the NSW and Queensland contracts. However, it is clear that cooperation between MSS and SSDS was extensive before that date. The SSDS note of the initial meeting of 24 June 2014 records: “MSS very happy to work closely with SSDS on the transfer of employees and minimise the risk around redundancy provided there is a transparent compensation formula that recognises the costs of recognising service and associated oncosts...” 118 [163] I am satisfied that prior to the interviews being conducted from mid September onwards, employees were advised of the arrangements in respect to sick leave and long service leave and MSS were aware that there would be an agreed incentive payment for maximising the engagement of SSDS employees. [164] The MOU provided that SSDS would pay MSS an amount for each employee in return for MSS recognising their service with SSDS for the purpose of long service leave. The MOU also provided that SSDS would pay MSS an amount based upon the proportion of existing permanent SSDS security employees receiving employment with MSS. The amount is based on $86,000 being paid if 100% of SSDS security staff under the NSW and Queensland contracts are taken on and the amount is reduced as the % achieved is reduced. MSS also agreed to credit each employee formerly employed by SSDS with five days of paid personal/carer’s leave to use at any point during the first six months of their employment. [165] The background part of the MOU refers to the intention of MSS to engage 85 to 90% of the existing SSDS employees and the $86,000 payment is linked to the proportion engaged. It is important that the reference is to the proportion of SSDS employees not to the proportion of SSDS employees who apply for jobs with MSS. I am satisfied that this means that the MOU is aimed at MSS both attracting and selecting a high proportion of SSDS employees. 119 [166] Mr Marriott gave evidence that the $86,000 payment was primarily intended as an incentive for MSS to employ as many SSDS staff as possible 120 and to a lesser extent to compensate MSS for the cost of crediting the personal/carers leave. Mr McKinnon considered that the payment was primarily to compensate MSS for the cost of crediting the personal leave. 121 Mr McKinnon gave evidence that if all employees took 5 days personal/carers leave it would cost more than $86,000. However, he acknowledged that it was also intended as an incentive to engage SSDS employees. 122 [167] It is relevant to consider if the $86,000 incentive payment resulted in MSS making more offers of employment to SSDS employees than they would otherwise have done. When asked in cross examination whether the $86,000 payment contributed to MSS making offers of employment to SSDS employees, Mr McKinnon responded by stating that the MOU allowed MSS to “... have the best offer possible to put forward to employees that was within our contract costings...” 123 In the same vane Mr McKinnon stated that the MOU was important in giving SSDS employees an incentive to apply and work for MSS under the new contract. 124 [168] Mr McKinnon acknowledged that MSS already had a strong incentive to employ as many SSDS staff as possible due to the tight time frames and the fact that they had the relevant experience and defence clearances. 125 MSS advised SSDS at the initial meeting on 24 June 2014, before the transition period had begun, that it was their intention to take on as many SSDS staff as possible and that they usually take on 90% of the employees from the outgoing contractor in contract transition scenarios. The SSDS note of the meeting records that: “This is generally achieved through direct recruitment though they are happy to work with the outgoing contractor (not generally a great deal of cooperation in their experience).” 126 Mr McKinnon gave evidence that MSS was generally successful in attracting a high number of former employees in transition situations because the employment package they offer is attractive to employees. 127 However, Mr McKinnon did refer to a situation where the outgoing contractor was trying to retain the employees and made things difficult and MSS only retained about 60%. 128 [169] Mr McKinnon suggested that the 90% figure he gave in the June 2014 meeting was a starting point for the purpose of commercial negotiations and did not necessarily reflect the situation on the ground. 129 I accept that it was a rough estimate and that upon reflection Mr McKinnon could recall situations where a significantly lesser outcome was achieved. Having heard the evidence from the incoming contractors in these proceedings I consider that the 90% figure does not reflect what would usually be achieved in a contract transition situation. [170] Mr McKinnon acknowledged that the defence security clearances held by SSDS employees was an important incentive to employ as many SSDS employees as possible: “It's true that it would have been almost impossible for MSS to begin servicing their contract from the first (inaudible) if you didn't take on a significant proportion of SSDS staff, isn't it?---It would have been difficult had the - in a situation where the defence department didn't make a dispensation in relation to the clearances. If they made a dispensation we would have been in a much different position to employ a lot less. 130 .... “So is it fair to conclude that MSS always had an incentive, a strong incentive, to employ as many SSDS staff as possible?---Yes, to the extent they met our employment criteria. And what was part of your employment criteria?---What, our normal? Yes?---Well, they need to be - they go through an interview process, they have the right attitude, the relevant experience, licensing, physical fitness, pass medical.” 131 [171] Mr Saunders for SSDS put the issue of the impact of the MOU on the engagement of SSDS employees directly to Mr McKinnon: “Now, in relation to those factors do you say that those factors, that is the work that SSDS did, actually assisted MSS to achieve its objective of employing as many SSDS employees as possible?---It certainly contributed. To what extent in the mind of each employee I'm not in a position to judge but we've got a very high conversion rate. And apart from assisting MSS to achieve its objective do you believe that SSDS's activities assisted its employees to succeed in actually getting a job offer from MSS?---Yes, it would have because assisting on the online application et cetera. In your statement at paragraph 2(h) on the first page you talk about SSDS outlining to MSS that the prime objective was to maximise the number of existing SSDS employees that gained employment with MSS. It's the case, isn't it, that MSS and SSDS agreed to work together to achieve that objective?---Yes.” 132 ... “And you'd also agree, wouldn't you, that those financial incentives did in fact motivate MSS to employ as many SSDS employees as possible?---Yes.” 133 [172] Some care should be taken in comparing the take up rate between MSS and those incoming contractors who work in cleaning, grounds maintenance, stores and catering areas. The external labour market in those areas may be quite different. The defence security clearance levels required will also be generally different. However, comparison with Wilson is relevant given that it is also a security service contractor. In the case of Wilson and MSS more than 90% of SSDS employees who applied for work with the incoming contractor were successful. However, the level of cooperation between SSDS and Wilson was very different from that between SSDS and MSS. A very high proportion of existing employees applied for work with MSS. We do not know what proportion of SSDS employees applied for work with Wilson. However we do know that only 77% of the total offers of employment were made to former SSDS employees whereas with MSS the comparable figure was 89.6%. In both cases we know that almost all the offers were accepted. There was no evidence of significant change in the scope of the security work in the contracts won by Wilson or MSS. [173] It should be noted that the employee witnesses who are now employed by MSS did not consider the long service leave recognition and the provision of leave credits an important factor in their decision to apply for and accept employment with MSS. 134 I accept that the desire to maintain a job was the strongest factor in the decision to apply and accept employment. However, I don’t discount the importance of the activity of MSS in seeking to attract as many SSDS employees as possible. [174] I am satisfied that the majority of SSDS employees would have been successful in obtaining employment with MSS regardless of the actions of SSDS. It is also true that MSS employees obtained their jobs through a merit based selection process conducted by MSS. It was the employee’s defence experience, their security clearances and the quality of their resumes and applications, in most cases developed and submitted by the employees themselves, which made the existing employees attractive for employment. However, in the case of MSS the following combination of factors leads me to conclude that the actions of SSDS had more influence on the outcomes than was the case with the other incoming contractors: ● The formal agreement between SSDS and MSS effectively gave SSDS employees preference. ● The agreement between SSDS and MSS gave MSS an incentive to maximise their engagement of SSDS employees. ● SSDS was a strong moving force behind the agreement. ● A very high proportion of the existing employees applied for jobs with MSS. In a number of cases we do not have comparative figures for other contractors. However, I am satisfied from the available evidence that the proportion was lower in the case of the other major security contractor Wilson and in the case of other general contractors such as Spotless. ● A very high proportion of the existing employee applicants were successful. The success rate was higher than for any of the other major incoming contractors. ● Only a small proportion of those hired were external. It is clear that in the case of MSS external applicants were hired mainly because there were insufficient internal applicants despite the intensive efforts to attract internal applicants. Compass is the other major contractor where only a small proportion of external applicants were hired. (Broadlex, a small sub-contractor, does not appear to have hired external applicants). Compass always intended to maximise employment from SSDS applicants but to supplement this with some external applicants. About 10% of SSDS applicants were unsuccessful with Compass compared to 5% with MSS. [175] If these actions had not occurred I consider that the best estimate is that the outcomes would have been similar to those in respect to Wilson which also wanted to engage existing employees but which did not cooperate with SSDS. We do not know what proportion of SSDS employees applied to work for Wilson. It is reasonable to conclude it was a lower proportion than with MSS given the incentives for MSS to attract applications from SSDS employees. I estimate that as a result of the actions of SSDS the proportion of SSDS employees engaged by MSS was between 10 and 20% higher than it would otherwise have been. Summary of conclusions in respect to “obtain” [176] In considering the actions of SSDS I reached the conclusion, as in the NT contracts decision, that to some extent the activity of the SSDS transition team was directed to establishing SSDS’s case to minimise their redundancy costs. To some extent SSDS sought to maximise the appearance of cooperation in order to strengthen their case to reduce redundancy pay and the language used in the SSDS notes and communications should be considered in that context. 135 [177] When the general measures implemented by SSDS to inform and assist employees are considered in combination with the particular agreements and cooperation with the incoming contractors I consider that the impact of the actions of SSDS are as follows: ● In respect to Transfield, Wilson, Brookfield and AFL the incoming contractor sought employees internally and externally and some SSDS applicants were unsuccessful. The actions to assist and inform employees may have made a difference to the chances of success of some individuals but the evidence does not establish this in particular cases. The cooperation and agreement with the incoming contractor made no material difference to the outcomes. ● In respect to Compass, Spotless and Menzies the actions to assist and inform employees may have made a difference to the chances of success of some individuals but the evidence does not establish this in particular cases. SSDS applicants were given some priority consideration and this probably increased their chances of successfully obtaining employment to a small extent. In the end the incoming contractors sourced employees internally and externally and some SSDS applicants were unsuccessful. Regardless of the actions of SSDS the incoming contractor sought to employ a high proportion of the existing employees provided they met the incoming contractors’ criteria. The actions of SSDS facilitated this process. The actions of SSDS probably produced a marginal difference in the proportion who were successful in obtaining employment. There is no obvious way of distinguish the sub-group(s) where the actions of SSDS were a strong moving force behind their success. ● In respect to Broadlex although external applicants were not considered I am not satisfied that the assistance provided by SSDS was a material influence on the outcome for particular SSDS employees. The cooperation of SSDS made it easier for Broadlex to implement its decision to consider the group of SSDS employees. However, Broadlex intended to focus on the SSDS employees regardless of the actions of SSDS. The actions of SSDS were a material factor but not a strong moving force behind the decision to focus on the SSDS employees. It is possible that if SSDS had not provided access and assistance it would have made a marginal difference to the number of SSDS employees who were offered employment. ● In respect to Blackhawk the primary actions of SSDS were to ascertain that Blackhawk were recruiting security guards, alert SSDS employees to that fact, and provide Blackhawk with some details of interested SSDS employees. There is inadequate evidence to reach a conclusion about whether or not there were unsuccessful candidates and/or whether external applicants were also appointed. Regardless of the actions of SSDS Blackhawk would have considered the SSDS employees to be attractive. The actions of the outgoing contractor probably made a marginal difference to the likelihood of employees being offered employment by the incoming contractor. ● In respect to MSS there was a formal agreement which effectively gave preference to the hiring of SSDS employees. SSDS was a strong moving force behind that agreement. Regardless of the actions of SSDS the incoming contractor sought to employ a high proportion of the existing employees provided they met the incoming contractors’ criteria. SSDS applicants were considered first and this probably increased their chances of successfully obtaining employment to a small extent. In the end MSS sourced employees internally and externally and some SSDS applicants were unsuccessful. However, only a small proportion of SSDS employees were unsuccessful and only a small proportion of externals were engaged. The actions of the outgoing contractor made a more significant difference than in the other cases to the likelihood of employees being offered employment by the incoming contractor. There is no evidence to identify the sub-group(s) where the actions of SSDS were a strong moving force behind their success but it is possible that they might be able to be identified. [178] I accept that the significant level of support SSDS offered to its employees in the incoming contractors’ recruitment process may have improved the chances of some individuals in that process. However, fundamentally candidates were being selected based upon their qualifications, experience and ability to meet the incoming contractors’ selection criteria. The strong moving forces towards the creation of a job offer in these circumstances were the actions of the candidate and the incoming contractor. [179] I am satisfied that SSDS was not a strong moving force behind the SSDS employees being offered employment with Transfield, Wilson, Brookfield, Menzies, AFL, Blackhawk, Spotless or Compass. The actions of SSDS were insufficient to cause acceptable alternative employment to become available to the redundant employees. [180] I am not satisfied that SSDS was a strong moving force behind each of the SSDS employees being offered employment with MSS. The actions of SSDS were insufficient to cause acceptable alternative employment to become available to each of the redundant employees. However, given I am satisfied that the actions of SSDS did make a significant difference, I consider that it may be possible to identify a particular sub-group or groups of employees where SSDS was a strong moving force behind the offers of employment and where the actions of SSDS were sufficient to cause alternative employment to become available. [181] I consider it appropriate that the parties be given the opportunity to make further submissions about this particular matter. I will therefore not make a determination about those who were made offers of employment by MSS at this stage. A directions conference will be held in Sydney at 9am on Thursday 5 February 2015 . Is the alternative employment offered by the incoming contractors “acceptable”? [182] As noted earlier I adopt the approach to this question in my earlier decision. 136 Given my decision in respect to “obtain” it is not necessary to determine the matter of whether the alternative employment is acceptable at this stage. However, I will make the following observations. [183] The wages and conditions for those employed by SSDS under the NSW/ACT contracts are close to the minimum award safety net (except for a relatively small group who are employed as range operators). 137 The wages and conditions with the incoming contractors are also close to the minimum award safety net. The submission of United Voice was that when the SSDS NSW Services Agreement 2012 (excluding Shoalhaven) is compared to the Security Industry Award 2010 there are a number of matters in the Agreement which are superior to the Award. I accept that some of the matters raised by United Voice are of significance; for example: annual salary arrangements, paid meal breaks, rest breaks, torch allowance, laundry allowance, casual conversion, loyalty leave bonus, additional compassionate and parental leave, delegate training leave and payment on non-rostered public holidays. However, apart from the annual salary arrangement, they are not sufficient in aggregate to disturb my overall conclusion. The annual salary arrangement offers the potential for an employee to be engaged at a significantly more beneficial rate than would otherwise apply under the Award. [184] Subject to the qualification above, I accept the comparisons of the relevant wages and conditions provided by SSDS. [185] If an employee, not on an annual salary, received a job offer which was for similar status work, in the same or a comparable location, with similar job security (i.e. full time, part time or casual) and with similar working hours then the only significant disadvantage in the new employment offered would be the loss of non-transferable credits in respect to accrued service, such as unfair dismissal protection, accumulated personal leave, and credit towards long service leave. I would be satisfied, notwithstanding the loss of service, that the employment is acceptable alternative employment. [186] The factors surrounding the loss of service are an important part of the rationale for redundancy entitlements. It is appropriate that the loss of service be compensated even if the alternative employment is acceptable. This would mean that I would not reduce redundancy entitlements to nil. I would consider further submissions from the parties before making a decision as to what the appropriate reduction should be having regard to the profile in respect to service related entitlements of the relevant employees. I would also have to consider particular individual circumstances including cases where it is argued that the employment offered was not similar status work, in the same or a comparable location, with similar working hours, with similar levels of job security and/or on the basis of other particular circumstances. In such cases I may conclude that SSDS has not obtained acceptable alternative employment. In any case it would not be appropriate to reduce the entitlements of any employee without giving the affected employee an opportunity to be heard in respect to these matters. At this stage of the proceedings it is only the relevant unions who have been involved. [187] In the NSW/ACT proceedings there was evidence from a number of employees that their wages and conditions were not comparable to those when they worked for SSDS. In some cases this related to matters which related to their individual characteristics such as hours of work and acting in higher duties but in others they related to more general characteristics such as rates of pay and leave and the leave loyalty bonus in particular. In respect to the contractors other than MSS this is not particularly relevant. Mr Inglis, Mr Wyness and Mr Vandermeut were successful in obtaining work with MSS. Mr Inglis gave evidence of loss of leave loyalty bonus and loss of income due to roster changes. Mr Wyness gave evidence that MSS were employing him on the Award rate which was lower than the SSDS agreement rate. A comparison of the award rates and the agreement rates does not reveal any difference. However, there may be a difference for those on annualised salaries under the SSDS agreement when compared to those under the award engaged by MSS. 138 Mr Vandermeut referred to his concern at the loss of paid parental leave which he was entitled to under the SSDS agreement but is not entitled to under the award with MSS. The evidence from the former SSDS employees who obtained employment with MSS does not lead to any change in my general conclusion that the alternative employment is acceptable. However, this may change in respect to individual employees depending upon the evidence. If a particular employee was subject to annualised salary then this may be a relevant consideration. Conclusion [188] I am not satisfied that SSDS obtained acceptable alternative employment for its employees employed under the NSW/ACT contracts with the incoming contractors except for MSS. This determination is the settlement of the disputes under Section 739 as far as they relate to those who were offered employment with the incoming contractors other than MSS under the NSW/ACT contracts. The applications under Section 120 are dismissed in so far as they relate to the NSW/ACT contracts and those who were offered employment with incoming contractors other than MSS. Further proceedings will be listed in respect to MSS to finalise the determination in respect to those employees who were offered employment with MSS. SSDS are to advise the Fair Work Commission and the other parties within seven days if there are any other employees in respect to whom they are seeking to be heard in respect to their applications in so far as they relate to the NSW/ACT contracts. COMMISSIONER Appearances : Mr T Saunders appeared for SSDS. Mr S Bull and Ms G Starr appeared for United Voice. Mr A Snowball appeared for the NUW. Ms C Pullen appeared for the Fire Brigade Employees Union (NSW). Mr T Warnes appeared for the TWU. Mr J Murphy appeared for the UFU. Hearing details: 2014 Sydney November 17, 18 & 19 Final written submissions: 5 December 2014 1 [2014] FWC 7678 . 2 [2014] FWC 7678 . 3 [2014] FWC 7678 , at paras [15]-[20], [53]-[55] and [84]-[90] in particular. 4 [2014] FWCFB 6737 . 5 [2014] FWCFB 6737 , at para [54]. 6 Submission of SSDS, 13 November 2014, at paras 22 and 25. 7 [2014] FWC 7678 , at paras [26], [27], [37], [41] and [42]. 8 PN331. 9 PN340. 10 PN431 to PN432. 11 [2014] FWC 7678 , at para [29]. 12 Exhibit Serco 8, at para 117 and following. 13 PN4480 to PN4481. 14 Exhibit UV 8. 15 PN3646 to PN3649, PN3684 to PN3693 and PN3703. 16 PN3709 to PN3710. 17 PN4052. 18 PN4677. 19 PN3515 to PN3519. 20 Exhibit Serco 8, Statement of Ms Phu, and PN189 and PN192. 21 PN93. 22 PN533 and PN544. 23 PN410. 24 PN4443. 25 Note: There is no direct evidence in respect to unsuccessful candidates for Blackhawk. 26 Note: Broadlex is probably an exception. There is no conclusive evidence in respect to Blackhawk. However, given that Blackhawk advised that there were 25 positions to fill and that only 15 SSDS employees were appointed it is likely that external applicants also got jobs. 27 Note: external candidates were probably not considered in the case of Broadlex. MSS, Compass and Spotless guaranteed internal candidates an interview but not external candidates. 28 See for example Statement of Mr Marriott, at para 161, and Mr Castles at PN4524. 29 PN282 and PN88. 30 PN297 and PN133. 31 PN499 and PN501. 32 PN509. 33 PN1521 to PN1525. 34 PN2271 to PN2277. 35 PN2276 and PN168 to PN170. 36 PN3506. 37 Exhibit Serco 9, Attachments NM103 and NM104. 38 Exhibit Serco 10, Attachment ML29, and Exhibit Serco 9, Attachment NM143. 39 Exhibit Serco 11, Attachment TM103. 40 Exhibit Serco 11, Attachment TM105. 41 PN2076 and PN2155. 42 Exhibit Serco 11, Attachment TM86. 43 Exhibit Serco 11, Attachment TM86. 44 PN2170. 45 PN2255. 46 [2014] FWC 7678 , at paras [44] and [60]-[63] in particular. 47 PN2094. 48 PN2109. 49 PN2238 to PN2239. 50 Exhibit Serco 10, Attachment ML17. 51 PN2065 and PN2138. 52 PN2082. 53 PN2135 to PN2137. 54 PN1619 to PN1625. 55 PN1626. 56 Exhibit Serco 11, Attachment TM62. 57 PN1645. 58 PN1630 to PN1631. 59 PN1675. 60 PN1713 and PN1749. 61 PN1635 to PN1639. 62 PN1642. 63 PN1666. 64 PN1720. 65 PN1712 to PN1714 and PN1749 to PN1754. 66 Exhibit Serco 11, Attachment TM60. 67 See Exhibit Serco 11, Attachment TM73. 68 Exhibit Serco 10, Attachments ML6 to M13. 69 Exhibit Serco 11, at para 124. 70 Exhibit Serco 11, Attachments TM42, TM43 and TM64. 71 Exhibit Serco 11, Attachment TM42. 72 Exhibit Serco 11, Attachment TM43. 73 Exhibit Serco 11, Attachment TM52. 74 Exhibit Serco 11, Attachment TM64. 75 PN852 to PN853. 76 See [2014] FWC 7678 , particularly at paras [60] to [63]. 77 Exhibit Serco 11, Attachment TM44. 78 PN1625 to PN1626. 79 Exhibit Serco 11, Attachment TM51. 80 Exhibit Serco 11, Attachment TM58. 81 PN4570. 82 Exhibit Serco 11, at para 142(c). 83 PN2429 to PN2430. 84 PN2428. 85 PN2489. 86 PN2577. 87 PN2518 to PN2522. 88 PN4546. 89 PN2495. 90 Exhibit Serco 13, Attachments PC12, PC14 and PC17. 91 Letter of 2 December 2014 from Mr McDonnell produced in response to order requested by SSDS. 92 Exhibit Serco 13, at para 23. 93 PN4432. 94 PN1858. 95 PN1861. 96 PN2019 to PN2020. 97 PN1864 to PN1867. 98 PN1940. 99 PN1915 to PN1917 and PN1931. 100 PN1906 to PN1908. 101 PN1824 to PN1825. 102 PN1950 to PN1951. 103 PN1964 to PN1965. 104 PN1488 and Exhibit NUW 3, Statement of Ms Donnini, at para 15. 105 Exhibit NUW 3, Statement of Ms Donnini, at para 11. 106 PN1482. 107 Exhibit Serco 10, Attachment ML45, and confirmed by document in response to order to produce provided 2 December 2014 by Dean Tranda Blackhawk Logistics. 108 PN683. 109 PN688. 110 Exhibit Serco 11, Attachment TM75. 111 PN710. 112 Exhibit Serco 10, Attachment ML45. 113 PN1381. 114 PN1381. 115 Exhibit NUW 2, Statement of Mr McKinnon, at para 2(j). 116 Exhibit Serco 11, Attachment TM123. 117 Exhibit Serco 11, Attachment TM123, email of 3 September 2014, and Exhibit Serco 13, Attachment PC23. 118 Exhibit Serco 11, Attachment TM112. 119 Exhibit Serco 11, Attachment TM126. 120 PN930. 121 PN1371. 122 PN1369. 123 PN1369. 124 PN1379. 125 PN1352 and PN1358. 126 Exhibit Serco 11, Attachment TM112. 127 PN1447. 128 PN1450. 129 PN1454. 130 PN1365. 131 PN1358 to PN1360. 132 PN1389 to PN1391. 133 PN1396. 134 PN4695, PN4699, PN5063, PN3795 and PN3799. 135 [2014] FWC 7678 , at paras [44] and [60]-[63]. 136 [2014] FWC 7678 , at paras [84]-[87]. 137 SSDS Supplementary Submissions of 4 December 2014, Attachment 1. 138 PN4681 to PN4690. 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