Over the last 40 years the Australian workforce has gradually become more and more mobile. Whilst employees may remain with the same group of employers, it is not unusual for employees to move between group companies and related employers as they take up new roles, move to different locations or commence on new projects.
So what happens to long service leave every time an employee moves to a related employer? Most employees believe that their service with the related employer will be recognised as continuous service for calculating their long service leave entitlements.
But then the employee ends up in Western Australia!
A recent decision of the Full Bench of the Western Australian Industrial Relations Commission (Full Bench) identified a far reaching gap on the Western Australian long service leave legislation. This has cast doubt over the entitlements of many Western Australia based employees.
Can "one and the same" mean "more than one"?
In Baker Hughes Australia Pty Ltd v Martin Venier  WAIRC 00843 the Full Bench considered the phrase "one and the same employer" in section 8 of the Long Service Leave Act 1958 (WA) (LSL Act).
The issue arose in the context of a claim for long service leave brought by Mr Venier following the ending of his employment in July 2015.
Mr Venier had commenced employment in the United Kingdom with an entity that was related to Baker Hughes Australia Pty Ltd (Baker Hughes). Subsequently, Mr Vernier's employment moved between various overseas entities that were also related to Baker Hughes and ,in July 2008, Mr Venier commenced employment with Baker Hughes within Australia.
Following termination, Mr Venier commenced action in the Industrial Magistrates Court of Western Australia seeking payment of long service leave entitlements on the basis of 26.64 years' of continuous service with Baker Hughes and its 'related bodies corporate'.
As the LSL Act does not include express provisions recognising employment with related bodies corporate or associated entities (similar to the express provisions that are set out in long service legislation applicable in other Australian States and Territories), Mr Venier needed to show that his employment with each of the overseas employers was employment with "one and the same employer" for the purposes of section 8(1) of the LSL Act.
The parties asked Industrial Magistrate Cicchini to make a preliminary determination as to whether service with related bodies corporate (as that term is defined in section 50 of the Corporations Act 2001 (Cth)) constitutes "continuous employment with one and the same employer".
In April 2016, the Industrial Magistrate answered "yes" to this question, finding that "one and the same employer" includes "more than one" and that service with related entities should be considered service with "one and the same employer".
Baker Hughes appealed to the Full Bench of the WAIRC.
When "one and the same" means "one and the same"
The appeal to the Full Bench was successful and the decision of the Industrial Magistrate was overturned. The Full Bench found that:
- the words "one and the same employer" are not ambiguous
- it is plain that the words "continuous employment with one and the same employer" means continuous employment with a single employer.
Additionally, the Full Bench found that the effect of the Industrial Magistrate's decision at first instance was to add words that were too "far-reaching" into the LSL Act to fill the gap between the LSL Act and long service leave entitlements in the other Australian States and Territories. In doing this, this constituted an extensive and impermissible amendment to the LSL Act that "would create new rights and obligations which…would usurp the role of Parliament."
What does this mean for employers?
The decision confirms that there is no statutory right under the LSL Act to have service with related bodies corporate recognised for the purpose of calculating long service leave entitlements.
Unless a contract of employment or an industrial instrument that applies to the employee's employment recognises service with a related body corporate for the purposes of calculating long service leave, until such time that the West Australian Parliament amends the LSL Act, it is open to employers to exercise a discretion to recognise, or to not recognise, any such service.
Employers should check the terms of their policies, contracts and industrial instruments to see whether they have an obligation to recognise service with related entities when calculating long service leave and, if not, consider how to respond to requests from employees for long service leave where the employee has been employed by a related entity, whether overseas or within Australia.