- The ‘ordinary and customary turnover of labour’ exception to the obligation to pay redundancy pay is confined to a narrow range of circumstances.
- The factual matrix surrounding the employment needs to be considered.
- The reasonable expectations of employees are a relevant factor in determining whether the exception applies.
In a decision that considers the construction of the ‘ordinary and customary turnover of labour’ exception (‘OCTL exception’) to the obligation to make redundancy payments under s 119(1)(a) of the Fair Work Act 2009 (Cth), the Full Federal Court of Australia has held that employees whose employment was terminated when their employers lost service contracts were entitled to redundancy pay.
In Berkeley Challenge Pty Ltd v United Voice  FCAFC 113, Rares, Collier and Rangiah JJ unanimously dismissed the appeals brought by Spotless against two separate but related first instance decisions of United Voice v Berkeley Challenge Pty Ltd  FCA 224 (‘Berkeley Decision’) and Fair Work Ombudsman v Spotless Services Australia Pty Ltd  FCA 9 (‘Spotless Decision’).
The scope of the OCTL exception is notoriously uncertain. The Full Federal Court’s decision canvasses the history of the exception, and provides some guidance as to its application, albeit confined to the particular facts of these matters. Insofar as the matters centre around a contracting company that lost a contract, those facts are not uncommon.