Maribyrnong ratepayers will foot the bill for almost $2.4 million in payouts to staff let go as part of the controversial outsourcing of home care services.

Maribyrnong and Hobsons Bay councillors voted in February to outsource services for some of the west’s most vulnerable residents.

The councils are sub-contracting domestic assistance, personal care and in-home respite for the elderly and people with disabilities to Uniting AgeWell because of possible changes in federal funding.

Maribyrnong council launched action in the Federal Court to argue a clause in its employment agreement (EA) with staff members meant it did not need to pay out redundancies because it was assisting their transfers to Uniting AgeWell.

The Australian Services Union, which represents the workers, maintained the redundancies should still be paid, a position last week backed by Justice Michael Wheelahan.

Union secretary Lisa Darmanin told Star Weekly the workers were entitled to redundancy payments in the event of the council ceasing their roles.

“I feel sorry for ratepayers that Maribyrnong council incurred these extra legal costs by taking the matter to court,” she said.

Ms Darmanin said the court challenge, launched before the council had even voted to proceed with outsourcing, showed “extraordinary disregard” for longstanding workers affected by the changes.

“Without the ASU, these workers who face an uncertain future and are at risk of insecure work, would have been denied their entitlement to redundancy payments,” she said.

 

Maurice Blackburn principal lawyer Kamal Farouque said the Federal Court decision means that Council workers who are made redundant will be entitled to redundancy payments estimated at $2.37 million.

“The Council claimed that it was not required to pay redundancy pay, but the court has decided that the enterprise agreement gives workers that right if they lose their council jobs due to redundancy.”

Maribyrnong Council community services director Clem Gillings said legal advice had prompted the council to seek clarity in the Federal Court on a clause relating to “transmission of business”.

“We wanted to clarify the application of our EA so that we, and our staff, are certain about how it applies during this process, including understanding our obligations relating to redundancies as the EA clauses were unclear,” she said.

“Council will absolutely meet all of the confirmed entitlements of staff.”

Ms Gillins said the council has 28 days to review the decision and is seeking legal advice on the matter.

The court’s decision does not affect Hobsons Bay Council as its workers were employed under a different enterprise agreement.