Association of Professional Engineers, Scientists and Managers, Australia, The v NSW Electricity Network Operations t/a TransGrid

[2018] FWC 5933

[2018] FWC 5933

FAIR WORK COMMISSION

RECOMMENDATION

Fair Work Act 2009
s 739 - Application to deal with a dispute

Association of Professional Engineers, Scientists and Managers, Australia, The
v
NSW Electricity Network Operations t/a TransGrid
(C2018/2862)

DEPUTY PRESIDENT SAMS SYDNEY, 25 OCTOBER 2018

Alleged dispute about a matter arising under an enterprise agreement – organisational restructure – redeployment or redundancy – whether entitlements accrue after termination of employment – agreed settlement – proposed deed of release disputed – conciliation conference – parties agree to the Fair Work Commission recommending a resolution of the issues remaining in dispute – recommendation issued.

BACKGROUND

[1] On 28 May 2018, the Association of Professional Engineers, Scientists and Managers, Australia (the ‘Union’) applied, pursuant to s 739 of the Fair Work Act 2009 (the ‘Act’), to have the Fair Work Commission (the ‘Commission’) deal with a dispute under the TransGrid Employees Agreement 2013 (the ‘2013 Agreement’). The dispute relates to Mr Vu Tran’s employment with the NSW Electricity Network Operations t/a TransGrid (‘TransGrid’) as a Maintenance Delivery Analyst. The Union alleged that Mr Tran’s role had significantly changed due to an organisational restructure. Therefore, Mr Tran should have been given the option of redeployment or redundancy under clause 9 of the Agreement. TransGrid denied that the role had significantly changed or that the circumstances enlivened clause 9 of the Agreement. Relevantly, Mr Tran’s employment with TransGrid came to an end on 11 May 2018.

[2] On 29 May 2018, the matter was allocated to me for determination. In accordance with my usual practice, I listed the matter for conference on 12 June 2018. That conference was adjourned at TransGrid’s request until 28 June 2018. At that conference, TransGrid made an offer to Mr Tran, on certain terms, and although not accepted at the time, the offer remained open for 24 hours. The following day, the Union contacted TransGrid to confirm that Mr Tran accepted the offer.

[3] However, on 8 August 2018, the Union advised the Commission that the parties had not yet concluded the settlement agreement because they disagreed in two respects. They were:

1. The calculation of the amount to be paid, specifically whether it should be calculated on the weekly rate of pay that applied at the time Mr Tran’s employment with TransGrid ended (11 May 2018), or the weekly rate of pay that applied at the time of the settlement (29 June 2018), after all employees received a 2% wage increase under a new Agreement, which came into effect on 30 May 2018; and

2. Whether the additional requirement to enter a deed of release was notified by TransGrid after all parties had agreed to the settlement terms on 29 June 2018. 

[4] The parties sought a recommendation from the Commission in respect to these outstanding issues. I agreed to provide a recommendation and issued directions to the parties to file submissions in support of their positions. Both parties complied. I note that in their submissions TransGrid raised various jurisdictional and other objections to the Commission dealing with the dispute, which appeared to be inconsistent with my understanding of what the parties had agreed in respect to the proposed recommendation. However, on 25 September 2018, TransGrid helpfully requested the Commission defer consideration of those issues until, and unless, the parties request the matter proceed to arbitration. Both parties are content for the Commission to issue a recommendation on these two issues. I will proceed to do so on that basis.

THE ISSUES – SUBMISSIONS OF THE PARTIES

The deed of release

[5] Turning firstly to the deed of release. Mr Tran, through his Union, objects to the deed of release on two broad bases. Firstly, he claims that TransGrid’s representatives did not make it sufficiently clear to him that the offer was subject to the execution of a deed of release. Secondly, he objected to the content of the deed, which had been prepared by TransGrid, and which he described as being ‘highly legalistic’. Mr Tran also objected to a number of the clauses contained in the deed of release. Without detailing the specific objections, they broadly relate to the terms’ alleged proclivity to favour TransGrid; his concern that he may have already breached the confidentiality term by discussing the settlement agreement with a small group of friends; and other clauses which he believes are either unnecessary or unduly onerous on him.

[6] TransGrid conceded that it did not discuss the requirement for a deed of release during the conciliation. However, it is necessary and not unusual that the parties enter into a formal agreement or deed which ensures that all issues are appropriately resolved and recorded in a document. The deed which was provided to Mr Tran is based on TransGrid’s standard terms of settlement, which it was said, are both reasonable and appropriate in the circumstances.

The correct rate of pay

[7] The basis for the dispute about what figure should constitute a ‘week’s pay’ is due to the approval of the TransGrid Employees Agreement 2016 (the ‘2016 Agreement’) on 23 May 2018 and which came into effect on 30 May 2018; see: [2018] FWCA 2881. The 2016 Agreement had been lodged with the Commission on 14 December 2017. Clause 11 of the 2016 Agreement states that a 2% wage increase applies to all employees on, or after the first full pay period from the date of approval; namely 23 May 2018.

[8] The Union referred to the jurisdictional objection TransGrid raised in the conference on 28 June 2018. That objection related to the effect of the approval of the 2016 Agreement, which included that the 2013 ceased to apply to all employees previously covered by the 2013 Agreement, including Mr Tran. Pursuant to Stephenson v Abetz [PR952743], Mr Tran was concerned that the Commission may no longer have jurisdiction to deal with his dispute under the 2013 Agreement. He believed he could only pursue his dispute via an unfair dismissal claim, pursuant to s 394 of the Act. However, compensation under an unfair dismissal claim is limited to 26 weeks, which is significantly less than what he was seeking by way of relief through this s 739 application. It was claimed that these factors weighed heavily in his mind when he accepted the proposed settlement offer. Alternatively, the Union submitted that s 392 of the Act is a useful reference guide, which refers to the amount the employee would have received, but for a dismissal; (s 392(c)).

[9] TransGrid submits that the 2013 Agreement is clearly the appropriate reference point for the meaning of the term ‘week’s pay’. At no time, did the 2016 Agreement apply to Mr Tran, which commenced two weeks after his employment was terminated. Under no circumstances, could the wage rates in the 2016 Agreement be regarded as a basis for the calculation of any settlement period. Further, the application itself arises in respect to the 2013 Agreement; therefore, it is logical that the 2013 Agreement is the appropriate reference instrument for a week’s pay. Further, any reliance on s 392 of the Act is misguided, as the unfair dismissal provisions are entirely different to applications under this section of the Act.

RECOMMENDATION

[10] Turning firstly to the deed of release issue. Executing terms of settlement is an entirely orthodox means of concluding agreements in the Commission, so much is so that I suspect Ms Buchanan would have been very aware of such a requirement, and because it was so obvious, did not think Mr Tran would have any other expectation. It is uncommon (though not rare) that parties disagree about the exact wording of particular clauses. These disputes are almost always able to be resolved. It is a great pity that the parties were not able to resolve their disagreement about the wording, without the need for the assistance of the Commission, which has resulted in unnecessary delay. This implies no criticism on either party though; both had very competent and experienced advocates and it might be said that this is an unusual case. In any event, I hope that Mr Tran has been successful in finding alternative employment in the meantime and has not allowed this dispute to adversely impact on him.

[11] That said, I tend to I agree with Mr Tran that the proposed terms of settlement from TransGrid are legalistic and overly technical. I appreciate that certainty is required; but I also acknowledge the confused reaction that litigants, particularly unrepresented parties, may have when confronted with unfamiliar legal jargon and technicality. Here, there are a few terms which I find rather problematic and I question whether some others are necessary. For example, clause 7 requiring the applicant to indemnify TransGrid against third party claims which arise from the Deed is an unusual term, in my experience. Further, I agree the release at clause 6 favours TransGrid, as it is usual for deeds of release to provide for mutual releases, which this deed does not. While I understand the concern that Mr Tran might have as a result, I do not think these issues are of such moment as to derail the entire agreement.

[12] Similarly, while confidentiality terms are common, the Commission is never likely to know (nor would an employer) if a confidentiality provision has been breached, either deliberately or inadvertently. Mr Tran ought not to have divulged the terms of the agreement to colleagues, albeit close friends. It was likely to put the settlement agreement at risk and has possibly led to some of the frustration that characterises the current situation. That said, that ‘egg cannot be unscrambled’. I am prepared to accept that Mr Tran’s disclosure was not deliberate and should not unravel the settlement.

[13] I accept that TransGrid’s representative did not state that a deed of release was a condition on the settlement agreed to in the 28 June 2018 conference. However, a deed of release is reasonable in all the circumstances, given the issues involved the dispute and the agreement of TransGrid to settle the matter on terms, particularly favourable to Mr Tran. Accordingly, on this issue I recommend as follows:

1. The parties should use my template deed which I frequently provide to parties in conciliations before me. I recommend they use this deed to record the agreement reached on 28 June 2018.

[14] Turning then to the ‘week’s pay’ issue. Just as the requirement for a deed should have been made apparent to Mr Tran at the conciliation conference, the exact settlement figure should also have been identified. This may not have immediately possible, if it was necessary for TransGrid to seek some time to check the correct figures through Payroll.

[15] In any event, the 2013 Agreement is the appropriate and only reference instrument for a ‘week’s pay’. As the applicant submitted, if he had been made redundant, the timing of that redundancy would have been when the 2013 Agreement was in force and operation. He was not employed at the time the 2016 Agreement came into operation. He had ceased employment two weeks earlier. While the timing was obviously unfortunate for Mr Tran, it seems he is seeking the best of both Agreements in circumstances where, despite the jurisdictional objections of TransGrid to his dispute being filed under the 2013 Agreement, he now seeks a benefit flowing from a new Agreement that has never applied, and could not have applied to him. This is impermissible as a matter of law and practical common sense. To demonstrate the illogicality of the proposition, if Mr Tran’s submission is accepted, it would have the absurd outcome of an employee being able to dispute the payment of benefits at the point of termination of employment and artificially prolonging a dispute for weeks or months until final settlement, while continuing to accrue service related entitlements (or as here, benefitting from the terms of a new industrial instrument) for that period; in effect, ‘gaming’ the system in order to obtain a benefit which had neither been earned, or acquired, as all service was extinguished at the point of termination.

[16] To further demonstrate the point, most employees receive their outstanding entitlements on the day their employment terminates. However, it is not uncommon for past employees to receive all their accrued and outstanding entitlements a few days, or even weeks, after termination, sometimes due to pay cycles or difficulties with calculating correct payments. It could not be seriously suggested that entitlements continue to accrue during the period in which a past employee is no longer employed; the accrual ceases on the day of termination. For these reasons, I can see no basis for using the 2016 Agreement as the reference instrument for the purposes of calculating Mr Tran’s ‘week’s pay’.

[17] I would add that reliance on the unfair dismissal provisions of the Act in a matter lodged under s 739 of the Act is entirely misconceived. While such a submission is creative, it is not open, in effect, to convert a dispute application under s 739 into a de facto unfair dismissal matter under Part 3-2 of the Act and then seek to justify a settlement amount on remedies in an entirely unrelated section of the Act. Accordingly, I recommend that the parties apply the 2013 Agreement rates to the financial component of the settlement.

DEPUTY PRESIDENT

Appearances:

M Buchanan for the applicant.

A Sarelas for the respondent.

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