Australian Municipal, Administrative, Clerical and Services Union v Australian Tax Office
[2013] FWCFB 4752
•17 JULY 2013
[2013] FWCFB 4752 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
v
Australian Tax Office
(C2013/4354)
CPSU, the Community and Public Sector Union
v
Australian Tax Office
(C2013/694)
VICE PRESIDENT WATSON | SYDNEY, 17 JULY 2013 |
DEPUTY PRESIDENT GOSTENCNIK | |
COMMISSIONER BLAIR |
Appeal against decision of Vice President Lawler [2013] FWC 2470 - Standing to appeal - person aggrieved - permission to appeal - interpretation of agreement - principles of interpretation - whether agreement precludes actions during consultation phase - ATO Enterprise Agreement 2011 - Fair Work Act 2009 - ss. 604, 607, 739.
Introduction
[1] This decision concerns applications for permission to appeal by the Australian Municipal, Administrative, Clerical and Services Union (ASU) and the Community and Public Sector Union (CPSU) against a decision of his Honour Vice President Lawler made on 23 April 2013. The original matter concerned a dispute between the ASU and the Australian Tax Office (ATO). The CPSU has also sought permission to appeal against the original decision pursuant to s.604 of the Fair Work Act 2009 (the Act).
[2] At the request of the ASU, the matter was listed for an expedited hearing on 18 June in Melbourne, and directions were issued for the filing of submissions by all parties. At the hearing, Mr P Rozen, of counsel, appeared for the ASU. Ms A Duffy, of counsel, appeared for the CPSU, and Mr J Snaden, of counsel, appeared for the ATO.
[3] The matter arises from the proposed reduction of facility management staff at Melbourne offices occupied by the ATO. Consequent upon the consolidation of Melbourne offices, the ATO seeks to reduce the number of staff from eight to four. During the consultation phase regarding these changes, and prior to the consideration of redeployment of the affected employees to alternative positions, the ATO sought to implement a merit selection process to determine which four staff members it wished to maintain in the new roles. The dispute relates to whether this proposal is consistent with the applicable enterprise agreement.
Background
[4] The original matter before Vice President Lawler arose from a dispute over the interpretation of clauses 117, 118 and 119 of the ATO Enterprise Agreement 2011 (the Agreement). The ASU notified a dispute with the Fair Work Commission pursuant to s.739 of the Act, seeking to have the dispute dealt with by the Commission. The matter was originally scheduled for conference before Deputy President Smith. Following a recommendation made by the Deputy President, the parties continued their discussions but were unable to reach a settlement. The matter was then dealt with by arbitration before Vice President Lawler in accordance with the Agreement’s dispute settlement procedures.
[5] The Vice President set out the relevant background and the key communication in his decision as follows:
“[2] In July 2012 five Australian Tax Office (ATO) offices in Melbourne were consolidated into a single, newly fitted-out building at “Collins Square”, 747 Collins Street. Prior to that consolidation there were eight APS 3 staff employed in the Facilities Management Branch who were required to ensure that the Facilities Management functions were performed in respect of those five separate sites. Following the consolidation the ATO requires less of those staff to manage the single “Collins Square” site. In particular, the ATO is determined that it requires only four APS 3 positions in the Facilities Management Branch for the efficient and economical working of its operations at the new “Collins Square” site. What is at issue in the dispute is the process by which the ATO proposes to reduce the number of APS 3 Facilities Management employees from eight to four.
[3] On 27 July 2012 Assistant Commissioner Smillie wrote to the ASU in the following terms:
“CONSULTATION PROCESS: MANAGING POSSIBLE EXCESS STAFF IN THE MELBOURNE CENTRAL BUSINESS DISTRICT.
The purposes of this correspondence is to inform you of the planned actions to manage the issue of possible excess APS 3 staff within the Melbourne CBD site located at 747 Collins Street.
As you may be aware there has been a process under way within the Melbourne CBD to consolidate the following ATO occupied buildings into a single location at 747 Collins street:
...
One impact of this consolidation is that the current numbers of APS 3 staff is greater than those required to manage a single modern building. There will be a lesser work load as a result of the new premises as is evidenced in other CBD areas where the ATO has consolidated lease holds such as the ACT.
The following advice has been sent (sic) to the affected staff on Wednesday, 1 August outlining the proposed process to address the situation of excess APS 3 staff.
I am writing to inform you that Property, Security and Environmental Services (PS&ES) now has more APS 3 staff in the Melbourne CBD than are required or affordable. This means that not all APS 3 staff will hold a position in the Melbourne CBD in the medium to long term.
As you are aware this situation has arisen due to the recent moves from the various Melbourne CBD sites, with the following ATO buildings have been consolidated into a single CBD building located at 747 Collins St.
414 Latrobe St
390 Latrobe St
350 Queen St
World Trade Centre
Casselden Place
Due to this reduction in the number of ATO sites, we will need to reduce the numbers of APS3 staff accordingly. We have sought advice and looked at the various options to achieve this in the fairest way, and are proposing to run a process where the affected CBD staff will be given an opportunity to apply for the positions within the new Collins St building. The successful APS 3 staff will be selected based on merit and the opportunity to apply for these positions will only be open to the current APS 3 staff who occupy positions within the CBD.
To ensure that the process is open and transparent we will work with ATO people to ensure an independent selection committee is appointed to run the process. Any staff that are not successful through this process will be supported by the ATO as per the ATO Enterprise Agreement 2011.
I will also be writing to the Unions to ensure that they have an opportunity to provide feedback on the proposed process. My intention will be to begin this process as soon as practical after I have received any feedback and will keep you informed when we have timeframes for the process to commence so that each of you has the same opportunity to prepare and apply for the available positions. Please contact me on ext 66104 if you have any questions about this process.
If you have any feedback I would appreciate you returning it to the Director of Facilities Management, Andrew Osborne by COB 10th August 2012”
(underline emphasis added)
[4] By letter dated 2 August 2012 the ASU advised the ATO that it was in dispute over the application of the Agreement in relation to the proposal. The ASU wrote:
“AC Smillie advised staff that he has sought advice, considered options and proposes to run a process where the affected APS 3 staff will apply for the reduced number of their own jobs. The unsuccessful staff will be supported by the ATO as per the ATO Enterprise Agreement 2011.
AC Smillie’s proposal, made with ‘advice’ is contrary to clause 118 of the Agreement. The ATO is obliged to follow the measures in clause 118.5 and following before it can consider commencing a process for selecting which employees are excess as is now proposed.”
[5] The letter sought to activate the dispute resolution procedure in the Agreement. The matter came before Deputy President Smith for conciliation on 3 October 2012. In accordance with a recommendation by Smith DP there was a further meeting of the parties on 7 November 2012 and there was an exchange of views in written correspondence. A further conciliation conference was held on 9 January 2013. Smith DP’s recommendation noted the “process raised in the letter of 27 July [2012] to the Australian Services Union constitutes a proposal for discussion.””
[6] His Honour further summarised the preferred interpretations of clauses 117-119 of both the ASU and the ATO:
“[7] The ASU’s essential submission is that the process outlined in the 27 July 2012 letter from the ATO is not permissible under clauses 117, 118 and 119 of the Agreement. The ASU contends that clauses 118 and 119 constitute a ‘code’ which must be observed by the ATO and followed in a sequential fashion. In particular, the ASU contends that the obligations under clause 118 must be complied with before the procedure in clause 119 is commenced. In that regard the ASU places a particular emphasis on the sub-heading to clause 119.1 and the second paragraph of clause 119.1. The ASU also places emphasis on the last portion of clause 118.5 together with the overall structure of clause 118 in submitting that the ATO is obliged to discharge its obligations under clause 118 before moving to clause 119 and the fact that variations to the action required by clause 118.5 can only occur following consultation with the employees and their representatives provides significant support for that contention.
[8] The ASU contends that clauses 117 to 119 do not permit the use of voluntary redundancy except in the circumstances outlined in clause 119.4. The ASU also places particular emphasis on clause 118.7 and argues that the “suitability” focus of clause 118.7(a) is inconsistent with the ATO conducting a merit based selection process to determine which of the eight Facilities Management employees will retain their jobs.
[9] The ATO contends that on the proper construction of the Agreement clauses 118 and 119 are to be applied in a practical and business like fashion and that there is no strict sequence as contended for by the ASU.
[10] The ATO also contends that the invitation to employees to submit expressions of interest in receiving a voluntary redundancy is a step that is consistent with clause 118.3 of the Agreement. The ATO also contends that seeking expressions of interest and proposing a merit based selection scheme of the sort set out in the 27 July letter is consistent with clause 118.5(a) as the proper alternative to redeployment that is being sought, reasonably, by the ATO.
[11] The ATO places particular reliance on item 4 of Step 2 and item 2 of Step 3 in clause 119.4 as indicating that it is permitted to seek informal expressions of interest in voluntary redundancy at any time.”
[7] Clauses 117, 118 and 119 of the Agreement are lengthy. They are set out in full in Appendix 1 to this decision.
[8] When the matter came before his Honour for arbitration the parties posed three agreed questions to the Commission. It was intended that providing answers to these questions would determine the dispute. The Vice President considered the three questions, and found as follows:
“[30] The questions posed for determination are answered as follows:
(a) Is a merit based selection process prior to, or as part of, clause 118 measures permissible under the Agreement? Yes.
(b) Do clauses 118-119 need to be followed completely sequentially? Yes, albeit that there is a degree of overlap between what is required by clause 118 and what is required by Step 2 of clause 119.4. This does not mean that clause 118 and Step 2 of clause 119.4 can be complied with concurrently, rather it means that when the ATO has complied with its obligations under clause 118, it will be obliged to provide a further month for consultation on the matters specified in Step 2 unless it is agreed that the full period is not needed.
(c) Can the ATO seek expressions of interest in voluntary redundancy at this stage from the eight affected APS3 facilities management staff? Yes.”
Standing of the CPSU to appeal
[9] The CPSU is covered by the Agreement but was not a party to the dispute before his Honour. It seeks to appeal on similar grounds to those raised by the ASU, and on additional grounds that the Vice President erred in failing to accord the CPSU an opportunity to be heard on the matters for determination.
[10] We are prepared to accept that the CPSU is a party aggrieved by the decision in that it and its members are covered by the agreement and that it contests the interpretation of the agreement arising from the proceedings. We will deal with its grounds of appeal relating to the interpretation of the agreement in conjunction with the ASU appeal. The additional grounds will be dealt with separately.
The nature of the appeals
[11] It was accepted that the questions posed by the parties involve the interpretation of the Agreement. The ASU and CEPU contend that as these questions do not involve the exercise of a discretion, the principles applicable to discretionary decisions do not apply. The ATO contends that since the exercise of arbitration powers arises from s.739 of the Act, and this provides that the Commission may arbitrate a dispute, the decision subject to appeal is a discretionary one.
[12] The nature of a discretionary decision was described by Gleeson CJ, Gaudron and Hayne JJ in Coal & Allied v AIRC 1 as follows:
“[19] “Discretion” is a notion that “signifies a number of different legal concepts”. In general terms, it refers to a decision-making process in which “no one [consideration] and no combination of [considerations] is necessarily determinative of the result”. Rather, the decision-maker is allowed some latitude as to the choice of the decision to be made. The latitude may be considerable as, for example, where the relevant considerations are confined only by the subject matter and object of the legislation which confers the discretion . On the other hand, it may be quite narrow where, for example, the decision-maker is required to make a particular decision if he or she forms a particular opinion or value judgment.”
(footnotes omitted)
[13] In our view the nature of the decision subject to the appeal depends on a consideration of the determinations the Commission was required to make. In this case his Honour was answering questions posed by the parties that involved interpreting the Agreement. There is no discretion involved in such a task. It follows therefore that, if permission to appeal is granted, the appeal bench must determine whether the interpretation adopted by his Honour and the answers he provided to the questions are correct. 2
Grounds of appeal
[14] The ASU seeks to appeal the findings of Vice President Lawler on several grounds. First, it says that his Honour erred in the construction of the Agreement:
● At paragraph [15] of his decision in his construction of clause 119 of the Agreement as applying when an ‘excess employee situation exists’;
● At paragraph [24] in construing the expression ‘these procedures’ in item 2 of step 3 of clause 119 of the Agreement as referring to both clauses 118 and 119;
[15] The ASU also contends that the approach taken by Vice President Lawler to the principles of construction at paragraph [22] in adopting what he described as a ‘practical approach to the construction of the agreement’ was incorrect. It also appeals findings made by the Vice President, as it says the following findings were made without evidentiary basis:
● That it was ‘most unlikely that the ATO could prevent that excess employee situation through the measures specified in clause 118.3(a) or (b);
● That it was ‘reasonably open to the ATO to conclude that it was not practicable to prevent the ‘excess employee situation’ [through the measures specified in clause 118.3(a) or (b)]”; and
● That the eight employees ‘do not have technical taxation skills’.
[16] The ASU ultimately appeals the conclusions of the Vice President in relation to the three questions posed by the parties and set out in paragraph [30] of his Honour’s decision. The ASU submits that the correct answers are ‘no’ to the first and third questions, and ‘yes’ to the second.
[17] The CPSU’s application provides three grounds for appeal. It says the Vice President erred in failing to accord the CPSU, which is an organisation covered by the Agreement, the opportunity to make submissions and lead evidence on the questions posed for determination.
[18] The CPSU also submits that the Vice President erred in finding that a merit based selection process was permissible prior to or as part of the measures in clause 118 of the Agreement, in that:
● It is inconsistent with the finding at paragraph [30](b) that clauses 118 and 119 need to be followed completely and sequentially;
● He failed to take into account the purpose and effect of clause 118 namely that for all intents and purposes it is a redeployment clause;
● He failed to take into account the terms of clause 119.4 Steps 2(d) and 6(a).
[19] The third ground for appeal is that the CPSU says the Vice President erred in that he has misconstrued the meaning of clause 118.5 in his findings at paragraphs [15], [16] and [23] because:
● It is inconsistent with the finding at paragraph [30](b) that clauses 118 and 119 need to be followed completely and sequentially;
● He failed to take into account the purpose and effect of clause 118 namely that for all intents and purposes it is a redeployment clause;
● He failed to take into account the terms of clause 119.10 - 119.13 when construing clause 118.5.
[20] Both the ASU and the CPSU seek to have the decision of Vice President Lawler overturned and for the Commission to make a further decision in relation to the matter pursuant to s.607(3)(b) of the Act.
[21] We note that s.739(5) precludes the Commission making a determination of a dispute that is inconsistent with the Agreement, and this dispute essentially relates to the proper interpretation of the Agreement. The nature of the appeal and the grounds of appeal require us to consider whether his Honour was correct in providing the answers he gave to the questions posed by the parties. We will consider the questions in turn after dealing with some preliminary issues.
Permission to Appeal
[22] As the Agreement is an important one, applying to a large number of employees and an important part of government, and as the questions requiring determination potentially affect future restructuring processes at the ATO, we consider that it is in the public interest to grant permission to appeal.
Principles of Interpretation
[23] The parties are not in dispute as to the principles to be applied in interpreting the Agreement. These have been stated in various cases. The leading High Court case is Amcor Ltd v Construction, Forestry, Mining and Energy Union; Minister for Employment and Workplace Relations v Construction, Forestry, Mining and Energy Union 3 (Amcor). In that case, Gummow, Hayne and Heydon JJ stated:
“30. Clause 55.1.1 must be read in context. It is necessary, therefore, to have regard not only to the text of cl 55.1.1, but also to a number of other matters: first, the other provisions made by cl 55; secondly, the text and operation of the Agreement both as a whole and by reference to other particular provisions made by it; and, thirdly, the legislative background against which the Agreement was made and in which it was to operate.”
[24] In that case Kirby J said:
“94. However, certified agreements such as this commonly lack the precise drafting of legislation. As appears from a scrutiny of the provisions of the Agreement, it bears the common hallmarks of colloquial language and a measure of imprecision. Doubtless this is a result of the background of the drafters, the circumstances and possibly the urging of the preparation, the process of negotiation and the omission to hammer out every detail - including possibly because such an endeavour would endanger the accord necessary to consensus and certification by the Commission.
96. The nature of the document, the manner of its expression, the context in which it operated and the industrial purpose it served combine to suggest that the construction to be given to cl 55.1.1 should not be a strict one but one that contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the Agreement. Approaching the interpretation of the clause in that way accords with the proper way, adopted by this Court, of interpreting industrial instruments and especially certified agreements. I agree with the following passage in the reasons of Madgwick J in Kucks v CSR Ltd, where his Honour observed:
‘It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.’” (references omitted)
[25] In the same case Callinan J stated that there was substance in the abovementioned observations of Madgwick J in Kucks v CSR Limited 4 (Kucks). He then said:
“131. An industrial agreement has a number of purposes, to settle disputes, to anticipate and make provision for the resolution of future disputes, to ensure fair and just treatment of both employer and employees, and generally to promote harmony in the workplace. It is with the third of these that cl 55 of the Agreement is particularly concerned. It is important to keep in mind therefore the desirability of a construction, if it is reasonably available, that will operate fairly towards both parties. …”
[26] In Kucks, following the passage quoted above, Madgwick J went on to say:
“But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.”
[27] A leading case in relation to the interpretation of commercial agreements is Codelfa Construction Pty Ltd v State Rail Authority of NSW. 5 The dicta of Mason J, as he then was, (and with whom Stephen, Aickin and Wilson JJ agreed) has frequently been adopted and applied in matters concerning the interpretation of enterprise agreements. In Codelfa Mason J said (at 352):
“The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although, as we have seen, if the facts are notorious knowledge of them will be presumed.
It is here that a difficulty arises with respect to the evidence of prior negotiations. Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification.
Consequently when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties' presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract.”
[28] With these principles in mind we now consider the specific questions posed.
Is a merit based selection process prior to, or as part of, clause 118 measures permissible under the Agreement?
[29] The terms of the Agreement under consideration are lengthy and somewhat complex. Clause 117 deals mainly with application and interpretation issues. As its heading implies, Clause 118 is directed to preventing excess employee situations. It requires, amongst other things, that consultation occur over planned restructures, mitigating measures be fully investigated and redeployment of displaced employees occur as far as practicable. There is no express mention of voluntary redundancies in clause 118. Clause 119 is headed Redundancy Provisions. Its application only arises if earlier efforts have not avoided an excess employee situation. It provides for a six step process to be followed prior to implementing redundancies. Those steps include the options of voluntary redundancy and redeployment.
[30] In the appeal the ASU and the ATO essentially repeated their submissions on the interpretation of the agreement that had been advanced before his Honour and the CEPU supported the ASU’s submissions. The central ASU contention is that the provisions are a code and the ATO is required to exhaust entirely the options under clause 118 before it applies clause 119 by offering voluntary redundancies. It views the provisions as a step by step series of obligations, the integrity of which depends on sequential application of the agreed processes. It submits that the ATO cannot implement a voluntary or merit based selection process in the course of following the process in clause 118. The ASU contends that the processes in clause 119 may be circumvented by the actions of ATO under clause 118.
[31] The ATO submits that there is nothing in the Agreement that precludes its intended process from occurring during the course of consultation and as a prelude to the process of redeployment. It envisages that other aspects of the Agreement will apply depending on the result of the selection process. That may involve redeployment under clause 118. It may or may not be necessary to implement the process under clause 119. The ATO submits that the ASU interpretation is too rigid and that the various processes contemplated by the clauses overlap and are capable of flexible application. It submits that practical problems flow from the ASU interpretation in that some employees may be redeployed who would be the best candidates to fill the remaining roles and if the ASU interpretation is adopted the process could preclude that result.
[32] The learned Vice President favoured the arguments of the ATO. In our view he was correct in doing so. There is no evidence of any extrinsic material relating to the making of the agreement that might explain the intention of the parties. The provisions obviously need to be read as a whole and be given their ordinary and natural meaning in the context in which they occur. They are quite prescriptive. They are also very detailed and deal with concepts such as redeployment and consultation in more than one clause. Despite the level of detail, the clauses do not clearly delineate the particular processes covered by them. They do not expressly or impliedly preclude either seeking interest for voluntary redundancies or undertaking a merit based selection process prior to redeployment.
[33] The ATO obviously wishes to retain the best employees in the four remaining roles. It does not want them redeployed. If it cannot identify the employees it wishes to deploy in the new roles before the redeployment process, then there is a risk of them not being available for the roles by the time the roles are filled. It is unlikely that the parties would have agreed to such a situation. In our view clear language would have been used if the parties intended to prevent the ATO taking the type of steps it proposes. In the absence of such clear words we are unable to conclude that the ATO is precluded from undertaking those steps. Furthermore, clause 118 is aimed at “preventing excess employee situations”. The proposals of the ATO are consistent with achieving that aim.
[34] For these reasons we are of the view that his Honour was correct in answering ‘Yes’ to the first question.
Do clauses 118-119 need to be followed completely sequentially?
[35] This question incorporates other notions which are really at the heart of the dispute. The Vice President answered this question “Yes”, with an explanation. Both parties contend that this is the correct answer. The real dispute is what is meant by the answer. The ASU and CPSU contend that the consequences of answering in the affirmative are that the ATO cannot undertake the processes of voluntary redundancy and merit selection before exhausting clause 118. The ATO contends otherwise. As the real issue is covered by the other questions we will not deal with this question further.
Can the ATO seek expressions of interest in voluntary redundancy at this stage from the eight affected APS3 facilities management staff?
[36] This question essentially involves the same considerations as the first question. The ASU contends that there is a sharp delineation between clause 118 and 119 and that the processes of voluntary redundancy and merit based selection must not precede seeking to prevent an excess employee situation pursuant to clause 118.
[37] The ATO contends that a failure to mention voluntary redundancy in clause 118 does not mean that such a process cannot be considered and applied during the consultation and redeployment process in clause 118. It submits that such measures are consistent with the notions of preventing an excess employee situation. The CPSU does not contest this interpretation
[38] His Honour found that the actions taken by the ATO were consistent with the discharge of obligations under clause 118. For the reasons given above regarding the construction of the relevant provisions we are the view that his conclusion was correct.
Additional CPSU grounds of appeal
[39] The CPSU submits that the Vice President erred in failing to accord the CPSU an opportunity to be heard on the matters for determination. We see no basis for this ground. Enterprise agreements are required to contain a term that requires or allows an independent party to settle disputes about matters arising under the agreement. 6 If the parties have agreed for the Commission to arbitrate a dispute it may do so.7 The Commission can only deal with a dispute on application by a party to the dispute.8
[40] The Commission’s obligation under the Act and the Agreement is only to take the steps the parties empower it to do on application by a party to the dispute. Any outcome of an arbitration cannot bind another person who is not party to the dispute in question. The Commission is under no obligation to notify potentially affected parties prior to exercising these powers. Not only is there no basis for suggesting that there is such an obligation, the practicalities of such a step would be prohibitive. Every employee of the ATO and every other party to the Agreement could be affected by an interpretation of terms such as the redundancy provisions.
Conclusions
[41] We have concluded above that the CPSU appeal is competent. We grant permission to the ASU and CPSU to appeal because the appeals concern the interpretation of important provisions of the ATO Agreement.
[42] As we do not consider that the answers provided by his Honour to the questions posed by the ASU and ATO are incorrect, or that the other grounds of appeal have substance, we dismiss the appeals.
VICE PRESIDENT WATSON
Appearances:
Mr P Rozen, of counsel, for the Australian Municipal, Administrative, Clerical and Services Union
Ms A Duffy, of counsel, for the CPSU, the Community and Public Sector Union
Mr J Snaden, of counsel, for the Australian Tax Office.
Hearing details:
2013.
Melbourne.
June
18.
1 (2003) 203 CLR 194
2 Pawel v AIRC (1999) 94 FCR 231.
3 [2005] HCA 10; (2005) 222 CLR 241.
4 (1996) 66 IR 182
5 (1982) 149 CLR 337
6 s186(6).
7 S739(4).
8 S739(6)
Printed by authority of the Commonwealth Government Printer
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APPENDIX 1 - EXTRACTS FROM ENTERPRISE AGREEMENT
“117. Excess employees
117.1 This clause only applies to ongoing employees who are no longer on probation.
When is an employee excess?
117.2 An employee becomes excess for either of the following reasons:
a) the duties of the employee are transferred to a different capital city or to an office which requires a move of a similar scale, involving a necessary change of residence, and
i) the employee is unwilling to perform duties at the new office; and the Commissioner is unable to provide ongoing work at the first office; and
ii) the Commissioner agrees redundancy is an economically viable alternative to relocation.
b) the Commissioner determines that the employee is a member of a given class that has more members than is necessary for the efficient and economical working of the ATO in a particular location.
118. Preventing excess employee situations
Consultation with employees and their representatives
118.1 The ATO will consult with employees and their representatives where the provisions of this clause need to be exercised.
a) Consultation and communication processes established under clauses 2 and 3 of this Agreement will be used to consult employees and their representatives about workforce adjustment issues;
b) The briefings of employees and their representatives, under sub-clause 3.3 of this Agreement, will be used to explain the overall funding and likely staffing situation of the ATO. It is envisaged these meetings will be held when data is available from the Budget and the additional estimates process;
c) Employees and their representatives will be consulted in relation to possible national corporate measures which could be taken under this clause to prevent excess employee situations.
Preventing excess employee situations
118.2 This clause only applies to ongoing employees who are no longer on probation.
118.3 The ATO will, as far as practicable prevent excess employee situations through:
a) an employee retraining/redeployment approach so that employees prepared to acquire new capabilities within an appropriate time can reasonably expect to be employed by the ATO, and/or
b) the measures set out in clause 118.5 to 118.7.
118.4 Where the provisions in 118.3 are not successful in preventing excess employee situations, the ATO will take actions consistent with any APS wide redeployment principles.
Measures for preventing excess employee situations
118.5 To prevent excess employee situations, the ATO will:
a) where appropriate, seek alternatives to redeploying employees, such as moving work, or
b) reassign the employees to other duties in their sub plan within their current site; or
c) if action taken under a) and b) above does not prevent the excess employee situation then the ATO will attempt to reassign employees to other sub plans within the site (refer to sub-clauses 118.7 and 118.8), or
d) where the above actions do not prevent the excess employee situation then the ATO will attempt to reassign the employees to each employees current sub plan within the region.
The order of action taken by the ATO under this sub-clause may be varied following consultation with the employees and their representatives.
118.6 Where a sub plan has undertaken the measures in clause 118.5 and still cannot prevent an excess employee situation the sub plans will participate in corporate workforce adjustment activities.
Information in relation to these activities will be available to employees and their representatives.
118.7 The ATO will assess employees, identified as being in a situation where they are likely to be excess, for suitability for any identified ongoing job opportunity in the ATO prior to it being filled in another way. In this context, suitability of an employee will be based on:
a) suitability for the work in areas where they could be redeployed, not on their relative suitability for work in the current work area; and
b) the employee’s ability to perform satisfactorily within a maximum of three months.
Where there are insufficient volunteers, the ATO may identify and redeploy an employee from the group of potentially excess employees.
Factors to be considered in redeployments under this clause
118.8 The following factors will be taken into account in redeploying employees:
a) Employees working in ATO sites outside the greater metropolitan area of capital cities (e.g. Geelong, Newcastle Townsville, Wollongong and Albury) will be given first consideration for additional job opportunities that arise in those sites as the size of the offices means there are different opportunities to those in metropolitan regions;
b) Within the greater metropolitan area of capital cities, on occasions it may be more practicable and reasonable to redeploy an employee between BSLs in their current site, than to re-assign the employee to a job in a different site in their current BSL. To the extent practicable, employee preferences and ‘hardship’ factors will be taken into consideration in redeployment decisions;
c) Employees may express interest in redeployment to another region, but the first priority will be to find jobs for employees within their current region. The ATO is not obliged to redeploy employees between regions and such redeployments do not have priority over other vacancy filling methods unless determined by the Commissioner;
d) Where a site is closing, employees may express a preference for a site for their redeployment. The ATO will take this preference into account in corporate workforce adjustment activities.
118.9 An employee who is redeployed to another office in the same city will be eligible for the relocation provisions under clause 112.
118.10 If both the ATO and the employee agree on redeployment to another region, the move may be considered to be in the interests of the ATO.
119. Redundancy provisions
Application
Where measures under clause 118 do not resolve the situation
119.1 This clause only applies to ongoing employees who are no longer on probation.
If, despite relevant steps having been taken under clause 118, an excess employee situation is likely to arise, the six steps set out in this clause will be taken.
119.2 Where 15 or more employees are considered to be excess, steps 3 to 6 below will apply as well as any relevant provisions provided for by relevant legislation.
119.3 Where less than 15 employees are considered to be excess the following steps will apply.
119.4 The six steps are:
Step 1
Affected employees and where they choose, their representatives, will be informed and will be provided with the following information:
a) the reasons why employees are likely to become excess; and
b) the time when, or the period over which, it is likely to occur.
When advising affected employees of the situation, the ATO will specifically ask the affected employee to identify which representative they wish the ATO to advise of the situation.
Step 2
1. Employees and, where they choose, their representatives will have one month for consultation with ATO management about:
a) measures that have been, or could be, taken to remove or reduce the likelihood of excess employees;
b) redeployment prospects for the employee(s) concerned;
c) the appropriateness of using voluntary redundancy; and
d) the method of identifying an employee as excess, having regard to the efficient and economical working of the ATO and the relative efficiency of employees.
2. If the invitation to be consulted is declined or it is agreed that the full period is not needed, follow on action may be taken before the end of the one month period.
3. If the Commissioner agrees, the period will be extended beyond one month.
4. Apart from employees who express interest in voluntary redundancy, no employee will be notified that they are excess within one month of the consultation period commencing.
Step 3
1. If redeployment or other measures are not feasible or only partially remove the problem, the Commissioner will identify the employees who are considered to be excess.
2. Nothing in these procedures will prevent excess employees being identified by seeking informal expressions of interest in voluntary redundancy. Employees who lodge an informal expression of interest in Voluntary Redundancy will be provided with, or given access to, information in relation to their likely entitlements. This could take the form of access to ‘selfhelp’ methods of estimating final leave/severance payments and superannuation benefits.
3. Where the ATO determines that it is effective and economical to do so, the ATO will facilitate the use of swaps to maximise the extent to which redundancies are voluntary.
4. Employees must be notified in writing that they are excess employees.
Step 4
1. Employees who are identified as being excess will be provided with the following information:
a) estimates of severance benefits, pay in lieu of notice and pay in lieu of any unused annual, purchased or long service leave credits;
b) the estimated amount of taxation the ATO will deduct from any payments;
c) access to superannuation information;
(i) For employees who are members of the CSS or PSS (either defined benefit or accumulation plan) the ATO is authorised by the employee to obtain details of accumulated superannuation contributions and the options available to those employees in relation to superannuation. The ATO will provide this information to the employee;
(ii) Employees who are not members of either the CSS or PSS funds are responsible for obtaining details about their options in relation to superannuation from their superannuation fund. The ATO will, where possible, assist the employee to get this information by providing relevant information in writing to the employee; and
d) the retention provisions which apply if the employee declines an offer of voluntary redundancy, including information about how the amortised salary would be calculated if they nominate the Alternate Retention Period as determined by Step 5 (4).
2. Once the employee has been provided with the information as set out in a), b) and c) (i) and d) above, and for an employee covered by c) (ii) they have had reasonable time to get the information, they will be made a formal offer of voluntary redundancy. An employee will have up to two weeks to accept or decline such an offer. Where the employee declines the offer, they will be required to, at the same time, nominate which retention period provisions they wish to apply to them (ie. the Retention Period as determined by Step 5 (3) or the Alternate Retention Period as determined by Step 5 (4).
3. Employees who accept the formal offer of voluntary redundancy will be given notice of termination and will be paid a voluntary redundancy severance benefit. With the agreement of the employee, follow on action may commence inside the two week period.
4. If the employee does not respond to the ATO within the two week period provided in subclause 2 above, they will be taken to have declined the offer.
5. If the employee does not nominate a retention period within the two week period provide in sub-clause 2 above, the retention period under Step 5 (3) will apply to them.
6. The ATO will not make a further offer of a voluntary redundancy to the employee at later steps in the process.
Step 5
1. Employees who decline the offer of voluntary redundancy will begin a formal retention period, to apply from that date.
2. Where the ATO determines that it is effective and economical to do so, the ATO will facilitate the use of swaps to maximise the extent to which redundancies are voluntary.
3. Retention period - An excess employee who declines the offer of voluntary redundancy will be entitled to the following period of retention:
a) 13 months where the employee has 20 years or more service or is over 45 years of age; or
b) 7 months for all other employees,
reduced by the relevant NES redundancy pay period that would apply to the employee at the end of 7 or 13 months retention period.
4. Alternate Retention Period - Where an employee elects to enter into the retention period provisions under this sub clause, the employee’s retention period determined in 3 above will be:
a) 13 months where the employee has 20 years or more service or is over 45 years of age; or
b) 7 months for all other employees.
5. Payment of salary during retention period
a) Unless (b) below applies an employee will be paid at their ordinary rate of pay during their retention period.
b) (i) Where an employee elects to enter into the Alternate Retention Period provisions their total pay throughout the retention period will be reduced by an amount equivalent to the employee’s redundancy pay entitlement under the NES, with such redundancy pay period entitlement calculated as at the expiration of the retention period.
(ii) For the purposes of (b)(i), the reduction of the employee’s ordinary pay will be amortised over the duration of the retention period.
6. If during the Alternate Retention Period the employee ceases to be excess (other than by termination of employment for the reason of being excess) amortisation will cease and the amount deducted as part of the amortisation provisions will be paid to the employee.
Step 6
Employees who cannot be placed in a suitable job within three months of declining an offer of voluntary redundancy:
a) will be advised that, because sufficient work is expected to remain available, it is intended to retain their services for the whole of their retention period, including the period since the offer of voluntary redundancy was rejected. In other than exceptional circumstances, it is expected that this will normally be the case but it may be necessary for affected employees to move to a different type of work, for which they are suitable, during this period; or
b) where the Commissioner is satisfied at any time in the remaining retention period that there is insufficient productive work available for the employee during the remainder of the retention period and that there is no reasonable redeployment prospects in the APS, the Commissioner may:
i. Give written notice of the involuntary termination of the employee’s employment under s.29 of the PS Act; or
ii. by agreement with the employee, give written notice of involuntary termination of their employment; or
c) will be given 4 weeks’ written notice of the intention to reduce their classification so that they can be redeployed to suitable employment, in which case income maintenance will apply instead of an involuntary redundancy benefit;
d) may at any time, be given written notice of the involuntary termination of the employee’s employment under s.29 of the PS Act.
Support for excess employees
119.5 Employees who are identified as being excess, or offered a voluntary redundancy, will be reimbursed for the costs of the following support where they choose to use it:
a) career, lifestyle and/or financial planning by a qualified advisor; and/or
b) assistance with preparation of applications for job interviews.
The maximum total amount of reimbursement under a) and b) is $2,200.
119.6 During any notice or retention periods referred to in this clause:
a) the ATO will provide assistance to the employees to try to find opportunities to redeploy the employee to another agency. This includes actions consistent with any APS wide redeployment principles; and,
b) excess employees will be given reasonable time to attend employment interviews, including reasonable travel and incidental expenses where these are not met by the prospective employer.
119.7 Where an excess employee has to move their household to a new locality as a result of a movement at level or reduction in classification, they will be entitled to reasonable travel and relocation expenses as if being promoted.
Payment if reduced in classification
119.8 If an employee is reduced in classification, the employee will maintain the base salary they had immediately prior to the reduction for either 7 or 13 months, less the period of employment since the offer of voluntary redundancy was rejected.
Notice period
119.9 The following notice periods will apply where employment is terminated:
a) if over 45 years of age, with at least 5 years continuous service: 5 weeks’ notice;
b) other employees: 4 weeks’ notice.
Voluntary redundancy benefit
119.10 An employee who elects for retrenchment with a redundancy benefit and whose employment is terminated by the Commissioner under s.29 of the Public Service Act 1999 on the grounds that he/she is excess to the requirements of the ATO, is entitled to payment of a redundancy benefit of an amount equal to two weeks’ salary for each completed year of continuous service, plus a pro-rata payment for completed months of service since the last completed year of service, subject to any minimum amount the employee is entitled to under the NES.
Attachment C sets out certain conditions relating to service for redundancy benefit purposes.
119.11 The minimum sum payable will be an amount equal to 4 weeks’ salary and the maximum payable will be equal to 48 weeks’ salary.
119.12 The redundancy benefit will be calculated on a pro rata basis for part time hours during the period of service if the employee has less than 24 years full time service.
119.13 This benefit will be in addition to any payment in lieu of the notice period and accrued annual leave, long service leave and purchased leave credits.
Involuntary redundancy benefits
119.14 Where employment is terminated involuntarily, employees will be paid a sum calculated as follows:
a) for employees with 20 or more years of service or over 45 years of age:- a lump sum equal to 13 months salary reduced by the amount of salary paid since the date the offer of voluntary redundancy was rejected; or
b) for others:- a lump sum equal to 7 months salary reduced by the amount of salary paid since the date the offer of voluntary redundancy was rejected.
119.15 Such employees will receive payment in lieu of accrued Annual Leave and Purchased Leave calculated as if the date of termination of their employment is 13 months or 7 months (as the case may be) later than the date the offer of voluntary redundancy was rejected.
119.16 If the total amount payable is less than the total amount (including pay in lieu of leave) that would have been payable had the employee accepted the offer of voluntary redundancy (reduced by any salary received since the date the offer was rejected), the employee will be aid an additional amount to bring the total benefit to that amount.
Salary for calculating benefits
119.17 For calculating redundancy benefits, an employee’s salary will include:
a) HDA, if received on the date notice is given and has been payable for a continuous period of at least 12 months at that date;
Where the higher duties of an employee who has received HDA for a continuous period of 12 months is ceased due to the workforce adjustment process necessitating the redundancy, and the employee would otherwise have continued to receive higher duties until the date notice was given, the higher duties will be taken to have continued to the date notice was given for the purpose of this clause.
b) an average of shift penalties over the 12 months prior to notice being given, provided shift work has been rostered in at least 26 weeks; and
c) any other regular allowance in the nature of salary received on the date notice is given.”
(underline emphasis added)
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