Australian Municipal, Administrative, Clerical and Services Union v Australian Taxation Office
[2011] FWA 5407
•18 AUGUST 2011
[2011] FWA 5407 |
|
DECISION |
Fair Work Act 2009
s.229 - Application for a bargaining order
Australian Municipal, Administrative, Clerical and Services Union
v
Australian Taxation Office
(B2011/177)
COMMISSIONER DEEGAN | DARWIN, 18 AUGUST 2011 |
Application for bargaining orders.
[1] This matter arises from an application lodged on 5 August 2011 by the Australian Municipal, Administrative, Clerical and Services Union (ASU) pursuant to s.229(1) of the Fair Work Act 2009 (the Act) for bargaining orders in respect of bargaining occurring between that union (and others) and the Australian Taxation Office (ATO).
[2] The ASU is seeking the following orders:
1. That the ATO will provide pertinent responses to the ASU questions numbered 1, 2 and 4 within 7 days of the date of this order.
2. That the ATO will allow a minimum of a further 14 days of good faith bargaining following the provision of the required answers prior to finalising a draft enterprise agreement for consideration by ATO employees.
[3] The question numbers referred to in the first draft order (and throughout this decision) relate to questions posed by the ASU in correspondence to the ATO of 14 July 2011 which were substantially repeated in a written notice dated 27 July 2011 addressed to the Commissioner of Taxation for the purposes of s.229(4)(b) of the Act. The making of the orders is opposed by the ATO.
The ATO’s s.596 application to be represented by lawyers
[4] On 9 August 2011 the ATO sought permission to be represented by a lawyer at the hearing on 12 August. The parties were advised that the request would be dealt with at the hearing but that leave would ordinarily be granted in an application for bargaining orders.
[5] At the hearing the ASU objected to the ATO being represented by a lawyer, claiming that the matter before FWA was not complex (but could be made unduly so if a lawyer or counsel were involved), the ATO could be adequately represented by ATO employees, and that it would be unfair to the ASU as the union representative, a Mr Jeff Lapidos, was neither an experienced advocate nor legally qualified.
[6] The legal representative seeking permission to appear for the ATO, Mr Michael Byrnes, a solicitor, pressed the request for legal representation. He advised that the ATO employee with the main carriage of the matter was unavailable as he was required to attend at another FWA matter being heard interstate. Mr Byrnes also noted that the officer representing the ATO at the hearing, Ms Hinde, had only recently been briefed and was not familiar with the matter whereas he, Mr Byrnes, had been involved in the preparation of the ATO response to the application. It was put by Mr Byrnes that, in the circumstances, the matter would proceed more expeditiously if he were allowed to represent the ATO.
[7] Having heard the submissions of both parties I indicated that I intended to allow the ATO to be represented by a lawyer. I considered any matter dealing with the issuing of bargaining orders to be a serious legal question involving questions of jurisdiction and the proper exercise of discretion. Given that there was some urgency in dealing with the matter to finality, and very little sitting time available, I considered that the matter would be dealt with more efficiently if the ATO were permitted to be legally represented. 1
The ASU application
[8] Mr Lapidos, for the ASU, set out the grounds upon which the application was made. He stated the ASU had given the notice required under s.229(4)(b) of the Act to the ATO and noted that the ASU was concerned that the ATO was not complying with the good faith bargaining requirement set out in s.228(1)(b), which requires employers to disclose relevant information in a timely manner. The ASU is seeking information directly relevant to the ATO claim that it cannot afford a pay increase in excess of that offered (4% in the first year and 2.5% in each of the next two years). The ASU stated that the ATO merely asserted that it could not afford a larger pay increase, and provided no information about productivity gains that might be reaped in the future.
[9] The ASU application included copies of correspondence from the union requesting particular information from the ATO and the ATO responses to those requests. The ASU had first requested information in the form of ten questions on 14 July 2011. 2 The ATO had responded by letter on 25 July 2011.3 On 27 July 2011 the ASU had provided to the ATO a notice4 pursuant to s229(4) of the Act seeking the answers to nine questions which the union considered had not been satisfactorily responded to in the ATO letter of 25 July. According to the ASU the ATO provided a “fuller” response on 1 August 2011, which included a Report on the ATO Change Program by a consulting firm called Aquitaine Consulting.
[10] Following the more fulsome response of 1 August, the ASU had lodged the application for bargaining orders seeking even better responses to three of the questions (Questions 1, 2 and 4) they had put to the ATO and an order for further negotiations to be conducted for a period of two weeks once those responses were provided.
[11] The relevant questions put to the ATO by the ASU were as follows:
- Question 1: What are the assumptions the ATO has made in its assessment that the proposed salary increase for the next three years is the maximum it can afford over this period?
- Question 2: What is the interrelationship between funding, staffing levels, productivity and affordability in the ATO determining how much it can afford to pay in salary increases?
- Question 4: How has the Change Program, productivity improvements and workloads affected the ATO’s demand for non-ongoing and irregular employees?
[12] Mr Lapidos, for the ASU, described in some detail the information the ASU was seeking through Questions 1, 2 and 4 and in what respects the ASU considered that the responses provided by the ATO were inadequate and not consistent with the good faith bargaining obligation to provide relevant information. 5
The ATO response
[13] The ATO evidence was provided by two witnesses, Ms Catherine Cox and Mr Robert Ravanello, both of whom filed comprehensive statements and were available for cross-examination at the hearing.
Ms Catherine Cox
[14] Ms Cox, Assistant Commissioner, ATO People, attested to the correctness of her statement. 6 Ms Cox is a management representative in bargaining. In her statement Ms Cox:
- Set out the history of bargaining for the agreement;
- Noted that on or about 18 July 2011 union bargaining representatives had been invited to a meeting with Mr Robert Ravenello, the ATO Chief Financial Officer, to discuss the ATO budgets;
- Indicated that the ATO had responded on 25 July 2011 to the questions put to it by the ASU on 14 July;
- Noted that the ATO had responded to the ASU concerns that the questions were not sufficiently answered at the bargaining meeting on 27 July by arranging a further meeting for the ASU with Mr Ravenello;
- Noted that the ATO had provided further information through the CFO at two meetings attended by the ASU on 28 July 2011;
- Noted that the ATO had provided a further written response to the ASU questions on 1 August 2011.
[15] The statement of Ms Cox included as attachments copies of the relevant correspondence between the ASU and the ATO.
[16] Under cross-examination Ms Cox was asked who in the ATO made the decision on the pay offer. She responded that it was her understanding that the ATO Executive had made the decision. She then listed those persons whom she knew to be on the Executive, including Mr Ravanello, in his capacity as the CFO of the ATO. She was not cross-examined further.
Mr Robert Ravanello
[17] Mr Robert Ravanello, CFO of the ATO, attested to the contents of his statement 7 and was cross-examined. In his statement Mr Ravanello described the role he performed at the ATO. He noted that while he was not directly involved in the bargaining negotiations, he had provided relevant information through briefing sessions and had been involved in the preparation of information in response to the ASU correspondence of 14 and 27 July. He set out in some detail the manner in which the responses to the ASU questions had been dealt with by the ATO and his interaction with the ASU in providing those responses. He noted that he had reviewed and settled the responses set out in the letter of 1 August 2011 from the ATO to the ASU, and detailed the advice he had sought from different areas of the ATO in order to finalise the response.
[18] At paragraphs 18 to 32 of his statement Mr Ravenello dealt with each of the three remaining questions to which the ASU is seeking further responses, indicating the manner in which the ATO had already responded to those questions and setting out reasons why no further, or more precise, response could be provided.
[19] For example, in the context of the ASU’s request for further information following the answers already provided by the ATO to ‘Question 1’ (What are the assumptions the ATO has made in its assessment that the proposed salary increase for the next three years is the maximum it can afford over this period?) Mr Ravanello stated:
“It needs to be understood that this is not a formulaic calculation, and instead involves a degree of judgement...there is no additional analysis, formula or other material, which sets out ‘the assumptions’ underlying the figure of 9%”
[20] So far as Question 2 was concerned (What is the interrelationship between funding, staffing levels, productivity and affordability in the ATO determining how much it can afford to pay in salary increases?) Mr Ravanello again stated that there was no “particular formula or algorithm” which reconciled the interrelationship between funding, staffing levels, productivity and affordability, as sought by the ASU, and that there was no other specific analysis of the interrelationship of those factors other than that given in the last paragraph of the ATO response to the ASU of 1 August.
[21] Similarly, in response to the ASU’s dissatisfaction with the ATO’s response to ‘Question 4’ (How has the Change Program, productivity improvements and workloads affected the ATO’s demand for non-ongoing and irregular employees?) Mr Ravanello stated that “there was no specific analysis or report which has been prepared which could address [the] prospective request for information being pressed by the ASU”. Mr Ravanello’s statement concluded by explaining:
“There is no analysis which has been undertaken, or is proposed to be commissioned or undertaken, which would set out projections of the savings and value of the productivity improvements that are expected, by year, over the life of the proposed Agreement resulting from the Change Program.”
[22] Under cross-examination by Mr Lapidos, Mr Ravanello stated that he did not seek instructions from the Tax Commissioner in preparing the answers to ‘Question 1’ or ‘Question 2’, nor did he make any enquiries as to who had made the decision that the pay offer made by the ATO was the maximum affordable.
[23] Mr Ravanello was cross-examined in detail as to why he had not provided different responses or more fulsome responses to the questions posed by the ASU. He responded by outlining the manner in which the ATO is funded and the budget allocated. He was also asked about savings that might flow from changes that had been made to ATO operations in previous years and enquiries that he could have made to glean further information about prospective productivity savings. In general his answers were directed at explaining the difficulties in making assumptions about savings that might be made in future years.
The ASU submissions
[24] The ASU submitted that the ATO was required to provide the union with “relevant information” in order to assist it with bargaining. The ASU was not satisfied that the ATO assertion that the pay offer made was all it could afford and had asked questions to determine the accuracy of the assertion. The ASU was not satisfied with the ATO responses to three of the questions it had posed and submitted that the ATO had failed to provide the relevant information sought. It was the ASU contention that the answers could be provided if the right people in the ATO were requested to assist with the preparation of the ATO’s response and where information was not currently in documentary form, this could be easily prepared and would not be an onerous task. 8
[25] Finally it was submitted that FWA should exercise its discretion to make the bargaining orders to assist the parties to move forward in the bargaining process.
The ATO submissions
[26] It was submitted for the ATO that the organization had provided the relevant information required in a timely manner. The statements of the ATO witnesses evidenced that, where information existed, it had been provided to the ASU and that the ATO had made real efforts to respond to the questions posed by the union.
[27] In response to the ASU contention that financial assumptions had not been provided it was submitted by the ATO that there were no assumptions or financial models that had been prepared or considered in the development of the pay offer. It was put that the evidence of Mr Ravanello reiterated the ATO position, which had been clearly put to the union, that the pay offer was not based on algorithms or spreadsheets but was a matter of judgment made on the basis of budget information which had been disclosed to the bargaining representatives. 9
[28] So far as Question 2 was concerned it was the ATO’s submission that the question itself was inherently difficult to respond to as it was “cast in very broad and ambiguous terms” but that, in any event, the ATO was not in possession of the sort of information the ASU was seeking. Similarly, the ATO had already provided all relevant information in its possession in response to Question 4, including a very comprehensive report detailing the benefits of the Change Program implemented in the ATO. It was Mr Ravanello’s evidence that no other analysis or report had been, nor will be, prepared setting out the sorts of projections the ASU was seeking. It was put that much time and effort would be required to produce the analysis sought by the union and that it would be unreasonable to expect the ATO to undertake such an exercise in order to comply with good-faith bargaining obligations under the Act. The ATO relied on the decision of Smith C in Finance Sector Union v Commonwealth Bank of Australia 10 as authority for the principle that there was no requirement to create information for the purpose of providing relevant information in accordance with good faith bargaining requirements.
[29] Finally, it was submitted for the ATO that orders in the terms sought by the ASU placed a “very heavy burden on the ATO not only in terms of compliance by also in terms of comprehension” and that the orders should not be made “because to make them in the terms in which they are sought would be unreasonable...because of the way in which they are in fact cast”. 11
The ASU response
[30] The ASU responded that there was no restriction contained in the terms of s.228(1)(b) of the Act to the effect that relevant information included only information currently in existence in documentary form. Furthermore, it was put that the information sought could be easily accessed from the appropriate employees of the ATO.
[31] Lastly, the ASU noted that information had been supplied by the ATO in response to the questions it had posed and that the information had been provided in a timely manner. The ASU were not claiming that the ATO had “dodged” the questions but simply that the responses did not meet the requirement of s.228(1)(b) relating to the disclosure of relevant information.
The relevant statutory provisions
[32] Section 229 of the Act relevantly provides:
229 Applications for bargaining orders
Persons who may apply for a bargaining order
(1) A bargaining representative for a proposed enterprise agreement may apply to FWA for an order (a bargaining order) under section 230 in relation to the agreement.
(2) .....
Timing of applications
(3) The application may only be made at whichever of the following times applies:
(a) if one or more enterprise agreements apply to an employee, or employees, who will be covered by the proposed enterprise agreement:
(i) not more than 90 days before the nominal expiry date of the enterprise agreement, or the latest nominal expiry date of those enterprise agreements (as the case may be); or
(ii) after an employer that will be covered by the proposed enterprise agreement has requested under subsection 181(1) that employees approve the agreement, but before the agreement is so approved;
(b) otherwise—at any time.
Note: An employer cannot request employees to approve the agreement under subsection 181(1) until 21 days after the last notice of employee representational rights is given.
Prerequisites for making an application
(4) The bargaining representative may only apply for the bargaining order if the bargaining representative:
(a) has concerns that:
(i) one or more of the bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements; or
(ii) the bargaining process is not proceeding efficiently or fairly because there are multiple bargaining representatives for the agreement; and
(b) has given a written notice setting out those concerns to the relevant bargaining representatives; and
(c) has given the relevant bargaining representatives a reasonable time within which to respond to those concerns; and
(d) considers that the relevant bargaining representatives have not responded appropriately to those concerns.
(5) ....
[33] I am satisfied that the relevant requirements of s.229 have been met.
[34] Section 230 of the Act sets out the requirements for the making of a bargaining order.
230 When FWA may make a bargaining order
Bargaining orders
(1) FWA may make a bargaining order under this section in relation to a proposed enterprise agreement if:
(a) an application for the order has been made; and
(b) the requirements of this section are met in relation to the agreement; and
(c) FWA is satisfied that it is reasonable in all the circumstances to make the order.
Agreement to bargain or certain instruments in operation
(2) FWA must be satisfied in all cases that one of the following applies:
(a) the employer or employers have agreed to bargain, or have initiated bargaining, for the agreement;
(b) a majority support determination in relation to the agreement is in operation;
(c) a scope order in relation to the agreement is in operation;
(d) all of the employers are specified in a low-paid authorisation that is in operation in relation to the agreement.
Good faith bargaining requirements not met
(3) FWA must in all cases be satisfied:
(a) that:
(i) one or more of the relevant bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements; or
(ii) the bargaining process is not proceeding efficiently or fairly because there are multiple bargaining representatives for the agreement; and
(b) that the applicant has complied with the requirements of subsection 229(4) (which deals with notifying relevant bargaining representatives of concerns), unless subsection 229(5) permitted the applicant to make the application without complying with those requirements.
Bargaining order must be in accordance with section 231
(4) The bargaining order must be in accordance with section 231 (which deals with what a bargaining order must specify).
[35] I am satisfied that the requirements of s.230(1)(a) and (b) and s.230(3)(b) have been met.
Consideration
[36] In order to make a bargaining order I must be satisfied that one of either s.230(3)(a)(i) or (ii) applies. Clearly s.230(3)(a)(ii) has not been raised in relation to this application. Therefore, I am unable to make a bargaining order unless I am satisfied that the ATO is not meeting, or has not met, the good faith bargaining requirements. The ASU claims that the ATO has not met the good faith bargaining requirement set out in s228(1)(b) which provides that a bargaining representative must disclose relevant information (other than confidential or commercially sensitive information) in a timely manner.
[37] On the basis of the evidence adduced by the ATO I am not satisfied that the ATO has failed to comply with this bargaining requirement. The ASU posed a series of detailed questions to the ATO concerning the basis upon which the ATO had decided upon the pay offer it was prepared to make. The evidence clearly shows that the ATO made considerable efforts to respond to the ASU question, both through briefings by the CFO and in writing. The ASU does not submit that this information was not provided in a timely manner, on the contrary, it concedes that the information was provided, and that it was provided in a timely manner. The ASU does not suggest that the ATO is acting in a capricious manner, or attempting to “dodge” the questions. Put at its highest the ASU claim is that the ATO response does not fulfil the requirement to provide “relevant” information.
[38] Clearly the information provided by the ATO is not sufficient to satisfy the ASU. This, however, is not the test set by s.228(1)(b). A bargaining representative is not required to provide information sufficient to satisfy the requirements of another bargaining representative but to provide “relevant information”. Taking into account all of the information provided to the ASU by the ATO in response to the questions which were the subject of the s.229(4) notice I am satisfied that the ATO is complying with the good faith bargaining obligation set out at s.228(1)(b). I accept the evidence of Mr Ravanello that there is no other information held by the ATO which could be provided in response to those questions which has not already been provided.
[39] I am not prepared to accept the broad submission that a bargaining representative will never be required to compile information for the purpose of meeting the good faith bargaining obligation set out at s.228(1)(b) of the Act. I am, however, satisfied that any order requiring the ATO to conduct the type of research that would appear to be necessary to respond to the ASU’s questions to the satisfaction of that union would be unreasonable, if not impossible in some respects.
[40] As I am not satisfied that the ATO has failed to meet the good faith bargaining requirements I refuse to make the order sought by the ASU. The application is dismissed.
COMMISSIONER
Appearances:
Mr Jeff Lapidos,Australian Services Union Tax Secretary, for the Applicant.
Mr Michael Byrnes, Special Counsel, Clayton Utz, for the Respondent.
Ms Melissa Hinde, Australian Taxation Office, for the Respondent.
Hearing details:
2011.
Canberra:
August, 12.
1 Fair Work Act 2009 (Cth) s.596(2)(a).
2 Attachment 2 to the ASU Application for a Bargaining Order (Form 32) dated 5 August 2011.
3 Attachment 3 to the ASU Application for a Bargaining Order (Form 32) dated 5 August 2011.
4 Attachment 1 to the ASU Application for a Bargaining Order (Form 32) dated 5 August 2011.
5 Transcript PN58-PN73.
6 Exhibit ATO 1.
7 Exhibit ATO 2.
8 Transcript PN255-PN256.
9 See, eg, Transcript PN264.
10 Finance Sector Union v Commonwealth Bank of Australia [2010] FWA 2690 (Smith C).
11 Transcript PN294.
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