Australian Municipal, Administrative, Clerical and Services Union v Essential Energy

[2013] FWC 4088

[2013] FWC 4088

FAIR WORK COMMISSION

DECISION

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

Australian Municipal, Administrative, Clerical and Services Union
v
Essential Energy
(C2013/64)

COMMISSIONER CAMBRIDGE SYDNEY, 25 JUNE 2013

Dispute settlement procedure - dispute as to entitlement to reclassification to higher pay rate - reasonable expectation of employee - questionable obligation arising from terms of industrial instrument - parties agreement to accept private determination - manifest errors of employer - good conscience should be reflected by acceptance of error - part payment of claim appropriate.

[1] This matter involves an application made pursuant to section 739 of the Fair Work Act 2009 (the Act), for the Fair Work Commission (the Commission), to deal with a dispute in accordance with a Dispute Settlement Procedure (DSP). The application was lodged at Sydney on 17 January 2013. The application was made by the Australian Municipal, Administrative, Clerical and Services Union(the ASU) and taken against Essential Energy(the employer).

[2] The Commission is empowered to deal with the matter by virtue of a DSP found at Clause 1.15 of the Essential Energy Enterprise Agreement 2011 (the 2011 Agreement). The question in dispute involves a claim by Ms Leni Alexander, an employee of Essential Energy, that she has been incorrectly classified since June 2008.

[3] The matter was the subject of unsuccessful conciliation and the arbitration of the substantive matter in dispute has involved a consent process to have the Commission determine the matter upon consideration of filed documentary material without any requirement for an attendance Hearing.

[4] The material which has been provided by the parties as the basis for the Commission’s determination has encompassed; a witness statement of Ms Alexander; a witness statement of Mr Steven Paul Wilson made on behalf of the employer; a witness statement in reply of Ms Alexander; an outline of submissions from the ASU; a response to the ASU submissions from the employer; and submissions in reply from the ASU.

Background

[5] In January 2003, Ms Alexander commenced employment with what was then Country Energy and which later became Essential Energy. Ms Alexander was initially engaged as an Administration Officer (AO) and she worked in the Customer Transfer Team of the employer’s Retail Division.

[6] In May of 2005, Ms Alexander made a successful application for an internally advertised position of Trainee Drawing Officer. At the time of her appointment to the Trainee Drawing Officer position, Ms Alexander was classified at the AO3 pay level and shortly after she took up the role as a Trainee Drawing Officer she was progressed to the AO4 level.

[7] The Trainee Drawing Officer position was advertised to comprehend the classification levels of AO2-AO7. The position description for the Trainee Drawing Officer anticipated that within a period of two to three years the trainee would qualify as a Drawing Officer. Given the information contained in the job advertisement and position description, Ms Alexander anticipated that once she had qualified as a Drawing Officer she would move beyond the AO7 classification level. There was no separate position description established for the qualified Drawing Officer at the time that Ms Alexander took up the Trainee position.

[8] As Ms Alexander embarked upon her role as a Trainee Drawing Officer, she undertook training and competency development consistent with the requirements to progress to the AO8 classification level and beyond. In the period of the first three years that Ms Alexander worked in the trainee role she received annual classification progressions which resulted in her being classified at the AO7 level at around the time that the trainee role completed, June 2008.

[9] In May of 2009, a position description for the qualified Drawing Officer role was established which mentioned a requirement for qualifications at the Australian Qualification Framework (AQF) 4 level. The employer’s progression guidelines established that a prerequisite for classification at level AO8 was “Competencies equivalent to an AQF4 qualification” 1. Ms Alexander utilised the 2009 position description as support for her claim that at or shortly after the completion of her three years as a Trainee Drawing Officer, (circa June 2008), she should have been classified into the qualified Drawing Officer position which would attract the AO8 classification rate.

[10] Ms Alexander made various unsuccessful approaches to the employer attempting to be reclassified at the AO8 level. In May 2010 Ms Alexander was seconded to another position which provided her with AO12 level pay rates until February 2011.

[11] In February 2011, Ms Alexander returned to the Trainee Drawing Officer role at the AO7 classification level and she recommenced to agitate her claim for reclassification into the position of Drawing Officer at the AO8 level, albeit applicable from about June 2008. However, in October 2010 the employer developed a new position description for the qualified Drawing Officer role and this description apparently determined that AQF3 and not AQF4 qualifications were relevant for the position. Consequently, the more recent 2010 job description restricts the highest pay level to AO7 and on this basis the employer rejected the applicant’s claim for reclassification to the AO8 level at either June 2008 or anytime thereafter.

[12] Subsequently,the ASU on behalf of Ms Alexander has challenged the employer’s rejection of the claim for the reclassification of Ms Alexander and the application that has given rise to these proceedings represents the culmination of the challenge which has been advanced by the ASU on behalf of Ms Alexander.

The ASU Case

[13] The submissions made by the ASU on behalf of Ms Alexander firstlyrecounted the relevant history of the employment of Ms Alexander and the various activities undertaken in the pursuit of the reclassification that was sought to the position of qualified Drawing Officer at the commencing pay level of AO8.

[14] The ASU sought to rely upon the terms of clause 12 of the Country Energy Enterprise Award 2004 (the 2004 Award) which reads as follows:

“12. Appointments and Gradings

An employee’s classification shall be matched to the employee’s major and substantial functions for which the employee shall have the skill and training necessary to properly perform.”

[15] It was submitted that clauses in identical terms to that of clause 12 of the 2004 Award were included in all of the relevant subsequent industrial instruments up to and including the Country Enterprise Energy Award 2007 (the 2007 Award). The 2007 Award operated until 1 July 2009 when it was superseded by the Country Energy Enterprise Agreement 2009 (the 2009 Agreement). Consequently, the ASU contended that the operation of the relevant industrial instruments should, at the latest in May 2009 when a position description was established for the qualified Drawing Officer position, entitle Ms Alexander to classification into that position at AO8 level and above.

[16] The submissions made by the ASU outlined various factual matters which were said to provide for a finding that it was the reasonable expectation of Ms Alexander to be reclassified at level AO8 once her trainee role had completed in about May of 2008. Particular emphasis was placed upon the training, skills development and studies undertaken by Ms Alexander.

[17] The ASU submitted that based upon the reasonable expectation of Ms Alexander, the Commission should determine that she be reclassified in accordance with the following time schedule which recognises the employer’s classification Progression Guidelines:

AO8 from 31 May 2008 to 30 May 2009;

AO9 from 31 May 2009 to 9 May 2010;

AO10 from 11 February to 30 May 2012; and

AO11 from 31 May 2012 and ongoing.

[18] The time periods included in the reclassification schedule were said to accommodate the secondment of Ms Alexander to an AO12 role in the period of 10 May 2010 to 10 February 2011. In conclusion, the ASU submissions sought that the dispute be resolved by providing Ms Alexander with a remedy in terms of the aforementioned reclassification schedule.

The Employer’s Case

[19] The submissions made for the employer included an historical summary which traced the recent development via industrial instrument regulation of a competency based pay structure. The move to a competency based pay structure involved a position by position analysis whereby AQF qualification level or levels would be determinate as being appropriate for a particular position and a Competency Based Position Description (CBPD) would then be established.

[20] The employer’s submissions noted that as the move to the CBPD pay structure occurred it provided a “guarantee that no one would suffer a reduction in pay.” Notwithstanding this guarantee there were difficulties encountered with the move to the CBPD structure, particularly as the process was time consuming and ultimately had to be “fast tracked”.

[21] In respect to the particular circumstances of Ms Alexander, the employer made significant concessions about various aspects of the Trainee Drawing Officer position to which Ms Alexander had been appointed in May 2005.

[22] Firstly, the employer identified that the original position description only mentioned Trainee Drawing Officer when it should have encompassed both the trainee and the qualified roles. The employer stated “The Position Description was incorrectly identified only as Trainee Drawing Officer.” Further the employer said that “The administrative history of the advertising and the associated position description for the Trainee Drawing Officer was poorly executed.”

[23] Secondly, the employer acknowledged that the progression from trainee to qualified Drawing Officer was mishandled in Ms Alexander’s case. The employer stated “Ms Alexander progressed in normal fashion as all other Drawing Officers to the top of the evaluated band for a Drawing Officer albeit poor administration failed to reclassify Ms Alexander to Drawing Officer status in 2008 but continued to be classified as a Trainee up until 2011.”

[24] However, the employer submitted that poor administrative processes and communication did not alter the fact that the Drawing Officer position is at an AQF3 level which means that the highest pay rate is that of AO7.

[25] The employer submitted that the Commission should reject the remedy sought by the ASU on behalf of Ms Alexander. However, the employer accepted that if the Commission did determine to provide Ms Alexander with some remedy it would agree to pay any consequential pay adjustments.

Consideration

[26] The dispute in this case has involved a protracted history of unfortunate mismanagement and other difficulties associated with the development and implementation of a competency based pay structure. The matter in dispute is essentially an underpayment of wages claim arising from the rejection of a claim for reclassification.

[27] In April/May 2005 the employer advertised and filled positions of Trainee Drawing Officer. It mistakenly omitted that the stipulated classification bands of AO2-AO7 were contemplated to cover to both the trainee position and the qualified Drawing Officer role. Consequently, Ms Alexander had a legitimate expectation that the qualified Drawing Officer role would commence at the AO8 classification level. However a legitimate expectation does not necessarily translate into an entitlement arising under an industrial instrument.

[28] Ms Alexander could have reasonably expected to have completed the trainee aspect of the Trainee Drawing Officer position in around June 2008. At this time she had progressed via annual adjustments to the AO7 classification level. The relevant industrial instrument was the 2007 Award which contained the following prescription at clause 12:

“12. Appointments and Gradings

An employee’s classification shall be matched to the employee’s major and substantial functions for which the employee shall have the skill and training necessary to properly perform.”

[29] At this time, June 2008, there appeared to be no identified classification of Drawing Officer as opposed to Trainee Drawing Officer. However, there was clear evidence that Ms Alexander had successfully completed the trainee role and was performing the major and substantial functions of a qualified Drawing Officer albeit without an identified classification to which the major and substantial functions could be matched. Therefore, in effect Ms Alexander’s legitimate expectation to progress to a qualified Drawing Officer position at the AO8 level could not be realised in June 2008 because the industrial instrument and the corresponding position description documentation created a vacuum.

[30] This vacuum was filled in May 2009, when a position description for a qualified Drawing Officer 2 was established. This position description was linked to qualifications at the AQF4 level. Consequently, on and from May 2009 there would seem to have been an entitlement provided by the terms of the 2007 Award operating in conjunction with the position description for Drawing Officer, for Ms Alexander to be classified as a Drawing Officer at the AO8 level.

[31] On 10 May 2010, approximately one year after the position description for a qualified Drawing Officer was established, Ms Alexander was seconded to a different position which attracted an AO12 pay level. Consequently, the practical impact of these circumstances resulted in Ms Alexander being denied reclassification to an AO8 level from May 2009 until she moved to the seconded role at AO12 level on 10 May 2010.

[32] Ms Alexander’s secondment finished in February 2011. However, while she was on this secondment the employer revisited the position description for the qualified Drawing Officer role and as part of the Competency Based Position Description (CBPD) alignment process and the level of evaluation was altered downwards to AQF Cert 3 - AO4 to AO7. This occurred in October 2010 3. Consequently, in February 2011 when Ms Alexander returned from her secondment the position description for the qualified Drawing Officer role had altered from its previous alignment with AQF4 and starting level of AO8, to the AQF3 and AO7 level maximum.

[33] The employer maintained that the move to a CBPD pay structure would be undertaken “...with the guarantee that no one would suffer a reduction in pay” 4. The employer’s guarantee would appear to have manifest as something of a hollow promise in Ms Alexander’s circumstances because before she commenced her secondment the major and substantial functions that she performed were aligned at an AO8 pay level and when she returned the position had been lowered to AO7. Had Ms Alexander been properly reclassified in May of 2009 in accordance with the position description which existed at that time she would have been aligned to the AO8 level. Consequently, upon return from her secondment the employer’s guarantee should have provided Ms Alexander with a minimum pay level of AO8 rather than the AO7 to which she was returned.

[34] Notwithstanding the various identified errors made by the employer in respect to the classification issues surrounding Ms Alexander, I am unable to identify any sustainable basis to support the claim for ongoing progression beyond the AO8 level which was aligned to the qualified Drawing Officer position in the position description established in May 2009. The position description of May 2009 was replaced in October 2010 with alignment determined at the AQF 3 level, maximum AO7. The employer’s guarantee of no reduction in pay as part of the move to a competency based pay structure should have ensured that Ms Alexander would maintain an AO8 level as a minimum but there is no entitlement to any progression beyond that level.

Conclusion

[35] The determination of this dispute has involved the settlement of a claim for reclassification of an individual, Ms Alexander. The reclassification claim arises in the context of an unfortunate and protracted history involving admitted mismanagement of the position description documentation and other aspects relevant to the classification of Ms Alexander.

[36] My consideration has led me to conclude that the circumstances of Ms Alexander provide justification for partial remedy of the claim as advanced by the ASU on behalf of Ms Alexander.

[37] Although there is an absence of clear entitlement to reclassification arising under the terms of the applicable industrial instruments at all relevant times, on the basis of equity and good conscience, I determine that Ms Alexander should have been reclassified at the AO8 level on and from the time of the establishment of the position description for qualified Drawing Officer in May 2009.

[38] Consequently, I determine that on and from 1 May 2009 Ms Alexander is entitled to have received payment at no less than the AO8 classification level.

[39] The competency based position description subsequently established for the qualified Drawing Officer role in October 2010, means that the AO 8 level is provided to Ms Alexander in accordance with the employer’s guarantee that the translation to a competency based pay structure would not result in any reduction in pay. The employer’s guarantee of no reduction in pay cannot be interpreted to provide for any progression above the level that was applicable, and in this case, should have been paid at the time of the translation.

[40] Therefore I further determine that there is no entitlement for Ms Alexander to have been reclassified above the AO8 level whilst performing the role of qualified Drawing Officer.

[41] In view of the conclusions that I have reached, the employer is required to make pay adjustments to Ms Alexander to reflect that on and from 1 May 2009 she was entitled to receive no less than the rate applicable to the AO8 classification. The claim in respect of any payment at rates above the AO8 classification level is refused.

[42] The application is determined accordingly and the proceedings are concluded.

COMMISSIONER

Appearances:

Ms M Nordenswan with Mr A Morgan appeared on behalf of the ASU.

Mr D Bourne with Mr B Braund appeared on behalf of Essential Energy.

Hearing details:

2013.
Sydney:

May, 17.

 1   “Annexure C” to the Statement of Alexander, at page 4 of 11.

 2   “Annexure T” to the Statement of Alexander.

 3   “Annexure Ai” to the Statement of Alexander.

 4   Employer’s Response to Applicant’s Outline of Submissions @ paragraph 5.

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