Australian Municipal, Administrative, Clerical and Services Union v Northern Rivers Community Legal Centre
[2020] FWC 3049
•11 JUNE 2020
| [2020] FWC 3049 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Australian Municipal, Administrative, Clerical and Services Union
v
Northern Rivers Community Legal Centre
(C2020/2598)
Social, community, home care and disability services | |
DEPUTY PRESIDENT BOYCE | SYDNEY, 11 JUNE 2020 |
Alleged dispute about matters arising under the Northern Rivers Community Legal Centre Enterprise Agreement – community sector not for profit organisation - whether genuine consultation has occurred in relation to a restructure – whether decision of employer to restructure business should be interfered with - additional funding received post decision to restructure business but before restructure implemented – whether additional funding alters justification for restructure - application dismissed.
[1] An application has been made by the Australian Municipal, Administrative, Clerical Services Union (NSW & ACT Services Branch) (ASU), on behalf of its member, Mr Ken Beilby, for the Fair Work Commission (Commission) to resolve a dispute pursuant to clause 59 (Dispute Settlement Procedure) of the Northern Rivers Community Legal Centre Enterprise Agreement (Agreement).1
[2] The Form F10 Application was filed by email with the Commission’s Registry on 21 April 2020. The focus of the dispute relates to whether or not the Respondent has complied with clause 63 (Consultation) of the Agreement.
[3] The parties agree that the Commission may arbitrate the subject matter of this dispute in accordance with the dispute term of the Agreement (clause 59), and s.739 of the FW Act.
Overview of dispute
[4] The Respondent is a community sector not-for-profit organisation that operates three services: a legal service, a Women’s Domestic Violence Court Advocacy Service, and a Tenancy Advice and Advocacy Service. The Respondent is dependent upon funding from State and Federal Government sources.
[5] Between March 2019 and September 2019, the Respondent was advised that its recurrent funding was to be reduced, and that funding for its Care Partner Program was to be withdrawn. For the period 2018 to 2021 the Respondent anticipated that its overall funding would be reduced by approximately $74,960. As a result of not only this funding reduction, but also a need to make the Respondent’s business more viable and service focused going forward, the Respondent conducted a review of its operations, and determined to implement a restructure.2
[6] Staff, including Mr Beilby, and the ASU, were extensively consulted in relation to the restructure. Informal consultations commenced in around July 2019, whilst formal consultations commenced in September 2019. Consultation occurred up to the end of January 2020, with further and on-going dialogue regarding the restructure and its implementation (between the Respondent, its employees, and the ASU) occurring into March 2020.
[7] On 10 March 2020, Mr Beilby was sent a letter inviting him to attend a meeting (to be held on 20 March 2020) to discuss the impact of the proposed restructure upon his employment.3 He was advised that the Respondent was proposing to reduce his hours, as Principal Solicitor, from 35 hours per week to 28 hours per week. In the alternative, Mr Beilby was offered the opportunity to elect to take a voluntary redundancy (and associated severance payment).
[8] On 27 March 2020, Mr Beilby wrote to the Respondent accepting the new role of Principal Solicitor on reduced hours (commencing 27 April 2020).
[9] It appears that after the acceptance of this offer, and prior to the commencement of the reduced hours, the Respondent received an additional allocation of funding, and a promise of further funding. As a result of this, the ASU and its members, sought that the planned restructure be placed on hold, reviewed again, and that further consultation occur. Such consultation has occurred with the ASU and Mr Beilby, however, the Respondent has determined to implement the restructure as previously determined.
[10] The Respondent’s determination to implement the restructure, despite the receipt of further funding, is based upon the following considerations (in summary):
(a) the restructure process has been on-going for almost a year. The fundamental concerns and issues behind the restructure still exist going forward for the organisation, and are not all based upon funding shortfalls;4
(b) wage rates and other costs continue to increase at much higher levels than regular funding income increases, placing on-going pressure on budgets;
(c) so far $50,000 has been received in funding arising from the COVID-19 crisis. Given the rapid developments in lifting restrictions, further promised funding may not be forthcoming. Hence, no long term decisions can be made based upon the promise of further COVID-19 funding;
(d) the COVID-19 funds are not recurrent funds;
(e) further recruitment of a Senior Solicitor is based upon an assessment of business needs going forward; and
(f) funding of $115,000 from the NSW Office Of Fair Trading has been provided on a prescriptive basis, and can only be used for the Respondent’s Tenancy Advice and Advocacy Service.
[11] The Applicant says that it remains in dispute with the Respondent regarding the restructure and its implementation. It says that genuine consultation has not occurred post additional funding being received, and that the Respondent has failed to demonstrate that there are no reasonable alternatives to the planned restructure (given the additional funding that has been received by the Respondent, and the Applicant’s view that the Respondent is only concerned about future funding issues (and not its current funding situation)). The Applicant asks the Commission to stand in the Respondent’s shoes, conduct a merits review of the restructure, and rescind the decision to reduce the hours of Mr Beilby (as Principal Solicitor). It relies upon the matters identified at paragraphs [8] to [16] of its reply submissions in this regard.5
Consideration
[12] Having considered all of the evidence and the submissions of the parties,6 I consider that the Respondent has complied with clause 63 of the Agreement (including as to genuine consultation and disclosure on a ‘good faith’ basis), and that the dispute application in this matter must be dismissed. In this regard:
(a) I am satisfied on the evidence that genuine consultation has occurred.7 It is appropriate to consider the lengthy consultation process overall, not just the consultation that has occurred post the new funding received by the Respondent. The Respondent has heard the position of the Applicant, and Mr Beilby, concerning their views on the proposed restructure. Whatever those views may be, the Respondent is not required to accept or implement them. The Respondent is only required to genuinely consult with employees (and their union), and consider any views or proposals arising from such consultation. Again, on the evidence, I am satisfied that this has occurred.8
(b) On 27 March 2020, Mr Beilby accepted the proposal to reduce his hours of work, and thereby rejected the offer of voluntary redundancy.9 Given the reasons for the restructure concern not just current and future funding issues, but include the manner in which the organisation seeks to structure its overall business on a more permanent basis, I do not consider that Mr Beilby has a basis to now withdraw his acceptance of his role at reduced hours. There is no suggestion on the evidence that the proposal to reduce Mr Beilby’s hours was a temporary or contingent arrangement at the time he accepted same.
(c) The Respondent’s reasons for implementing the restructure are, in my view, bona fide, and based upon reasonable and cogent business needs and reasons.10 It is not for the Commission to stand in the shoes of an employer, and dictate how an employer is to run or structure its business. The fact that reasonable minds may differ as to the manner in which a business is run, managed or structured, is not to the point.
(d) Further to (c), clause 63(k) of the Agreement requires that any redundancy or reduction in hours only occur after notification to the ASU, and the relevant employees affected. It also requires consultation with the ASU, and the relevant employees affected. Finally, it requires that the Committee of Management to demonstrate that there is no reasonable alternative to the proposed action, and that other options have been canvassed. On the evidence, I am satisfied that this has occurred.11
(e) In my view, the requirement for “the [Respondent’s] Committee of Management to demonstrate that there is no reasonable alternative to the proposed action” does not mean that the Committee of Management cannot structure the business of the Respondent in the manner it considers to be reasonably necessary. Provided, of course, that any such decision, as to, for example, a restructure (or associated redundancy or reduction in work hours) is not made in bad faith, unjustly or unreasonably. Numerous decisions of this Commission have reaffirmed this overarching principle, for example:
(i) In Australian Federated Union of Locomotive Enginemen v State Rail Authority of New South Wales (XPT Case),12 a Full Bench of the Australian Industrial Relations Commission spoke of the “test” for whether the Commission should interfere with a managerial decision:
“It seems to us that the proper test to be applied and which has been applied for many years by the Commission is for the Commission to examine all the facts and not to interfere with the right of an employer to manage his own business unless he is seeking from the employees something which is unjust or unreasonable. The test of injustice or unreasonableness would embrace matters of safety and health because a requirement by an employer for an employee to perform work which was unsafe or might damage the health of the employee would be both unjust and unreasonable. The ACTU submitted to us that we should apply the test as to whether the demand of the employer was just and equitable having regard to all the circumstances. It is our view that under any given set of facts the test suggested by the ACTU would not lead to a different decision from the test which the Commission has applied over time. Accordingly in reaching our decision we have approached the matter from the point of view of making a judgement whether the request of the SRA that the XPT be manned by one man is unjust or unreasonable”. (my emphasis)
(ii) In Construction, Forestry, Mining and Energy Union v HWE Mining Pty Ltd,13 Vice President Lawler referred to the XPT Case, summarising the relevant test as follows:
“I proceed on the basis that an exercise of managerial prerogative will not be unreasonable in this sense if a reasonable person in the position of the employer, could have made the decision in question”.14
(iii) In Australian Rail Tram and Bus Industry Union v Sydney Trains,15 Deputy President Bull refers to the XPT Case, and from those principles surmises the following:
“The Commission accepts an employer is free to manage its business in the most effective manner possible and that industrial tribunals should not interfere unless … the employer is acting contrary to an industrial agreement, creating a safety risk or proceeding on an unreasonable basis … ”.16
(iv) In John Burke v University of Technology Sydney,17 Commissioner Johns said:
“The Commission should not lightly interfere with the employer’s right to manage its business”.18
Determination of dispute
[13] On the basis of my reasons set out herein, this dispute application is dismissed. An order to this effect will issue separately to this decision.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
<AE417151 PR720096>
1 AE417151.
2 Respondent’s Submissions dated 4 May 2020, at [15] (including the annexures referred to therein); Respondent’s Submissions dated 28 May 2020, at [12] to [24] (including the annexures referred to therein).
3 Respondent’s Submissions dated 4 May 2020, Annexure ‘D’.
4 Respondent’s Submissions dated 4 May 2020, at [15] (including the annexures referred to therein); Respondent’s Submissions dated 28 May 2020, at [12] to [24] (including the annexures referred to therein).
5 In summary, a “survey monkey” consultation does not include proposals from legal service staff, supported by TAAS staff, not to reduce the Principal Solicitor’s hours; previous consultation is not relevant to an assessment of consultation taken post further funding being received; any restructure should wait as there is no problem with funding currently; Commonwealth funding has yet to be announced for the coming year; some Commonwealth funding has not been taken into account; the Respondent is only speculating that COVID-19 funding may or will be reduced; the Principal Solicitor supervises TAAS work and is paid out of TAAS core funding. Such TAAS funding should be applied to pay for make-up hours for the Principal Solicitor; there are no performance reasons for reducing the hours of the Principal Solicitor.
6 Form F10 Application (with Annexures) dated 21 April 2020; Respondent’s Submissions dated 4 May 2020 (with annexures); ASU Submissions (undated); Respondent’s Submissions dated 28 May 2020 (with annexures); ASU Reply Submissions (undated).
7 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Vodafone Network Pty Ltd, PR911257 (AIRC, Smith C, 14 November 2001), at [25].
8 Respondent’s Submissions dated 4 May 2020, at [8] to [14] (including the annexures referred to therein); Respondent’s Submissions dated 28 May 2020, at [6] to [11] (including the annexures referred to therein).
9 Respondent’s Submissions dated 4 May 2020, Annexure ‘E’.
10 Respondent’s Submissions dated 4 May 2020, at [15] (including the annexures referred to therein); Respondent’s Submissions dated 28 May 2020, at [12] to [24] (including the annexures referred to therein).
11 Ibid.
12 [1984] CthArbRp 432; 295 CAR 188, at 191.
13 [2011] FWA 8288.
14 Ibid, at [12].
15 [2020] FWC 1457.
16 Ibid, at [88].
17 [2019] FWC 3190.
18 Ibid, at [67].
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