Australian Municipal, Administrative, Clerical and Services Union v RailCorp and Transport for NSW
[2014] FWC 45
•6 JANUARY 2014
[2014] FWC 45 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Australian Municipal, Administrative, Clerical and Services Union
v
RailCorp and Transport for NSW
(C2013/6715)
Rail industry | |
COMMISSIONER CARGILL | SYDNEY, 6 JANUARY 2014 |
Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)].
[1] This decision arises from an application made pursuant to section 739 of the Fair Work Act 2009 (the Act) for the Fair Work Commission (FWC) to deal with a dispute. The application was brought by the Australian Municipal, Administrative, Clerical and Services Union (ASU). Initially there were two employer parties, Rail Corporation New South Wales (RailCorp) and Transport for New South Wales. The application is no longer pressed against this second body.
[2] The matter was the subject of a conciliation conference on 15 November 2013. At that time intervention was sought by the Australian Rail, Tram and Bus Industry Union (RTBU) and The Association of Professional Engineers, Scientists and Managers, Australia (APESMA). Intervention was granted.
[3] The matter did not settle during conciliation. There are ongoing discussions between the parties in relation to one aspect of the dispute which concerns annual and long service leave. That aspect is not the subject of this decision.
[4] The other aspect of the dispute concerns the question of whether there is an entitlement to an incentive bonus payment in certain circumstances. This issue was listed for arbitration by agreement of the parties. The arbitration was heard on 16 December 2013. At that time, Mr Slevin of counsel represented the ASU, RTBU and APESMA (the Unions). Mr Kite, Senior Counsel, represented RailCorp.
ISSUE TO BE DETERMINED
[5] The specific issue which is to be determined is whether an employee who has declined an offer of voluntary redundancy is no longer entitled to an incentive bonus if they are offered voluntary redundancy on a subsequent occasion or occasions.
[6] The dispute arises under the RailCorp Enterprise Agreement 2010 (the 2010 Agreement). Clause 6.1 of that agreement provides that it is binding on RailCorp, all employees other than Executive Contract Staff, the ASU, RTBU and APESMA as well as four other registered organisations.
[7] Clause 47 of the 2010 Agreement deals with the subject of voluntary redundancy and management of excess employees. It reads as follows:
“During the life of this Agreement, reduction in staffing levels will be achieved through natural attrition, redeployment or voluntary redundancy in accordance with RailCorp’s Redeployment and Separation Policy and Procedure applying at the date of certification of this Agreement.”
[8] It should be noted that the date of approval of the agreement was 25 November 2010. The nominal expiry date of the agreement is 31 March 2014.
[9] The Redeployment and Separation Policy and Procedure which applied at the date of approval is the policy which was in effect from 23 December 2009 (the 2009 Policy). A copy of this policy is at Tab 4 of Exhibit RailCorp 1. The part of the policy which is most relevant for present purposes is clause 5.2.1 which is headed “Standard Entitlements” and which reads:
“Employees covered by this Procedure are entitled to the following after they have accepted an offer of redundancy:
● Incentive bonus - range from 20 to 24 weeks (depending on length of continuous service). This bonus is available if the offer of redundancy is accepted within 2 weeks of the offer being made. The incentive bonus will be as follows:
- 1 year of service - 20 weeks
- 2 years of service - 21 weeks
- 3 years of service - 22 weeks
- 4 years of service - 23 weeks
- 5 or more years of service - 24 weeks
...”
THE UNIONS’ CASE - EVIDENCE
[10] Evidence for the Unions was given by two witnesses: Ms M Lane, RailCorp employee and Ms S McManus, Branch Secretary of the NSW and ACT Services Branch of the ASU. Ms Lane provided a statement, Exhibit ASU1. She was not required for cross-examination.
[11] Ms Lane’s evidence is that her position was made redundant in 2010, since which time she has been pursuing redeployment. Ms Lane received an offer of voluntary redundancy in 2011. That offer included the incentive payment. Ms Lane did not accept the offer. In November 2013 Ms Lane received another offer of voluntary redundancy. This offer, which was also not accepted, did not include the incentive bonus.
[12] The evidence of Ms McManus is that, as far as she is aware, redundancy entitlements for RailCorp employees have always been enshrined in policy. During bargaining for the 2010 Agreement the Unions sought the inclusion of clause 47 to ensure that the then New South Wales government policy concerning redeployment was confirmed in an industrial instrument.
[13] Ms McManus refers to a 1996 employee handbook for employees of a predecessor to RailCorp. She notes that the entitlements for early retirement and voluntary severance at that time included an incentive bonus.
[14] It is the evidence of Ms McManus that the ASU had not been involved in negotiating any redundancy and separation policies for employees of RailCorp or its predecessors. It is her evidence that she is not aware of any situation where a RailCorp employee had accepted voluntary redundancy and had not been paid an incentive bonus. She was uncertain whether an employee had ever declined an offer and later received another offer which included an incentive bonus.
[15] Ms McManus also provided evidence about the history of the dispute between 28 October and 13 November 2013.
THE UNIONS’ CASE - SUBMISSIONS
[16] It is noted that FWC has jurisdiction to arbitrate the dispute by virtue of clause 9.4 of the 2010 Agreement and section 739(4) of the Act.
[17] Mr Slevin referred to clause 47 of the 2010 Agreement and noted that the incorporation of the 2009 Policy accorded with section 257(a) of the Act. He rejected a submission made on behalf of RailCorp that the Policy was a unilateral document of the employer rather than a mutually agreed outcome.
[18] Mr Slevin submitted that the 2009 Policy, in particular clause 5.2.1, does not contain any provision which disentitles employees to the incentive bonus in the event of a second or subsequent offer. He submitted that this reflected a change from previous policies which contained a note setting out such a disentitlement. Mr Slevin noted that the 2009 Policy also included a significantly higher bonus quantum than previous policies.
[19] Mr Slevin submitted that the words in clause 5.2.1 were clear. They indicate that the bonus applies in relation to an offer of redundancy, the entitlement operates for a period of two weeks and then lapses if the offer is not accepted. Mr Slevin noted that, under the Policy, the remaining redundancy entitlements did not disappear. He further noted that it appeared to be RailCorp’s practice to withdraw the remaining entitlements after two weeks but submitted that this did not flow from the Policy itself.
[20] As a consequence of the clear words of clause 5.2.1, an employee who declines an offer of voluntary redundancy will be entitled to the incentive bonus if a subsequent offer is made.
[21] It is submitted that the resolution of the correct interpretation of an enterprise agreement turns upon the language of the particular agreement considered in the light of its industrial context and purpose: Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 @ [2]. This approach was referred to in the Full Bench decision of Shop, Distributive and Allied Employees Association (Queensland Branch) Union of Employees v Woolworths Limited trading as Woolworths[2013] FWCFB 2814 @ [12] - [14].
[22] Mr Slevin submitted that the Full Bench makes it clear that extrinsic material, such as many of the documents in Exhibit RailCorp 1, cannot be used to disregard or rewrite the provision in question so as to give effect to an externally derived conception of the intention or purpose of the parties. A further limitation is that regard cannot be had to the subjective, separate intentions of the parties. It is their common intention as reflected in the written terms which is relevant: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 @ 179. Mr Slevin noted that the fairness of the relevant provision is not the focus of the arbitration.
[23] Mr Slevin also noted that RailCorp was relying on Exhibit RailCorp 1 as evidence of its past practice in offering the incentive payment only in relation to a first redundancy offer. He submitted that the Unions did not concede that any such practice was ever accepted by anyone other than RailCorp. There is no evidence that the Unions’ actions reflected a common understanding that the incentive payment applied only to a first offer. Mr Slevin rejected the submission that attendance by union representatives at a slide show presentation amounted to such evidence: Tab 9 of Exhibit RailCorp 1. By October 2013 the ASU had put the issue in dispute.
[24] Mr Slevin submitted that, in any event, past practice is of limited assistance when construing industrial instruments: Australian Nursing and Midwifery Federation v Eastern Health [2013] FCAFC 137 @ [7] and [23]. He submitted that, merely because RailCorp had put its understanding of the manner in which clause 5.2.1 should operate in correspondence to employees in 2010 and 2011, did not give rise to evidence of a settled interpretation based on a common understanding.
[25] Mr Slevin submitted that there is no need to depart from the clear words of the policy that there is no disentitlement to the incentive bonus in any subsequent redundancy offer. The Unions seek a determination in the following terms:
“that the proper application of clause 5.2.1 to multiple offers of voluntary redundancy made to an employee over time is that each offer must include the incentive bonus and that bonus is available where the redundancy is accepted within 2 weeks of the offer being made.”
RAILCORP’S CASE - EVIDENCE
[26] Evidence from RailCorp was given by Mr S Cooney, Acting General Manager, Workplace Relations for Sydney Trains. Mr Cooney provided a witness statement, Exhibit RailCorp 2. He was not required for cross-examination. Mr Cooney provided copies of the redeployment and redundancy policies which were in force prior to the 2009 Policy.
[27] The policy dated 22 July 2003, Attachment SC1 to the Exhibit contains the following sentence in clause 1.6.3, “(I)f displaced employees do not accept an initial offer of voluntary redundancy, they are not entitled later to the incentive bonus component of the redundancy package ...”.
[28] Clause 4.1.2 of the policy dated March 2008, Attachment SC2 to the Exhibit, provides that employees who accept voluntary redundancy within two weeks of a formal offer being made will receive the “Additional Redundancy Payment (if any) that is in place at that time.” It goes onto state:
“If an employee rejects an offer of voluntary redundancy or early retirement, the Additional Redundancy Payment in place at that time will not apply to any subsequent offers. Subsequent offers of voluntary redundancy will attract whatever Additional Redundancy Payment (if any) is in place at the time of that offer.’
[29] RailCorp also provided a folder of documents, Exhibit RailCorp 1. Mr Kite highlighted various aspects of those documents. He noted that clause 47 of the 2010 Agreement does not permit involuntary redundancy. He also noted that the 2009 Policy is RailCorp’s document, in contrast to the agreement which is a mutual document.
[30] Tabs 2 and 3 contain relevant extracts from the 2008 and 2005 agreements. Clause 48 of the 2008 agreement provides that, unless a more generous package is offered, the benefits in the 2005 agreement continue to apply. Those benefits are set out in Schedules 2F, 3F and 4E. Each contains a note which states: “Surplus Employees who have previously refused a formal offer of severance are not entitled to the incentive bonus.”
[31] Tab 4 contains the redeployment and separation policies and procedures which were in force as at the date of approval of the 2010 Agreement. Mr Kite submitted that it was important to note that redundancy is offered only where an employee’s skills are no longer required by RailCorp. He also noted that a formal offer is made only after an employee has expressed an interest in redundancy. Mr Kite submitted that regard should be had to the fact that the bonus is expressed as an “incentive”, an encouragement to accept the offer. If it was to be a part of every offer it would lose its purpose.
[32] Tabs 5 and 6 are the same as Attachments SC1 and 2 respectively to Exhibit RailCorp 2 referred to earlier.
[33] Mr Kite submitted that RailCorp has consistently applied the policy of offering the incentive bonus only to employees who have not previously refused a formal redundancy offer. Tabs 7 and 8 are examples of letters of offer in different terms depending upon whether the employee had previously declined an offer or not.
[34] Tab 9 contains a presentation made in October 2011. Details of redundancy entitlements are set out at page 5, including the incentive bonus if the offer is accepted within two weeks. A note on page 6 states that, if an employee declines or fails to respond to the offer, any future offer will not include the incentive bonus. Mr Kite noted that union representatives were in attendance at the presentation.
[35] Further examples of letters of offer are contained at Tabs 10, 25 October 2011 and 11, 28 February 2012. Each notes that, in the event an employee declines an offer, the incentive bonus will not be available in the future. The employee response form at Tab 11 expresses an understanding that there will be no further offers of the bonus.
[36] Tab 12 contains an Employee Information Guide which relates to employees covered by the 2010 Agreement. Clause 2 provides a summary of the voluntary redundancy package and notes that the incentive bonus will be offered only once.
[37] Tab 13 and 14 contain material relating to the closure of a particular facility at Taree. A draft letter at Tab 13 notes that voluntary separation post redeployment does not include the incentive bonus.
[38] Tab 15 contains an Employee Information Guide in similar terms to the one which is at Tab 12.
[39] Tab 16 contains a presentation made to Transit Officers in April 2012 which sets out various options for that particular group of employees. Page 31 of the presentation contains the following dot points:
- If you do not respond within this timeframe it will considered that you have declined the offer and any future offers will not include the incentive bonus.” (sic)
“ You will have 14 days from the date of offer (inclusive) to accept or decline the offer of Voluntary Redundancy. If you do not accept, any possible future offer will not include incentive bonus.
[40] Tab 17 contains a form letter to Transit Officers dated 6 June 2012. It includes a paragraph noting that the incentive bonus will only be offered if the voluntary redundancy offer is accepted within two weeks. It also notes that, should an initial offer be declined, the employee will no longer be entitled to receive the incentive bonus in any future offer.
[41] Tabs 18, 19 and 20 contain correspondence from Transport for New South Wales to Unions New South Wales. The letter at Tab 20, dated 28 October 2013, refers to a meeting with unions on 14 October and notes that staff who have previously declined an offer of voluntary redundancy will not be offered the incentive payment with the present offer. It notes that the others will be offered such a payment as part of their package. It also notes that letters to employees will contain advice that employees will not be entitled to the incentive payment in any future offer.
[42] The letter at Tab 20 also rejects the suggestion that there was an agreement that Transit Officers were to continue to be eligible for the incentive payment. A further letter to Unions New South Wales dated 7 November 2013 is at Tab 22. Among other things the letter requests any material which would support the existence of such an agreement. Mr Kite noted that nothing had been provided in response to this request.
[43] Tabs 23 and 24 contain an exchange of correspondence between RailCorp and the ASU in June and July 2009. The correspondence relates to the development of “HR Procedures” including redundancy. Tab 25 is a flowchart dealing with the Career Transition Services - Service Delivery Model. A box at the end of Phase 1 notes “Employee Declines VR seeking Redeployment (Incentive Removed)”.
[44] Tab 26 contains a schedule of employees who have previously declined an offer of voluntary redundancy. Mr Kite noted that some of these employees had continued in employment for long periods. He submitted that this reinforced the “incentive” aspect of the bonus payment which was to put an end to RailCorp’s liability in relation to the particular employee.
RAILCORP’S CASE - SUBMISSIONS
[45] Mr Kite did not challenge the relevance of the authorities relied upon in the Unions’ case. He accepted that the dispute required an interpretation of the text of a document. However he submitted that the relevant document was in fact RailCorp’s policy. Mr Kite submitted that the context in which the policy should be considered and the mutual intent of the parties was that which is found in the 2005 agreement. This had made it clear that the incentive bonus would apply to an initial redundancy offer only.
[46] Mr Kite submitted that regard should be had to the use of the word “incentive” in the context where it has been decided that the particular employee no longer had skills required in RailCorp’s business in circumstances where there can be no forced redundancies. He submitted that the only option was to offer voluntary redundancy enhanced with an incentive to encourage acceptance of the offer and reduce the long term costs of redeployment.
[47] Mr Kite submitted that the absence from the 2009 Policy of specific words stating that the incentive bonus was available only with an initial offer did not reflect a change in the terms and conditions of employment.
[48] Mr Kite conceded that the reference in the policy to the period of two weeks related to the incentive bonus not the offer. He noted that there was nothing in the policy to suggest that there would be any subsequent offers after the initial one. Mr Kite submitted that the incentive would lose its character if an employee could decline it but remain entitled to it at any subsequent time even after RailCorp had carried the redeployment and wages costs in the interim.
[49] Mr Kite noted that, prior to the 2010 Agreement, the parties had agreed that only the initial offer carried the incentive. RailCorp’s actions in 2011, 2012 and 2013 had been consistent with that past practice. Mr Kite submitted that it defied reality to suggest that the Unions had not been aware of RailCorp’s position. He noted that there had been an extensive consultation process with the Unions and Unions New South Wales.
[50] Mr Kite also noted that the process leading to the making of a formal offer of voluntary redundancy was not rushed and that employees had ample time to consider whether they would be interested in such a proposition. In that context the two week limit on the incentive bonus would be worthless if the bonus was available into the future.
[51] Mr Kite submitted that the historical context, consistent approach to the policy, the absence of debate about its past application and the fact that it is RailCorp’s policy all support its interpretation of clause 5.2.1. This is further supported by the description of the bonus as an “incentive” together with its time limit.
CONCLUSIONS
[52] There is no issue that FWC has jurisdiction to deal with this dispute. Section 739 of the Act provides that the section applies if a term referred to in section 738, being a term which provides for a procedure dealing with disputes, requires or allows FWC to deal with a dispute. In this instance Step 4 of clause 9.4 of the 2010 Agreement provides for arbitration of an unresolved dispute with certain limitations which are not presently relevant.
[53] The principles which govern the interpretation of instruments such as enterprise agreements are reasonably well settled. They were summarised in a recent Full Bench decision, DP World Brisbane Pty Ltd v The Maritime Union of Australia[2013] FWCFB 8557 @ [28]ff.
[54] In short, the task begins with a consideration of the ordinary meaning of the words in question having regard to their context and purpose. Context may come from the agreement as a whole, its arrangement and the place within it of the terms to be interpreted. The legislative context is also relevant. The common intention of the parties as expressed in the terms of the agreement is what matters not their subjective beliefs or understandings. Importantly, the task does not involve re-writing a provision to give effect to a notion of what is fair and just. Extrinsic materials may be used as an aid to construction as provided for in section 15AB of the Acts Interpretation Act 1901.
[55] As noted at paragraph [7] above, clause 47 of the 2010 Agreement provides that reduction in staffing levels will be achieved through natural attrition, redeployment or voluntary redundancy in accordance with RailCorp’s redeployment policy applying at the date of certification of the agreement. There is no issue that the reference to “certification” should be read as “approval” in the present legislative context.
[56] I do not agree that, just because the 2009 Policy is RailCorp’s policy, it should be treated as a unilateral rather than a mutual document or in any different fashion to the agreement itself. There may be a basis for such differential treatment if the reference was to some policy which had yet to be formulated or which could change over time at RailCorp’s sole discretion. However, the incorporated policy is a document in specific terms at a specific point in time. Whatever its genesis it has become a document of the parties in the same way as if it had been a schedule or attachment to the agreement.
[57] I accept that RailCorp has acted consistently in dealing with its employees according to its interpretation of the 2009 Policy. That is reflected in documents such as its letters to employees at Tabs 7, 8, 10 and 11 of Exhibit RailCorp 1, the presentation at Tab 9 and the Information Guide at Tab 12.
[58] However, that does not detract from the clear words of the policy. Clause 5.2.1 provides that the incentive bonus is available if the offer of redundancy is accepted within two weeks of the offer being made. In the absence of any words to the contrary this must mean that it is available each time an offer is made. This conclusion is reinforced by the change in wording from the 2005, and consequently, 2008 agreements which specifically stated that employees who have refused a formal offer are not entitled to the bonus in the event that they receive a further offer.
[59] There is nothing intrinsic about the word “incentive” which suggests that it should necessarily be available only once. It should be noted that it is totally within RailCorp’s control as to whether an employee receives more than one offer of redundancy and, if so, the timing of such offer or offers. An incentive is no less an incentive because it may be offered on more than one occasion.
[60] I do not consider that, since the approval of the 2010 Agreement, the Unions have demonstrated acceptance of RailCorp’s interpretation of the 2009 Policy such that the clear words of the policy should be set aside. There was no evidence before me that a member had brought the practice to the attention of a relevant official. Attendance at the slide presentation is not sufficient to demonstrate acquiescence.
[61] I determine the issue in dispute in the terms sought by the Unions, namely, that the proper application of clause 5.2.1 of the 2009 Policy to multiple offers of voluntary redundancy made to an employee over time is that each offer must include the incentive bonus and that bonus is available where the offer is accepted within two weeks of it being made.
COMMISSIONER
Appearances:
T. Slevin, counsel for Australian Municipal, Administrative, Clerical and Services Union, Australian Rail, Tram and Bus Industry Union and The Association of Professional Engineers, Scientists and Managers, Australia.
P.M. Kite, Senior Counsel for RailCorp.
Hearing details:
2013.
Sydney:
December 16.
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