Australian Rail, Tram and Bus Industry Union & Australian Municipal, Administrative, Clerical and Services Union v Sydney Trains & NSW Trains T/A NSW Trainlink

[2021] FWC 4039

[2021] FWC 4039

FAIR WORK COMMISSION

DECISION

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

Australian Rail, Tram and Bus Industry Union &
Australian Municipal, Administrative, Clerical and Services Union
V
Sydney Trains &
NSW Trains T/A NSW Trainlink
(C2021/2813; C2021/2817; C2021/2821; C2021/2823)

DEPUTY PRESIDENT BULL SYDNEY, 16 JULY 2021

Dispute about any matters arising under an enterprise agreement and the dispute procedure - Whether Commission has power to make award sought under s.739(5) - Effect of no extra claims clause in enterprise agreement.

Background

[1] The Australian Municipal, Administrative, Clerical and Services Union (ASU) and the Australian Rail, Tram and Bus Industry Union (RTBU) (the Unions) have respectively filed applications for the Fair Work Commission (Commission) to deal with a dispute pursuant to s.739 of the Fair Work Act 2009 (the Act).

[2] The s.739 applications are made against Sydney Trains and NSW Trains (the respondents), being two separate legal entities. Each respondent is party to one of two enterprise agreements, the Sydney Trains Enterprise Agreement 2018, 1and the NSW Trains Enterprise Agreement 20182(Agreements). The Unions are covered by the Agreements by virtue of having given notice under s.183 of the Act that they wished to be covered by the Agreements.

[3] Clause 8 Dispute Settlement Procedure (DSP) (DSP) of the Agreements sets out the process for dealing with disputes which are defined to include ‘matters pertaining to the relationship between the Employer and Employees’. A 4 Step escalating process is set out under sub clause 8.4, which provides that where a dispute remains unresolved, any party may refer the matter to the Commission for conciliation and where the matter does not resolve, the matter shall be arbitrated.

[4] The dispute is now requested to be arbitrated by the Unions, with the parties having failed to reach a conciliated resolution before the Commission. Putting aside the respondents’ argument that the DSP has not been followed, 3 the Commission is otherwise satisfied that the dispute is properly before it.

[5] In the initiating applications, the Unions submitted that the respondents were in breach of the status quo provisions of the Agreements which are found in the DSPs of the Agreements. The Commission initially dealt with the status quo argument of the Unions, and as the four dispute notifications concerned the same subject matter, and the Agreements contained identical relevant terms, the disputes were joined for the purposes of the Commission’s deliberation.

[6] The respondents, at the time, disputed that they were in breach of the status quo provisions of the Agreements on the basis that the Agreements’ status quo requirements only have application to ‘the work procedures and practices in place immediately prior to the change that gave rise to the dispute’.

[7] The identified change was the restructuring of roles within corporate functions of Sydney Trains and NSW Trains following a ‘Corporate Functions Review’ due to Transport for NSW (TfNSW) (which is not a party to this dispute) having decided to achieve an integrated approach to corporate functions in the Transport Service resulting in certain corporate functions that are performed by the respondents’ employees being centralised and integrated into TfNSW. As a result, a number of corporate positions occupied by the respondents’ employees would become redundant as their roles would be undertaken within TfNSW.

[8] The evidence adduced was that TfNSW having identified what roles they wish to integrate, have commenced a process of offering positions to employees of the respondents which the employees may accept or decline. The evidence in this hearing given by Ms Krajewski, Senior Workplace Relations Consultant for Sydney Trains, was that of the 377 positions affected by the corporate restructure, there were 307 direct matches with TfNSW positions and that to date, 206 employees had received offers of employment from TfNSW. 4 Upon accepting a role with TfNSW, an employee will be deemed to have resigned from their employment with the relevant respondent.5

[9] In the dispute applications, the Unions have submitted that the dispute concerned ‘the imminent restructure of roles within corporate functions’ of the respondents as these roles will be progressively ‘transferred’ to TfNSW and the respondents have unreasonably asked affected employees to accept inferior working conditions with TfNSW where the consequences of a refusal include termination on the ground of redundancy. 6

[10] The Commission, in its status quo decision of 23 June 2021, 7 concluded that the respondents’ corporate review was subject to the Agreements’ status quo provisions, which apply to ‘work procedures and practices’ in place prior to the change giving rise to the dispute. It was concluded that this had application to the restructure of roles within the respondents’ enterprises.

[11] As a result, a determination was issued by the Commission in the role of a private arbitrator as per the dispute procedure of the Agreements, that the proposed workplace restructure arising from the Corporate Functions Review cease until the dispute is finally determined.

[12] As the dispute has still not been resolved, the dispute is now to be determined on its merits, as per the final step of the DSPs in the Agreements. The parties continued to be legally represented pursuant to permission being granted under s.596(2)(a) of the Act.

Unions’ Claim

The Unions seek from the Commission ‘orders’ in the following form:

1. Sydney Trains will ensure that if an affected employee accepts an offer of employment from Transport for NSW, and as a result of accepting such an offer the employee is not afforded the following benefits:

- Redundancy benefits in accordance with Deed in relation to Managing Excess Employees in the Rail Entities 2018;

- An employee Travel Pass in accordance with clause 31 of the Sydney Trains Enterprise Agreement 2018;

- A picnic Day in accordance with clause 30 of the Sydney Trains Enterprise Agreement 2018.

Sydney Trains shall provide to the employee at the time of termination of his or her employment:

a. Nine months’ pay in lieu of the six month implementation period and the three month notice period under the Deed.

b. Employment Assistance Grant in the sum of $3,000.

c. Five days’ pay in lieu of picnic days for a five year period.

d. Employee Travel entitlements in the sum of $7,800 being the equivalent of free intercity travel on Sydney Trains and NSW TrainLink services for a three year period.

2. NSW Trains will ensure that if an affected employee accepts an offer of employment from Transport for NSW, and as a result of accepting such an offer the employee is not afforded the following benefits:

- Redundancy benefits in accordance with Deed in relation to Managing Excess Employees in the Rail Entities 2018;

- An employee Travel Pass in accordance with clause 31 of the NSW Trains Enterprise Agreement 2018;

- A picnic Day in accordance with clause 30 of the NSW Trains Enterprise Agreement 2018.

NSW Trains shall provide to the employee at the time of termination of his or her employment:

a Nine months’ pay in lieu of the six month implementation period and the three month notice period under the Deed.

b Employment Assistance Grant in the sum of $3,000

c Five days’ pay in lieu of picnic days for a five year period

d Employee Travel entitlements in the sum of $7,800 being the equivalent of free intercity travel on Sydney Trains and NSW TrainLink services for a three year period 8

[13] In support of the claim, the Unions relied upon the evidence of:

•  Ms Amanda Perkins - ASU Organiser;

•  Ms Judith Wright - ASU Deputy Branch Secretary;

•  Mr Gary Shaw - Sydney Trains Senior Analyst/Programmer; and

•  Mr Stephen Priestly - Sydney Trains Network Incident Manager.

[14] The respondents relied on the evidence of:

•  Mr Robert Hutchinson - NSW Trains Principal Manager Workplace Relations; and

•  Ms Justine Krajewski - Sydney Trains Senior Workplace Relations Consultant.

[15] In essence, the claim is that the Commission determine that where the respondents’ employees accept an offer of employment from TfNSW and where their current terms and conditions in respect of redundancy, travel pass and annual picnic day entitlements are not provided by TfNSW in their employment contract, that they are compensated for this loss by the respondents.

[16] It is submitted that the Agreements’ dispute resolution procedure allows for the Commission to make such a determination. This is because the consultation provisions in the Agreements require the respondents to discuss with the Unions and employees the proposed changes, being the corporate restructure, including measures to avoid or minimise any adverse impacts on employees and where the matter cannot be resolved it is to be dealt with in accordance with the dispute procedure. The relevant Agreement provisions are as follows:

“7.3 Consultative Arrangements

The Employer will consult with Employees when there is a proposed change that will impact upon the working arrangements of the Employees. Consultation shall be conducted in good faith with reasonable time for the Employees, Union(s) and their members to respond to the proposed changes.

…

(b) The Employer will meet with the affected Employees and/or their Union Representative(s) and discuss the effects of the changes on the Employee{s) concerned and measures proposed to avoid or otherwise minimise any possible adverse impact on affected Employees.

7.4. Unresolved Matters

Where matters cannot be resolved through the consultative process the dispute will be dealt with in accordance with the Dispute Settlement Procedure at Clause 8 of this Agreement.”

[17] The Agreements’ consultation provisions require the respondents to consult over the proposed restructure and to discuss measures proposed to avoid or otherwise minimise any possible adverse impact on affected employees. The Unions submit that during this process they identified three areas where the Award to cover employees who accept a position with TfNSW, the Transport for New South Wales and Sydney Metro Salaries and Conditions of Employment Award 2019 9(the Award), provides less beneficial conditions than the affected employees currently enjoy. The subject matter of the lesser conditions are redundancy, travel, and picnic day.

[18] While sub clause 7.4 provides for unresolved matters dealt with in the consultative process be dealt with under the DSP, it is not submitted by the Unions that the respondents have not met their obligation to consult.

[19] It was put that as the parties following consultation were unable to agree on a means upon which the adverse impacts could be avoided or otherwise minimised, the Commission is now asked to resolve the dispute in the terms sought, as set out above. The justification for the claim is to compensate those employees who accept a job offer with TfNSW and the loss of conditions they will suffer. 10

[20] Had TfNSW effected the job offers by way of compulsory employment transfer as is provided for under the Transport Administration Act 1988 (NSW) (the TAA), the affected employees would have pursuant to s.67 of the TAA been retained on their existing terms and conditions, which on the Unions’ submission gives rise to an expectation of affected employees that they should maintain their terms and conditions where they accept a job with TfNSW.

[21] The redundancy benefits sought are currently reflected in a document titled Managing Excess Employees in the Rail Entities 2018 executed as a Deed, whereas the travel and picnic day benefits are contained in the Agreements.

[22] The Unions submit that the matter in dispute; whether the respondents should take further steps to avoid or otherwise minimise the adverse effects of accepting employment with TfNSW, is within the power of the Commission to resolve, through a combination of the consultative and dispute settlement provisions of the Agreements. It is submitted that the respondents have failed to mitigate the adverse impact of the change.

[23] With regard to the Agreements’ ‘no extra claims’ clause, the Unions contend that the outcome sought is not inconsistent with the clause and the remedy sought is not an extra claim but a measure available to the respondents to offer as a measure to avoid or minimise the adverse impacts of the change.

[24] It is further not accepted by the Unions that s.739(5) of the Act is a prohibition on the Commission making the determination as sought.

Conclusion

[25] In this matter the parties have reached an impasse in their consultative discussions as required under the Agreements to discuss ‘measures proposed to avoid or otherwise minimise reducing any possible impact on affected employees’.

[26] It is noted that on 24 June 2021, the RTBU also filed a dispute application with the Industrial Relations Commission of New South Wales, stating that a dispute exists regarding the terms and conditions of employment that will apply to employees that transfer from Sydney Trains and NSW Trains to TfNSW, seeking an order from the NSW Commission that no further steps be taken until the dispute is finalised. 11

[27] While the Unions have identified three existing conditions of employment (redundancy and travel benefits, annual picnic day) said to be superior to those offered under a new employment contract with TfNSW, the respondents submit that there are also more beneficial conditions of employment offered by TfNSW to affected employees being:

•  Full time ordinary hours of 35 per week which is less than the 76 hours per fortnight mandated under the Agreements which results in an immediate 8% pay increase, as employees will receive that same pay rate for working less hours;

•  Twice as many flex leave days compared to the equivalent accrued days off in the Agreements; and

•  Family and Community Service Leave. 12

[28] Ms Krajewski’s evidence 13 referred to an application by the respondents14 made in the Commission in 2018 for 22 transferring employees from TfNSW who occupied human resources roles to be placed on the terms and conditions of the Agreements and not continue to be covered by the then Transport for NSW Salaries and Conditions of Employment Award 2016. In that matter, Unions NSW, in submitting that the employees would be disadvantaged if moved onto the Agreements, relied on a number of inferior conditions including ordinary hours increasing from 35 to 38 per week, stating it was a ‘substantial increase’.15

[29] As part of the respondents’ efforts to minimise any adverse effects on employees, the respondents state that they have held discussions with TfNSW who have been willing to provide additional travel benefits in respect of the Opal and Gold Passes and beneficial salary arrangements.

[30] Although it was not obliged to provide the employee Opal Pass to new employees, TfNSW had advised the respondents that the employee Opal Pass would be retained for a period of two years (retention period) from the commencement of employment with TfNSW.

[31] In relation to the Gold Pass, TfNSW has advised the respondents that:

•  if an employee has qualified for a Gold Pass at the end of the retention period, they will transition to a former employee Gold Pass; and

•  for a period of three years following the retention period, affected employees who would have otherwise been eligible for a Gold Pass if their role had remained with the respondents, could apply for TfNSW Award service to be recognised for a former employee Gold Pass. Subject to meeting all requirements in the Passes booklet, this would be approved as an exception. An employee would not hold the pass during the period between the end of the two year retention period and being approved for a former employee Gold Pass. 16

[32] In addition to the further travel benefits, TfNSW have also agreed to implement beneficial salary arrangements for employees who accept a TfNSW role at an equivalent TfNSW grade, on the following basis:

i. appointment to the Award increment that is equal or next higher than the Employee's current salary. The new increment date is from commencement of employment with TfNSW; or

ii. where the employee's current salary is higher than the top of the equivalent Award grade, the Employee will maintain their current rate as a personal salary (while remaining at that grade). subject to Award increases. 17

[33] The orders sought by the Unions for the affected employees amount to payments of:

•  9 months’ salary in respect of redundancy entitlements;

•  $3,000 in respect of an employment assistance grant;

•  5 days pay over a period of 5 years in lieu of picnic days; and

•  $7,800 in lieu of travel passes. 18

[34] In advancing the merits of the Unions’ claim, both Ms Wright and Ms Perkins who gave evidence in support of the claim were cross-examined and accepted that the actual dollar amounts now sought had not been previously put to the respondents and that the outcome they were seeking had not been subject to any cost analysis undertaken by the Unions.

[35] Mr Shaw, who provided a witness statement, but was not cross-examined, attested to receiving a job offer with TfNSW. Mr Shaw’s annual salary with Sydney Trains is $157,545. 19 On this basis, under the Unions’ claim, should Mr Shaw accept the employment offer with TfNSW in respect to the compensation sought for the less beneficial redundancy benefits, he would be entitled to a payment of approximately $118,000 from Sydney Trains, being nine months’ salary, upon his resignation if the claim was granted by the Commission.

[36] While the respondents also did not provide any detailed analysis of the claim, it was put that taking the average salary of the potentially affected employees it would total in excess of $30 million.

[37] Both Ms Wright and Ms Perkins accepted in cross-examination that any payment in lieu of the less beneficial redundancy terms offered by TfNSW would be a windfall gain where an employee received this payment and was never made redundant by TfNSW.

[38] The respondents have raised a number of objections to the application including that the Commission is statute barred from granting the remedy as sought.

[39] In essence, it is submitted that this is because of the prohibition set out at s.739(5) of the Act and the no extra claims clause of the Agreements. For the reasons below the Commission accepts the respondents’ contention that the claim falls afoul of the Act and the no extra claims terms of the Agreements.

Statutory prohibition

[40] The Unions’ applications are filed pursuant to s.739 of the Act. Section 739 is titled Disputes dealt with by the Fair Work Commission, and states at sub-s.739(1):

“This section applies if a term referred to in section 738 requires or allows the Commission to deal with a dispute.”

[41] Sub section 738(b) provides that the Commission may deal with a dispute where an enterprise agreement includes a term that provides a procedure for dealing with disputes.

[42] Sub section 739(4) states:

“If, in accordance with the term, the parties have agreed that the Commission may arbitrate the dispute, however described, the Commission may do so.”

[43] Sub section 739(5) then goes on to state as follows:

“Despite subsection (4), FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.”

[44] The meaning of s.739(5) of the Act was outlined in Endeavour Energy v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (“Endeavour Energy”),²⁰ where the Full Court said:

“Section 739(5) does not alter the character of the arbitration which the Commission undertakes under an enterprise agreement. It merely places a limit on the range of arbitrated (but not conciliated, it may be noted) outcomes available to the Commission in those cases in which the parties have agreed that the Commission may arbitrate.”

[45] In exercising its powers as a private arbitrator under the dispute procedure, the Commission must be cognisant of any legislative curtailment of its decision making. Sub section 739(5) curtails the Commission’s role in determining a dispute referred to it via a dispute settlement procedure in an industrial instrument to the extent that any decision must not be inconsistent with the referring industrial instrument. To do otherwise would be to provide entitlements or rights not otherwise provided for in the industrial instrument.

[46] The ‘orders’ sought are not benefits that are set out in the Agreements.

[47] On resignation of employment, the Agreement benefits do not provide for the payment of nine months’ salary or any of the other benefits sought. As the Full bench held in Srikumar Arampamoorthy v Ausgrid Management Pty Ltd T/A Ausgrid where a claim for $8,000 for outplacement support had been made via the dispute settlement procedure, as it was in excess of the enterprise agreement terms and conditions, it was therefore inconsistent with the agreement within the meaning of s.739(5) and not within the power of the Commission to grant. 21

[48] The Commission does not accept as sustainable the Unions’ argument that as the Agreements’ consultative provisions provide that as unresolved matters are to be dealt with under the dispute settling procedure that there is no inconsistency with the Agreements should the Commission grant the remedy sought.

[49] The contention put forward is that the respondents refused to take any measures themselves to avoid or mitigate the adverse impacts of the restructure 22 and that the matter that requires resolution is whether they should take further steps.23

[50] The relevant obligation on the respondents under the consultative terms of the Agreements do not oblige the respondents to do any more than meet with and discuss measures proposed to avoid or otherwise minimise any possible adverse impact. The evidence was that through the respondent’s discussions with TfNSW some of the ‘adverse impacts’ will be minimised.

[51] It was submitted on behalf of the Unions that it is ‘not assumed’ that the respondents must avoid or minimize the adverse effects of the restructure, but that “they should do so.” 24 In the Commission’s view, whether the respondents ‘should do so’ takes the matter no further in avoiding the restraint of s.739(5).

[52] As there is no right to obtain any non-agreed measure, the measures now sought by the Unions cannot become entitlements to be determined through the dispute resolution clause and not be subject to s.739(5) of the Act. The Unions’ claim is not a case of determining a right under the Agreements or interpreting the meaning of any particular clause of the Agreements.

[53] As the Unions’ claim seeks a benefit greater than that provided by the Agreements it cannot be entertained by the Commission. The outcomes sought are not permitted to be awarded by the Commission as per s.739 (5) of the Act as they would be inconsistent with the fair work instruments that applies.

No extra claims

[54] At clause 13 of the Agreements is a provision titled No Extra Claims other than in accordance with this Agreement which is stated to apply to the parties during the life of the Agreements. For the purposes of this matter the relevant provision is sub clause 13.1(b) which, states:

“(b) except in accordance with the terms of Clause 12, shall make no extra claims for any changes in remuneration or conditions of employment;”

[55] The specified exception in accordance with clause 12 has no application to the Unions’ claim in this dispute.

[56] The Commission has previously held that the no extra claims clause of the Agreements is an enforceable term 25 and nothing has been put to alter this conclusion. What is said by the Unions is that there is nothing in the ‘no extra claims’ clause which prevents the Commission making the determination sought as the outcome requested would be consistent with the recognition of sub clause 13.1(a) which states the parties:

“will continue to recognise the Employer’s managerial prerogative to propose and implement change in compliance with this Agreement.”

[57] The Unions’ submission is prefaced on the basis that sub clause 7.4 permits the resolution of unresolved matters arising out of consultation (clause 7 Consultative Arrangements) being dealt with under the disputes settlement procedure.  26

[58] It is also put that there has not been a claim for a change in remuneration or conditions but rather a claim for the respondents to take measures to avoid or otherwise minimise any possible adverse impact of the restructure. 27 Despite the manner in which the Unions’ claim is characterised, it cannot be viewed as anything other than a claim for an additional condition of employment for the affected employees upon resignation and accepting a position offered by TfNSW.

[59] If the Unions’ argument was to be accepted, the wording of the Agreements’ no extra claims or consultative clauses would need to have been cast in a manner where an exception to the otherwise unambiguous wording of clause 13 No Extra Claims other than in accordance with this Agreement was readily apparent. As it currently reads the clause has application to all conditions of employment under the Agreements other than where it is stated not to.

[60] On the basis of the above, the Agreements’ no extra claims clause is also an insurmountable barrier to the granting of the Unions’ claim.

[61] The reference at sub clause 7.4 to matters not resolved through the consultative process being dealt with in accordance with the dispute procedure does not elevate such unresolved matters arising from this process into a special category of dispute not encumbered by the no extra claims clause or s.739(5) of the Act.

[62] While the Unions’ applications are able to be made under the disputes procedure, as the dispute pertains to the relationship between the respondents and their employees, the Commission is without power to grant the remedy as sought.

[63] On the basis of what is set out above, the applications are dismissed.

DEPUTY PRESIDENT

Appearances:

Mr T Slevin of Counsel and Mr P Pasfield Solicitor Slater and Gordon on behalf of the applicant Unions

Mr Y Shariff SC of Counsel and Ms A DeBoos and Mr P Willink Solicitors Kingston Reid on behalf of the respondents Sydney Trains and NSW Trains

Hearing details:

Microsoft Teams Hearing

2021

12 July

Printed by authority of the Commonwealth Government Printer

<PR731554>

 1   AE428119

 2   AE428I20

 3   In view of the outcome of this decision the matter does not require a determination

 4   Given in oral evidence

 5   See letter of offer to Mr Shaw from TfNSW attachment GS2 to Exhibit A1

 6 F10s at 2.1(1) and (9)

 7   [2021] FWC 3468

 8   Unions’ written submissions of 2 July 2021 at [52]

 9   An award of the Industrial Relations Commission of New South Wales

 10   Unions’ written submissions of 2 July 2021 at [20]

 11   Statement of A. Perkins of 2 July 2021; attachment AP15

 12   Respondents’ written submissions of 15 June 2021 at [14] and oral submissions at hearing

 13 Statement of J. Krajewski of 9 July 2021 R3 at [20]

 14   [2018] FWC 1681

 15   See JK 18 of Statement of J. Krajewski of 9 July 2021 at [4]

 16 Statement of J. Krajewski of 9 July 2021 R3 at [22(b)]

 17 Statement of J. Krajewski of 15 June 2021 R1 at [27(f)]

 18   Unions’ written submissions of 2 July 2021 at [52]

 19   See statement of 2 July 2021 at [16] and letter of offer at attachment GS2

20 [2016] FCAFC 82 (‘Endeavour Energy’) at [33]

 21   [2019] FWCFB 689 at [13-14]

 22   Unions’ reply submissions of 10 July 2021 at [6]

 23   Ibid at [7]

 24   Ibid at [22]

 25   [2021] FWC 2319 at [222]

 26   Unions’ reply submissions of 10 July 2021 at [17]

 27   Ibid at [18]