Australian Rail, Tram and Bus Industry Union v Keolis Downer Northern Beaches Pty Ltd T/A Keolis Downer Northern Beaches
[2025] FWC 187
•29 JANUARY 2025
| [2025] FWC 187 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Australian Rail, Tram and Bus Industry Union
v
Keolis Downer Northern Beaches Pty Ltd T/A Keolis Downer Northern Beaches
(C2023/5483)
| DEPUTY PRESIDENT CROSS | SYDNEY, 29 JANUARY 2025 |
S.739 – Application to deal with a dispute – alleged underpayments and overpayments – orders to produce.
On 12 September 2023, an application was made by the Australian Rail Tram and Bus Industry Union (the RTBU/Applicant), pursuant to Clause 92.1 of the KDNB Bus Operations Enterprise Agreement 2021 (the EA). Clause 92.1 of the EA provides:
“When the Parties to this Agreement are in dispute with either of the Unions or Employer over any issue that directly affects the interests of any of the Parties, the dispute will be dealt with in accordance with this clause.”
Background
Keolis Downer Northern Beaches Pty Ltd (the Respondent) operates bus services for Region 8 in the Lower North Shore and Northern Beaches of Sydney under contract to Transport for NSW (the Contract). It commenced doing so on 31 October 2021, taking over from the State Transit Authority.
Since the commencement of the Contract there have been a multitude of issues with the Respondent’s payroll system, resulting in both underpayments and overpayments of employees. The RTBU and its members have regularly raised those issue with the Respondent seeking rectification.
On 6 June 2022, the Respondent notified employees of overpayments they had received due to the incorrect payment of some broken shifts and public holiday pay during the period 31
October 2021 to April 2022. The Respondent sought to recover the overpayments made to employees.
On 4 July 2022, the Applicant notified the Respondent that its members sought an external audit at the Respondent’s cost and that the RTBU be provided with a broad data outcome for transparency.
The Respondent thereafter engaged KPMG to complete the external audit (the KPMG Audit). The Applicant and Respondent agreed that the period between 31 October 2021 and 6 August 2022 would be audited (the Review Period). The KPMG Audit was finalised in around June 2023.
From around 21 June 2023, the Respondent wrote to its employees, advising them of
the outcome of the KPMG Audit. In respect of the identified overpayments, the Respondent demanded payment. Employees were invited to attend a meeting to discuss the outcome of the KPMG Audit.
The RTBU was advised by numerous members that the results in the KPMG Audit were erroneous.
On 27 July 2023, the RTBU notified the Respondent of a dispute regarding recovery
and/or roll out of audit results concerning over/under payments, errors/inconsistencies in audit results, not providing full audit results to members, not providing members with documentation on request and not taking steps to ensure that members have no out of pocket expenses in regards to recovery of overpayments such as repaying net amounts and/or covering the costs of a tax reassessment (the Dispute).
On 16 August 2023 the RTBU wrote to the Respondent proposing to refer the dispute to the Fair Work Commission (the Commission) for conciliation.
By email dated 17 August 2023, the Respondent stated that it was outside the EA’s dispute resolution procedure to refer the matter to the Commission.
On 11 September 2023, the RTBU wrote to the Respondent, advising that it intended to
escalate the matter to the Fair Work Commission. The Dispute concerning the attempted recovery by the Respondent of alleged overpayments to its employees was filed on 12 September 2023.
That initial dispute notification did not resolve the issues between the parties and there continued to be disputation as to the calculation of the alleged overpayments into 2024.
After the Respondent engaged debt collectors to recover its alleged overpayments on 11 July 2024, the RTBU sought injunctive relief in the Federal Court of Australia. Those proceedings resolved, and the debt collection ceased, on the basis that the parties entered into heads of agreement (the Agreement), dated 24 July 2024, and a deed, which included a three-step process to deal with the alleged overpayment issues. This included arbitration of any dispute arising from this process by the Commission in this Dispute.
The full terms of the Agreement are:
Heads of Agreement – subject to deed
1. The below process applies to RTBU members that are listed in Exhibit CKCC-2 and RTBU members and former employees as identified in a supplementary list to be provided by the Union to Keolis Downer by Friday 26 July 2024.
Step 1: Meetings between management and Union (delegates/officials).
2. Union to send a list of concerns (not limited to individual member concerns), contentions and requests for information in relation to the Audit, including any requests for documents, by Friday 2 August 2024. The usual rules concerning relevance, privilege and confidentiality to the request for production pf documents apply.
3. Management of KDNB to set out in writing its answers to those concerns and provide any requested documents it is willing to provide within 7 days.
4. Meetings with Union delegates, officials and management to follow to work through those concerns. A timetable for individual meetings will be discussed.
5. The above meetings in Step 1 finish within 28 days. No extension or adjournment to this time period without mutual consent between the parties.
6. If there are issues outstanding between the parties, including in relation to document production, they will be referred to arbitration before Deputy President Cross in matter C2023/5483 in accordance with Step 3 (subject to 15 below). If all issues resolve, step 1 concludes.
Step 2: Individual meetings with employees
7. Step 2 to commence at the conclusion of Step 1, including any arbitration.
8. Individual meetings to be offered to any union member who has not agreed to repay the debt, to occur within a 60 day period (commencing the day after step 1 ceases). Unpaid meetings consistent with FWC recommendation. No extension or adjournment to this 60 day time period without mutual consent.
9. KDNB will ensure that a person with sufficient understanding of and expertise in the payroll system will be in attendance aty the meeting.
10. If requested by any RTBU member, delegates will be in attendance at the meeting.
11. If a member is unable to arrange or attend a meeting due to operation reasons, a delegate may attend in their stead.
12. The relevant delegate will not unreasonably withhold consent to a shift alteration to facilitate meetings. Keolis Downer will take reasonable steps to accommodate the attendance of a delegate (within ordinary hours) without changing their shift (without loss of pay). If it is not practically possible for this to occur, an alternative RTBU official or RTBU employee will be permitted to attend. In exceptional circumstances, a pre-nominated employee from the local depot (and covered by the agreement) may stand in to attend in the event that the employee cannot be represented by an RTBU delegate, RTBU official or RTBU employee.
13. if agreement is reached, a repayment plan with options for repayment to be presented to the employee, and a repayment plan will be entered into. The RTBU undertakes not to represent the member in any future dispute about the overpayment (save for any dispute about the frequency of repayments).
Step 3: Arbitration
14. In the event that the debt for any member remains challenged or there is not agreement by Step 1 and 2, arbitration to occur before Deputy President Cross at the Fair Work Commission in matter C2023/5483 (subject to 15 below.
15. it is agreed that the arbitration referred to in paragraphs 6 and 14 above is to be before Deputy President Cross of the Fair Work Commission, bearing in mind his knowledge of the dispute. This is subject to the agreement of the Fair Work Commission for Deputy President Cross to arbitrate and the member allocation process of the Fair Work Commission. This clause would not prevent the RTBU from making any recusal application in respect of any future conduct.
16. If an individual debt is proven to the satisfaction of the Fair Work Commission, the arbitrator is empowered to make orders under s 324(1)(c) or orders for repayment of the debt. Arbitrator otherwise empowered to resolve any global questions arising under Step 1.
The above process does not apply to:
1. Any non-union member employee that does not opt into the process within the next 14 days from the deed; or
2. employees who have already agreed to an arrangement to repay with respect to their individual debt.
Notice of discontinuance to be filed with no order as to costs after the execution of the Deed.
KDNB to instruct CCSG to not conduct any further debt collection activities during the above process in respect of the RTBU members the subject of the above process, and instruct CCSG to cease its current collection procedure in respect of the RTBU members the subject of the above process.
A communication to employees to be agreed between the parties, and will include a notification to RTBU members that CCSG will not pursue collection procedures until the above procedure is exhausted.
The parties remain otherwise free to communicate as they see fit and KDNB reserves its right to reengage CCSG at the conclusion of Steps 1-3 above.
In accordance with the item 2 of the Agreement, on 2 August 2024, the RTBU provided the Respondent with a list of concerns, a request for information and a request for documents. By way of example, the first three concerns and contentions (out of five specified) were:
(a) Keolis Downer has failed to sufficiently explain to employees the amounts owing. The explanatory document (audit spreadsheet) is highly confusing, and contains obvious integrity issues, such as including post-tax deductions in the ‘amount paid’ column and double-counting gross and net pay. Additionally, Keolis Downer has not facilitated meetings between employees and a Keolis Downer employee with sufficient payroll expertise to explain the alleged debts;
(b) the amounts claimed by Keolis Downer are in many cases incorrect. A review of one employee’s spreadsheet reduced the amount owed by her by $1,213.19, about 60% of the debt. Another managed to identify, by reference to his payslips, that while the KPMG audit claimed he had been paid a particular allowance in error 32 times this had only occurred 21 times. These are examples – it is highly unlikely that any one audit result is more or less accurate than any other;
(c) The above leads to a conclusion that there are systemic issues with the audit process, for example the failure to account for employees on paid leave, that render the audit results are inherently unreliable;
On 9 August 2024, the Respondent responded to those concerns, consistently with item 3 of the Agreement.
On 21 August 2024, representatives from both the RTBU and the Respondent met, consistently with item 4 of the Agreement, during which the RTBU sought:
a. a payslip for each pay period where the Respondent alleges that there was an overpayment which identifies what the employee should have been paid for the relevant pay period;
b. evidence of repayment of alleged debts by employees;
c. each employee’s leave record for any pay period where there is an alleged overpayment; and
d. copy of the excel spreadsheets prepared in the KPMG Audit with the prefix for each shift.
On 22 August 2024, the RTBU and the Respondent met online through Microsoft Teams. The Respondent provided a demonstration of the pay system screen it proposed to show
employees during their individual meetings.
On 3 September 2024, the RTBU wrote to the Respondent repeating its request for the provision of the documents requested on 21 August 2024.
On 4 September 2024, the RTBU wrote to the Respondent seeking an extension to the
28 days within which the Agreement provides the meetings between the RTBU and the Respondent was to conclude. That correspondence provided:
Re: External payroll audit
We refer to paragraph 5 of the Heads of Agreement signed by Keolis Downer and the RTBU on 24 July 2024 which requires the meetings between Keolis Downer management and the RTBU to conclude within 28 days.
In our view the 28 days is 6 September 2024 being 28 days after Keolis Downer responded to the RTBU’s concerns and provided the requested information.
As the meetings between Keolis Downer and the RTBU continue and a timetable for individual meetings is yet to be finalised, we think that an extension of the 28 days until 1 November 2024 is necessary to work through the RTBU’s concerns and finalise a timetable for individual meetings. Please advise if this is agreed.
On 5 September 2024, the Respondent refused the RTBU’s request for an extension and
advised that it had commenced meetings with affected employees. That correspondence provided:
RE: External payroll audit: request to extend Heads of Agreement Stage 1
In relation to point 5, our view is that the 28 days expired on 21 August 2024. In our meeting 21 August 2024, we discussed the timetable for individual meetings, we discussed the RTBU’s concerns, the planned meeting schedule capacity and moved forward with implementing the process for affected employees to book meetings.
KDNB communicated with affected employees on 27 and 29 August and commenced meetings with affected employees from Monday 2 September 2024 it is our view that 60 days for meetings to be conducted concludes 30 September 2024.
Any extension would have the consequence of delaying meetings which have already commenced, as such we do not agree to any extension in time at this time.
On 5 September 2024, the RTBU wrote to the Respondent, advising that it did not agree that Step 1 was complete, and that not all relevant matters had been worked through in accordance with the Agreement.
On 6 September 2024, the Respondent responded to the RTBU’s email of 5 September
2024, advising that its position was that Step 1 concluded on 21 August 2024.
Later on 6 September 2024, the RTBU responded, advising that the 28-day timeframe within the Agreement applied to meetings between the parties representatives only and not to
Step 1 as a whole. Further, the RTBU stated that the Agreement provided that, unless the parties resolve all matters, any dispute is referred to arbitration before the Commission.
On 25 September 2024, the Respondent filed a Form F1 seeking production of documents.
The Respondent’s payroll system is not set up to reprint pay slips, and so employees cannot be provided with a copy of their payslip for each pay period.[1]
The Outstanding Issues and Questions for Determination
The RTBU noted a dispute has arisen out of Step 1 of the Agreement, namely, whether:
(a) Step 1 has concluded due to the expiry of the 28-day time limit contained in item 5; and
(b) Keolis Downer should be ordered to produce the documents sought by the RTBU, namely:
i. a payslip for each pay period where Keolis Downer alleges that there was an overpayment which identifies what the employee should have been paid for the relevant pay period;
ii. evidence of repayment of alleged debts by employees;
iii. each employees leave record for any pay period where there is an alleged overpayment; and
iv. copy of the excel spreadsheets prepared by KPMG with the prefix for each shift.
As to the first issue, the RTBU’s position is that Step 1 only concludes when ‘all issues resolve’ in accordance with item 6. It submits there are two key outstanding issues that are unresolved and, therefore, Step 1 remains on foot.
As to the second issue, the RTBU is seeking orders for the Respondent to produce the documents sought because:
(a) the overpayment calculations in the KPMG audit contain numerous errors;
(b) they would assist all parties in calculating and repaying the correct amounts; and
(c)doing so would give the parties a pathway forward other than inevitable disputation and further delay should the Commission decline to make the orders sought.
The RTBU proposed the following questions for determination, which it submitted both should be answered in the affirmative:
1.Are there outstanding issues between the parties in relation to Step 1? (Question 1); and
2.Should the Respondent produce the documents sought by the RTBU pursuant to Step 1? (Question 2).
The Respondent apparently agreed to the two questions posed by the RTBU,[2] and would submit that they be answered in the negative. The Respondent’s position is, however:
(a) that ‘Step 1’ in the Agreement has concluded, and that ‘Step 2’ has commenced;
(b)that once ‘Step 2’ commenced, the RTBU could not seek to have an issue arbitrated under ‘Step 1’;
(c)the Agreement comprehensively provides that if there is no agreement reached with the Respondent and the RTBU or individual employees under the Agreement at the conclusion of ‘Step 2’, the RTBU on behalf of members has standing to commence arbitration in respect of those matters under clause 14 of the Agreement; and, in the alternative:
(d) If the FWC accepts the RTBU’s submission that ‘Step 1’ has not concluded:
(i)the only ‘key issue outstanding unresolved’ is whether the Respondent should produce certain ‘Documents’ sought by the RTBU;
(ii)that the requested order for ‘Documents’ should not be made on the basis that, with the exception of ‘leave records’ and ‘evidence of repayment’ (which have already been produced) the proposed order would require the Respondent to create new documents.
The Evidence
(a) The RTBU
The Applicant relied upon statements from three members/employees of the Respondent, and statements from Mr Grech, the Divisional President of the RTBU.
The statements from three members/employees of the Respondent were admitted into evidence without the deponents being required for cross-examination on the basis that their evidence was limited to the issue of the extent of production of documents.[3]
Mr Grech gave evidence regarding the history of the Dispute, and the steps taken to comply with step 1 of the Agreement. His evidence in cross-examination displayed that he had only a vague understanding of the Agreement and a distinct lack of urgency in completing meetings with 28 days.
(b) The Respondent
The Respondent led evidence from Mr Sudip Ghimire, a Payroll Specialist with the Respondent. Mr Ghimire was cross-examined and he gave clear, responsive and candid evidence. He readily made concessions that he clearly knew were unfavourable of the Respondent where such concessions were nonetheless true. They included:
(a)In certain circumstances if materials were not provided for the KPMG Audit it would be wrong;[4]
(b)There may be errors arising from going from a manual system of journals to an online system;[5]
(c)That documents upon which employees would have to rely in calculations were confusing,[6] including the KPMG Audit;[7]
(d)That part of what the RTBU is seeking is compliance with the Fair Work Regulation regarding payslips which is a reasonable request;[8] and
(e) His evidence regarding the KPMG Audit, in conclusion, was:[9]
My point is that it's very difficult for an employee to understand the basis of that and you can understand why they don't have any - - -? --- Confidence.
Confidence in the results? --- I agree.
So it's not surprising in that context that people have refused to pay. You agree with that? --- Yes.
Submissions
(a) RTBU
The RTBU submitted Step 1 of the Agreement makes clear that the meetings between the various parties will finish within 28 days unless an extension is agreed. However, any outstanding issues between the parties, including in relation to document production, will be referred to the Commission for arbitration. It is only if ‘all issues resolve’ that Step 1 concludes.
To construe the Agreement in the manner advanced by the Respondent would render items 5, 6, 7 and 15 otiose. Item 6 expressly provides for arbitration in respect of Step 1 where there are outstanding issues between the parties arising out of the meetings. There is simply nothing in the words of item 5 or 6 that place a 28-day time limit on raising an issue arising out of those meetings.
As to the second question, orders to produce the Documents are necessary because despite repeated requests by the RTBU and its members, no substantive explanation has been forthcoming to the question of how the alleged overpayments are calculated.
Employees do not have any confidence in the calculations, and the KPMG Audit is infected by a litany of errors which have completely undermined its integrity.
The Commission should resolve Question 1 and Question 2 in the RTBU’s favour, and should make orders requiring the Respondent to provide the Documents sought to the relevant employees.
(b) The Respondent
There is no dispute between the parties that Steps 1 to 4 of the Agreement concluded, or that in accordance with Step 5, the ‘meetings with union delegates, officials and management’ to work through concerns were required to ‘finish within 28 days’ of the Agreement.
The Respondent submitted that unless the parties agreed to extend the time for meetings under clause 5, or a matter was ‘referred to arbitration’ within the timeframe in clause 5, Step 1 would conclude and Step 2 would commence. The Respondent accepts that if an ‘outstanding’ issue or issues arising from the meetings had been referred to arbitration within the 28 days in accordance with clause 6, it could not commence the process in Step 2 until ‘all issues resolve’.
As no ‘issues’ were referred to arbitration until 25 September 2024, which was 27 days after the Respondent had commenced offering individual meetings from 29 August 2024 in
accordance with clause 8 in Step 2.
The Respondent noted that on 5 August 2024 the RTBU’s legal representative wrote to the Respondent’s legal representative stating, ‘our client’s understanding that point 5 requires those meetings to take place within 28 days of the agreement being reached on 24 July 2024 meaning 21 August 2024’. It was only on 3, 5 and 6 September 2024, that Mr. Grech raised the issue of production, and the argument that meetings under ‘Step 2’ could not commence and the parties remained in ‘Step 1’.
Regarding the request for documents, the Respondent submitted the following table summarising the positions of the RTBU and the Respondent:
| Category | KDNB’s response |
| a payslip for each pay period where Keolis Downer alleges that there was an overpayment which identifies what the employee should have been paid for the relevant pay period | A ‘payslip for each pay period’ as requested by the RTBU does not exist, employees have been provided with audit results which show by pay period, what should have been paid in the view of the Auditor and what was paid by KDNB. |
| evidence of repayment of alleged debts by employees | This has been provided to employees and is available from the payroll system which is accessed during meetings between KDNB and employees. Employees who paid back previously identified overpayments do not have those overpayments contained within Audit results. |
| each employees leave record for any pay period where there is an alleged overpayment; | On 9 August 2024 the Union was provided with relevant documents that display days relevant to the audit and include the employees’ time and attendance and whether leave was taken. |
| copy of the excel spreadsheets prepared by KPMG with the prefix for each shift, | The document requested by the RTBU does not exist. On 9 August 2024 KDNB provided the RTBU with relevant time and attendance data which contains the prefix for each shift. |
The RTBU had conceded that if production of the first, second and third categories of documents is ordered, it did not press for production of the last category.[10]
The Respondent submitted that there was no power to order the creation or alteration of documents, and that the orders sought by the RTBU are outside the parameters in which the Commission can make Orders, because the prescribed documents they are seeking do not exist.
Consideration
(a) Question 1
The wording of the Agreement is clear. It is the “meetings in Step 1 [that] finish within 28 days”, not necessarily the whole step. “If there are issues outstanding between the parties, including in relation to document production, they will be referred to arbitration…”
An interpretation that applies a strict 28 day limitation period to the whole of Step 1 renders the clear provisions of items 6 and 7 otiose. Outstanding issues could not be determined in the timeframe, even where, for example, outstanding issues were determined early in the 28 day period.
The Agreement was signed by the parties on 24 July 2024, and so the 28 days expired on 21 August 2024. Pursuant to the terms of the Agreement:
(a)A list of concerns, contentions and requests for information was sent by the RTBU on 2 August 2024 (Item 2);
(b)Management of the Respondent was to set out its answers to the concerns document within 7 days, which it did on 9 August 2024 (Item 3); and
(c)Meetings occurred between the Union and the Respondent on 21 and 22 August 2024 (Item 4).
The RTBU requested documentation on 9 August 2024, but only some was provided. The requests for the outstanding documents were repeated in meetings on 21 and 22 August 2024. The issues identified by the RTBU were clearly outstanding and had not been resolved, and Step 1 had not concluded.
Question 2
It is important to observe from the outset the extraordinary state of affairs where the Respondent cannot say, and produce payslips establishing, the amounts actually paid to the employees.
Regulation 3.33 of the Fair Work Regulations 2009 provides:
3.33 Records—pay
(1) For subsection 535(1) of the Act, a kind of employee record that an employer must make and keep is a record that specifies:
(a) the rate of remuneration paid to the employee; and
(b) the gross and net amounts paid to the employee; and
(c) any deductions made from the gross amount paid to the employee.
(2) If the employee is a casual or irregular part-time employee who is guaranteed a rate of pay set by reference to a period of time worked, the record must set out the hours worked by the employee.
(3) If the employee is entitled to be paid:
(a) an incentive-based payment; or
(b) a bonus; or
(c) a loading; or
(d) a penalty rate; or
(e) another monetary allowance or separately identifiable entitlement; the record must set out details of the payment, bonus, loading, rate, allowance or entitlement.
Note: Subsection 535(1) of the Act is a civil remedy provision. Section 558 of the Act and Division 4 of Part 4-1 deal with infringement notices relating to alleged contraventions of civil remedy provisions.
Contrary to the above regulation, the Respondent could not produce payslips for each relevant pay period.[11] That presents considerable difficulty in establishing alleged overpayments.
Also of concern was the Respondent’s continued reliance on the KPMG Audit. It is relied upon by the Respondent in relation to the first two categories of documents sought, however when scrutinised in the cross-examination of Mr Ghimire, it was found to be understandably a document in which employees could have no confidence. As a result, I consider the production of the first two categories of documents sought in the above table necessary and essential to the employees from whom the Respondent seeks to recover alleged overpayments.
Further, in the circumstances where the Respondent could not produce payslips for each relevant pay period and the KPMG Audit is so flawed, I consider it appropriate to order the production of documents. It is no answer to such order to submit the Respondent should not/can not be required to create documents in circumstances where:
(a)No existing documents allow correct calculation of overpayments to settle the Dispute; and
(b) The Respondent seeks to rely on a created document, the KPMG Audit.
I consider the production of the third category of the leave records also necessary because there have been incorrect deductions identified in the KPMG Audit during periods of leave, and the employee will be able to reconcile those amounts without having to rely on the KPMG Audit. [12]
I find that both questions posed, being:
Are there outstanding issues between the parties in relation to Step 1?; and
Should the Respondent produce the documents sought by the RTBU pursuant to Step 1?
Should be answered in the affirmative.
The parties should prepare a draft order reflecting this decision.
DEPUTY PRESIDENT
Appearances:
Mr J Martin of Counsel, on behalf of the Applicant.
Mr W Treglown, on behalf of the Respondent
Hearing details:
30 October 2024.
Sydney.
In-person.
[1] Transcript PN 1110 to
[2] Respondent’s Submission dated 22 October 2024, at [24].
[3] Transcript PN 63 to 141, but particularly PN 86.
[4] Transcript PN 458.
[5] Transcript PN 535 and 536.
[6] Transcript PN 584 and 621.
[7] Transcript PN 895.
[8] Transcript PN 813.
[9] Transcript PN 715 to 717.
[10] Transcript PN 29.
[11] Transcript PN 1110 to 1115.
[12] Transcript PN 1012.
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