“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v Viva Energy Australia Pty Ltd
[2022] FWC 668
| [2022] FWC 668 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739—Dispute resolution
“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
Viva Energy Australia Pty Ltd
(C2021/5473)
| COMMISSIONER YILMAZ | MELBOURNE, 29 MARCH 2022 |
Dispute arising under an enterprise agreement – redundancy and redeployment – Meaning of agreeable alternative employment.
Introduction
This decision concerns an application by the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, known as the Australian Manufacturing Workers’ Union (AMWU) under s.739 of the Fair Work Act 2009 (the Act) for the Commission to deal with a dispute in accordance with the dispute settlement procedure in clause 8.1 of the Viva Energy Australia Geelong Refinery Enterprise Agreement 2017 – Maintenance Employees (the Agreement). The AMWU is covered by the Agreement.
The Agreement regulates the pay and conditions of employees engaged in classifications of work in the Shell Geelong Refinery Engineering Employees Award specified in clause 1.5. The dispute concerns the jetty maintenance fitters who work on the jetty where ships dock to transfer oil into the refinery for refining and processing. At the time that this dispute first arose in 2021, there were 12 jetty maintenance fitters. The Commission was notified of the dispute on 10 September 2021. The onset of the dispute relates to a presentation on 20 April 2021 to employees about the proposed impact of introducing the Gall Thomson Camlock technology, a system intended to simplify the coupling process of cargo hoses to the jetty, but which also removes the necessity for qualified jetty maintenance fitters.
Clause 3.1 of the Agreement relates to security of employment for maintenance personnel. Relevantly, the clause states that all parties agree that security of employment is maximized through delivery of world class maintenance services in terms of both outcomes and costs. It further provides reference to redeployment and redundancy as a last resort. The final paragraph refers to a trial period in a position that may be offered by the Company, as an alternative to redundancy, where the position is not consistent with their current position.
This dispute was first listed for a conference on 27 September 2021. The AMWU raised an agreed outcome of a dispute that was settled before me in 2019. In 2019 Viva Energy Refining Pty Ltd (Viva) committed that it had no intention to reduce staffing or outsource permanent fitter positions. However, in 2021, Viva acknowledged that pressure on refineries from the pandemic resulted in a reduction in refineries nationwide from four, to now two. The two remaining (including Viva) contemplated what was necessary to remain viable. The AMWU raised the Federal Government’s support package to assist the remaining refineries to fund retention of employment and maintain a fuel security strategy.
At the conference in September 2021, it was reported that four of the 12 jetty maintenance fitters expressed an interest in redeployment, while the remainder opted for the redundancy package. In response to concerns that redeployment opportunities were not altogether clear for the fitters, the AMWU and Viva agreed to further discussions so that redeployment could be properly explored by all jetty maintenance fitters. Progress was made at the report back on 5 October 2021, however at the report back on 12 October 2021, the parties identified a significant gap in their respective positions therefore programming for arbitration was set, including jurisdictional objections. A further directions hearing was scheduled for 9 November 2021, after Viva filed its jurisdictional submissions.
On 13 October 2021, the AMWU emailed the Commission and Viva clarifying the two matters in dispute that it is pressing. Those matters were described as:
“The dispute is about the Respondent breaching their commitment in the Outcomes Statement that there was no intention to reduce staffing or outsource permanent fitter positions and about the unwillingness to identify Agreeable Alternative Employment for the Maintenance and Jetty Employees, within the meaning of the term as used in the Deed.”
Viva addressed the first part of the defined dispute in their jurisdictional objections but did not press jurisdictional objections on the second part of the dispute. The AMWU agreed not to press the first point in the dispute. Therefore, the remaining matter in dispute concerns the alleged unwillingness of Viva to identify Agreeable Alternative Employment for the jetty maintenance fitters within the meaning of the term in the Deed.
While the AMWU did not press the first part of the matters it describes in dispute, and this decision need not address the first part of the dispute, I do observe that Viva did comply with its commitment outlined in the Outcomes Statement, dated 8 October 2019. I am satisfied that Viva at the time did not intend to make further redundancies other than the five identified to take effect on 30 November 2019. The evidence that no further redundancies occurred since 30 November 2019 supports the commitment Viva made at the time of the 2019 dispute.
No concerns were raised regarding compliance with the dispute settlement clause. Part 8, clause 8.1 provides the process for resolution of disputes at the workplace level and referral to the Commission where there is no resolution. Clause 8.1.5 v. provides for two stages of resolution before the Commission. Firstly, a) by mediation, conciliation, expressing an opinion or making a recommendation; and b) if unable to resolve the dispute, the Commission may arbitrate the dispute and make a determination that is binding on the parties (subject to any appeal).
I observe that clause 8.1.2 provides, “As all parties have given their support for consultation in the introduction of new work methods, ideas and programs, the use of a resolution of dispute procedure should be unusual.”
The AMWU dispute conceivably concerns the introduction of a new work method and despite the commitment in clause 2.1 for continuous improvement, we do find the parties in dispute before the Commission.
While the parties did not agree on a specific question for the Commission to determine, the AMWU say it is a requirement of Viva to identify “Agreeable Alternative Employment” for the jetty maintenance fitters within the meaning of the term used in the Deed. The AMWU states that the term “agreeable” means agreed to between the parties. The positions offered as an alternative to the jetty maintenance fitters, in their view, were not agreeable because the effect was the reduction of salary and the loss of accrued entitlements at the higher rate except where leave is taken in the first six months of the transfer.
Based on the formulation of the dispute by the AMWU, the question to be determined can be characterized as:
“Does the obligation to consult in clause 3.1 extend to identifying agreeable alternative employment as defined in the Deed, with the term agreeable meaning agreeable between the parties?”
In support of this question, the AMWU sought an undertaking from Viva, and should Viva not agree to the undertaking that the Commission issue orders comprising the sought undertaking. The AMWU submits that the undertaking or orders will avoid such disputes in the future. The AMWU proposed undertaking/orders are:
1. The existing pay rates of any employees who redeploy will be maintained for 12 months.
2. In the circumstances of any future redundancies involving AMWU members at the Refinery, Viva will make all endeavors to redeploy affected employees.
3. This will involve identifying alternative positions.
4. Where any concerns are raised as to the fairness of these alternative positions or where the alternative positions are not agreeable to all parties the matters will be treated as a Dispute under the applicable Agreement.
5. Viva will raise no jurisdictional objection about such matters if they proceed to the Fair Work Commission.
Viva did not provide the undertaking being sought by the AMWU and in relation to the matter in dispute it contends that the AMWU view of the term “agreeable alternative employment is different to what the Deed says.
Section 739 of the Act empowers the Commission to deal with disputes under enterprise agreement dispute settlement terms. Part 8 – Dispute Resolution Matters and clause 8.1 Due Process of the Agreement, provides steps for the resolution of disputes and referral to the Commission for conciliation and if not resolved, through to arbitration.
Background
Viva operates the Geelong Refinery and the AMWU members are mainly metal maintenance workers. The dispute concerns the jetty operations. There were two prior disputes regarding the work of jetty fitters, where Viva made 5 of the 17 redundant in 2018 and in 2019 the parties agreed to resolve an absence coverage dispute with an agreed outcomes statement.
On 13 August 2021 Viva announced that it would be introducing a new coupling system for the loading and unloading of oil from tanker ships, which meant that jetty fitters would be made redundant. This announcement followed a proposal in April 2021 to introduce technology upgrades at the Geelong Refinery Jetty.
On 20 April 2021 Viva submits that it began a process of group consultation with jetty maintenance fitters, others working on the jetty and AMWU representatives in relation to the proposal to install new Gall Thomson hose coupling technology for ship connections without the use of a standard flange joint.[1]
The new technology had been ordered and was due to arrive in July 2021. Viva submits that the new technology is safer and more reliable, while the AMWU have reservations concerning the reliability of the system, however its major concern is the resultant redundancy of jetty maintenance fitter positions.
Viva offered redeployment opportunities as Maintenance Fitter in the central maintenance team (two available positions), Field Operator and Wharf Attendant. Weekly consultation sessions were scheduled to discuss among other issues, the detail of the opportunities for redeployment. The redundancies and redeployment arrangements were made in late November 2021.
The AMWU submissions
The AMWU submits the offer to fill two maintenance fitter positions on the “terms and conditions of employment will be those of a maintenance fitter”[2] raised a series of questions among the jetty maintenance fitters. Those questions concerned whether pay rates would transfer to the new role, whether shift loading would be paid on annual leave and sick leave if the redeployment was to a day shift role and whether already accrued entitlements would be paid at the jetty maintenance fitter rate. Viva responded to the questions, and further discussion during the consultation period did not alter Viva’s position. The AMWU contend that Viva “is in breach of its obligations under the Agreement to consult and to identify agreeable alternative redeployment in redundancy situations.”[3] The AMWU also contend that the terms and conditions attached to the two maintenance fitter positions do not constitute “agreeable alternative redeployment.” The witness evidence of Messrs Rendell and Lewis confirm that the positions offered were “not agreeable or suitable”[4] to them.
Mr Lewis, a jetty maintenance fitter with 26 years’ service gave evidence that should he consider an alternative role, such as the Maintenance Fitter, he would experience a pay cut, his annual leave and long service leave would be calculated at the lower rate and he contends that Viva could not provide assurances that progression through the classification structure would close the gap in salary in any specific time frame. He states that these conditions rendered the opportunity for redeployment not agreeable or suitable, and to receive all entitlements at the higher salary would require the acceptance of redundancy. This he says means that he had no option other than to take the redundancy.[5]
Mr Rendell, a jetty maintenance fitter with 36 years’ service considered the roles of Maintenance Fitter and Operator. He gave evidence that to transfer to the Operator role, he would experience a $42,000 drop in annual salary. To progress through the classification structure, he was informed he could progress from level 1 to 3 in up to 2 years, but no assurance in relation to timeframe could be given to close the gap in salary. He also expressed concern that by taking the role his entitlements would be paid at the lower rate, thereby he describes the situation as “handing back to Viva part of his accumulated entitlements.”[6] Mr Rendell further gave evidence that should he accept an alternative role and be made redundant in the future, he understands that his entitlements would be paid at the lower rate of pay. He states that in the past when Viva offered an alternative role, existing pay rates and conditions were preserved, unlike this occasion.[7] Mr Rendell concludes by stating that together with the Federal Government’s Refinery support package, he did not consider that Viva was serious about offering “agreeable alternative employment,” therefore he felt he had no option but to take a “forced redundancy”.[8]
The AMWU submit that in correspondence to the Respondent on 7 October 2021, it advised that the options for redeployment offered were not considered “Agreeable Alternative Employment” for the following reasons:
1. There is no guaranteed timing of progression through the classifications.
2. Transferring employees will suffer an immediate pay cut.
3. The Respondent has refused to protect the full value of accrued entitlements.[9]
The AMWU relies on selective extracts from clause 3.1 of the Agreement:
“In such circumstances, all endeavours will be made to retrain and redeploy affected employees to other roles inside or outside the Refinery. Redeployment to a new position will always involve assessment as to the individual's suitability for the new position.
Redundancy is a measure of last resort. It arises in circumstances other than through the normal and customary evolution of positions and associated changes in duties and responsibilities. The priority of the Company will be to redeploy those employees whose position is substantially altered or made redundant.
Should a retrenchment arise, a process of consultation between the Company, employees, and (unless specifically not requested by the employee/s), their representatives shall commence with the aim of reaching agreement to the method by which the reduction in employees may be achieved.”
The AMWU also relies on clause 4.16 of the Agreement which incorporates the Viva Energy Redundancy Deed. Clause 4.16 provides:
“4.16 Redundancy
The Viva Energy Redundancy Deed shall apply to all employee covered by this Agreement.”
In relation to the Deed, the AMWU submits that it assists with the understanding of the meaning attached to clause 3.1 of the Agreement. The AMWU tendered in evidence a copy of the Deed, which I observe is undated and not signed. Viva in their submissions do not raise any issue with the tendered Deed, therefore I accept the version tendered is the confidential redundancy provision applicable to maintenance and jetty employees agreed to between the parties.
The AMWU submits that the objective of clause 3.1 of the Agreement is that “redeployment” and “consultation….with the aim of reaching agreement to the method by which the reduction in employees may be achieved.”[10] It relies on the definition of “Agreeable Alternative Employment” in the Deed to demonstrate that the offer of redeployment was on less favourable terms, that the redeployments were “nugatory” and that the Respondent refused to consult. It submits that the Agreement obligates the Respondent to truly consult on redeployment opportunities to identify agreeable alternative employment.[11]
VIVA submissions
Viva submits the context of the dispute relates to an announcement in August 2021 to jetty maintenance fitters and the AMWU, that it intends to upgrade technology at the Geelong Refinery Jetty. The decision to upgrade the technology was first raised as a proposal in April 2021. The April proposal was to introduce Gall Thomson hose coupling technology for ship connections, without the use of the traditional standard flange joint. Viva submits the Refinery had been significantly affected by the Covid-19 pandemic with part of the Refinery shutdown for months in 2020, it experienced significant financial losses, two of the four refineries in Australia closed down and there was speculation that the Geelong Refinery would also close down.[12]
Viva gave evidence that there were five consultative work group meetings following the 20 April 2021 meeting.[13] At the 9 August 2021 meeting, Viva announced its decision to introduce the April 2021 proposal. In addition, Viva conducted separate meetings with the AMWU, offered personalized meetings with each individual jetty maintenance fitter (of which six employees took up the offer) and it set up a dedicated inbox for queries (no employee used this option).[14]
Viva reported that 11 of the 12 jetty maintenance fitters decided against redeployment to another position with Viva, therefore opted to take the redundancy package upon their termination of employment. One jetty maintenance fitter accepted redeployment and while he would not receive the redundancy package, he will receive benefits as part of the redeployment including an ex-gratia payment. Viva gave evidence that through consultation it agreed to additional benefits for both those redeploying into another role and for employees opting to take the redundancy, and for those opting to redeploy into either the maintenance fitter or operator role they would be appointed to the role without the requirement of an interview.
In response to the AMWU’s assertion that Viva did not consult, it says that in addition to the additional benefits conferred, only four of the 12 affected employees engaged in consultation to consider redeployment. Despite this, not one employee discussed a 3rd alternative role proposed by Viva (the Jetty Shift Lead which became available on 7 July after a resignation) nor was there any interest identified in any other vacancies. On this basis, Viva contends that the ‘AMWU’s assertion of a refusal to consult bears no relationship with the true facts.”[15]
In relation to the assertion that Viva contravened clause 3.1 of the Agreement read together with the Deed, it submits that the AMWU is wrong. It submits that while the AMWU submissions do not expressly say that “no employee’s position will ever be made redundant unless an ‘Agreeable Alternative Position’ is offered to them,” Viva submits that neither the Agreement nor the Deed supports this AMWU position. Further Viva submits the remedies proposed are not supported by the terms of the Agreement or the Deed nor the facts, therefore the application should be dismissed.[16]
Viva submits I need not determine whether the two positions offered for redeployment which they say are reasonable redeployment options, are “Agreeable Alternative Employment” within the meaning of the Deed, although Viva contend that the Commission should be satisfied that they are.[17]
Viva also addressed the language of the Agreement and the Deed in their submissions.
The Agreement
Clause 3.1 of the Viva Energy Australia Geelong Refinery Enterprise Agreement 2017 – Maintenance Employees provides as follows:
Security of Employment
“All parties agree that security of employment for Maintenance personnel will be maximised through the delivery of world-class maintenance services in terms of both outcomes and costs.
Without prejudicing the rights of either party, in the event that it is necessary to reduce the numbers of Maintenance personnel it is the preference of all parties to achieve this through voluntary redundancy, attrition and/or redeployment (subject to the availability of positions and an individual's suitability).
If this process does not deliver the reductions required, the company will consult with the delegates and the unions as to the method of reduction to be used at the earliest practical stage.
This does not affect the right of the company to dismiss an employee for gross or wilful misconduct or continued poor individual performance.
In the event that a current activity is discontinued or a section of the Refinery operations is closed down, then discussions will take place as early as possible with the affected employees and relevant Unions to determine how the adjustments can be made. In such circumstances, all endeavours will be made to retrain and redeploy affected employees to other roles inside or outside the Refinery. Redeployment to a new position will always involve assessment as to the individual's suitability for the new position.
In respect of maintenance activities, it is our intention to continue with a Viva Energy Australia workforce for predictive, preventative and corrective maintenance in the core areas of electrical, instrumentation and mechanical equipment. There will be no change to this philosophy without discussion and involvement of employees.
Redundancy arises where the Company has made a definite decision to reduce its staffing by removing a position or a number of positions.
Redundancy is a measure of last resort. It arises in circumstances other than through the normal and customary evolution of positions and associated changes in duties and responsibilities. The priority of the Company will be to redeploy those employees whose position is substantially altered or made redundant.
Should a retrenchment arise, a process of consultation between the Company, employees, and (unless specifically not requested by the employee/s), their representatives shall commence with the aim of reaching agreement to the method by which the reduction in employees may be achieved. This process may involve seeking expressions of interest from the work group or trades skill pool being affected by the need to reduce positions, it may also involve the need to establish criteria to select employees to be made redundant which may include: skills, attendance, competence, performance, capacity, etc.
Having established this process and all things being equal, the Company will aim to retain a mix of employees and classifications and has the right to consider showing preference to persons of capacity and experience.
As an alternative to redundancy the Company may offer an employee a trial period in a position that the company considers not consistent with their current position. If, within 12 weeks from the start in the new position the employee believes the position is not appropriate, or the Company believes the employee is not suitable, the Company will either provide a position that is consistent with the employee's skills, qualifications, experience and classification, or will provide a redundancy/severance payment.”
The operative provisions of the Deed relevantly contain the following:
1. Subject to clause 2, where a Maintenance and Jetty Employee’s employment is terminated by Viva Energy Refining due to redundancy at any time prior to the Deed End Date, Viva Energy Refining will pay the maintenance and Jetty Employee redundancy pay in accordance with the Redundancy Pay Formula (as defined).
2. Viva Energy Refining will not be obliged to pay a Maintenance and Jetty Employee the Redundancy Pay Formula if it has obtained Agreeable Alternative Employment for the Maintenance and Jetty Employee.”
In addition, the Deed contains a definition of Agreeable Alternative Employment being:
“Agreeable Alternative Employment means other employment which would not result in an unfair outcome for the employee having regard to the principles determined by the Full Bench of the Australian Conciliation and Arbitration Commission in the Termination, Change and Redundancy Case [1984] 8 IR 34 and decisions of industrial tribunals which have followed that case (not including the criterion of inability to pay); but does not include employment which does not include a binding obligation for redundancy pay on terms and conditions substantially similar to or considered on an overall basis no less favourable than those contained in this Deed.”
The Agreement provides at 4.16 that the Deed applies to employees. Neither the AMWU nor Viva raised any jurisdictional objections to the application of the Deed in this dispute. Clause 4.16 provides:
“4.16 Redundancy
The Viva Energy Redundancy Deed shall apply to all employee covered by this Agreement.”
I am satisfied that the Deed is incorporated into the Agreement.
Consideration
The principles to be applied in the construction of agreements are well established. I respectfully adopt those principles in AMWU v Berri Pty Limited[2017] FWCFB 3005 at [114] and AMIEU v Golden Cockerel Pty Ltd[2014] FWCFB 7447 at [19-41].
The Agreement clause is to be read objectively within the context and purpose of the Agreement, and in the context of its industrial setting.
The starting point is the Agreement, to determine whether it has a plain meaning or contains ambiguity.
Clause 3.1 contains 11 paragraphs which are unnumbered. Nevertheless paragraph 2 and 3 refer to the process where it is necessary to reduce the numbers of maintenance personnel. Relevantly, paragraph 2 provides “it is the preference of all the parties to achieve this through voluntary redundancy, attrition and/or redeployment (subject to the availability of positions and an individual’s suitability).” There is no ambiguity that redeployment is the preference in situations of redundancy to positions that are available.
Paragraph 5 relates to circumstances where a current activity is discontinued, or a section is closed down. Discussions are to take place as soon as possible, and in this matter, Viva has had discussions with affected employees and the AMWU to determine how the adjustments are to be made. The minutes show discussions about the proposal, the effect of the change, the timing, redundancy payments and options for redeployment. Paragraph 5 also states “all endeavours will be made to retrain and redeploy affected employees to other roles inside or outside the Refinery.” Again, the preference to redeploy is emphasized with all endeavours made. The clause in my view does not require the creation of positions agreeable to both parties nor does it place any obligation for an agreeable alternative position as a condition for redundancy.
Further paragraph 5 provides that an individual’s suitability for a position will be assessed, Viva submit that it assessed the suitability of jetty maintenance fitters to perform the job either of the two positions it identified as available for redeployment, in addition, affected employees were encouraged to identify alternatives including any available throughout the Refinery.
Jetty maintenance fitter positions are to be made redundant because of the introduction of new technology. The definition of activity is relevant to the context of paragraph 5 which places an obligation to consult in relation to employees affected by a possible redundancy. The definition of activity includes “state, or quality of being active, actions, occupations,”[18] or pursuit in which a person is active, business activities social activities.[19] The activity of the jetty maintenance fitters is the activity performed in the job, and paragraph 6 makes a further reference to activities where it groups maintenance activities. Paragraph 6 affirms Viva’s intention to continue a maintenance workforce, a workforce that is covered by this Agreement. The Agreement contains classifications of work and conditions relevant to maintenance personnel and Attachment 2 clarifies what is meant by process maintenance. The maintenance activities fall into two main areas; equipment adjustment and minor maintenance and equipment preparation for major maintenance and return to service where required. In respect to maintenance activities the workforce is engaged in predictive, preventative and corrective maintenance in the core areas of electrical, instrumentation and mechanical equipment.[20] Activities is not intended to cover classifications or position, as the Agreement uses the term classification(s) or position where it is intended.[21]
Reading the Agreement makes clear, that in the Refinery, there are numerous maintenance activities and given the nature of the operation, the parties agree to continual improvement in efficiency and productivity which can be clearly identified in clauses 1.6, 2.1, 2.2, 2.3, 3.3, 3.5, 8.1.2, and Attachment 5.
Paragraph 6 contains a commitment to continued engagement of maintenance activities for predictive, preventative and corrective maintenance and no change will take place without discussion and involvement of employees. Viva’s intention to retain Maintenance employees even though the jetty maintenance fitter position will be redundant is consistent with this paragraph and the workgroup consultation is indicative of the commitment to discussion and involvement of employees.
Paragraph 7 makes it clear that redundancy applies where a definite decision to reduce staffing by removing a position or a number of positions is made. By removing the jetty maintenance fitter position, the redundancy provisions in the Agreement apply. I observe that paragraph 8 makes it clear that redundancy is a last resort with the priority to redeploy, for “those employees whose position is substantially altered or made redundant.” The discontinuance or closure of an activity in paragraph 5 is captured by paragraph 8 where a position is substantially altered or made redundant, the priority being redeployment and redundancy a last resort.
Paragraph 9 refers to retrenchment (and not redundancy) to initiate consultation for the method by which a reduction in the number of employees is achieved. The AMWU rely on the first part of this paragraph in support of their application. However, this paragraph relates to retrenchment,[22] that is the reduction of the number of employees. Clause 9 places an obligation on the parties to reach agreement on the method of how the reduction in number of employees will occur. In this matter, Viva’s proposal is not to reduce the number of jetty maintenance fitter positions but to do away with the position altogether. For this reason, this provision is not relevant to this dispute.
Paragraph 11 provides an alternative to redundancy where Viva may offer a trial period in a position that Viva considers not consistent with their current position. A trial period of 12 weeks from the start in the new position and if the employee “believes the position is not appropriate, or the Company believes the employee is not suitable, the Company will either provide a position that is consistent with the employee’s skills, qualification, education and classification or provide redundancy/ severance payment.” The AMWU relied on this clause during the course of the dispute but did not rely on this clause in the hearing. I do not consider it necessary to say any more than note that the clause does not require an alternative to redundancy to be subject to a 12 week trial period. The clause purposefully allows for the Company to offer, should it choose, a trial period where the alternative position is not consistent with the current position for the purpose of both the Company and Employee to assess their suitability in the alternative role.
While clause 3.1 places an emphasis on redeployment, subject to availability of positions, any failure to identify “Agreeable Alternative Employment” that is agreeable between the parties is not a breach of the consultation obligations. However, the AMWU rely on the definition of “Agreeable Alternative Employment” in the Deed to support the contention that a breach of the consultation obligations has occurred.
The definition in the Deed contains two parts, (the first being applicable in this matter) which is shown as follows:
“Agreeable Alternative Employment means other employment which would not result in an unfair outcome for the employee having regard to the principles determined by the Full Bench of the Australian Conciliation and Arbitration Commission in the Termination, Change and Redundancy Case [1984] 8 IR 34 and decisions of industrial tribunals which have followed that case (not including the criterion of inability to pay);
but does not include employment which does not include a binding obligation for redundancy pay on terms and conditions substantially similar to or considered on an overall basis no less favourable than those contained in this Deed.”
The Termination, Change and Redundancy Case, often referred to as the TCR Case was a significant test case that considered a substantial volume of material before setting award standards in relation to unfair dismissal, redundancy, consultation, notice and settlement of disputes. The principles of the TCR Case remain relevant to decisions of the Commission that have followed since. The Agreement’s Deed in this case recognizes the importance of the principles and standards, and by virtue of its reference to the TCR Case indicates that “Agreeable Alternative Employment” must be considered in that context.
The TCR Case makes reference to the principles of consultation, which places an obligation on employers to consult with employees and their representatives as soon as a firm decision has been taken about major change.[23] Relevantly, the ACTU at the time made it clear that the purpose of the consultation was not to tell the employer what must or must not be decided.
Following its deliberations, the Commission in setting the standards for awards, had regard to the NLAC Guidelines which relevantly provide the purpose of consultation as:
“The aim of employers should be to provide employees and their organizations with information on the nature of the technological changes proposed; the likely date of implementation of the change; how they expect the change to be implemented; the expected effects on employees; proposals for retraining and redeployment if they are likely to arise; the possibility of retrenchment and any other matters likely to significantly affect employees”
“The arrangements for consultation may vary with regard to the type and extent of the change being made, or the needs of particular situations, but the employer should always seek to afford the appropriate trade union officials and/or other recognized employees’ representatives an opportunity to express their views on the employment effects associated with a technological change.”[24]
There is nothing in the TCR Case that stipulates a requirement that consultation requires the offer of “Agreeable Alternative Employment” which is agreeable between the parties as contended by the AMWU. In addition, the TCR Case contemplates that redeployment may be made to lower paid duties, however, where this occurs it considered it necessary to afford the affected employee with the required period of notice for the change or alternatively where the notice is not given then payment equal to the notice period at the higher rate of pay.[25] The decision does not provide that agreeable alternative positions are of equal pay and conditions and relevantly, in considering income maintenance for redundant employees, the Commission rejected any income security benefits.
More recent decisions concern redeployment when deciding genuine redundancy and application of the NES. These decisions are helpful to put in context the relevant considerations of suitable alternative employment. In considering redeployment a Full Bench of the Commission in Ulan Coal Mines Limited,[26] found that “the job must be suitable, in the sense that the employee should have the skills and competence required to perform it to the required standard either immediately or with a reasonable period of retraining. Other considerations may be relevant such as the location of the job and remuneration attaching to it. The decision provides no further guidance as that case turned on the question whether a competitive process was a genuine redundancy, and it decided it was not.
A further decision providing guidance is in the matter of Mr Geza Szanto v ISS Facility Services Pty Ltd. Commissioner Cambridge relevantly found that “that the context of s.120 of the Act the term ‘acceptable’ is not a subjective notion involving an option available to a redundant employee. It is not a matter of choice for the redundant employee to either accept or reject alternative employment. Acceptable alternative employment is determined by way of an objective analysis involving a comparison between the terms and conditions that applied to the job that became redundant, and those terms and conditions applicable to the alternative employment.” [27]
Commissioner Cambridge further elaborated:
“[43] In simple terms, if the comparison between the redundant job and the alternative employment identified terms and conditions which were not comprehended by the employment and represented changes that had some significant impact on the employee, the alternative employment would be unacceptable. Conversely, if the terms and conditions of the alternative employment were comprehended by the employment which governed the redundant job or if the changed terms and conditions had little detrimental impact on the employee, then the alternative employment would be acceptable.”[28]
These decisions offer guidance and in my view are contemplated by the definition of “Agreeable Alternative Employment” by the Deed. The principles relevant to this dispute are that:
· consultation is not contingent on reaching “agreed” alternative employment,
· that acceptable alternative employment is not a subjective notion but objective and therefore not subject to the employee’s decision to accept,
· that redeployment may entail retraining,
· redeployment may include lower paying jobs, but other considerations are relevant, such as location, the skills and competence of the employee affected including remuneration.
· Awards and Agreements may provide exclusions from severance pay where agreeable alternative employment is offered to an employee.
Neither the Deed nor the Agreement can be read that “Agreeable Alternative Employment” requires the alternative position to be agreeable by the parties. The principles arising from the TCR Case do not support this proposition advanced by the AMWU. Further, the Deed, nor Agreement or the principles describe a breach of consultation should agreeable positions not be offered. As Commissioner Cambridge reasonably determined, the test should be an objective one when assessing the job lost compared to the alternative position offered. The evidence which was not challenged was that the positions offered were of comparable skills and competence, that some of the jetty maintenance fitters had prior experience in maintenance fitting, that the same Agreement applies and the main variance in remuneration was the payment of shift penalties and allowances for jetty maintenance fitters largely due to the rostering arrangements particular to the role.
Viva submits I need not determine whether the alternative positions offered meet the definition of “Agreeable Alterative Employment.” I agree that I need not address this issue, as it was not the question to be answered, the AMWU did not address this issue and those employees that did not opt for an alternative role were paid their severance payments consistent with the Deed together with the additional benefits offered by Viva.
Further, the Deed makes one further reference to Agreeable Alternative Employment in addition to the definition, and that is contained in clause 2 which provides that Viva need not pay the severance pay in the Redundancy Pay Formula if it has obtained Agreeable Alternative Employment for the employee. On this basis the purpose of the Deed is not to place additional obligations on consultation, but rather the reference concerns the application of severance payment where employment is obtained for the employee who otherwise would be made redundant.
Conclusion
The parties could not reach agreement on the question to be determined. The AMWU described the dispute about the alleged unwillingness of Viva to identify Agreeable Alternative Employment for the Maintenance and Jetty Employees, within the meaning of the term as used in the Deed. It further states that the definition means “agreeable” between the parties.
Viva did identify redeployment options and it submits that while the alternative options were not agreeable by 11 of the 12 jetty maintenance fitters, it met its obligations in relation to consultation and redundancy was a last resort. Viva participated in an extensive consultation period together with employees and the AMWU. The fact that the alternative employment options were not agreeable by 11of the jetty maintenance fitters, is not an indication that the consultation obligations were breached. Further, the contention that “Agreeable” means agreeable by the parties, is not made out.
In answer to the below question, the answer is no.
“Does the obligation to consult in clause 3.1 extend to identifying agreeable alternative employment as defined in the Deed, with the term agreeable meaning agreeable between the parties? “
The orders sought by the AMWU are also rejected for the following reasons:
· The AMWU seeks a remedy that is not provided for in the Agreement and no basis for the discretion of the Commission is made out,
· The Agreement already provides that Viva is to make endeavours to redeploy employees should situations arise in the future,
· No commitments can be made for hypothetical situations in the future, and no case is made out for the need for such orders.
For the above reasons the application is dismissed.
COMMISSIONER
Appearances:
Mr R. Wainwright for the Applicant
Mr B. Avallone for the Respondent
Hearing details:
2021
Melbourne
24 November
[1][1] Exhibit R 1 Glen Lyons witness statement, attachment GL-8 and GL-9.
[2] Exhibit R1, attachment GL-8, Geelong Refinery Jetty Organisation Review slides presented on 20 April 2021.
[3] Applicant’s outline of submissions at [12] – [14].
[4] Applicant’s outline of submissions at [17] and exhibit A1 and A2.
[5] Exhibit A1, Witness statement of Brett Lewis.
[6] Exhibit A2, Witness statement of Scott Rendell
[7] Ibid at [31].
[8] Ibid at [29] - [33].
[9] Applicant’s outline of submissions, attachment AMWU-1.
[10] Applicant’s outline of submissions at [23].
[11] Ibid at [31].
[12] Respondent’s submissions as to jurisdiction at [17-8] and Exhibit R1 statement of Mr Glenn Lyons at [18] and attachment GL-7.
[13] Exhibit R1, statement of Mr Glenn Lyons attachments at GL-9 to GL-14, Copies of minutes.
[14] Exhibit R3 at [21].
[15] Respondent’s outline of submissions at [5] and see exhibit R3 at [23] – [30].
[16] Respondent’s outline of submissions at [6]-[7].
[17] Respondent’s outline of submissions at [16]
[18] Oxford dictionary.
[19] Merriam Webster Dictionary.
[20] See clause 3.1, paragraph 6 for clarity.
[21] See clause 3.1, paragraphs 2,5,7,8,9,10, and 11.
[22] Retrenchment is defined as to cut down, reduce”, Oxford Dictionary.
[23] Termination, Change and Redundancy Case [1984] 8 IR 34, at pages 52 and 63-64.
[24] Ibid at page 52.
[25] Ibid at page 67.
[26] Ulan Coal Mines Limited v A Honeysett, A Oldfield, C Michaelides, G Atkinson, R Butler and D Dixon and R Murray, M Butler and C Butler v Ulan Coal Mines Limited[2010] FWAFB 7578 at [34].
[27] Szanto v ISS Facility Services Pty Ltd[2013] FWC 3270 at [42].
[28] Ibid.
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