Bernard Terence Bastian Pulle v Commonwealth of Australia acting through the Secretary of the Department of Parliamentary Services
[2011] FWA 7462
•31 OCTOBER 2011
[2011] FWA 7462
The attached document replaces the document previously issued with the above code on 30 October 2011 with a number of minor errors throughout the document being corrected.
Alex Gounis
Associate to Vice President Lawler
Dated 4 November 2011
[2011] FWA 7462 |
|
DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Bernard Terence Bastian Pulle
v
Commonwealth of Australia acting through the Secretary of the Department of Parliamentary Services
(C2010/5258)
VICE PRESIDENT LAWLER | MELBOURNE, 31 OCTOBER 2011 |
Private arbitration under dispute resolution procedure in a workplace agreement - discretion to grant allowance in exceptional circumstances - employee over 70 not receiving superannuation contributions because superannuation fund unable to accept contributions - challenge to discretionary decision to refuse an allowance to redress that situation - extent of powers that may be exercised when there is dispute over the exercise or refusal to exercise a discretion vested in the employer.
Preliminary
[1] This is an application for Fair Work Australia (FWA) to deal with a dispute in accordance with a dispute resolution procedure in a workplace agreement, the Department of Parliamentary Services Union Collective Agreement 2008-2011 (2008 Agreement).
[2] The named respondent in the originating application is the Department of Parliamentary Services (DPS). DPS is not a legal person and the correct respondent is the Commonwealth acting through the Department of Parliamentary Services or, more precisely, the Secretary of the Department of Parliamentary Services. There was no issue taken in this regard at the hearing.
[3] The 2008 Agreement was made under the Workplace Relations Act 1996 (WR Act). Pursuant to transitional provisions, the WR Act continues to apply in relation to this matter, albeit that FWA performs the functions previously performed by the Australian Industrial Relations Commission (AIRC).
[4] In particular, the application must be dealt with in accordance with s.709 of the WR Act. It may be noted that there is not issue taken that steps that, under the terms of agreement, must be taken before the matter is referred to the Commission have not been taken (see s.709(2)).
[5] The 2008 Agreement commenced operation on 30 October 2008. It is convenient to list the predecessor agreements:
Department of Parliamentary Services Certified Agreement 2005-2008 (2005 Agreement) which had been certified on 18 August 2005.
Department of the Parliamentary Library Certified Agreement 2002-2005 (2002 Agreement).
Department of the Parliamentary Library Certified Agreement 2000-2002 (2000 Agreement).
Background
[6] In December 2000 Mr Pulle commenced employment with the Department of the Parliamentary Library (DPL), having responded to a job advertisement that referred to an entitlement to superannuation.
[7] At all material times Mr Pulle was a member of the superannuation fund for Commonwealth employees known as the Public Sector Superannuation Accumulation Fund (PSS). When Mr Pulle’s employment commenced DPL commenced making employer superannuation contributions to PPS on Mr Pulle’s behalf.
[8] On 1 February 2004 DPL and two other parliamentary departments were merged to form the Department of Parliamentary Services. Mr Pulle’s employment transferred to DPS with continuity of employment, that is, with accrued rights and entitlements preserved.
[9] Mr Pulle turned 70 years of age on 6 October 2002. About a week before this, on 27 September 2002 he had received an email from the responsible administrator informing him that “As you will be turning the age of 70 in the next pay period, all your superannuation contributions will cease (this includes employee and employer contribution)”. At that time, the rules of the PPS did not permit it to accept contributions on behalf of an employee who was 70 years or older.
[10] Each of the 2002 Agreement, the 2005 Agreement and the 2008 Agreement contain a clause that confers a discretion on the Secretary to grant an allowance that is over and above the entitlements in the agreement in “exceptional circumstances”. The parties have referred to such an allowance as a “Secretary’s allowance”.
[11] For a portion of the period since 2 October 2002 Mr Pulle received a Secretary’s allowance that compensated him for the monetary value of the superannuation contributions that he would have received if he was younger than 70. The initial grant of a Secretary’s allowance was described as a “retention allowance” and based on a consultant’s recommendation that noted Mr Pulle had “made an extensive case for special recognition” based on his specialised skills in taxation, corporations and superannuation “and to the loss of employer superannuation contributions following his recent 70th birthday”. That allowance was reviewed and increased in October 2004 for the 12 months from 6 October 2004 and was extended again in September 2005 for the period ending 6 April 2006. Each of those extensions was described as a “retention allowance” and was based on recommendations from an intermediate manager that placed reliance only on the usefulness of Mr Pulle’s skills and knowledge in his specialist areas.
[12] Understandably, Mr Pulle was aggrieved by the cessation of his Secretary’s allowance on 6 April 2006 because he was not receiving the benefit of superannuation contributions being received by all other employees of DPS under the age of 70 resulting in him receiving a total remuneration significantly less than the total remuneration received by other employees of DPS in the same classification.
[13] Mr Pulle has been in dispute over the decision to discontinue the Secretary’s allowance, a refusal to grant a further allowance and his total level of remuneration ever since. He pursued that dispute through the dispute resolution procedure in the then current agreement, the 2005 Agreement. That dispute was referred to the AIRC. In Pulle v Department of Parliamentary Services 1 Commissioner Deegan applied the decision of a Full Bench of the AIRC in Stephenson v Senator the Honourable Eric Abetz (Special Minister of State)2 (Stephenson) and held that the AIRC had no jurisdiction to deal with that dispute. Mr Pulle appealed that decision. Pursuant to transitional legislation, a Full Bench of FWA dealt with that appeal and refused leave to appeal (Pulle v Commonwealth of Australia acting through the Department of Parliamentary Services3).
[14] The Full Bench noted that Mr Pulle advanced a number of grounds including that:
“... the Full Bench decision in Stephenson was wrong or could be distinguished, that the application under the old agreement gave rise to an accrued right that was protected by s.8(c) of the Acts Interpretation Act 1901, there was an implied term in the old agreement that applications under it should be determined and that a relevant equitable estoppel had arisen to prevent the Department from objecting to the application being determined. Reliance was also placed on the Age Discrimination Act 2004.” 4
[15] The Full Bench rejected those arguments:
“[12] As we have indicated, Mr Pulle’s application is cast in terms of a challenge to the exercise of a discretion residing in the Parliamentary Secretary under cl.179 of the [2005 Agreement]. That clause provides for the payment of an allowance or other payment in extraordinary circumstances. A similar provision appears in cl.197 of the [2008 Agreement]. Clause 197 reads where relevant:
“The Secretary may, in exceptional circumstances, determine other pay and conditions for employees above the provisions of this agreement.”
[13] Clause 197 provides that in exceptional circumstances the Secretary may decide to grant other payments. Presumably such payments might be by way of or in substitution for the retention allowance which Mr Pulle seeks.
[14] It appears to us that the Commissioner’s decision was based squarely, and properly, on clear Full Bench authority in Stephenson. On the submissions we have heard and read we do not consider it appropriate to re-examine Stephenson in this case. In considering whether to grant leave to appeal it is also relevant to consider whether Mr Pulle has an avenue of potential redress under the current agreement. In our view Mr Pulle can seek a favourable decision from the Secretary under cl.197 of the current agreement and, to that extent, he has an equivalent remedy.
[15] It is appropriate, however, that we record our view that a real question arises as to whether a dispute about the exercise or failure to exercise the discretion conferred by cl.179 of the old agreement or cl.197 of the current agreement constitutes a dispute of the kind which can be settled under the relevant dispute settlement provisions. If it were such a dispute, the further question would arise of what powers could be exercised in settlement of the dispute. Clearly the resolution of those issues involves significant legal questions. Be that as it may, it seems to us that Mr Pulle has an avenue of potential redress under the [2008 Agreement] which militates against the grant of leave to appeal, particularly when the decision under appeal was based directly on relevant Full Bench authority.”
(underline emphasis added)
[16] The Full Bench identified an “avenue of potential redress” for “payments [that] might be by way of or in substitution for the retention allowance [granted under clause 197] which Mr Pulle seeks”, namely, by Mr Pulle raising and pursuing his challenge to DPS’s refusal to make the payments he seeks under the dispute resolution procedure in the 2008 Agreement (2008 DRP). Mr Pulle raised such a dispute and it is that dispute which I am arbitrating pursuant to the 2008 DRP.
[17] The rules of the PPS were varied in about 2007 to permit “employer mandated contributions” to be made for employees between the age of 70 and 75 years. That change did not assist Mr Pulle. First, because by that time he was older than 75 years of age and secondly because DPS was unable to make “employer mandated contributions” for technical reasons to do with the definition of that expression and the fact that it was the Workplace Authority Director who approved the relevant agreement.
[18] Notwithstanding that Mr Pulle was informed that employer superannuation contributions on his behalf would cease when he turned 70, it now seems that DPS in fact continued to make contributions to PPS on behalf of Mr Pulle at the statutory minimum level of 9% (an amount less than the employer contributions to which employees were entitled under the applicable collective agreement) because it was obliged to do so by the Superannuation Guarantee (Administration) Act 1992 (SGA Act) - notwithstanding that PSS was not entitled to retain those contributions for Mr Pulle’s benefit. PSS remitted those contributions to consolidated revenue. That is, the Commonwealth retained the superannuation guarantee contributions paid by DPS to PPS on Mr Pulle’s behalf - in effect, the Commonwealth paid those amounts to itself.
Characterisation of the dispute
[19] DPS has raised a jurisdictional objection to Mr Pulle’s present application. When a jurisdictional challenge of the sort now raised by the Department falls to be considered, the authorities emphasise the importance of properly characterising the dispute.
[20] The initiating application filed with the tribunal identifies the subject matter of the dispute as:
“The dispute relates to the underpayment of remuneration for the period 6 April 2006 to 29 October 2008 and a detailed description as set out in the minute to the Secretary on 1 March 2010 (Attachment C) and Attachment D.”
[21] Those attachments are lengthy and cover the full history of Mr Pulle’s attempts to obtain an ongoing Secretary’s allowance that compensates him for the superannuation contributions that he would have received (through PSS) if he were younger than 70 years of age.
[22] The period of “underpayment” addressed in the originating application is 6 April 2006 to 29 October 2008. However, it was clear from the totality of the originating application and the oral submissions that the dispute relates to the whole of the period from 6 October 2002 when he turned 70 and whether Mr Pulle should have received a Secretary’s allowance to redress the non-receipt of employer superannuation contributions.
[23] Clause 197 of the 2008 Agreement is fundamental to the present dispute. It provides:
“Other payments
197 The Secretary may, in exceptional circumstances, determine other payments and conditions for employees above the provisions of this Agreement. An employee must not be disadvantaged by a determination made under this clause. Where the Secretary makes a determination under this clause, the matter will be referred to the DPS Consultative Forum for information, however this advice will not involve the provision of information that identifies an individual employee.”
[24] Following the decision of the Full Bench, and acting on its reasons that he had a “potential avenue of redress” by seeking an allowance under clause 197 of the 2008 Agreement to address the disadvantage represented by his non-receipt of superannuation contributions received by other employees in his classification, Mr Pulle made a claim in a dispute notification addressed to the Secretary of DPS and dated 1 March 2010.
[25] Mr Pulle’s notification of 1 March 2010 does not expressly seek a Secretary’s allowance pursuant to clause 197 of the 2008 Agreement. However, that is the only basis upon which that claim could be granted and it is clear that DPS understood Mr Pulle’s notification of 1 March 2010 to involve a claim for a Secretary’s allowance pursuant to clause 197 that fully redressed the non-receipt of superannuation contributions since 6 April 2006, a matter acknowledged on behalf of DPS during supplementary oral argument.
[26] There is no document formally recording a decision by the Secretary in response to Mr Pulle’s notification of 1 March 2010. Rather, the Secretary “authorised the Parliamentary Librarian and [Mr Boyer, the Acting Director of HR Services] to act on his behalf in relation to [Mr Pulle’s claim].” 5
[27] On 14 May 2010 the Acting Director of HR Services sent a minute to Mr Pulle entitled “Response to Notification of Dispute”. That minute opens by referring to Mr Pulle’s notification of 1 March 2010 (and to two other subsequent and related minutes) “regarding a dispute in relation to the cessation of your retention allowance”. The minute continues:
“DPS position on this matter
2. At the outset, I would like to state that DPS’s position in regard to this matter is that DPS acted in accordance with the relevant legislation and industrial agreements in ceasing your retention allowance with effect from 6 April 2006. Accordingly, DPS does not consider that you are owed monies from 6 April 2006 as arrears through cessation of your retention allowance.”
[28] DPS accepted that Mr Boyer’s minute of 14 May 2010 should be interpreted as a decision, properly attributable to the Secretary, to reject Mr Pulle’s claim for a Secretary’s allowance under clause 197 of the 2008 Agreement to compensate him for not receiving superannuation contributions since 6 April 2006 (Rejection Decision).
[29] The dispute may best be summarised as a dispute over the Rejection Decision and whether Mr Pulle should receive a Secretary’s allowance pursuant to clause 197 of the 2008 Agreement to redress what he contends are exceptional circumstances that have led to him being deprived of the benefit of employer superannuation contributions received by all other employees in his classification and such that he should be compensated for those lost contributions since he turned 70 subject only to bringing to account the Secretary’s allowance he received in the period 6 October 2002 to 6 April 2006 (Dispute).
DPS’s jurisdictional objection
[30] It will be noted that the period in respect of which Mr Pulle claims to have been disadvantaged through the non-receipt of superannuation contributions and a refusal to provide a Secretary’s allowance to address that disadvantage (or, in relation to at least part of the period prior to October 2002, the provision of an inadequate allowance) is a period in which a succession of statutory collective agreements operated and a period that is ongoing.
[31] The first question that arises is whether the Dispute is a dispute of the kind which can be settled under the 2008 DRP having regard to the provisions of Division 5 of Part 13, and in particular s.709(1), of the WR Act?
[32] DPS contends that to the extent that Mr Pulle is making a claim about the non-receipt of superannuation contributions to which he was entitled during the period of operation of either the 2002 Agreement or the 2005 Agreement, FWA has no jurisdiction to deal with the Dispute because those Agreements have ceased to operate. DPS relies upon the decision of the Full Bench in Stephenson to support that contention.
[33] Section 709(1) of the WR Act provides:
“709 Application
(1) A person may apply to the Commission to have a dispute resolution process conducted by the Commission under this Division in relation to a matter or matters in dispute if:
(a) the dispute is one that, under the terms of a workplace agreement, may be resolved using a dispute resolution process conducted by the Commission; ...”
(emphasis added)
[34] DPS contends that, to the extent the Dispute raised by Mr Pulle is a dispute over alleged entitlements, the jurisdictional restriction in s.709(1) prevents FWA from dealing with the Dispute in respect of alleged entitlements that accrued during the currency of the 2002 Agreement or the 2005 Agreement because there is nothing in the terms of the 2008 Agreement that allows for the resolution of disputes over alleged entitlements that accrued under the 2002 or 2005 Agreements. DPS contends that this position is supported by the decision of the Full Bench in Stephenson.
[35] In any event, in my view it is strictly incorrect to characterise what Mr Pulle seeks as confined to “entitlements”. Indeed, it is precisely because it may be held that Mr Pulle did not have an explicit “entitlement” to receive superannuation contributions after he turned 70 that he sought a Secretary’s allowance. Before it is granted, such an allowance is not an “entitlement” but, rather, a matter of discretion.
[36] There is nothing in the broad language of clause 197 that confines an allowance granted pursuant to that clause to “exceptional circumstances” that arose during the operation of the 2008 Agreement. In my view, the discretion conferred on the Secretary by clause 197 is very broad indeed and, on the proper construction of that clause, could be an allowance to redress “exceptional circumstances” that existed before the commencement of the 2008 Agreement but had not been adequately addressed by that time. Any such allowance will still be a “payment ... above the provisions of this [2008] Agreement”. Thus, there is nothing in the language of clause 197 that prevents an employee like Mr Pulle from seeking, during the life of the 2008 Agreement, an exercise of the discretion in clause 197 to address an inequity that arose before the commencement of the 2008 Agreement, particularly when that inequity arises from an ongoing state of affairs that continued after the commencement of the 2008 Agreement. That is the situation here.
[37] Section 709(1) of the WR Act directs attention to the terms of the workplace agreement. It is convenient to set out the whole of the 2008 DRP:
“Procedures for preventing and settling disputes
19 The procedures for preventing and settling disputes concerning this Agreement are set out in clauses 20 to 31. At any time, a DPS employee may seek review pursuant to section 33 of the Parliamentary Service Act 1999 to the extent allowed under that Act.
20 The parties to a dispute bound by this Agreement must ensure that work continues normally and that work practices shall be in accordance with this Agreement, except where employees would be placed in a genuinely unsafe situation. Should this be the case, employees agree to perform alternative duties.
21 It is the responsibility of the parties bound by this Agreement to take reasonable and genuine steps to prevent or settle disputes by discussion within the part of DPS where the dispute arises and to do so within 15 working days of that dispute arising. If a matter applies across all or most of DPS, such discussion may take place through the DPS Consultative Forum, or by some other mechanism agreed between the parties to this Agreement.
22 Where the dispute is not resolved as described in clause 21, the parties to the dispute may agree to appoint a suitably qualified and unbiased person or persons to resolve the matter by conciliation or mediation. The parties to the dispute will approach this process in the spirit of good faith in an attempt to reach a resolution.
23 In the event that the parties to the dispute are unable to resolve a dispute in a manner consistent with clause 21 or 22, the specific matter(s) in dispute will be:
(a) referred to the AIRC by either party to the dispute; or
(b) reviewed pursuant to section 33 of the Parliamentary Service Act 1999, to the extent allowed under that Act.
24 Where a disputed matter is subject to an application by a relevant employee under section 33 of the Parliamentary Service Act 1999, or has been dealt with to finality under that section, it will not be further considered under these provisions.
25 Unless the parties to the dispute agree to the contrary, the AIRC shall, in responding to the matter, have regard to whether a party has applied these procedures.
26 For the purposes of clause 23(a), the AIRC may, unless otherwise agreed in writing by the parties to a particular dispute, do all things necessary for the just resolution or determination of the dispute and may conduct any or all of the following dispute resolution processes:
(a) conferencing;
(b) mediation;
(c) assisted negotiation;
(d) neutral evaluation;
(e) case appraisal (which may include recommending referral of the matter to another forum or an alternative process which is, in the view of the AIRC more appropriate);
(f) conciliation;
(g) arbitration.
27 If arbitration is necessary the AIRC may exercise the procedural powers in relation to hearings, witnesses, evidence and submissions which the AIRC considers are necessary to make the arbitration effective, such as:
(a) conduct a hearing;
(b) take evidence on oath or affirmation;
(c) summon to appear before the AIRC any party to the dispute, witnesses or persons whose presence the AIRC believes would assist in the resolution of the dispute;
(d) compel the production of documents and/or materials that relate to the dispute;
(e) give directions in relation to procedural matters arising in the dispute resolution process;
(f) arbitrate and determine the dispute (including, where appropriate, in the absence of any party to the dispute or person who has been notified of the dispute or who has been summonsed to appear);
(g) hold a ballot of affected employees where in the opinion of the AIRC such a ballot may assist in the resolution of the dispute; or
(h) have recorded and transcribed proceedings before the AIRC.
28 In carrying out arbitration the AIRC will:
(a) apply the rules of natural justice, and ensure that the parties to the dispute have a reasonable opportunity to be heard;
(b) have regard to the AIRC’s established principles for dealing with disputes about the actions of an employer and precedent decisions, including any precedent decisions in relation to the interpretation or implementation of this Agreement;
(c) act according to equity, good conscience and consider the merits of the case without regard to technicalities and legal form; and
(d) provide the outcome of any arbitration in writing and accompanied by written reasons unless agreed between the parties to the dispute that written reasons are not required.
29 Subject to any appeal, any decision or direction the AIRC makes in relation to a dispute will be accepted by all affected persons, and the parties to the dispute agree to comply with any direction or decision, be it final or procedural.
30 Employees may nominate another person or body to represent them at any stage in relation to the dispute settlement process.
31. An employee preparing for or attending industrial proceedings pursuant to subclause 23(a) or clause 30 will receive full pay.”
(underline emphasis added)
[38] The only relevant jurisdictional limitation in the 2008 DRP is that the dispute must be a dispute “concerning” the 2008 Agreement. Mr Pulle has sought an exercise of the discretion in clause 197 of the 2008 Agreement to make a payment that compensates him for the total loss he has suffered though not receiving the full employer superannuation contributions that would have been received by him if his age was less than 70 years. The present Dispute arises because the Secretary of the DPS has refused to authorise such a payment, or any further payment at all, under clause 197 of the 2008 Agreement. The Dispute is a dispute over the proper exercise of the discretion conferred by clause 197 of the 2008 Agreement as, as such, is a dispute “concerning” clause 197 of the 2008 Agreement. It does not lose that character simply because the allowance sought by Mr Pulle under clause 197 extends to compensation for superannuation payments not received during the currency of prior agreements.
[39] If I am correct in this analysis then the decision in Stephenson is irrelevant. However, in the event that I am wrong, I should make the following observations.
[40] The decision in Stephenson was based on the Full Bench’s conclusion as to the effect of s.170LX of the WR Act which provided that a certified agreement ceases to be in operation, and can never operate again in relation to an employee, if its nominal expiry date has passed and it is replaced by another certified agreement. The Full Bench held that s.170LX was “a constraint or limitation on the Commission’s jurisdiction to exercise the private arbitration power arising from the procedures in a certified agreement for preventing and settling disputes” 6 and held that:7
“[I]f a certified agreement empowering the Commission to settle disputes over the application of the agreement ceases to operate because of the provisions of s.170LX of the Act, then the Commission no longer has jurisdiction to exercise that private arbitration power in the agreement.”
[41] The effect of the decision in Stephenson is that, in the absence of express words in the successor agreement preserving the operation of the predecessor agreement in relation to disputes where the dispute resolution process has started but not finished, jurisdiction in relation to such ‘part heard’ disputes is extinguished upon (what will usually be) the accident of the timing of the commencement of the successor agreement. An arbitral hearing in relation to a dispute over outstanding entitlements could be in final submissions but the tribunal would be obliged to cease hearing it. It stands to reason that it is unlikely that Parliament intended such an outcome. The correctness of Stephenson is open to doubt. The Full Bench in Stephenson, when determining the effect of s.170LX, failed to consider the fundamental principle of construction that a statute is presumed not to extinguish accrued rights in the absence of express words. 8 Under the common law it is trite that the termination of a contract prevents the creation of new rights and liabilities under the contract but does not prevent a party from utilising ‘procedural’ clauses under the contract, typically an arbitration clause, to vindicate rights that accrued under the contract before its termination. The principle of construction to which I have referred suggests that s.170LX and its equivalents in subsequent versions of the WR Act and the Fair Work Act 2009 (FW Act)9 should be construed as operating in the same way and that the ‘operation’ with which s.170LX and its equivalents are concerned is the operation in terms of the creation of new rights and liabilities and, in the absence of express words, does not prevent the pursuit of accrued rights under a dispute resolution procedure in an agreement that has ceased to ‘operate’ pursuant to s.170LX or one of its equivalents. Moreover, the Full Bench in Stephenson failed to consider whether s.51(xxxvi) of the Constitution would be offended by its construction (but not the narrower construction identified above) because agreement rights are a species of property and a provision that acquires or extinguishes those rights other than on just terms is unconstitutional and, if possible, should be read down to avoid that outcome.
[42] It should be noted that in its decision on Mr Pulle’s earlier appeal the Full Bench refrained from explicitly endorsing the decision in Stephenson. Rather it did not consider it “appropriate” to re-examine Stephenson and this, clearly enough, primarily because it considered that Mr Pulle had an “avenue of potential redress under the [2008 Agreement]” 10.
[43] As a single member, I regard myself as bound by Stephenson until such time as it is reconsidered by a Full Bench or until an appropriate court disapproves it or makes a decision inconsistent with it. However, as noted, I am not persuaded that Stephenson is relevant in the present case.
[44] I note that Mr Pulle placed reliance on s.8(c) and s.46 of the Acts Interpretation Act 1901. The principle of construction to which I have referred finds expression in s.8(c) in relation to an Act that repeals another Act. Section 46 of the Acts Interpretation Act 1901 applies the same rule to legislative instruments - legislative instruments that are neither legislative instruments for the purposes of the Legislative Instruments Act 2003 nor a rule of court - that repeal legislative instruments of that type. Collective agreements given statutory effect would seem to be instruments of that sort suggesting that a provision of a certified agreement, workplace agreement or enterprise agreement made under the WR Act or the FW Act will not be taken to extinguish rights that accrued under a predecessor agreement in the absence of express words to that effect. However, those provisions are not relevant to the construction of s.170LX and its equivalents because they are an Act operating on a legislative instrument. Neither s.8(c) nor s.46 is concerned with that permutation (albeit that it would be peculiar that there could be one outcome in relation to an Act repealing and Act and a legislative instrument repealing a legislative instrument but a different outcome in relation to an Act repealing an legislative instrument).
Approval of the 2011 Agreement does not affect jurisdiction
[45] It should be noted that on 23 September 2011 FWA approved the Department of Parliamentary Services Enterprise Agreement 2011 (2011 Agreement). That agreement, an enterprise agreement made under the FW Act, replaced the 2008 Agreement. However, there is no question of FWA’s jurisdiction in the relation to the present dispute brought under the 2008 Agreement being extinguished on the basis outlined in Stephenson. This is because item 7 of Schedule 3 to the Transitional Act, which commenced on 1 July 2009, expressly preserves accrued rights or liabilities when a “transitional instrument” terminates or ceases to apply. That item provides:
“7 No loss of accrued rights or liabilities when transitional instrument terminates or ceases to apply
(1) If a transitional instrument terminates, or ceases to apply in relation to a person, that does not affect:
(a) any right or liability that a person acquired, accrued or incurred before the transitional instrument terminated or ceased to apply; or
(b) any investigation, legal proceeding or remedy in respect of any such right or liability.
(2) Any such investigation, legal proceeding or remedy may be instituted, continued or enforced as if the transitional instrument had not terminated or ceased to apply.
(3) This item has effect subject to a contrary intention in this Act or in the FW Act.”
[46] The expression “transitional instrument” is defined in item 2 of Schedule 2 by reference to subitems 2(3) and (4) of Schedule 3. Subitem 2(3) defines “WR instruments” to include a workplace agreement made under the WR Act as a transitional instrument. Subitem 2(3) provides:
“(3) The following WR Act instruments become transitional instruments on the WR Act repeal day:
(a) each WR Act instrument (other than a Division 2B State reference transitional award) that was in operation immediately before the WR Act repeal day;
(b) each workplace agreement or workplace determination made before the WR Act repeal day but that had not yet come into operation by that day;
(c) any other WR Act instrument that, although not in operation immediately before the WR Act repeal day, could come into operation after that day because of an instrument interaction rule.”
[47] The WR Act repeal day was 1 July 2009. The 2008 Agreement, a workplace agreement, was in operation immediately before that day and, as such, is a “transitional instrument”. There is not contrary intention in either the Transitional Act or in the FW Act.
[48] It follows that item 7 of Schedule 3 to the Transitional Act preserves the tribunal’s jurisdiction in relation to the present dispute, albeit that it is equally clear that neither the 2002 Agreement nor the 2005 Agreement were in operation in the relevant sense immediately before the WR Act repeal day and, accordingly, they are not “transitional instruments” to which item 7 of Schedule 3 in Part 2 of the Transitional Act applies.
[49] The commencement of the operation of the 2011 Agreement did not extinguish the tribunal’s jurisdiction to deal with the Dispute.
The Applicant’s arguments
[50] Mr Pulle placed reliance on numerous clauses in the 2008 Agreement. It is convenient to set out a number of those clauses:
“Purposes of the Agreement
...
4 The purposes of the Agreement are:
(a) to provide and give effect to fair remuneration and working conditions for all DPS employees;
...
Closed Agreement
6 From the commencement of this Agreement, a party to the Agreement or an employee whose employment is subject to the Agreement shall not pursue further claims for terms and conditions of employment that would have effect during the period of operation of this Agreement, except where consistent with the terms of this Agreement.
...
Non-discriminatory employer
32 DPS does not discriminate on the basis of race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction, social origin or whether or not a person is, or is not, a member of a union. Nothing in this Agreement is intended to discriminate against an employee on any of these grounds. Clause 32 does not prevent any different treatment that is specifically exempted under Commonwealth anti-discrimination legislation.
...
Salary on promotion/engagement/transfer
206 Persons commencing with DPS, or being promoted from within DPS, will generally be paid at the bottom of the salary range for the relevant classification. However, the Secretary may approve a higher salary in the relevant classification. This can be done before commencement or in the first six months of engagement or promotion. In considering such proposals the Secretary will consider, but not be restricted to, the relevant guidelines at Appendix D. Payment of any resulting higher rate will be prospective.
...
Reduction in salary
210 A reduction in salary will only occur under sub-section 23(4) of the Parliamentary Service Act 1999, under the Determinations or as a result of the processes set out in Appendix G.
...
Superannuation
215 For an employee who exercises superannuation choice, DPS will maintain the maximum basic contribution for designated employers as specified for employees who are members of the Public Sector Scheme Accumulation Plan.
...
217 Employees who are aged 75 or over who meet legislative requirements, including the work test, are eligible to become members of the Public Sector Scheme Accumulation Plan and DPS will make contributions in accordance with clause 215.”
[51] Mr Pulle advanced a series of arguments to the effect that terms of the 2008 Agreement other than clause 197 allowed FWA to deal with his claims in respect of his alleged entitlements that arose under the 2002 and 2005 Agreements and required the Secretary to grant him an allowance pursuant to clause 197.
[52] Mr Pulle contended that clause 4 was intended to be an operative clause that separately created entitlements or obligations. I disagree. Clause 4 is an expression of purpose and aspiration - it contains precatory words. I am not satisfied that clause 4 is an operative clause. However, this does not mean that the words of clause 4(a) have no work to do. Where an operative clause of the Agreement is ambiguous, a clause like clause 4 may be used to assist in preferring one available interpretation over another. Clause 4 may also bear upon how a discretion that is otherwise enlivened ought be exercised.
[53] Mr Pulle argued that clause 6 allowed FWA, under the 2008 Agreement, to reach back and deal with claims in respect of alleged entitlements that accrued while each of the 2002 Agreement and 2005 Agreement were in operation. I cannot accept that argument. Clause 6 is a relatively standard ‘no extra claims clause’ and is intended to prevent new claims by the bargaining parties during the nominal life of the 2008 Agreement. There is nothing in the language of clause 6 that gives it the operation for which Mr Pulle contends. I might also note that clause 6 does not operate so as to prevent Mr Pulle seeking a discretionary Secretary’s allowance under clause 197 of the 2008 Agreement.
[54] Mr Pulle contended that the Rejection Decision involved a breach of the prohibition against discrimination in clause 32 of the 2008 Agreement. An equivalent clause appeared in both the 2005 Agreement and the 2002 Agreement. That is, the DPS (and the DPL before it) has been under an agreement obligation not to discriminate against Mr Pulle throughout the period in which Mr Pulle complains about non-receipt of superannuation entitlements.
[55] Putting aside the last sentence of clause 32, I have no doubt that the refusal of the Secretary to grant the allowance sought by Mr Pulle is a decision that has the substantive effect of discriminating against Mr Pulle on the basis of his age contrary to that clause. Superannuation forms part of the total remuneration of all DPS employees. The only reason that Mr Pulle is not receiving the full benefit of employer superannuation contributions received by all other DPS employees under the age of 70 is because, throughout the relevant period, Mr Pulle was above the age of 70. On any view, this involves discrimination on the basis of age within the approach endorsed in the High Court 11.
[56] However the last sentence of clause 32 is important: “Clause 32 does not prevent any different treatment that is specifically exempted under Commonwealth anti-discrimination legislation.” Age-based discrimination is prohibited by the Commonwealth Age Discrimination Act 2004 (AD Act). It is the relevant “Commonwealth anti-discrimination legislation”. The relevant exemptions are in sections 37 and 38 of the AD Act. Those sections relevantly provide:
“37 Superannuation and insurance
(1) Subsections (2) and (3) apply to the following:
(a) an annuity;
(b) a life insurance policy;
(c) a policy of insurance against accident or any other policy of insurance;
(d) membership of a superannuation or provident fund;
(e) membership of a superannuation or provident scheme.
(2) This Part does not make it unlawful for a person to discriminate against another person, on the ground of the other person's age:
(a) in respect of the terms or conditions on which the annuity, policy or membership is offered to, or may be obtained by, the other person; or
(b) by refusing to offer the annuity, policy or membership to the other person;
if the condition in subsection (3) is satisfied.
(3) The condition is satisfied if:
(a) the discrimination:
(i) is based upon actuarial or statistical data on which it is reasonable for the first-mentioned person to rely; and
(ii) is reasonable having regard to the matter of the data and other relevant factors; or
Note: The Commission and the President can require the disclosure of the source of the actuarial or statistical data (see section 54).
(b) in a case where no such actuarial or statistical data is available and cannot reasonably be obtained - the discrimination is reasonable having regard to any other relevant factors.
38. Superannuation legislation
(1) This Part does not make unlawful anything done by a person in direct compliance with:
(a) a Commonwealth Act (or a provision of a Commonwealth Act) relating to superannuation; or
(b) a regulation or any other instrument (or a provision of a regulation or instrument) that:
(i) relates to superannuation; and
(ii) is made under a Commonwealth Act.
(2) This Part does not make unlawful anything done by an exempt public sector superannuation scheme (within the meaning of the Superannuation Industry (Supervision) Act 1993) in accordance with an Act of the Commonwealth, a State or a Territory, or a trust deed, by or under which the scheme is established.”
[57] The exemption in s.37 only operates if the condition in s.37(3) is satisfied. On the material before me the exemption in s.37(3) is not made out but I do not regard it as fair, given the way the hearing was conducted, to make any finding against DPS on that basis.
[58] While it is technically arguable that, on the material before me, neither of the exemptions in s.38 is made out in relation to the Rejection Decision itself, it is tolerably clear those exemptions were intended to facilitate differential treatment by superannuation funds of their members on the basis of age and to ensure that an employer making contributions as required by legislation and the rules of the relevant fund would not, without more, breach the AD Act.
[59] Mr Pulle relied on clause 210 to contend that the cessation of his Secretary’s allowance on 6 April 2006 involved a reduction in salary contrary to clause 210. I cannot accept that argument. The Secretary’s allowance was not part of his “salary” in the relevant sense. Part 4 of the 2008 Agreement is entitled “Classification structure, pay rates and associated matters” and is constituted by clauses 203 to 235. Table 1 of Appendix A is entitled “Rates of Pay” and specifies the base rates of pay (i.e. not including superannuation) for the various classifications. Separate provision is made for broadbanding and associated rates of pay. Clause 213 provides that details of “salary rates” for broadbanded classifications can be found at Appendix A, Table 2. It is clear that a reference to “salary” or “rates of pay” in the 2008 Agreement is a reference to the salary or rates of pay of employees excluding superannuation.
[60] Mr Pulle also sought relief based not on a challenge to the Rejection Decision itself but independently on the basis of equitable estoppel and breach of his contract of employment. Fair Work Australia is not a court and has no jurisdiction to entertain equitable or contractual causes of action. This is not to say that the existence of an equitable estoppel or a valid contractual claim can never be relevant to a dispute being dealt with under a dispute resolution procedure in a statutory collective agreement. Rather, at all times it is the terms of the agreement itself (subject, of course, to any limitations in the governing legislation) that will determine whether claims on such a basis can be dealt with under a dispute resolution procedure in a statutory collective agreement. In this case, I can see nothing in the 2008 Agreement which allows me to grant relief independently on the basis that there is an equitable estoppel or a breach of Mr Pulle’s contract of employment.
[61] Mr Pulle also advanced an argument that the Rejection Decision was wrong and should be overturned. It is to that argument that I now turn.
Basis for interfering with a refusal to exercise of the discretion in clause 197
[62] I accept that clause 197 confers a broad discretion on the Secretary as indicated by the use of the word “may” in that clause. There is an issue as to the basis upon which this tribunal, acting as private arbitrator of the Dispute, can interfere in the Rejection Decision not to grant the allowance sought by Mr Pulle.
[63] The DPS does not submit that the exercise of discretion under clause 197 is unexaminable. It concedes that FWA could interfere with the Rejection Decision if the evidence demonstrated that it was arbitrary or capricious. It submitted that Mr Pulle would need to demonstrate an error of the sort identified in House v The King 12. Those principles are concerned with the identification of error by an appeal court in a discretionary decision by a judge or judicial officer at first instance. In my view, the relevant principles are those identified in Australian Federated Union of Locomotive Enginemen v State Rail Authority of New South Wales (the XPT Case)13.
[64] In the XPT case Full Bench laid down the principles pursuant to which the tribunal can interfere in an exercise of managerial prerogative. The Full Bench said: 14
“It seems to us that the proper test to be applied and which has been applied for many years by the Commission is for the Commission to examine all the facts and not to interfere with the right of an employer to manage his own business unless he is seeking from the employees something which is unjust or unreasonable. The test of injustice or unreasonableness would embrace matters of safety and health because a requirement by an employer for an employee to perform work which was unsafe or might damage the health of the employee would be both unjust and unreasonable. The ACTU submitted to us that we should apply the test as to whether the demand of the employer was just and equitable having regard to all the circumstances. It is our view that under any given set of facts the test suggested by the ACTU would not lead to a different decision from the test which the Commission has applied over time. Accordingly in reaching our decision we have approached the matter from the point of view of making a judgment whether the request of the SRA that the XPT be manned by one man is unjust or unreasonable.”
[65] In the context of award making pursuant to the conciliation and arbitration power, the High Court in Re Cram: Ex parte N.S.W. Colliery Proprietors' Association Ltd 15, made it clear that whilst there was jurisdiction to deal with matters long regarded as managerial prerogative, “an industrial tribunal should exercise caution before it makes an award in settlement of a dispute where that award amounts to a substantial interference with the autonomy of management to decide how the business enterprise shall be efficiently conducted.”16
[66] I recognise that the question of whether an exercise of the prerogative of management to give lawful and reasonable directions to employees, the issue at the heart of the XPT case, is not identical to the question of whether or not a discretion of the sort contained in clause 197 should or should not be exercised in a particular way. However, both concern the exercise of a managerial discretion and, in my view, the principles in the XPT case provide proper guidance as to whether a refusal to exercise the discretion conferred by clause 197 should be interfered with.
[67] I proceed on the basis that, as private arbitrator of the present dispute, I should exercise caution and not interfere in the Rejection Decision unless I am satisfied that it is unjust or unreasonable.
What powers may be exercised in settlement of the Dispute?
[68] A related question is the question of what powers may be exercised in settlement of the Dispute once it is found to be within jurisdiction. That question was raised in terms by the Full Bench in Mr Pulle’s earlier appeal. The purpose of a private arbitration under a dispute resolution procedure in an agreement is to settle the dispute through an arbitral determination that will be binding on the parties (subject to any right of appeal). The question raised by the Full Bench equates to asking what restrictions exist on the range of possible determinations that may be made to settle a dispute once it is found to be within jurisdiction.
[69] The relevant statutory provisions were summarised by the Full Bench in CPSU v University of New South Wales 17:
“[5] Part 13 of the Act deals with dispute resolution. Division 5 of Part 13 deals with the Commission’s function of conducting a dispute resolution process under a workplace agreement. Section 709, which is in Division 5, permits an application to be made to the Commission to conduct a dispute resolution process where a workplace agreement allows it and if all necessary steps have been taken. The Commission’s powers in dealing with such an application are set out in s.711, which reads:
“711 Commission’s powers
(1) In conducting the dispute resolution process under this Division, the Commission has, subject to subsection (2), the functions and powers:
(a) given to it under the workplace agreement; or
(b) otherwise agreed by the parties.
(2) The Commission does not have the power to make orders.
(3) The Commission must, as far as is practicable, act:
(a) quickly; and
(b) in a way that avoids unnecessary technicalities and legal forms; and
(c) if the parties have agreed, either in the workplace agreement or otherwise, that an aspect of the process is to be conducted in a particular way—in accordance with that agreement.
(4) Subdivision B of Division 4 of Part 3 of this Act does not apply in relation to the conduct of the dispute resolution process by the Commission under this Division.”
[6] As is apparent s.711(1) provides that the Commission has the functions and powers given to it under the workplace agreement in question or otherwise agreed by the parties. Section 711(2) provides that the Commission does not have the power to make orders. Reference should also be made to s.353 which deals with dispute resolution provisions in workplace agreements. Section 353(1) reads:
“353 Workplace agreement to include dispute settlement procedures
(1) A workplace agreement must include procedures for settling disputes (dispute settlement procedures) about matters arising under the agreement between:
(a) the employer; and
(b) the employees whose employment will be subject to the agreement.” ”
[70] It is clear that the power of the private arbitrator is limited by the terms of the governing legislation and the terms of the agreement.
[71] It is necessary to consider the restriction in s.711(2). The meaning of the term “order” in an Act may vary according to context 18. In my view the term “order” in s.711(2) of the WR Act must be given a narrow construction. This is consistent with the approach of the Full Bench in University of Western Sydney v Fletcher19. It cannot be open to doubt that the prohibition in s.711(2) on the Commission (now FWA) making an “order” does not prevent the tribunal acting as a private arbitrator if it is empowered to do so by the agreement. Any construction of s.711(2) that prevented arbitration where this was provided for in a dispute resolution procedure would be inimical to the clear legislative purpose of Part 13 of the WR Act (indeed, it is tolerably clear that arbitration is available under the model dispute resolution procedure in Division 3 of Part 13 provided the parties consent to arbitration20). The outcome of such an arbitration conducted pursuant to a dispute resolution procedure in a workplace agreement is not on “order” enforceable as such but, rather, a determination that is binding on the parties by virtue of the fact that they are bound by the agreement itself. That is, the enforcement of such a determination is not an enforcement of an “order” but, rather, involves an enforcement of the dispute resolution procedure in the agreement.
[72] I have already set out the dispute resolution procedure at paragraph [37] above. Putting aside clause 27(f), the balance of clause 27, to the extent that it is concerned with the tribunal’s powers, is concerned with the procedural powers of the tribunal as a private arbitrator. Clause 27(f) empowers the tribunal to “arbitrate and determine the dispute” but does not otherwise specify the powers that may be exercised to “determine” the dispute. Clause 28 and, in particular, paragraphs (b) and (c), are relevant and have been applied by me. However, again, clause 28 does not explicitly specify the power that may be exercised to “determine” the dispute.
[73] In R v Commonwealth Court of Conciliation & Arbitration, Ex parte Broken Hill Proprietary Co. Ltd 21Griffiths CJ rejected the contention of the President of the Commonwealth Court of Conciliation and Arbitration, in relation to an industrial dispute under the Commonwealth Conciliation and Arbitration Act 1904, that “in settling the dispute I have power to do anything in pursuance of the Act that may settle the dispute”. Griffiths CJ held:22
“I cannot assent to that assertion of power in those terms. Sec. 38, par. (u), of the Act authorizes the Court to give all such directions and do all such things as it deems necessary or expedient in the premises. I apprehend that those words empower the President to deal with all matters incidental and ancillary, provided they are within the ambit of the dispute submitted to him. But the Court cannot of its own motion give directions in a matter not substantially involved in or connected with the disputes submitted to it.”
[74] This approach was adopted by the Full Bench in Abigroup Contractors Pty Ltd v CFMEU 23, a case concerned with a decision made by a single member of FWA under the dispute resolution procedure in a workplace agreement made under the WR Act:
“[16] Upon making his finding the Commissioner turned his mind to the remedy to be afforded. Because cl 10.2(f) of the Agreement provided that the “AIRC may exercise its conciliation and/or arbitration powers as appropriate” he seemed to consider that he was at large to provide such relief as seemed to him to be necessary to “undo the impact of the exercise of the undue influence.” It is worth noting that in its application the CFMEU had sought as relief “an undertaking to work with the CFMEU to identify those employees on the Nagambie Bypass Project who have an entitlement to [the allowance].”
[17] Whilst it is settled law that in granting a remedy the Commission, now Fair Work Australia, is not constrained to grant the relief sought, it must nevertheless be as to matters substantially involved in or connected with the dispute. We agree with Mr Dixon, that in not foreshadowing the nature of the relief that he granted the Commissioner denied Abigroup an opportunity to make submissions in relation thereto and thereby failed to afford it procedural fairness and denied it natural justice. By so doing the Commissioner erred, including committing jurisdictional error.
[18] We also accept that the power to arbitrate conferred by clause 10 of the Agreement is not a power to arbitrate generally. It is limited to dealing with the dispute in question. ...”
(footnotes omitted)
[75] I conclude that the powers available to me as a private arbitrator under a dispute resolution procedure in a certified agreement, when arbitrating a dispute that is within jurisdiction, are limited to the making of determinations that are substantially involved in or connected with the dispute in the sense of being rationally and reasonably adapted to resolving the dispute fairly and effectively. That is, in a manner that is consistent with “equity, good conscience and the merits of the matter” (s.578(b) of the FW Act and, in this case, clause 28(c) of the 2008 Agreement) and “enabling fairness ... at work and the prevention of discrimination by ... providing accessible and effective procedures to resolve grievances and disputes ...” (the object in s.3(e) of the FW Act).
Consideration
[76] None of the decisions rejecting Mr Pulle’s various applications or claims for a Secretary’s allowance for any part of the period from 6 April 2006 articulate any particular reasons for refusing that allowance beyond effectively saying to Mr Pulle: “you have received all your legal entitlements and DPS has no obligation to pay you any more”. In particular, no reason has been advanced why, even if that is so, Mr Pulle’s circumstances do not amount to exceptional circumstances that warrant an exercise of the discretion in clause 197 in his favour.
[77] In rejecting the Mr Pulle’s 1 March 2010 claim for a Secretary’s allowance the acting HR Manager stated that DPS has “acted in accordance with relevant legislation and industrial agreements in ceasing your retention allowance with effect from 6 April 2006.” 24 DPS maintains that position before me. DPS contends that it has paid Mr Pulle all of his “entitlements” (it contends that, strictly correctly, that a Secretary’s allowance under clause 197 is not an “entitlement” because the payment of such an allowance is a matter within the discretion of the Secretary). But this is not to the point. Mr Pulle’s claim is that, to the extent that acting “in accordance with relevant legislation and industrial agreements” has allowed DPS not to provide him with the benefit of superannuation contributions received by every other employee, the only proper exercise of the discretion in clause 197 is to grant an allowance that properly redresses that inequity. The discretionary payment of an “exceptional circumstances” Secretary’s allowance pursuant to clause 197 and its predecessors appears to be the only mechanism under successive collective agreements or applicable legislation by which the injustice claimed by Mr Pulle can be cured.
[78] In its written submissions, DPS argued:
“16 Because the exercise of the discretion under clause 197 of the Agreement involves the payment of public money out of the limited budget that has been appropriated by Parliament to the Department, a consideration of whether or not to exercise the discretion may appropriately involve the consideration of a range of factors and matters outside of the knowledge of the Tribunal. For such reasons, the exercise of such a managerial prerogative is something that the Tribunal has traditionally been reluctant to overturn unless the decision that has been taken is manifestly unfair or capricious. In this regard, the words of Commissioner Smith in the case of ACT Minister for Health v Australian Nursing Federation are apposite:
However, for a case to be made out in relation to the failure of management to exercise its responsibilities properly, it is necessary to go beyond demonstrating a viable and/or credible alternative to that decided upon. It needs to be clearly understood that the preferred option of a “third person”, namely the Commission, is irrelevant to the case that the ANF has to prove.
It is eventually the responsibility of management to succeed or indeed fail. It is trite to state that the exercise of managerial prerogative also includes the possibility that a decision may not prove to be the right one. Simply put, it is not the function of this Commission to substitute its view for that of the employer as to the most efficient way of managing the enterprise.” 25
(emphasis added by DPS)
[79] For the reasons I have set out above, it is not the case that the Secretary’s exercise of discretion under clause 197 is unexaminable, albeit that it is examinable on the basis of the principles in the XPT case rather than House v King principles. However, some additional comment is called for in relation to the opening remarks in that submission. It was open to DPS to lead evidence about “range of factor and matters” that were considered in making the Rejection Decision (that is, the reasons for making the Rejection Decision). It did not do so. I have taken account of the fact that budgetary considerations may have played a part in the Rejection Decision but, in the absence of evidence to the contrary, I find it hard to imagine that the monetary cost of correcting the injustice suffered by Mr Pulle would have anything other than a relatively insignificant impact on the budget of an organisation that employs as many people as DPS.
[80] DPS has never acknowledged to Mr Pulle that he has a valid moral claim in relation to the non-receipt of superannuation benefits after he turned 70. And yet it is clear from the evidence that DPS in fact recognises that Mr Pulle’s non-receipt of superannuation contributions involves an inequity.
[81] In a letter dated 12 November 2008 to the Secretary of the Treasury, the Secretary of DPS wrote that staff over the age of 75 “are not treated equally with staff below that age because they effectively receive a lower “total remuneration” ”.
[82] A letter dated 16 November 2010 from the Secretary of the Department of Finance and Deregulation to the Secretary of the DPS refers to a letter dated 13 October 2010 from the Secretary of the DPS “regarding superannuation arrangements for older employees” which is clearly a letter that specifically addresses the circumstances of Mr Pulle. That letter addresses a number of technical issues and notes a decision to implement a change that will remove the obligation on an employer like DPS to make employer contributions to the PSS for an employee in Mr Pulle’s position notwithstanding that PSS is not permitted to retain those contributions on Mr Pulle’s behalf. The letter notes this will give DPS “access to funds previously returned to Consolidated Revenue” and that:
“This could provide your Department with some scope to address the inequity your have identified in relation to Mr Pulle, through other aspects of his remuneration arrangements.”
[83] A letter dated 24 December 2010 from the CEO of ComSuper (the agency that administers PSS) to the Secretary of DPS opens:
“RE: Superannuation Arrangements - Mr Pulle
I refer to your letter dated 13 October 2010, requesting advice as to whether there is any remedy available through which the employer contributions paid by the Department of Parliamentary Services on Mr Pulle’s behalf could be of benefit to him.”
[84] The letter notes that this would require a change to both the Superannuation Industry (Supervision) Regulations 1994 (SIS Regulations) and the PSS rules.
[85] I have set out clause 217 of the 2008 Agreement at paragraph [50] above. At the time the 2008 Agreement came into operation Mr Pulle was the only employee of the DPS over the age of 75. It is reasonable to infer that clause 217 was included in the 2008 Agreement for the specific purpose of addressing the inequity suffered by Mr Pulle in relation to superannuation. It is common ground that clause 217 was ineffective at achieving that purpose because, despite various changes, PSS still cannot receive contributions for an employee who is over 75 years of age.
[86] Mr Pulle has not ceased to have a need to provide for himself and any dependents when he eventually retires. Superannuation is a universal entitlement of employees under Commonwealth legislation. The purpose of compulsory superannuation is to enable employees to meet their financial needs during retirement (and to reduce the burden on the taxpayer in the process). The fact that Mr Pulle is well past the historical retirement age of 65 does not mean that he has ceased to have a need to provide for himself and any dependents when he retires - he could live to be very old. His age means that, in an actuarial sense, his life expectancy on retirement will be less than another employee retiring at an earlier age. However, if and when he does retire, he will still have a life expectancy and a need to provide for himself if he survives to that expected age or beyond. It is manifestly inequitable and unjust that he should receive a total remuneration with a value significantly less than all other employees in the same classification who are less than 70 years of age.
[87] Every employee of DPL and subsequently DPS under the age of 70 received superannuation contributions above the statutory minimum of 9%. Such superannuation contributions are correctly seen as part of the total remuneration of those employees. Mr Pulle, for no reason other than his age, has not received the benefit of employer superannuation contributions since he turned 70. He received a Secretary’s allowance that compensated him for most of that loss in the period to 6 April 2006 but thereafter he has received a total remuneration that is substantially less than other employees who hold the same PEL 1 classification. There is no question of poor performance: Mr Pulle has usually been rated as “highly effective” in performance reviews. In my view, the circumstances of Mr Pulle are, on any view, properly described as exceptional circumstances. On the evidence before me, Mr Pulle is the only employee of DPL/DPS who has not received the benefit of employer superannuation contributions which at all times was part of what would be understood by most people in a commonsense way as being part of his total remuneration. Mr Pulle’s moral claim to a payment under clause 197 is, in my view, unanswerable. DPS has advanced no persuasive reason why Mr Pulle should not receive a Secretary’s allowance pursuant to clause 197 to redress the inequity of his position, particularly when it is the express purpose of the 2008 Agreement “to provide and give effect to fair remuneration and working conditions for all DPS employees”. In my view, the Commonwealth has been unjustly enriched (within the ordinary meaning of that expression) by the receipt into consolidated revenue of contributions made by DPL and DPS to PPS on Mr Pulle’s behalf since he turned 70.
[88] I find that the Rejection Decision was plainly unjust and unreasonable. Having made that finding, it is open to me to make an arbitral determination that resolves the Dispute by determining that Mr Pulle receive a Secretary’s allowance pursuant to clause 197 that fully redresses the injustice suffered by him and, for the reasons I have given, I have decided that such a determination should be made.
Determination
[89] As private arbitrator, I make the following arbitral determination:
1. Mr Pulle is to receive a Secretary’s allowance under clause 197 of the 2008 Agreement that:
(a) Compensates Mr Pulle for the non receipt of employer superannuation contributions for an employee with his substantive classification (PEL 1) from 6 October 2002, including an amount referable to interest calculated at the Reserve Bank reference rate at fortnightly rests, but with full allowance being made against the principal amount for each payment of the Secretary’s allowance received by Mr Pulle in the period to 6 April 2006.
(b) Provides Mr Pulle with an ongoing fortnightly allowance equivalent to the employer superannuation contributions for an employee with his substantive classification.
2. To the extent that the parties are unable to agree those amounts the matter can be relisted for an arbitral determination of those amounts by Fair Work Australia.
[90] In the event that I am wrong about the proper characterisation of the dispute in this case and/or about the DPS arguments based on Stephenson such that superannuation payments referable to the period of the 2002 and 2005 Agreements were outside the jurisdiction of the tribunal, I would have determined that Mr Pulle receive a Secretary’s allowance pursuant to clause 197 that compensated him for the period of operation of the 2008 Agreement and on an ongoing basis.
[91] I recommend to Secretary of the Department of Finance and Deregulation that the budget allocation for DPS be adjusted to return to DPS monies paid by it to PSS on Mr Pulle’s behalf but remitted by PSS to consolidated revenue, together with an appropriate allowance for interest, so that DPS’s budget is not prejudiced by complying with my determination.
[92] In my view, the Superannuation Guarantee (Administration) Act 1992, the Superannuation Industry (Supervision) Regulations 1994 and the rules of the PSS deserve the attention of the Government with a view to considering amendments that will ensure that all Commonwealth employees receive the benefit of employer superannuation contributions appropriate to their classification, irrespective of the employee’s age or, at the very least, to ensure that where an employer makes superannuation contributions under the Superannuation Guarantee (Administration) Act 1992 on behalf of an employee, the employee is able to enjoy the benefit of those contributions.
VICE PRESIDENT
Appearances:
BTB Pulle on his own behalf.
B Boyer for the Department of Parliamentary Services.
Hearing details:
2010.
Canberra:
November 4.
Melbourne and Canberra (phone hearing):
December 1.
2011.
Sydney and Canberra (phone hearing)
January 17.
February 4.
March 31.
Melbourne and Canberra (video hearing):
March 7.
Canberra:
June 23.
October 21.
1 [2009] AIRC 715
2 [2004] AIRC 1059
3 (2009) 190 IR 365
4 Ibid at para [11]
5 Exhibit S2.
6 [2004] AIRC 1059, para [42]
7 Ibid, para [49]
8 See, for example, the cases cited in para [5.29] of Pearce & Geddes Statutory Interpretation in Australia, 6th edition.
9 s.347(5) of the WorkChoices version of the WR Act, item 3 of Schedule 7 of the ‘Forward to Fairness’ version of the WR Act and s.58(2)(d)(ii) of Fair Work Act 2009.
10 [2009] FWAFB 901, paras [14] and [15]
11 see, for example, Waters v Public Transport Corporation (1991) 173 CLR 349 at 392 per Dawson and Toohey JJ
12 (1936) 55 CLR 499
13 (1984) 295 CAR 188
14 Ibid at p 191
15 (1987) 163 CLR 117
16 Ibid at pp 136-137
17 (2007) 169 IR 253
18 Meat & Allied Trades Federation of Australia v Australasian Meat Industry Employees Union (1991) 39 IR 41; University of Western Sydney v Fletcher (2009) 183 IR 256 at [28].
19 (2009) 183 IR 256
20 See the omission of any reference to paragraph (b) of s.701(4) in s.701(5).
21 (1909) 8 CLR 419
22 Ibid at 440-1
23 (2011) 202 IR 51
24 Minute of Mr Boyer of 14 May 2010, Exhibit S1
25 Exhibit DPS 2
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