Colleen Mulcahey v Victorian Building Authority
[2016] FWC 324
•20 JANUARY 2016
| [2016] FWC 324 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Colleen Mulcahey
v
Victorian Building Authority
(C2015/642)
COMMISSIONER WILSON | MELBOURNE, 20 JANUARY 2016 |
Application to deal with a dispute.
[1] This decision concerns the resolution of an alleged dispute pertaining to the employment of Ms Colleen Mulcahey, who was employed until May 2015 by the Victorian Building Authority (VBA). Her employment was subject to an enterprise agreement, which Ms Mulcahey alleges has not been complied with during the decision-making by the VBA to firstly declare her position surplus to requirements and to then terminate her employment, for reason of redundancy.
[2] Ms Mulcahey was employed by the Victorian Building Authority as Team Leader, Building Audit Program between 6 June 2013 and 13 May 2015. The parties agree that throughout that period Ms Mulcahey’s employment was subject to the terms of the Victorian Building Agreement Authority 2013, 1 (the VBA Agreement) and that her employment was subject to a position description.2
[3] The matter was the subject of conciliation before me, however the two conferences were unsuccessful in bringing the parties to a resolution of the dispute, and Ms Mulcahey pressed for arbitration of her application even though by that time her employment with the VBA had ended. I am satisfied that jurisdiction exists for the matter to proceed for the reason that the agreement is an ongoing one, with employees continuing to be employed under it. In the absence of a term in the VBA Agreement to indicate that the parties intended that the operation of the clause is contingent on an employee remaining in employment, a dispute raised by an employee pursuant to a dispute resolution provision in an agreement does not cease to be such a dispute by reason of the termination of the employee’s employment before the dispute has been finally dealt with by the Commission. 3
[4] At the start of the arbitration proceedings I discussed with the parties an appropriate question for determination by the Commission, with them agreeing that the following were the appropriate questions;
“(1) In deciding to declare the position in which Ms Colleen Mulcahey was employed to be surplus to requirements and its consequential decision to terminate her employment for reason of redundancy, did the Victorian Building Authority apply the requirements of the Victorian Building Authority Agreement 2013, and in particular with the provisions of;
(a) clause 7 (Implementation of Change);
(b) clause 11.5 (Redundancy);
(c) clause 21 (Disputes and Grievances)?
(2) In the event the Commission finds that the Victorian Building Authority has not applied any or all of the above requirements, what relief should be accorded Ms Mulcahey?”
[5] For the detailed reasons which are set out within this decision, I answer the above questions as follows;
(1) Yes;
(2) Unnecessary to answer.
Background to the Application
[6] For about nine years, Ms Mulcahey worked for the Victorian Public Sector in several positions and with several agencies. 4 From June 2013 she was employed as Team Leader, Building Audit Program for the Victorian Building Authority, having been selected for the position through a merit selection process. In brief she managed between two and eight other employees and describes her role as Team Leader as including the following;
“(a) leading the audit function: coordinating the comprehensive program of risk–based technical, targeted and random audits of registered building practitioners
(b) for developing annual targets, standards and documentation for audits to monitor and evaluate the integrity of the building permit system
(c) developing and enhancing an effective database of audit findings and outcomes” 5
[7] In addition to these duties, Ms Mulcahey reported undertaking a number of additional responsibilities which she describes as being the following;
“(a) providing authoritative strategic, tactical and operative advice and recommendations to the VBA Board, Chief Executive Officer, Executive Leadership Team (e.g. DOC2 – VBA Action Plan following presentation and recommendations regarding major identified risks in building permit process)
(b) presentation to high level stakeholders (i.e. VBA Board and Industry groups representing the audit function in CEO/Department/Industry body meetings)
(c) risk management (identification and management)
(d) development of policy and organisational statements (e.g. development of the Performance Audit Policy, 2014 Annual Report Content)
(e) resolution of complex operational issues (i.e. Design and delivery of database and cleansing and transfer of corrupt data, negotiation with enterprise for funding and support)
(f) implementing effective interventions and solutions (i.e. Development of communication campaign to measurably improve major building risks identified during audit)
(g) planning and budgeting – including monitoring and evaluation targets” 6
[8] Between April 2014 and February 2015 Ms Mulcahey reported directly to the Director of Compliance and Performance, Murray Smith.
[9] The VBA was established by legislation in July 2013, taking over functions previously performed by two separate organisations, namely the Building Commission and the Plumbing Industry Commission. The environment in which the VBA was formed and now works includes recommendations made by the Victorian Auditor General about the legislative remit of predecessor organisations and how those organisations had performed their functions. Amongst the matters identified by the Auditor General were recommendations about auditing by the authorities of private industry permit holders.
[10] The VBA was, and is, expected to perform in a manner that overcomes the risks identified by the Auditor General.
[11] Mr Smith notes in his evidence that at the time the VBA was established, and despite its formation being a merger, the two functions of the predecessor Building Commission and Plumbing Industry Commission were still operating separately within the VBA. In his opinion, the VBA was not effectively a merged entity at that time. 7 Mr Smith’s evidence is that in about April 2014, the Chief Executive Officer of the VBA, Ms Prue Digby, announced a restructure of the organisation which would lead to the VBA being organised into six new functionally aligned divisions, which was in contrast to the previous structure which separated out the building and plumbing divisions. One of the six divisions was to be the Compliance and Performance Division for which Mr Smith was responsible. He notes that announcement of the restructure required further changes in order to properly reflect the headline announcement made by the CEO;
“7. In the role of CP Director I had ultimate managerial responsibility for the whole of the CP Division. The key functions of the division are to:
a) conduct audits and investigations into building and plumbing activities;
b) manage the collection of building levies;
c) gather practitioner intelligence to understand regulatory risk; and
d) manage practitioner discipline activities.
Compliance and Performance Integration Project
8. Whilst a new director was appointed to head each of the six divisions, what lay beneath that structure was not altered at that point. What needed to be changed was the structure under each director. It was necessary for the CP Division to undertake that work as quickly as possible to ensure that the division was functionally aligned with: appropriate reporting lines, consistent supervision of staff and staff appropriately supported in their roles across the CP Division.
- 9. I initiated the CP Integration Project to review and re-structure the operating model of the CP Division so that it was functionally aligned rather than industry aligned. Essentially, the purpose was to bring together the building and plumbing components so that we could deliver the compliance and enforcement functions of the division more efficiently and effectively.” 8
[12] In time, the work undertaken by him on these matters led him to form certain views about a suitable ongoing substructure for the Compliance and Performance Directorate;
“11. In November 2014 I proposed, on advice from the change team, to restructure the CP Division into four functionally focused business units being:
a) Audit;
b) Investigations;
c) Practitioner Intelligence & Levy; and
d) Practitioner Discipline.
12. Each function was to be headed by a unit manager reporting directly to me. A central Business Support Team was also to be established to support all functions within the CP Division with administrative and client service support.
13. The four new business units were to replace the previous three units being:
a) Compliance & Performance (Building);
b) Compliance & Peformance [sic] (Plumbing); and
c) Levy and Building Information.
14. The proposed structure was one that we thought would meet the needs of the organisation. However, we were open to any opportunities for improvement which might arise from consulting with staff.” 9
[13] Ms Mulcahey agrees that in March 2014 she became aware that the Compliance and Performance Division was undertaking what she refers to be an integration project, which she understood to be a project that “highlighted the need for the division to align policy”, however she does not agree that at that time there was discussion of a staff restructure. 10 On 1 December 2014, in a meeting between Ms Mulcahey, Mr Smith and Ms Kylie Mackinnon, the VBA’s Manager, People Services, Ms Mulcahey was informed that the integration project being worked on by Mr Smith had led not only to the considerations referred to above but that implementation of the new structure proposed by Mr Smith would lead to the abolition of her position, namely that of Team Leader, Building Audit Program.
[14] Two days later on 3 December 2014, Mr Smith and Ms Mackinnon presented the proposed divisional restructure to the staff of the Compliance and Performance Division. 11 The presentation given to staff on that occasion identified the following, against a heading of “why do we need to change”;
“ In April 2014 the Division initiated the Compliance & Performance Integration Project.
- The purpose of this project was to review and re-design the operating model for the Compliance & Performance Division and to develop capability within the Division to more effectively deliver its functional responsibilities.
- One of the ways in which it has been determined that we can operate more efficiently and effectively is through the functional realignment of the Division.
- This will result in an organisational restructure which will establish four functionally focussed business units within the Division. The business unit structure will retain existing industry identities and expertise, in particular within the Audit and Investigation Business Units.” 12
[15] In the same briefing, staff were given the following information about what would be changing;
“There are currently three units within the Compliance and Performance Division: Compliance & Performance (Building); Compliance & Performance (Plumbing); and Levy & Building Information. It is proposed that these units no longer exist.
The proposed restructure will:
• Establish four new functionally focussed business units:
– Audit Unit
– Investigations Unit
– Practitioner Intelligence & Levy Unit
– Practitioner Discipline Unit
• Establish a Business Support Team with a centralised administrative support function for the Division.” 13
[16] The briefing continued with information about implications of the proposal for Ms Mulcahey’s team;
“What is changing
Compliance and Performance Management team
As a result of the functional alignment, the following Unit Manager positions no longer exist in their current format:
- Manager, Compliance and Performance - Building (Band 6)
- Manager, Compliance and Performance – Plumbing (Band 6)
- Manager, Levy and Building Information (Band 6)
The existing functions of these positions will transfer (with additional functions) across the following new Manager positions:
- Manager Audit (Band 6)
- Manager Investigations (Band 6)
- Manager Practitioner Intelligence and Levy (Band 6)
- Manager Practitioner Discipline (Band 6)
The current incumbents of the Unit Manager positions will have first priority to apply for the new Manager positions through a limited recruitment process.” 14
“What is changing - from the current structure
Compliance & Performance (Building)
Positions no longer required
- Team Leader Building Audit (Band 6)
- Board Hearings Co-ordinator (Band 5)
- Brief Officer (Band 4)
- Board Hearings Officer (Band 3)
- Board Hearings Assistant (Band 2)” 15
“What is changing - in the proposed structure
Audit Unit
Reporting line changes
- Existing Building, Plumbing and Levy Audit functions to transfer to the Audit Unit
New positions
- Team Leader Audit (Building), (Band 5)
- Team Leader Audit (Levy), (Band 5)” 16
[17] Under a heading of “Possible Change scenarios and impacts” the presentation to staff included the following table regarding the impact of change; 17
What is changing | Change impact on individual |
Change in reporting line, division and/or position title (with no change to functions). | The individual is directly matched and transfers to the new structure as is. |
Minor changes to the position, and the employee can be re-trained /re-skilled in a reasonable timeframe | The employee is directly matched and transfers to the new structure. Changes made to the Position Description in discussion with the employee. |
Significant changes to the position | The position is considered new (which will be vacant), and the existing position is no longer required. The incumbent of the existing position is assessed against new position and determination made as to whether there can be a match to new position if not redeployment process commences. |
Position is no longer required | The incumbent of the existing position is assessed against new positions (at band level) and determination made as to whether there can be a match to new position if not redeployment process commences. |
Similar function, but required at a different level | A new position is created at the new classification (which will be vacant), and the existing position is no longer required. The incumbent of the existing position is not directly transferred to the new structure, and commences redeployment. |
[18] The table is important to Ms Mulcahey, for the reason that she considers the VBA has not acted in accordance with the intentions set out in the table. In particular she argued at the time that the changes impacting on her own position should properly be described as “minor” and not “significant”. In the case of minor changes, the above table would indicate that a person would be directly matched and transferred from an existing position to a new one. 18
[19] Having been briefed about the proposed changes, Ms Mulcahey made several requests for further information in December 2014 and January 2015. She provided a comprehensive response document to the VBA on 7 January 2015, with that document headed “Compliance & Performance Division Functional Alignment – Alternative Proposal”. On 30 January 2015, the VBA advised Ms Mulcahey and other staff of its final decision about the restructure, with staff being told three positions would be declared surplus. They were told that a further five employees would be transferred to new positions within the final structure. This included three Band 6 managers whose positions were significantly changed. 19 Ms Mulcahey was informed that her position would not be one of those transferred to a new position and that instead her position would be made redundant.
[20] Over the following period of February to May 2015, Ms Mulcahey raised a grievance with the VBA about what had occurred and what it proposed, first internally within the VBA, and then to the Fair Work Commission. The VBA also assigned a redeployment case manager to work with Ms Mulcahey and provided advice about what redeployment assistance would be given to her.
[21] On 13 May 2015, Ms Mulcahey's employment was terminated on the ground of redundancy, at which time she was paid a Targeted Separation Package which the VBA says is in accordance with the Public Sector Workplace Relations policies. 20
Relevant Agreement clauses
[22] Several clauses of the VBA Agreement are relevant to determination of this dispute, as framed in the question for resolution set out earlier in this decision, being clause 7 (Implementation of Change), clause 11.5 (Redundancy), and clause 21 (Disputes and Grievances).
[23] Each clause has potential relevance to resolution of the dispute in this matter for the reason that Ms Mulcahey puts forward that the VBA has not provided her with the entitlement she has, derived from the terms of the VBA Agreement, to be consulted about proposed significant changes; to put forward alternative proposals for the VBA’s consideration; and, to the extent that she disputes the actions or proposed actions of the VBA, to be able to raise and have considered and resolved workplace disputes within the framework established by the Agreement’s dispute resolution procedure.
[24] The relevant terms of the clauses are as follows;
7 IMPLEMENTATION OF CHANGE
The parties acknowledge that during the life of this Agreement the VBA may be required to make organisational and operational changes. Where the employer is considering restructuring the workplace, introducing new technology or changing employee work practices a consultative approach will be taken.
Stage One: Advising Affected Employee(s)
The employer will advise the affected employee(s) as soon as practicable after a proposed decision has been made. Where the proposed changes are likely to have an impact to the operations of the VBA and its employees, the employer will also notify any employee organisation covered by the Agreement. The employer will include in their notification details of the proposed change, the likely effects on employee working conditions and responsibilities, and the rationale and intended benefits of the change. Where appropriate, the employer will provide the affected employee(s) with training to assist them integrate into the new system or structure.
Stage Two: Employee(s) consideration and response
Employee(s) are entitled to nominate an employee representative, including a union representative, for the purpose of consultation under this clause. The employer will provide the employee(s) with at least 15 working days to consider the proposed change. During this consultation period the employee(s) can request further information or to meet with the employer. Any requests will be considered by the employer in a timely manner. The employee(s) or their nominated representative may submit an alternative proposal which addresses the intended rationale and benefits of the proposed change during the consultation period.
The employees(s) period to consider the proposed changes is considered to be concluded, when one of the following occurs:
(a) The affected employee(s) have submitted an alternative proposal; or
(b) The affected employee(s) have advised the employer in writing that the change has been accepted; or
(c) The time period specified by the employer has expired.
Stage Three: Employer Response
The employer will respond to any alternative proposals and notify affected employee(s) of the final decision in respect of the proposed change within 10 working days. If the employer does not accept the alternative proposal the employer will provide considered reasons to the affected employee(s) and their nominated representative.
7.1 Consultative Committee
The employer agrees to operate a consultative committee for the purpose of ensuring consultation with employees occurs prior to implementation of change as outlined in clause 7. Implementation of Change or other employment related matters as raised by committee members. The committee will convene on at least a quarterly basis. The committee will be made up of equal representation from management and VBA employees. A union representative can attend committee meetings where invited by a committee member. Union representatives can be requested to speak to an agenda item by a committee member.
11 TERMINATION OF EMPLOYMENT
[11.1 – 11.4 – not reproduced]
11.5 Redundancy
In the event of redundancy, the Public Sector Workplace Relations Policies will apply, but do not form part of this agreement.
21 DISPUTES AND GRIEVANCES
21.1 Disputes and Grievances
The employer and the employee agree to deal with disputes and grievance in accordance with this clause, where it relates to:
(a) a matter arising under this Agreement; or
(b) a matter pertaining to the relationship between the employer and the employee covered by this Agreement; or
(c) the National Employment Standards, other than,
This clause does not apply to any dispute or grievance relating to:
- (a) termination of employment; or
(b) matters arising in the course of bargaining in relation to a proposed enterprise agreement.
The employer or employee covered by the Agreement may choose to be represented at any stage by a nominated representative, including a union representative. Where an employee has nominated a representative, the representative will be obliged to follow the resolution process and principles as outlined in this clause.
Where the chosen employee representative is another employee of the employer, they must be released from normal duties, provided that the operations of the employer are not unduly affected, for such periods of time as may be reasonably necessary to enable them to represent employees concerning matters pertaining to the employment relationship including but not limited to:
(a) investigating the circumstances of a dispute or grievance;
(b) endeavouring to resolve a dispute or grievance; or
(c) participating in conciliation, arbitration or any other agreed alternative resolution process.
21.3 Resolution Obligations
The following resolution principles will be observed by both parties in the settlement of all disputes and grievances:
(a) The parties will genuinely attempt to resolve the dispute or grievance.
(b) The parties will have the right to procedural fairness.
(c) The parties will cooperate to ensure the process is carried out as quickly (as practicable) and as informally as proper consideration of the matter allows.
(d) The matter will be treated seriously.
(e) The matter will be treated confidentially and discreetly as possible.
(f) The parties to a grievance will be protected from victimisation, as far as practicable.
(g) The parties to a grievance will be offered counselling via the VBA’s Employee Assistance Program.
21.4 Working Arrangements During a Dispute or Grievance
An employee who is party to a dispute or grievance is expected to continue to work in accordance with their normal work practice. This means the status quo remains including in respect of any decision or outcome made by the employer that is subject to the dispute or grievance.
The only exception is where there is a reasonable concern about an imminent risk to the employee’s health or safety, the employee has advised their manager of this concern, and the employee has not unreasonably failed to comply with a direction from their manager to perform other work that is safe and appropriate.
No person covered by the Agreement will be prejudiced as to the final settlement of the dispute or grievance by the continuance of work in accordance with this clause.
21.5 Lodging a Dispute or Grievance
A dispute or grievance must be lodged within 14 days (in relation to promotion or appointment decisions) or 35 days (for all other decisions) from the date the employee or employees were notified of the action or management decision, resulting in the dispute or grievance. A compliant may be lodged out of time in exceptional circumstances and with the approval of the relevant Director.
A dispute or grievance must be lodged in writing and addressed to the Manager, People and Culture. The written submission must outline:
(a) The subject matter of the dispute or grievance;
(b) The name and title of the decision maker;
(c) The date that the action was taken and the date the employee became aware of the action;
(d) The basis for the dispute or grievance, including whether (if relevant):
i. the employee considers that the decision made involved a procedural irregularity;
ii. there is new information that could not reasonable have been provided to the employee(s) at the time of the original decision, and that the employee considers would probably have affected the division or an penalty imposed;
iii. the employee considers that the decision was manifestly wrong or not available in the circumstances; or
iv. the employee considers that the penalty/disciplinary action imposed was excessive, harsh or inappropriate.
(e) The particulars of the people involved;
(f) Details of any action that has already been taken to attempt to resolve the matter; and
(g) The remedy or resolution sought.
21.6 Resolution Process
The resolution process outlined below will be followed in relation to all disputes and grievances. Each stage of the process must be followed. Either party may elect to escalate the dispute or grievance to the next stage of the process where an unsatisfactory outcome has been received. The party escalating the dispute or grievance must notify the other party within five working days of the previous step being completed.
21.7 Disputes of a Collective Character
The parties covered by the Agreement acknowledge that disputes of a collective character concerning more than one employee may be dealt with more expeditiously by an early reference to FWC. No dispute of a collective character may be referred to FWC directly unless there has been a genuine attempt to resolve the dispute at the workplace level prior to it being referred to FWC.
21.8 Procedures of Fair Work Commission
- Subject to any agreement between the parties to the dispute, in relation to a particular dispute or grievance and the provisions of this clause, in dealing with a dispute or grievance through conciliation or arbitration FWC may conduct the matter in accordance with Subdivision B of Division 3 of Part 5-1 of the Fair Work Act 2009.
[25] Ms Mulcahey’s overarching contention is that the VBA had no or insufficient basis to make her redundant because it did not adequately consult with her about its proposed organisational changes (which is in breach of the obligations held by the VBA under clause 7); further that it did not apply to her the Public Sector Workplace Relations policies, which would be a breach of clause 11.5; and finally that it did not follow the applicable dispute resolution procedures in dealing with a grievance lodged by Ms Mulcahey, which would be a breach of clause 21.3.
[26] For its part, the VBA contest these matters.
[27] It says about the primary contention of Ms Mulcahey, that there was a failure to consult with her about change affecting her, that it consulted with her fully and in compliance with the enterprise agreement provisions.
[28] The VBA also point out that the terms in clause 11.5 state that while the Public Sector Workplace Relations policies “will apply” to an employee in the event of redundancy, the same provision stipulates that the policies do not form part of the agreement. In this regard, the VBA argues a jurisdictional objection that would prevent the Commission from proceeding to determine the dispute because of the terms of the Fair Work (Commonwealth Powers) Act 2009 (Vic) (the Referral Act) exclude from referral to the Commonwealth “matters pertaining to the number or identity of employees in the public sector dismissed or to be dismissed on grounds of redundancy”. 21
[29] Notwithstanding the VBA’s contention in this regard, I do not find this dispute to be one pertaining to the number or identity of persons to be dismissed on grounds of redundancy.
[30] The correct characterisation of the dispute is instead that it is about whether the VBA has applied the terms of the VBA Agreement, which include its obligation to take a consultative approach to decision-making to restructure the workplace, which is the commitment it freely gave in the first paragraph of clause 7 of the enterprise agreement.
[31] If failings are to be found of the VBA on the strength of Ms Mulcahey’s case, they are likely to surround the propositions either that the VBA may not have sufficiently notified her of what was proposed in the way of the employer’s decision (Stage One: Advising Affected Employee(s), of the “implementation of change” procedure prescribed by Clause 7), or that it did not sufficiently respond to her request for further information in order that she be able to submit an alternative proposal (Stage Two: Employee(s) consideration and response). Alternatively, it may be the VBA has not provided a considered response to Ms Mulcahey if it chooses not to accept any alternative proposal she put forward (Stage Three: Employer Response).
[32] There is also the question of whether the VBA in fact did “apply” the Public Sector Workplace Relations policies to her. While those policies may not form part of the VBA Agreement, there is a commitment, through the enterprise agreement, for those policies to be applied to her, which in the ordinary sense may reasonably mean that she has a right to expect the content of the policies, whether helpful or not, whether in her favour or the VBA’s, to have been demonstrably considered and used to make decisions about her situation. The alternative proposition, that there is no expectation the clause would create any right for her, would render the clause otiose. While the face of the clause discloses an ambiguity surrounding the work it is intended to do, there is nothing before me that would suggest that the parties, when drafting the VBA Agreement, intended its words to be read down to a point where the clause is merely a sign-post to an external document of the Victorian Public Service.
[33] Ms Mackinnon referred to the status of the policies within her statement thus;
“The Public Sector Workplace Relations Policies contain obligations regarding providing redeployment opportunities for surplus employees within the agency. However, the more detailed redeployment policy (Attachment 6) contained within the Public Sector Workplace Relations Policies does not have direct application to the VBA since VBA is not subject to the Victorian Public Sector Workplace Determination 2012.” 22
[34] I take her to be saying with this evidence that she asserts the redeployment part of the policies, referred to as the Redeployment Appendix, only apply to persons employed under the Victorian Public Sector Workplace Determination 2012. However, that is not what Clause 11.5 of the VBA Agreement says; instead, the clause says that in the event of redundancy, the policies will apply.
[35] It may be that there is extrinsic evidence that demonstrates the parties to the VBA Agreement only intended a limited number of relevant or defined parts of the Public Sector Workplace Relations policies to “apply” in the event of redundancy, however that evidence is not before me. It would seem odd that a part of the policies demonstrably going to the redeployment of surplus employees somehow does not “apply” to a VBA employee, even though it has committed that “[i]n the event of redundancy, the Public Sector Workplace Relations Policies will apply”, albeit with those policies not forming part of the VBA Agreement. Even though the Redeployment Appendix is explicit in its application to “employees covered by the Victorian Public Service (VPS) Workplace Determination 2012”, that does not prevent the extension of its application through a means such as the VBA Agreement.
[36] Ultimately, because I am unpersuaded that the VBA has not complied with its consultation obligations, it is unnecessary for me to determine the question of whether the Public Sector Workplace Relations policies have direct application to VBA employees.
[37] I am, however, of the view that, because of the content of the Public Sector Workplace Relations policies, that clause 11.5 is not a term pertaining to the number or identity of persons to be dismissed on grounds of redundancy, but rather about the rights given to both parties for the conduct and regulation of their workplace relations.
[38] The preamble to the policies includes the contextual statement;
“This document reflects the Government’s position on a number of public sector workplace relations matters and sets out various standards and requirements, particularly with regard to the negotiating and making of enterprise agreements.” 23
[39] While its contents include those of termination of employment and redundancy, redeployment and retrenchment, those matters are in addition to matters of making enterprise agreements; managing industrial action dispute resolution; employee entitlements on transfer from the public sector to a private provider; work/family model clauses; public holidays; and a model enterprise agreement dispute resolution clause. I accept that application of the policies to questions of the matters pertaining to the number or identity of employees in the public sector dismissed or to be dismissed on grounds of redundancy will be beyond the Commission’s powers, however that is not to say that the remainder of the policies are somehow incapable of applying to Ms Mulcahey.
[40] For the same reasons, I am unable to find that clause 21 is a term pertaining to the number or identity of persons to be dismissed on grounds of redundancy. It is, instead, about the framing, discussion and resolution of workplace grievances.
[41] While Ms Mulcahey’s grievance was ended with a redundancy, that is not axiomatic with the proposition that her grievance was about the number or identity of persons to be dismissed on grounds of redundancy.
[42] The VBA’s written submissions also raised an objection against continuation of the application because of the implied constitutional limitation on the exercise by the Commonwealth of powers that would constrain the powers of a State to determine the number and identity of persons to dismiss with or without notice from its employment on redundancy grounds; per Re Australian Education Union; Ex parte Victoria 24 (Re: AEU). The objection points to certain provisions of the VBA Agreement that, in any event, and irrespective of the implied constitutional limitation, limit the powers of the Commission to deal with the dispute. Those provisions are;
- clause 5, which prescribes that the agreement does not permit the referral of a matter to the FWC for order or determination where the FWC lacks power to deal with the matter, for reason either of the Referral Act, or the implied constitutional limitation;
- clause 11.5, referred to earlier, which provides that while the Public Sector Workplace Relations policies “apply”, they do not form part of the VBA Agreement; and
- clause 21.1, within the dispute resolution clause, which provides that the clause does not apply to any dispute or grievance relating to termination of employment.
[43] In dealing with the content of the VBA Agreement, firstly, I consider that clause 5 merely restates what is the law anyway, with it providing nothing beyond the general situation. In any event, the term does not either advance or determine this matter. Secondly, what is said about clause 11.5 has been dealt with earlier; with me concluding that although the provision, not being otiose, has work to do, it is unnecessary for me to determine the extent to which the clause provides rights to Ms Mulcahey. Thirdly, while clause 21.1 limits the power of the Commission to determine a dispute or make orders about a dispute or grievance relating to termination of employment, I have already found that this dispute is not about termination of employment, but is instead about whether the VBA has complied with its consultation obligations.
[44] The context of the VBA’s submissions is that its Re AEU objection sits separately to the VBA’s objection for the continuation of this matter by reason of the provisions of the Referral Act. If that is the case, the objection falls away, for reason of the judgement of the Full Court of the Federal Court in United Firefighters’ Union of Australia v Country Fire Authority 25 in which it was held, after consideration not only of Re AEU, but the earlier case of Melbourne Corp v Commonwealth26 and the later case of Victoria v Commonwealth27 that the implied constitutional imitation is not applicable to provisions voluntarily entered into in an agreement and then given statutory force.28 The Full Court held that for the implied limitation to apply there would need to be a “significant impairment to the State's capacity to function as a government”, with the existence of that impairment being demonstrated.29
[45] None of the clauses contended by the Respondent as being in contravention of the implied constitutional limitation have been shown to have been entered into other than voluntarily, and there is no evidence before me that operation of the clauses would amount to a significant impairment on the State.
[46] For these reasons, I find there is no jurisdictional impediment to the making or continuation of Ms Mulcahey’s application.
Consideration of the merits of Ms Mulcahey’s claim
[47] Notwithstanding my finding about jurisdiction, I am not persuaded VBA did not comply with the obligations cast upon it from the enterprise agreement.
[48] Five relevant obligations arise from the enterprise agreement. They are;
- the obligation arising under Stage One of clause 7 to advise employees of a proposed decision about an organisational or operational change with the attendant obligation to provide details to employees of the proposed change, the likely effects on employees’ working conditions and responsibilities and the rationale and intended benefits of the change;
- the obligation arising under Stage Two of clause 7 to provide employees with at least 15 working days to consider the proposed change, allow employees to request further information or to meet with the employer and consider such requests in a timely manner as well as to allow employees or their nominated representative to submit an alternative proposal for change which addresses the intended rationale and benefits;
- the obligation arising under Stage Three of clause 7 to respond to any such alternative proposals received and if those proposals have not been accepted to provide considered reasons to the affected employees and their nominated representative;
- the obligation in clause 11.5 to apply the Public Sector Workplace Relations policies; and
- in relation to disputes and grievances arising under the agreement or relating to a matter pertaining to the relationship between the employer and an employee or relating to the National Employment Standards, to progress such dispute in the manner set out within clause 21 and in particular in accordance with the process set out in clause 21.6.
[49] The evidence discloses a comprehensive compliance by the VBA with the stages set out within clause 7.
[50] There was a personal briefing with Ms Mulcahey on 1 December 2014 about the implications of the VBA’s proposed decision for her own job. That was followed through with a staff briefing on 3 December 2014 with staff at that time being provided with substantial documentation about what was proposed. Staff were provided with overview information in a set of slides that accompanied a verbal briefing and were also provided with a lengthy Staff Briefing Pack. There is little doubt after scrutiny of these materials that staff were provided with suitably comprehensive material about what was being proposed and the reasons for it. Whether or not that material was persuasive to staff, and Ms Mulcahey in particular, is not the test that is set out within clause 7. The test is not that which would be expected of a submission to a Board of Directors for agreement to change, in which case certain duties need to be exercised by the directors about the wisdom of what is proposed. Instead the VBA’s obligation as set out within the enterprise agreement is to provide “details of the proposed change, the likely effects on employee working conditions and responsibilities and the rationale and intended benefits of the change”.
[51] The evidence given by the VBA about its motivations for the restructure included identification of its desire to align the work of certain branches operationally, rather than functionally. That means, it was said, a desire to combine policy and auditing and other regulatory functions associated with plumbing and building activities into single service delivery that sits across plumbing and billing. Further assessment of licensing risk by the VBA would take account of risk factors across the disciplines, rather than conducting a risk assessment followed by an auditing response for plumbing and another for building. The evidence given on these matters was plausible and capable of acceptance. Although Ms Mulcahey may hold a different view on the subject, such views, for the purposes of this decision, are not material.
[52] Ms Mulcahey does not accept that these materials amount to her being given by the VBA its rationale and intended benefits of the change. However, a scrutiny of the material so provided indicates the VBA has reasonably exercised its obligations in this regard.
[53] The VBA Agreement specifies that there is an entitlement for employees to have a minimum of 15 working days to consider the proposed change. That was given and in fact the initial consultation closing date of 24 December 2014 was extended to 7 January 2015 when the Community and Public Sector Union requested an extension. 30
[54] Ms Mulcahey provided a proposal document entitled “Compliance & Performance Division Functional Alignment – Alternative Proposal” to the VBA on 7 January 2015. 31 However, rather than being an alternative proposal as such it is probably better characterised as a series of further and very detailed questions of the VBA, as well as being a detailed critique of what the VBA proposed. The document not only asked for a response to certain matters set out within it, but also to matters she had raised verbally by the end of January 2015. Ms Mulcahey’s correspondence included 25 questions or requests for further information.
[55] Having gone through numerous matters in the document, Ms Mulcahey indicates the following;
“j. KPMG recognises the requirement that legislative reform, which brings the plumbing and building processes into greater uniformity, is a necessary pre-condition for organisational reform (Page 13). This precondition has not been met.
The proposal outlined in the Staff Briefing Pack references legislation that is not in effect. There is no legislation currently before Parliament and it is premature to predict with certainty what will be contained in any forthcoming legislation. It is therefore only possible to present an alternative divisional structure based on some hypothetical legislation on which there is no shared knowledge or understanding– this does not seem to be solid ground to base organisational reform on.
Consequently, I will not be presenting a significant alternative divisional structure at this stage that is based on fictional legislation. I do however propose more minor changes.
k. The Staff Briefing Pack argues that the proposed structure will increase the division’s capability to effectively deliver current functional responsibilities. This claim is not supported by any evidence provided through a capability review of current staff or what capabilities are needed in future. The absence of such a capability review, a tool often employed in public and private organisations, creates significant doubt of the claim that the proposed structure will increase the division’s capability.
l. The functional alignment proposal contains the establishment of the practitioner intelligence function within the division. While this seems like a worthy inclusion, I suggest that it be aligned to broader organisational requirements and consider an enterprise risk and intelligence unit instead.
The VBA faces risk in all operational divisions. Risk generally has quantifiable and intelligence components. The Monitoring and Evaluation Reporting Framework being developed by the Governance Unit in the Office of the CEO will have an impact on how all operational divisions work. This is reinforced by the requirements of Stage 2 of the Statement of Expectations that requires the VBA (not just Compliance and Performance division by itself, or any other division) to adopt a risk based approach to achieve regulatory outcomes. I recommend that the ELT should discuss the appropriate way to establish a whole of VBA Risk and Intelligence Team that focuses on a whole of building approach and what falls within that.” 32
[56] While the document does not consist of something that might be immediately identifiable as an alternative proposal, some of the commentary within it does contain matters that she seeks the VBA to take into account in its final decision; see the following as examples; 33
“c. A key weakness of the proposed functional alignment is the lack of performance indicators to benchmark current performance and to measure future performance against.
Furthermore, no performance targets have been identified to facilitate the development of alternative organisational structures. Rather, the proposal in the Staff Briefing Pack rests on general assertions like ‘costs’ or ‘benefits‘ or ‘more effective’ or ‘more timely’ or ‘ever improving’ or ‘contributing to quality outcomes’ or ‘over time’ without defining what these terms mean conceptually and in practice. This makes it extremely difficult to outline an alternative proposal when such key terms and parameters are not defined or measured. VBA management has asked for alternative proposals to be provided. Since this information has not been provided it raises doubt over the intent of the consultation process.”
“g. The Staff Briefing Pack implies that the functional divisional design will enable the Practitioner Intelligence unit to take responsibility of how the division approaches risk. However, it implies that the risks in the building and plumbing industries will be static. In fact, industry risks are dynamic and require ongoing attention. This is confirmed by the results of the recent Building Audit program. Rather, the proposed structured appears to infer a static risk approach with limited capability to detect and/or measure risk and shift resources accordingly. Which unit has responsibility to create the risk framework? Create the audit schedule and prioritise audit activities?”
“u. Consideration should also be given to administrative resource for the Building Audit unit, specifically for undertaking of non-levy performance audits. While it is impossible to know what activities the proposed function to undertake under this new structure, if activity continues as it is currently there is a requirement for an administrative resource. Was it considered that an oh-hire employee has been engaged in this capacity for more than two years? Is it noted that there are significant differences in the technical skills of auditors undertaking levy and non-levy performance audits and this may impact the requirements of the teams?”
[57] In context, the matters put forward by Ms Mulcahey are largely objections or further questions.
[58] It is more likely than not that, upon reading the totality of the material that she put forward, the VBA took the view that she was not putting forward a clear and identifiable alternative proposal to which it could say “yes”, “no” or “maybe, subject to further information”.
[59] The context of all the material put forward by Ms Mulcahey on 7 January 2015, together with the numerous critical comments and questions she had posed to several managers before and after that date, would lead me to the view that it was reasonable for the VBA to not regard what Ms Mulcahey had put forward as being an alternative proposal for the purposes of Stage Two of clause 7.
[60] The VBA’s final decision in this regard was made on 30 January 2015, and was communicated firstly in a meeting directly with Ms Mulcahey and secondly in a divisional briefing at which employees were advised of the final structure.
[61] The divisional briefing included material presented through slides. While the material within those slides certainly addresses the matter of the VBA’s final decision and several changes that it had adopted along the way, it does not specifically identify the alternative proposals the VBA had been provided with or, if any had been provided, whether it had adopted any aspect of those proposals, and if not what the VBA’s considered reasons might be for it not accepting those proposals. For the reason that I have not found that Ms Mulcahey’s communication with the VBA on 7 January 2015 amounted to an alternative proposal, there was no necessity on the part of the VBA to include within its 30 January 2015 material or elsewhere its considered reasons for not accepting anything that she had put forward.
[62] In relation to clause 11, the VBA’s obligation is to apply the Public Sector Workplace Relations policies even though they do not form part of the agreement. I am satisfied that the VBA broadly applied the policies. Amongst other things it ensured Ms Mulcahey was treated fairly and reasonably, and allowed her a reasonable avenue of redress against what she perceived as unfair or unreasonable treatment. Similarly it provided her with assistance once it became apparent to the VBA that her position was surplus to requirements. Ms Mackinnon’s evidence is that, upon termination, Ms Mulcahey was provided with a Targeted Separation Package in accordance with the Public Sector Workplace Relations policies. 34
[63] Clause 21 sets out obligations of the VBA and employees bound to the VBA Agreement about the handling of disputes and grievances. Clause 21.6 provides a four stage process for the articulation and resolution of disputes through a process that emphasises first that disputes should be attempted to be resolved at a local level on an informal basis between the employee and their direct manager. In the event that a dispute is unable to be resolved it is to be referred to a person holding a position of “Director” of the VBA, being a managerial position. That person is to be independent to the dispute or grievance and is obliged to hold a meeting with all relevant parties either independently or together. The parties may provide submissions for consideration of the director, whose obligation is to then attempt to facilitate a resolution that is agreeable to the parties.
[64] The evidence shows both that Ms Mulcahey made use of the procedure and that the VBA complied with its obligations arising under the procedure. Ms Mulcahey’s dispute notification was made to her employer on 24 February 2015, in a letter dated 19 February, and which identified a dispute in respect of three matters as follows;
“ the consultation process following the proposed organisational changes to the Compliance & Performance division announced on Wednesday, 3 December; and
- my role being abolished resulting from the organisational changes to the Compliance and Performance Division announced on Friday, 30 January; and
- the resulting process of redeployment that I am being subject to.” 35
[65] The dispute notification also indicated a lack of faith from Ms Mulcahey about the ability of her manager, Murray Smith, to undertake the conciliation processes contained within Stage 1 of the resolution process of clause 21.6.
[66] Rather than insisting upon Ms Mulcahey undertaking the discussion process as required under the clause, the VBA agreed to her request and referred the dispute to Jarrod Edwards, its Director of Technical and Regulation, to be the independent director allowed for within Stage 2 of the dispute resolution process. While he did not give evidence in these proceedings, it is apparent that while Mr Edwards was unsuccessful in resolving the differences between the VBA and Ms Mulcahey, he undertook the process that is envisaged within the dispute resolution clause.
[67] Stage 2 of clause 21.6 requires that once the matter is referred to the independent director, that person is to hold a meeting with all relevant parties, either independently or together. The evidence shows that he did so, preferring to meet with the parties separately. The clause allows for the parties to provide submissions for consideration in writing and/or verbally and again it appears that such occurred. The independent director is also to attempt to facilitate a resolution that is agreeable to the parties.
[68] While the evidence would suggest that the efforts of the independent director in that regard were not extensive, they were likely appropriate within the context of the matters in dispute and the way in which the parties presented themselves.
[69] Stage 2 of the dispute resolution procedure also requires the independent director to confirm the outcome of their actions in writing, which has been done. Mr Edwards’ report was tabled in these proceedings and that report, to some extent, addresses the process Mr Edwards went through in order to facilitate a resolution that was agreeable to the parties. It shows that Mr Smith met with Ms Mulcahey on 10 March 2015 and then on 11 March 2015 and he considered certain relevant documents. Mr Edwards then met with Mr Smith on 11 March 2015 and discussed the situation with him.
[70] Mr Edwards then met with the VBA’s Acting Chief Executive Officer, Ms Marlo Baragwanath, on 11 March 2015 and he reports about that meeting the following, together with his conclusion about the overall dispute and his role within it;
“A meeting with Ms Baragwanath was held on 11 March 2015, at this meeting I advised that I had previously met with Mr Smith and that the context of that meeting was specific to the options proposed by Ms Mulcahey as they relate to the Compliance & Performance Division structure, Ms Mulcahey's former role and the change management process.
Ms Baragwanath advised that the VBA was not able to accept either of the options as proposed by Ms Mulcahey and strongly refuted the allegations associated with unlawful conduct. Ms Baragwanath advised that the VBA did not consider compensation appropriate and should Ms Mulcahey not be successful in obtaining an alternative position with the VBA she would be entitled to receive a target separation package in accordance with the Victorian Government Workplace Relations Policy. Ms Baragwanath advised that the VBA is not agreeable to either option proposed.
Conclusion
Further to meetings with Ms Mulcahey, Mr Smith and Ms Baragwanath I have concluded that a resolution agreeable to all parties is not able to be achieved at this time.” 36
[71] While it may well have been preferable for Mr Edwards to go somewhat further in endeavouring to see how or if the differences between the parties might be capable of being resolved, I am satisfied that the context within which the parties found themselves in March 2015 is such that it was reasonably open to Mr Edwards to form the view that a pathway between the parties’ differences was not going to be found. To that extent, I am prepared to accept that Mr Edwards complied with his obligation to attempt to facilitate a resolution that is agreeable to the parties. Further, I note that this matter was the subject of two conciliations before me on 29 April 2015 and 6 May 2015, with the first of those being conducted before Ms Mulcahey’s employment with the VBA ended. Even at that point the parties were in a somewhat intractable position. There is no reason to suggest that Mr Edwards would, had he tried a different strategy with the parties in March, achieved an outcome different to that which he reported.
[72] Ms Mulcahey argues that the VBA has not complied with its dispute resolution obligations, both under the VBA Agreement’s clause 21.3 and clause 21.6. Ms Mulcahey’s reference to clause 21.3 is an argument that the VBA has not complied with broad obligations cast by the agreement upon the Authority, with the clause providing the following;
21.3 Resolution Obligations
The following resolution principles will be observed by both parties in the settlement of all disputes and grievances:
(a) The parties will genuinely attempt to resolve the dispute or grievance.
(b) The parties will have the right to procedural fairness.
(c) The parties will cooperate to ensure the process is carried out as quickly (as practicable) and as informally as proper consideration of the matter allows.
(d) The matter will be treated seriously.
(e) The matter will be treated confidentially and discreetly as possible.
(f) The parties to a grievance will be protected from victimisation, as far as practicable.
(g) The parties to a grievance will be offered counselling via the VBA’s Employee Assistance Program.
[73] Ms Mulcahey argues broadly that not only had Mr Edwards failed in his obligations, but also that there is no evidence that the matters she raised in the dispute notification were considered by either the Acting Chief Executive Officer or the Director of Compliance and Performance. Further she argues that the VBA has failed to fulfil its obligations in a timely manner and that Mr Edwards’ report about the dispute notification was addressed to the CEO and not to Ms Mulcahey. She also advances an argument that certain public sector employment principles require that a review of the grievance is to be based on consideration of relevant facts and evidence and that there is no evidence of a review.
[74] While I accept that Ms Mulcahey firmly holds these beliefs about the obligations upon the VBA, it does not necessarily follow that the VBA has failed in the manner that she puts forward. Firstly, the evidence before me demonstrates that the VBA has complied with its obligations under clause 21.3, with there being apparently genuine attempts to resolve the dispute, and nothing that would lead to a finding that those attempts were other than genuine; and that procedural fairness was accorded and that the underlying processes were relatively quick and informal. Further, and with one exception, there is no material that would suggest the matters put forward by Ms Mulcahey were treated other than seriously and confidentially.
[75] The exception referred to is a request made by Ms Mulcahey when she put forward her alternative proposal on 7 January 2015, at which time she requested her proposal be treated with anonymity which was declined by Ms Mackinnon. 37
[76] Why the VBA was not prepared to treat the proposal as anonymous has not been explained, however that fact does not seem particularly untoward or indeed to have prejudiced Ms Mulcahey in any way. Further, the evidence is that Ms Mulcahey was informed by the VBA that it would not be treating her material anonymously and there was then no consequential endeavour by her to withdraw anything she had put forward. In context, while it may have been preferable for the VBA to acquiesce to Ms Mulcahey’s request for anonymity until such time as its need to make a decision meant that anonymity could not be maintained, I do not think that it follows that I should find the VBA has not complied with the obligation under the dispute resolution clause to treat Ms Mulcahey’s grievance confidentially and discreetly.
[77] The obligations within clause 21.3 also require that a person submitting a grievance be protected from victimisation, as far as practicable. There is no evidence before me to suggest there was victimisation. Further, the same clause requires that the parties to a grievance will be offered counselling through the VBA’s employee assistance program, which appears to have been done at several stages of the wider period of consultation about the structural change and the consequential dispute notified by Ms Mulcahey.
[78] In all, I am satisfied that the VBA complied, to the extent that can be reasonably expected, with the obligations it had under clause 21.
[79] Having identified the relevant obligations upon the VBA arising under the enterprise agreement and as applicable to Ms Mulcahey’s circumstance, and having found that the VBA has reasonably complied with each such obligation, it follows that I must find that the dispute question posed above must be answered in the affirmative. It then becomes unnecessary to consider the matter of any relief that should be accorded to Ms Mulcahey.
[80] The dispute question is therefore answered in the following manner;
Question: | Answer: |
(1) In deciding to declare the position in which Ms Colleen Mulcahey was employed to be surplus to requirements and its consequential decision to terminate her employment for reason of redundancy, did the Victorian Building Authority apply the requirements of the Victorian Building Authority Agreement 2013, and in particular with the provisions of; (a) clause 7 (Implementation of Change); | YES |
(2) In the event the Commission finds that the Victorian Building Authority has not applied any or all of the above requirements, what relief should be accorded Ms Mulcahey?” | UNNECESSARY TO ANSWER |
[81] As a result of these findings, the application made by Ms Mulcahey must be dismissed, and an order to that effect is issued at the same time as these reasons for decision.
COMMISSIONER
Appearances:
Ms C Mulcahey on her own behalf
Ms A Cooper (solicitor, Ashurst) for the Respondent
Hearing details:
2015.
Melbourne:
9 November.
1 AE405646.
2 Exhibit A1, Witness Statement of Colleen Mulcahey, Attachment 1.
3 per Telstra v CEPU [2007] AIRCFB 374 at [13], with reference to ING Administration Pty Ltd v Jajoo 158 IR 239.
4 Exhibit A1 [3].
5 Ibid [4]-[5].
6 Ibid [6].
7 Exhibit R1, Witness Statement of Murray Smith, [5].
8 Ibid [7]-[9].
9 Ibid [11]-[14].
10 Exhibit A1 [11].
11 Ibid [14].
12 Ibid Attachment 5, 3.
13 Ibid Attachment 5, 5.
14 Ibid Attachment 5, 7.
15 Ibid Attachment 5, 8.
16 Ibid Attachment 5, 10.
17 Ibid Attachment 5, 18-19.
18 Ibid [14].
19 Exhibit R2, Witness Statement of Kylie Mackinnon, [47].
20 Ibid [57].
21 Fair Work (Commonwealth Powers) Act 2009 (Vic), s.5(b).
22 Exhibit R2 [9].
23 Ibid Attachment KM-1, 1.
24 (1995) 184 CLR 188, at 232 .
25 [2015] FCAFC 1.
26 (1947) 74 CLR 31.
27 (1996) 187 CLR 416.
28 Ibid at [193].
29 Ibid at [190].
30 Exhibit R2 [38].
31 Exhibit A1 [21]; Exhibit A1 Attachments 10 and 11.
32 Exhibit A1 Attachment 11 [2j]-[2l].
33 Ibid Attachment 11 [2c], [2g], [2u].
34 Exhibit R2 [57].
35 Exhibit A1 Attachment 25.
36 Exhibit R2 Attachment KM-25.
37 Exhibit A1 [21].
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