[2019] FWCFB 143

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.266 - Industrial action related workplace determination

Commonwealth of Australia as represented by the Department of Home Affairs
(B2016/1232)

VICE PRESIDENT CATANZARITI
DEPUTY PRESIDENT KOVACIC
COMMISSIONER JOHNS

SYDNEY, 11 JANUARY 2019

Industrial action related workplace determination

[1] The background to this matter is set out in our Statement of 8 June 2018 1 (the June 2018 Statement). In that Statement the Full Bench set out its intentions regarding a number of remuneration related issues. This Decision determines the remaining issues regarding the Department of Home Affairs Workplace Determination 2018 (the Determination) as foreshadowed in the June 2018 Statement and where necessary provides more substantive reasons for our previously outlined approach on remuneration related issues. This Decision also sets out in further detail our reasons for not granting an interim wage increase in December 2017 as sought by the Australian Institute of Marine and Power Engineers (AIMPE)2.

[2] Draft workplace determinations were provided by the Commonwealth of Australia as represented by the Department of Home Affairs 3 (the Department) and the Community and Public Sector Union4 (CPSU). By way of background, Departmental employees are currently covered by Department of Immigration and Citizenship Enterprise Agreement 2011-20145 (the DIAC Agreement) and a number of determinations made under s.24 of the Public Service Act 1999 (the PS Act – the determinations will hereafter be referred to as s.24 determinations).

Interim wage increase – reasons for not granting

[3] We made a statement on transcript 6 on 19 December 2017 declining to grant AIMPE’s application for an interim wage increase of 2 per cent. In that statement we undertook to provide detailed reasons for not granting the increase in our decision regarding the workplace determination. The statement which was published on 21 December 20177 included the following:

“[2] With regard to the Australian Institute of Marine and Power Engineers’ application for an interim wage increase of 2 per cent pending finalisation of a workplace determination for the Department of Immigration and Border Protection, we thank the parties for their detailed written and oral submissions.

[3] We have had regard to those submissions, but in view of the Home Affairs Non-SES Moving Employees Determination 2017 (the Home Affairs Determination), we consider that granting an interim increase would effectively be a leap into the unknown given that there is no material presently before the Commission regarding the terms and conditions of employment of those employees who will be covered by the Determination. We have therefore decided not to grant the application.” 8

[4] We set out below our further reasons for not granting the interim wage increase sought by AIMPE.

[5] Section 601 of the Fair Work Act 2009 (Cth) (the Act) deals with writing and publication requirements for the Fair Work Commission’s (the Commission) decisions and provides scope for the Commission to issue interim decisions. Specifically, s.601(1) provides as follows:

“601 Writing and publication requirements for the FWC’s decisions

(1) The following decisions of the FWC must be in writing:

(a) …

(b) an interim decision that relates to a decision to be made under a Part of this Act other than this Part;

Note: For appeals and reviews, see sections 604 and 605.” 9

[6] Section 267 of the Act deals with the terms of an industrial action related workplace determination and provides as follows:

“267 Terms etc. of an industrial action related workplace determination

Basic rule

(1) An industrial action related workplace determination must comply with subsection (4) and include:

(a) the terms set out in subsections (2) and (3); and

(b) the core terms set out in section 272; and

Note: For the factors that the FWC must take into account in deciding the terms of the determination, see section 275.

Agreed terms

(2) The determination must include the agreed terms (see subsection 274(2)) for the determination.

Terms dealing with the matters at issue

(3) The determination must include the terms that the FWC considers deal with the matters that were still at issue at the end of the post-industrial action negotiating period.

Coverage

(4) The determination must be expressed to cover:

(a) each employer that would have been covered by the proposed enterprise agreement concerned; and

(b) the employees who would have been covered by that agreement; and

[7] Further, we note that the Act does not include a provision which explicitly empowers the Commission to issue an interim workplace determination. As such, if the Full Bench was to have granted an interim wage increase in this case it would have had to rely on s.601(1)(b) of the Act.

[8] More specifically, for a decision granting an interim wage increase in this case to have any legal effect the Commission would be required to issue an interim determination giving effect to that interim wage increase. However, any such interim determination would be inconsistent with s.267 of the Act in that it would not include the agreed terms for the determination [s.267(2)] and terms which the Commission considers deal with the matters that were still at issue at the end of the post-industrial action negotiating period [s.267(3)]. In other words, it is not possible to issue an interim determination which only partially deals with one of the many matters in issue in this case.

[9] The June 2018 Statement included the following:

“[9]... At the hearing on 16 April 2018 the Full Bench sought the Department’s view on issuing a separate decision on the wages claim. While the Department did not object to that approach the Full Bench has decided not to adopt that course but rather to issue this Statement.” 11 (Endnotes omitted)

[10] The further reasons outlined above as to why we did not grant an interim wage increase apply equally to our decision not to issue a separate decision on the wages claim in this case.

Legislative framework

[11] The legislative scheme which regulates the making of a workplace determination is found in Part 2-5 of the Act. Division 3 of Part 2-5 deals with an industrial action related workplace determination and regulates the circumstances in which the Commission must make a determination and the content rules for the determination made.

[12] As to the circumstances in which the Commission must make a determination, the Commission must do so as quickly as possible if:

(a) a termination of industrial action instrument has been made in relation to a proposed enterprise agreement; and

(b) the post-industrial action negotiating period ends; and

(c) the bargaining representatives for the agreement have not settled all of the matters that were at issue during bargaining for the agreement. 12

[13] As noted in the June 2018 Statement 13:

“• on 5 October 2016 Commissioner Wilson issued an Order 14 terminating protected industrial action in support of the then proposed Department of Immigration and Border Protection (described interchangeably as DIBP or the Department as it subsequently became the Department of Home Affairs) enterprise agreement. The following day the Commissioner issued a Decision15 outlining his reasons for terminating the protected industrial action; and

• the post-industrial action negotiating period failed to result in agreement on any of the substantive issues in dispute, with subsequent attempts to narrow the range of issues on which the parties had not reached agreement unsuccessful.”

[14] As to the content rules for the determination, ss.267 and 268 of the Act together with Division 5 of Part 2-5 of the Act deal exhaustively with the content of an industrial action related workplace determination. Only four kinds of terms may be included in a workplace determination. These are discussed briefly below.

Agreed terms 16

[15] Relevantly, in respect of an industrial action related workplace determination, an agreed term is a term that the bargaining representatives for the proposed enterprise agreement concerned had, at the end of the post-industrial action negotiating period, agreed should be included in the agreement. As noted above, the post-industrial action negotiating period failed to result in agreement on any of the substantive issues in dispute.

Terms dealing with matters at issue 17

[16] An industrial action related workplace determination must include the terms that the Commission considers deal with the matters that were still at issue at the end of the post-industrial action negotiation period. In the absence of agreement between the parties on any issues the Full Bench is therefore required to determine each and every aspect of the workplace determination.

Core terms 18

[17] The ‘core terms’ of a workplace determination are set out in s.272 as follows:

“272 Core terms of workplace determinations

Core terms

(1) This section sets out the core terms that a workplace determination must include.

Nominal expiry date

(2) The determination must include a term specifying a date as the determination’s nominal expiry date, which must not be more than 4 years after the date on which the determination comes into operation.

Permitted matters etc.

(3) The determination must not include:

(a) any terms that would not be about permitted matters if the determination were an enterprise agreement; or

(b) a term that would be an unlawful term if the determination were an enterprise agreement; or

Better off overall test

(4) The determination must include terms such that the determination would, if the determination were an enterprise agreement, pass the better off overall test under section 193.

Safety net requirements

(5) The determination must not include a term that would, if the determination were an enterprise agreement, mean that the FWC could not approve the agreement:

(a) because the term would contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); or

(b) because of the operation of Subdivision E of Division 4 of Part 2-4 (which deals with approval requirements relating to particular kinds of employees).” 19

[18] As should be apparent from the above, apart from ensuring that the workplace determination contains only terms that are about permitted matters, not contain unlawful terms or designated outworker terms, passes the better off overall test (BOOT), does not contravene s.55 of the Act and complies with the requirements of Subdivision E of Division 4 of Part 2-4 of the Act, the only expressed “core term” is a term specifying a nominal expiry date that is no more than 4 years after the workplace determination comes into operation.

[19] As noted in the June 2018 Statement, 20 the duration of the workplace determination proposed by the parties ranged from effectively twelve months based on the CPSU’s proposed nominal expiry date of 30 June 2019 (assuming a commencement date of the 1 July 2018 for the workplace determination) to three years as proposed by the Department, AIMPE and employee bargaining representatives, Ms Elizabeth Ryan and Mr Jon Holmes. Further, in the June 2018 Statement21 we indicated that given the difficult, protracted and ultimately unsuccessful negotiations for an agreement we considered the CPSU’s proposed timeframe too short to enable the parties to rebuild their relationship and that a period of three years was too long before the parties had the opportunity to bargain again. Against that background we indicated that a nominal expiry date two years after the date of commencement of the workplace determination would, among other things, provide the parties with an opportunity to rebuild their relationship. We will therefore include a nominal expiry date two years after the date of commencement of the workplace determination in the determination we make.

Mandatory terms 22

[20] The ‘mandatory terms’ of a workplace determination are set out in s.273 as follows:

“273 Mandatory terms of workplace determinations

Mandatory terms

(1) This section sets out the mandatory terms that a workplace determination must include.

Term about settling disputes

(2) The determination must include a term that provides a procedure for settling disputes:

(a) about any matters arising under the determination; and

(b) in relation to the National Employment Standards.

(3) Subsection (2) does not apply to the determination if FWC is satisfied that an agreed term for the determination would, if the determination were an enterprise agreement, satisfy paragraphs 186(6)(a) and (b) (which deal with terms in enterprise agreements about settling disputes).

Flexibility term

(4) The determination must include the model flexibility term unless FWC is satisfied that an agreed term for the determination would, if the determination were an enterprise agreement, satisfy paragraph 202(1)(a) and section 203 (which deal with flexibility terms in enterprise agreements).

Consultation term

(5) The determination must include the model consultation term unless FWC is satisfied that an agreed term for the determination would, if the determination were an enterprise agreement, satisfy subsection 205(1) (which deals with terms about consultation in enterprise agreements).” 23

[21] There is no agreement about the terms of the dispute settlement procedure for inclusion in the determination. The CPSU’s proposed procedure provides for the Commission to arbitrate in circumstances where mediation or conciliation fails to resolve a dispute, whereas the Department’s proposed determination only authorises the Commission to arbitrate in circumstances where the parties to the dispute consent. There are also a number of other differences. We will deal with this issue later in this Decision.

[22] The Department and CPSU have both proposed that the model consultation term be included in the determination. However, the CPSU also proposes the retention (with some amendments) of a number of consultation related provisions of the DIAC Agreement, i.e. provisions relating to the National Staff Consultative Forum (NSCF) and local forums and workplace delegates 24. Consistent with s.273(5) of the Act and the views of the Department and CPSU the model consultation term will be included in the determination we make. We will further consider the abovementioned consultation related provisions in the DIAC Agreement which the CPSU seeks to retain later in this Decision.

[23] The individual flexibility arrangements (IFAs) provision proposed by the CPSU is broader than that proposed by the Department in that it inter alia provides for an individual flexibility arrangement to also deal with remuneration and leave whereas the Department’s provision mirrors the model flexibility term as set out in the Fair Work Regulations 2009 (the Regulations) 25. In the absence of an agreed flexibility term, s.273(4) of the Act provides that the determination must include the model flexibility term. Accordingly, the model flexibility term will be included in the determination we make.

[24] On a related issue, the CPSU has included its proposed flexibility term in the section of its proposed workplace determination dealing with other conditions and arrangements, whereas the Department has included the model term in the section of its proposed determination concerning remuneration. Given that both parties flexibility term provides scope for an IFA to deal with arrangements about when work is performed, we consider the provision more appropriately belongs in the section dealing with other conditions and arrangements.

Coverage 26

[25] An industrial action related workplace determination must be expressed to cover:

(a) each employer that would have been covered by the proposed enterprise agreement concerned; and

(b) the employees who would have been covered by that agreement; and

[26] The coverage provisions of the Department’s and the CPSU’s proposed determinations were identical save for the latter’s provision referring to the Secretary of DIBP as opposed to the Department of Home Affairs. Coverage is dealt with in clause 2 of the draft determination proposed by each party. 27 As the DIBP no longer exists, we will adopt the coverage term proposed by the Department in the determination we make.

Merits arbitration

[27] In determining the matters at issue, the Commission is required to take into account each of the factors set out in s.275.

“275 Factors the FWC must take into account in deciding terms of a workplace determination

The factors that the FWC must take into account in deciding which terms to include in a workplace determination include the following:

(a) the merits of the case;

(b) for a low-paid workplace determination—the interests of the employers and employees who will be covered by the determination, including ensuring that the employers are able to remain competitive;

(c) for a workplace determination other than a low-paid workplace determination—the interests of the employers and employees who will be covered by the determination;

(d) the public interest;

(e) how productivity might be improved in the enterprise or enterprises concerned;

(f) the extent to which the conduct of the bargaining representatives for the proposed enterprise agreement concerned was reasonable during bargaining for the agreement;

(g) the extent to which the bargaining representatives for the proposed enterprise agreement concerned have complied with the good faith bargaining requirements;

(h) incentives to continue to bargain at a later time.” 28

[28] The reference to ‘include’ where second appearing in the first line of s.275 suggests that the Commission is not confined to those considerations alone, and can have regard to any other relevant considerations in the circumstances of the particular case. 29 The provisions found at ss.577 and 578 are therefore relevant. Section 577 provides as follows:

“577 Performance of functions etc. by the FWC

The FWC must perform its functions and exercise its powers in a manner that:

(a) is fair and just; and

(b) is quick, informal and avoids unnecessary technicalities; and

(d) promotes harmonious and cooperative workplace relations.

Note: The President also is responsible for ensuring that the FWC performs its functions and exercises its powers efficiently etc. (see section 581).” 30

[29] Section 578 provides:

“578 Matters the FWC must take into account in performing functions etc.

In performing functions or exercising powers, in relation to a matter, under a part of this Act (including this Part), the FWC must take into account:

(a) the objects of this Act, and any objects of the part of this Act; and

(b) equity, good conscience and the merits of the matter; and

(c) the need to respect and value the diversity of the work force by helping to prevent and eliminate discrimination on the basis of race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.” 31

[30] Apart from these matters, a Full Bench in Transport Workers' Union of Australia v Qantas Airways Limited; Q Catering Limited 32 (Qantas Airways) made the following observations in relation to the merits considerations with which we agree:

“[33] This is obviously an important consideration although it is neither possible nor desirable to exhaustively list the disparate merit considerations that might be considered relevant in this matter.

[34] EBA7 is an appropriate starting point because it represents the package of terms the parties have previously agreed to apply, the terms under which the parties are presently operating, and the basis for the negotiations conducted by the parties. If terms have not been operating satisfactorily or if circumstances have changed such as to warrant a change, then a party seeking the change must make out a case for the change. Traditional merit considerations will be relevant. These fall generally within the concepts contained in the objects of the Act including the achievement of productivity and fairness through enterprise level collective bargaining, noting that this arbitration is in substitution for bargaining between the parties that did not result in an agreement.

[35] It is also relevant to have regard to practices of other employers in the airline industry and the terms and conditions applying to their employees. Such information is capable of being relevant to the fairness of particular terms as well as the appropriateness of the package of benefits in a highly competitive environment. We note in this regard that in many respects, the current wages and conditions of the employees covered by this arbitration are the highest or among the highest of comparable employees in the airline industry in Australia.

[36] As the arbitration involves the replacement of an enterprise agreement, limitations on powers for making modern awards are not relevant. However issues of principle and the approach of industrial tribunals to particular matters will be relevant to the merits of the case. These include the general reluctance of industrial tribunals to interfere with the right of management to manage its business, unless some unfairness to employees is demonstrated. The Full Bench decision in the XPT Case is frequently quoted as stating the relevant principle. The Bench expressed the principle in these terms:

“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.”

[37] The extent to which the parties have been prepared to deal with matters in enterprise bargaining negotiations and their approach to such matters for this and other groups of employees will also be relevant. Such practices may provide a guide to deciding what provisions are fair and reasonable in a workplace determination applying at this enterprise.” 33 [Endnotes omitted]

[31] Section 275(b) is not relevant in this case as the Commission is not tasked with making a low-paid workplace determination.

[32] Section 275(c) requires the Commission to take the interests of the employers and employees who will be covered by the determination into account. This consideration calls for an appropriate balance between the legitimate expectations of the employers and employees. 34

[33] Section 275(d) requires the Commission to take the ‘public interest’ into account. The public interest imports a discretionary value judgment confined only by the subject matter, scope and purpose of the Act and refers to matters that may affect the public as a whole such as the achievement or otherwise, of the objects of the Act, employment levels, inflation and the maintenance of appropriate industrial standards. 35

[34] The statutory distinction between the interests of the employer and employees on the one hand found in s.275(c) and on the other, the public interest found in s.275(d) means that the public interest is distinct from the interests of the parties, though the considerations may overlap so that which is in the public interest might also be in the interests of one or more of the parties. 36

[35] One of the factors which the Commission must take into account and found in s.275(e) is ‘how productivity might be improved in the enterprise ... concerned’. The meaning of the word ‘productivity’ in this context was considered by a Full Bench in Schweppes Australia Pty Ltd v United Voice Victoria Branch 37 (Schweppes) which stated as follows:

“[37] The term ‘productivity’ appears in several Parts of the Act:

• Part 1-1 - Introduction; s.3 - Object of the Act;

• Part 2-3 - Modern Awards: s.134 - The modern awards objective;

• Part 2-4 - Enterprise agreements; s.171 - Objects of the Part, ss.241 and 243 - Low paid bargaining and authorisation;

• Part 2-5 -Workplace determinations; s.262 - special low paid workplace determination and s.275 - Factors to be taken into account in deciding the terms of a workplace determination;

• Part 2-6 - Minimum wages; s.284 - The minimum wages objective; and

• Part 2-8 - Transfer of business; ss.318-320 - Making and variation of transferable instruments.

[38] ‘Productivity’ is not defined in the Act but given the context in which the word appears it is clear that it is being used to signify an economic concept. It may be regarded as a technical word and hence evidence may be admitted to interpret its meaning.

[39] The Productivity Commission defines productivity as:

“...a measure of the rate at which outputs of goods and services are produced per unit of input (labour, capital, raw materials, etc). It is calculated as the ratio of the quantity of outputs produced to some measure of the quantity of inputs used”

[40] Similarly, the Commonwealth Treasury also defines productivity by reference to volumes of inputs and output:

“Productivity is a measure of the rate at which inputs, such as labour, capital and raw materials, are transformed into outputs. The level of productivity can be measured for firms, industries and economies. Productivity growth implies fewer inputs are used to produce a given output or, for a given set of inputs, more output is produced.”

[41] The Oxford Dictionary of Economics (2012) similarly defines productivity as the ‘amount of output per unit of input achieved by a firm industry or country’.

[42] We accept that the conventional economic meaning of the word productivity is the number of units of output per units of inputs. Productivity is a measure of the volumes or quantities of inputs and outputs, not the cost of purchasing those inputs or the value of the outputs generated. Schweppes incorrectly equates productivity with the average cost of labour per unit, which, properly understood, is a measure of nominal unit labour costs.

[43] In our view productivity, as used in the Act, refers to the conventional economic meaning of the quantity of output relative to the quantity of inputs. It is quite different in concept to the price of output and price of inputs, including the price of labour.

[44] The legislative context is also important. Context may require a word to be read more narrowly than if was considered in isolation. In this regard we note that the ‘modern awards objective’ (s.134) requires consideration of the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden. The distinction between productivity and employment costs recognises that whilst employment costs will be affected by productivity in relation to the quantity of labour input required, the price of labour constitutes a separate and distinct consideration. A similar distinction is made between productivity and business competitiveness and viability in the ‘minimum wages objective’. It may be presumed that Parliament intended the word productivity to have the same meaning throughout the Act.

[45] Accordingly, we find that ‘productivity’ as used in s.275 of the Act, and more generally within the Act, is directed to the conventional economic concept of the quantity of output relative to the quantity of inputs. Considerations of the price of inputs, including the cost of labour, raise separate considerations which relate to business competitiveness and employment costs.

[46] Financial gains achieved by having the same labour input - the number of hours worked - produce the same output at less cost because of a reduced wage per hour is not productivity in this conventional sense. A reduction of unit labour costs, achieved under Schweppes’ shift proposal through less overtime and lower shift loadings, does not constitute productivity within that conventional meaning. Similarly, an increase in the value of output achieved through product differentiation and a higher average value of the quantity of output is not productivity in the conventional sense.” 38 [Endnotes omitted]

[36] As to s.275(f) and (g), these matters are of some controversy in this matter. The first of these matters is directed to the conduct of the bargaining representatives during bargaining for the agreement in question and therefore focuses on the bargaining process leading to the termination of the industrial action and this arbitration. 39 The consideration of conduct should be applied against the background of the rights and obligations available to parties involved in enterprise bargaining under the Act.40 In general, conduct that is lawful and available under applicable laws would not be considered unreasonable because the scheme of the Act, as with predecessor legislation, permits parties to take protected industrial action and engage in robust negotiation tactics in support of their claims in enterprise bargaining.41 We give consideration to these factors later in this decision.

[37] Section 275(g) requires the Commission to take into account incentives to continue to bargain at a later time, and is consistent with the encouragement of collective bargaining and the desirability of parties making enterprise agreements central to the objects of the Act. 42

The Department’s case

[38] The Department contended that on any view the CPSU’s proposed workplace determination came at an extraordinary cost to the public purse. The Department further contended that the CPSU’s endeavour to persuade the Full Bench to adopt a predisposition towards existing terms and conditions was flawed for several reasons, including that the CPSU’s proposed workplace determination went beyond the existing terms and conditions and sought to “cherry pick” the more beneficial provisions of the DIAC Agreement and the Australian Customs and Border Protection Service Enterprise Agreement 2011-2014 43 (the ACBPS Agreement which together with the DIAC Agreement will be referred to as the Agreements). The Department also posited that the CPSU did not suggest that there were any gains in productivity attributable to measures in its proposed workplace determination, adding that any productivity gains which had been secured by the Department following integration were predominantly attributable to the introduction of new technologies and systems of work.

[39] The Department submitted that the parties’ outlines of submission in opening revealed two significant differences in the positions of the CPSU and the Department in relation to the task of the Full Bench. First, they differ on the approach of the former Australian Industrial Relations Commission in CFMEU v Curragh Queensland Mining Ltd 44 (Curragh) and second they differ on the issue of whether the Full Bench ought to start from a disposition that a party seeking to make a case for change from existing terms and conditions has the onus of making a case for that change. As to the first issue, the Department submitted that to the extent that the CPSU sought an outcome that was in some way founded upon what would have happened had bargaining continued that should be rejected, adding that it would be speculative to say the least as to what the outcome may have been in circumstances where the parties had such entrenched positions and were most unlikely to reach agreement. With regard to the second issue, the Department contended that the objective considerations in s.275 of the Act did not afford any presumptive primacy to the status quo and that if presumptive primacy was to be afforded to a single pre-existing enterprise agreement it would be the DIAC Agreement on the basis that it had historically applied to the majority of employees who would be covered by the workplace determination.

[40] In respect of the s.275 considerations, the Department submitted that:

• the merits of its proposal were informed by

• its limited and diminishing financial resources which confirmed the need to secure improvements in productivity and efficiency and reduce labour costs, and

• the requirement for flexibility and agility in its workforce in order to perform its public duty efficiently and effectively;

• the suggestion that the Full Bench should simply retain the terms and conditions of the various pre-existing enterprise agreements that applied to Departmental employees through the use of schedules to the proposed workplace determination should be rejected;

• there was merit to its claim for a determination which relieved it from the sub-optimal levels of productivity and efficiency of its workforce arising from the constraints of the Agreements in relation to hours of work, rostering, disparate terms and conditions of employment for similar roles and remuneration and allowances;

• there was also merit to its case in relation to the impact of the CPSU’s proposal on jobs and the financial position of the Department and its ability to fulfil its statutory functions;

• in assessing the merits the Commission should also have regard to a number of general economic factors;

• the interests of employers may include ease of administration, productivity gains through better utilisation of resources, cost savings, greater certainty and flexibility, reducing the size of the workforce and the introduction of new technologies to lower operating costs and in this case also includes ensuring that it was able to operate as efficiently and effectively as possible in the strict regulatory environment in which it exists;

• the interests of employees may include increased income, avoidance of disruption to domestic life, greater security employment with opportunities for advancement and having input into operational decisions without interfering with managerial prerogative;

• the assessment of the interests of employers and employees is evidence-based;

• the total cost of its salary increase proposal for the three years of its proposed workplace determination was $144.9 million;

• its proposed workplace determination, if made, would result in a phased reduction in staffing levels over three years, with that reduction in staffing levels to be facilitated by natural attrition;

• the estimated cost of the CPSU’s proposed determination was $613.9 million over three years which would result in additional costs over and above the Department’s proposal of $469 million over three years;

• there was public interest in a government agency adhering to the policies of the government of the day adding that this is what the Department sought to do during bargaining;

• consistent with authority there was significant public interest in the Full Bench giving weight to the Government’s Workplace Bargaining Policy in the context of the Government’s overall fiscal strategy;

• the evidence firmly established that the Department was unable to fund the cost of the CPSU’s proposed workplace determination internally;

• there was considerable downward pressure on the Department’s operating budget;

• as both Mr Swan and Dr Emerson conceded, the Government’s capacity to meet costs is a matter for the Government of the day;

• there was significant public interest in ensuring that the terms of any workplace determination could be funded through internal funding within the Department, adding that such a position was not undermined in any way by the evidence of Mr Wayne Swan and Dr Craig Emerson;

• the Commission must look favourably upon terms which support or permit potential improvements in productivity;

• one way in which the Commission could contribute to productivity improvement was to give attention to unreasonable restraints on productivity and to eliminate them where ever that can be done consistent with the maintenance of fair standards of treatment for employees;

• in respect of the conduct of bargaining representatives, at its highest the evidence established nothing more than that the Department refused to make concessions sought by the CPSU during bargaining;

• it accepted that all bargaining representatives took a strong stand in the negotiations but that in pursuit of that stand no one acted inappropriately;

• anything said or done outside of bargaining was not relevant when considering the conduct of bargaining representatives;

• the CPSU had failed altogether to establish that the Department had acted unreasonably or contrary to the good faith bargaining requirements during bargaining;

• throughout bargaining the CPSU rigidly adhered to its endorsed bargaining position, adding that at no stage did the CPSU document a proposal in relation to a composite rate of allowances, a proposal on wages that would establish pay parity for all employees or a proposal for the removal of unnecessary duplication of allowances;

• it was entirely appropriate for the Department to engage in bargaining in accordance with the parameters set by the Government’s Workplace Bargaining Policy, adding that there was nothing contrary to the good faith bargaining requirements in a non-party exercising some influence over a party negotiating an enterprise agreement;

• it made appropriate concessions on numerous occasions during bargaining, gave genuine consideration to the proposals put by the CPSU through bargaining, gave genuine consideration to the wishes and demands of employees and responded to CPSU proposals or requests for information in a timely manner;

• the matters in ss.275(f) and (g) were not of sufficient gravity to influence the outcome or the content of the workplace determination in this case;

• in reaching a view as to the entirety of the workplace determination, the Commission should stand back and make an overall assessment as to whether the package of terms and conditions of employment is a disincentive to future bargaining, i.e. the Commission should leave room for the parties to negotiate a new enterprise agreement to replace the workplace determination.

[41] The Department contended that its proposed workplace determination sought to promote a rational and measured set of terms and conditions of employment. In its submissions, the Department dealt at length with the competing remuneration proposals. In the June 2018 Statement we set out the Department’s position on remuneration. 45 Given that the June 2018 Statement set out our intentions regarding a number of remuneration related issues (including wages), we do not repeat here the Department’s submissions regarding remuneration.

[42] In respect of the evidence in this matter, the Department submitted that where there was a disparity between the evidence of its witnesses Mr Murali Venugopal and Mr David Leonard on the one hand and the union officials and delegates on the other hand, that the account given by Messrs Venugopal and Leonard was to be preferred. The Department also stated that it did not challenge the credit of any of the CPSU delegates or officials though it contended it was apparent from the evidence that they gave that they were heavily invested in the opinions that they expressed. As such, the Department posited that their evidence was less than objective and less likely to assist the Full Bench in carrying out its task. The Department maintained that there was no reason to reject or devalue the evidence of any of its witnesses.

[43] Beyond that, the Department submitted that the prerequisites set out in s.266 of the Act had been met, that its proposed workplace determination included the core terms required by s.272 of the Act and the mandatory terms for the purposes of s.273 of the Act, and that its proposed determination comfortably satisfied the BOOT.

[44] In its Outline of Oral Submissions 46, the Department contended that the CPSU’s submissions disregarded the distinction between negotiation and arbitration, invited the Full Bench to evaluate the negotiating position of the parties near the end of bargaining and diverted attention from the merits of the provisions of the parties respective workplace determinations. The Department further contended that the CPSU invited the Full Bench to adopt a number of terms from its third proposed enterprise agreement (third offer)47 as the starting point for the purposes of the workplace determination, adding that if accepted it would have the effect of removing any incentive to bargain.

[45] The Department submitted that the following extract from the decision in Curragh should guide the Full Bench:

“… Nevertheless, there is much to be said in cases of this kind for preserving, as far as it can be preserved, the traditional distinction between negotiation and arbitration so that the task of arbitration can take place without any need to examine the relative correctness of the parties' negotiating positions or tactics unless such an examination contributes in an objective way to an evaluation of the merits of the claim. Such an approach is not inconsistent with the requirement upon the Commission to have regard to the extent to which the conduct of the negotiating parties during the bargaining period was reasonable.” 48

[46] While the Department acknowledged that its third offer contained a package of terms and conditions that were acceptable to it at a time when it had been subjected to significant industrial action, it submitted that the compromises offered in those circumstances represented a proxy for its interests in the context of these proceedings. The Department added that it should not be criticised for not including the compromised conditions in its proposed determination in circumstances where inter alia those conditions were rejected by the CPSU and employees and the CPSU never compromised on its bargaining position.

[47] As to the criticisms of the development of its proposed workplace determination, the Department rejected any suggestion that Mr Leonard was on a frolic of his own, positing that the process by which an employer arrives at the contents of a proposed workplace determination was not within the scope off any of the factors in s.275 of the Act.

[48] Also in its Outline of Oral Submissions the Department responded to the CPSU’s submissions on a range of issues, including allowances and other entitlements, performance management and consultation. Similarly, the Department also responded to the submissions of AIMPE, Ms Ryan and Mr Holmes on a number of matters in issue.

[49] Key aspects of the Department’s oral submissions included that:

• it was wrong to say that any presumed primacy should be given to anything, adding that if there was to be any presumed primacy given to anything it certainly was not the ACBPS Agreement 49;

• the decisions in Qantas Airways and Health Services Union v Austin Health 50(Austin Health) stand for the proposition that in making a workplace determination the Commission should avoid, to the extent that it can, including any material which might be described as aspirational content51;

• those decisions informed its position in relation to the CPSU’s claims regarding freedom of association and occupational health and safety and to a certain extent also informed its position in relation to performance management 52;

• were the Commission to adopt a number of terms in the Department’s third offer as the starting point for the purposes of the workplace determination it would have the effect of removing any incentive to bargain 53;

• in terms of the productivity improvements that had occurred since integration, there was no clear evidence that those productivity gains were attributable to labour input 54;

• in terms of how productivity might be improved, the evidence was that the Department was satisfied that the flexibilities that would be delivered up through its proposed workplace determination and the removal of unreasonable restraints would deliver up productivity gains 55;

• in respect of the CPSU’s alternative proposal as outlined in its correspondence of 12 April 2018 56 (see below)

• the proposal simply complicated things by adding another layer, particularly as the Commission would still be required to determine whether the content proposed in the CPSU’s correspondence is appropriate to form the terms of a workplace determination having regard to s. 275 of the Act 57,

• if the proposal simply involved a matter of attaching a schedule and saying that consideration of those matters could be left until later then the CPSU was inviting the Commission to abrogate its statutory responsibility to make a workplace determination 58,

• the proposal was antithetical to an essential element of the CPSU’s case, i.e. the need for equity or parity in terms and conditions of employment for all employees doing the same work 59,

• the suggestion that it was appropriate for the Commission to adopt the CPSU’s alternative approach should not be accepted 60, and

• it would be totally inappropriate for the Commission to be seduced by the alternative position as offering some convenient or easy way out 61.

[50] Ms Jenet Connell, the Chief Operating Officer (COO) and Deputy Secretary Corporate of DIBP; Mr Steven Groves, DIBP’s Chief Financial Officer (CFO) and First Assistant Secretary, Finance Division; Mr David Leonard, DIBP’s Assistant Secretary, Work Health and Safety and Enterprise Agreement Taskforce; Mr Murali Venugopal, DIBP’s First Assistant Secretary, People Division; and Mr Clive Murray, Assistant Commissioner, Strategic Border Command with the Australian Border Force (ABF), all gave evidence for the Department. Their evidence is summarised below.

Ms Jenet Connell

[51] In her witness statement 62 Ms Connell provided an overview of the 2015 integration of the former DIAC and Australian Customs and Border Protection Service (ACBPS) to form DIBP (hereafter referred to as integration) stating that integration was formally completed on 30 June 2016. Among other things, Ms Connell deposed that the pursuit of a unified culture of integrity and professionalism had been inhibited by the inequity in terms and conditions of employment between the former DIAC and ACBPS. Ms Connell further deposed that a unified workplace culture would not be achieved unless DIBP secured:

• streamlined terms and conditions of employment by way of a single industrial instrument;

• a technological environment which was consistent and streamlined across the entire agency; and

• operationally efficient accommodation for its entire workforce with a significantly reduced number of premises which enhanced the coordination and co-location of complimentary elements of DIBP’s operations.

[52] Key aspects of Ms Connell’s oral evidence included that:

• DIBP Senior Executive Service (SES) salaries had been increased in November 2016 and July 2017; 63

• the failure to achieve a new enterprise agreement for DIBP within 12 months of integration, consistent with the expectation set out in the joint Australian Public Service Commission (APSC) and Department of Finance publication Machinery of Government Changes A Guide for Agencies, 64 was not through a lack of effort, adding that there was no exemption from the Government’s Workplace Bargaining Policy to facilitate integration;65

• the Department continues to deliver and meet growing volumes of activity and its key performance indicators; 66

• some staff had been involved in the introduction of new technologies to assist with their roles, later accepting that where this had occurred the intent was to free up staff to do higher level work with the result being that some employees may be performing at a higher skill level; 67 and

• she did not necessarily agree with the proposition that employees had taken on increased responsibility since integration. 68

Mr Clive Murray

[53] Mr Murray provided two witness statements. 69 In his first witness statement Mr Murray provided a comprehensive overview of the establishment, structure, operations and future priorities of the ABF. Among other things, Mr Murray deposed that:

• since integration there had been significant reforms to the way in which DIBP targeted areas of risk and intervened to minimise vulnerabilities in the various domains in which it operated;

• the ABF needed to move its resources away from relatively low level transactional-based work which could be facilitated through improved technology measures so as to deploy personnel into roles requiring the exercise of professional judgement in relation to areas of higher assessed risk;

• to do this it needed the means to generate a sense of “one” ABF and have the ability to upskill its officers without the distraction caused by the current differing industrial arrangements; and

• the activities of the ABF continued to increase, e.g. since 2011-2012 incoming air cargo had increased by 90 per cent, imported sea cargo had grown by 17 per cent and the number of international air and sea travellers had increased by approximately 25 per cent.

[54] In respect of the impediments arising from DIBP’s existing industrial arrangements, Mr Murray deposed that the DIBP workforce was made up of people performing the same duties in blended teams but who were engaged on different terms and conditions of employment. Examples cited by Mr Murray included the inequities in rostering arrangements due to different working hours for officers formally covered by the Agreements and the different conditions applying to Executive Level (EL) 2 employees under those Agreements. Mr Murray further deposed that:

• this impaired the development of a unified professional law-enforcement culture in the ABF and was a genuine impediment to the cultural change management strategies to establish a credible, professional ABF;

• this was continuing to prove difficult to manage in a day-to-day operational environment;

• the Department’s proposed workplace determination removed these constraints, while a number of terms of the CPSU’s proposed workplace determination had the potential to seriously impair or undermine the ABF’s operations;

• the significant upfront cost of the CPSU’s proposal would have a material effect on DIBP’s financial position with a consequent impact on the ABF’s capacity to fulfil its principal functions; and

• many of the allowances under the current industrial arrangements which the CPSU sought to preserve were a disincentive for some employees to leave positions with generous entitlements.

[55] In his witness statement in reply, 70 Mr Murray inter alia responded to aspects of the witness statements of a number of CPSU witness statements. In particular, Mr Murray:

• disagreed with Mr Michael Suijdendorp’s statement that it would be difficult for DIBP to attract and retain suitable qualified and committed staff in the absence of standards of remuneration which kept pace with external employers, citing two recent recruitment rounds which had attracted 2,300 applicants; and

• in respect of Ms Brooke Muscat-Bentley’s statement, agreed that there were areas of DIBP’s operations where volumes were increasing such as airports but disagreed that this had necessarily increased workload pressures on individual employees beyond what was ordinarily expected of ABF personnel in their day-to-day activities.

[56] In his oral evidence Mr Murray attested that:

• the expectations of staff had grown in the sense that they had greater responsibility in terms of being deployed in mobile and agile teams, later acknowledging that ABF employees were both cooperating in implementing the reforms outlined in his witness statement and performing at a higher level; 71

• not all ABF personnel were working in “blended” teams, i.e. teams comprised of ABF and DIBP staff; 72

• with regard to the ABF 2020 document 73, he was not suggesting that there were any obstacles to achieving the various objectives (the so-called eight pillars) set out in the document though there were some impediments in terms of growing a culture of a professional ABF;74

• the fact that staff had not had a pay increase for four years was having an impact on morale; 75

• the ABF had been able to deal with any concerns about allowances making people inflexible by directing staff to relocate, adding that staff movements were happening; 76

• he disagreed that requiring marine engineers to work 195 days as opposed to 191 days each year was not fair or unreasonable in the circumstances; 77 and

• he was unable to explain why the quantum of allowances proposed in the Department’s workplace determination was lower than what had been proposed in the various agreements which were voted on by employees. 78

Mr Murali Venugopal

[57] Mr Venugopal filed three witness statements. 79 In his first witness statement Mr Venugopal provided a detailed overview of integration, the current industrial instruments applying to DIBP, the enterprise agreement negotiations for DIBP, the composition of DIBP’s workforce, Australian Public Service (APS) employment arrangements and relevant legislation and an outline of what he considered to be essential elements for a workplace determination. Among other things, Mr Venugopal deposed that:

• integration required a particular focus on leadership and culture and the development of a new workforce model, adding that it was essential for DIBP to secure terms and conditions of employment which would support an agile and mobile workforce;

• limited financial resources imposed a significant constraint upon DIBP when negotiating for an enterprise agreement and in proposing its workplace determination;

• more than half of DIBP’s expenditure was on labour costs, adding that given the abovementioned financial resourcing constraints the net cost of any enterprise agreement would have a direct impact on labour costs and jobs;

• throughout the enterprise agreement negotiations DIBP sought to secure an outcome which would preserve a workforce which could sustain an efficient and effective service in the face of increasing demands and diminishing resources; and

• the Department’s proposed workplace determination would result in a phased reduction in staffing levels over three years facilitated by natural attrition whereas the CPSU’s proposed workplace determination would result in an immediate and drastic reduction in staffing levels such that he could not see how DIBP could sustain an efficient and effective service.

[58] As to the essential elements of a workplace determination, Mr Venugopal deposed that they were:

• establishing a single set of terms and conditions which included consistent working hours for all employees, a single set of pay ranges and a rationalised allowance structure that reflected a multi-skilled, deployable location based workforce;

• allowing change to be progressed without disproportionate consultation while providing for consultation on major change and proposals to change working hours and arrangements;

• providing the flexibility required to operate an around-the-clock frontline operation with highly variable work requirements in a way which allowed the Department to determine when work was required to be performed, to set employee attendance requirements after appropriate consultation and which provided flexibility for employees within operational constraints;

• providing remuneration outcomes which were sustainable and affordable; and

• providing location based allowances which reflected contemporary standards.

[59] Mr Venugopal further deposed that the Department’s current workplace settings were debilitating and entrenched inflexibilities through skill and location based allowances, constrained the Department’s ability to deliver the necessary operational model required to protect Australia’s border and manage the movement of people and goods across it and were not fit for purpose for a modern, skilled workforce that worked in blended teams. More specifically, Mr Venugopal deposed that:

• the current allowance based structure of terms and conditions entrenched employees in certain locations and roles because the income differential associated with some allowances meant that employees were reluctant to take up new positions which did not carry the same allowances;

• the administration of the 60 or so existing allowances required manual intervention by payroll staff and an understanding of each allowance and how and when it applied;

• the current consultation provisions were ineffective; and

• performance management was another area in need of reform, describing the current performance assessment and measurement mechanisms as inefficient and resulting in management being reluctant to undertake any performance management for fear of getting buried in a detailed and inefficient process.

[60] In his second witness statement 80 Mr Venugopal provided a more detailed overview of the enterprise agreement negotiations. In doing so, Mr Venugopal disputed aspects of Mr Muffatti’s evidence and denied any suggestion that the Department’s conduct throughout the negotiations was anything other than reasonable and in accordance with good faith bargaining requirements. Mr Venugopal also deposed that in the context of bargaining meetings over the period late August to late September 2016 the CPSU position remained largely unchanged, adding that at no stage did the CPSU table a direct response to any enterprise agreement proposed by the Department or table a draft of its own. Beyond that, Mr Venugopal acknowledged that the Department had been able to secure improvements in productivity over the period since the expiry of the Agreements. Those productivity improvements he deposed stemmed from advancements in technology, the development and more targeted use of intelligence, streamlining processes through the use of technology and through programs such as the Trusted Trader Programme. Mr Venugopal added that these improvements in productivity had been achieved through considerable financial investment by the Department.

[61] Mr Venugopal used his third witness statement 81 to tender a number of documents relating, among other things, to the Department’s terms and conditions of employment.

[62] Mr Venugopal was cross examined extensively regarding a number of issues, particularly the performance management provisions reflected in the Department’s proposed workplace determination. Key aspects of Mr Venugopal’s oral evidence were that:

• in January 2016 he became the Department’s lead negotiator in the enterprise bargaining negotiations; 82

• at no stage did he discuss with the APSC the progress of the enterprise bargaining negotiations; 83

• the Department indicated in proceedings in the first half of April 2016 relating to the suspension of the CPSU’s protected industrial action that it was ready to put a further proposed agreement on the table in the enterprise bargaining negotiations; 84

• there were no enterprise bargaining negotiations between 27 April 2016 (when CPSU protected industrial action was suspended) and 30 August 2016, primarily as a result of the caretaker period from mid-May until the latter part of July 2016 and the need to obtain APSC approval of the proposal to be tabled; 85

• the Department was constrained in bargaining by the Government’s Workplace Bargaining Policy and by its bargaining position/agency specific considerations; 86

• the removal of policy matters from the proposed agreement resulted in employees not having recourse to the proposed agreement’s dispute resolution procedure over those matters; 87

• the Department’s workforce had been agile, flexible and able to adapt following integration; 88

• he did not agree that that there was no impediment in the Department’s current employment arrangements to the workforce being agile, flexible and adaptable, citing the range of location and job specific allowances as an example but later conceding that he did not have any direct experience in directing an employee to move and that employee refusing to do so because of the Department’s existing industrial arrangements; 89

• it was not the case that the difference between the Department and bargaining representatives was that the Department wanted to reduce conditions to the lowest common denominator, though he acknowledged that employees who currently received the Use of Force Allowance would be around $700 per annum worse off under the Department’s proposed composite allowance while those employees who were also paid the Custodial Firearms Instructor Allowance would be a further $700 per annum worse off under the proposal; 90

• the CPSU indicated in the negotiations that it was willing to discuss a composite allowance on the basis that no one went backwards; 91

• his criticism of the CPSU for not providing a proposed agreement was not unfair in circumstances where he had not asked the union to do so because it was his expectation that the CPSU would provide him with alternative clauses; 92

• on 9 September 2016 Mr Richard Muffatti responded to his request to provide in writing the CPSU’s position as to how bargaining could be resolved 93, adding that Mr Muffatti had also put to him in meetings that the Department’s failure to depart from the Workplace Bargaining Policy was causing problems in reaching agreement, that the Department was being inflexible and that the Department’s proposals would reduce the take-home pay of CPSU members;94

• the negotiations turned on what the Department sought; 95

• the Department did change its position on some key issues in the negotiations in September 2016, e.g. on 27 September 2016 on the issue of hours of work the Department agreed that it would grandfather a 7 hour 21 minute working day for former ACBPS employees, though he agreed the Department’s proposed workplace determination provided for a 7 hour 30 minute working day for all employees; 96

• with regard to the comments in his witness statement on the issue of performance management:

• he had not conducted a formal review of performance in the Department,

• data drawn from the Department’s performance management system indicated that in 2015-2016 one employee had been rated as not meeting requirements out of a workforce of 14,000,

• the Department’s proposed approach, i.e. shifting those provisions setting out the details of the Department’s performance management process from the enterprise agreement to policy documents, predated his involvement in the enterprise bargaining negotiations,

• the Department’s proposed approach of replicating the existing approach in policy documents would not result in the removal of any impediments or streamlining, and

• managers approached performance management with some degree of hesitation in circumstances where the process was reflected in an enterprise agreement as opposed to a policy document, agreeing that this might be as a result of fears that under the former arrangement a dispute might be brought before the Commission; 97

• the Department’s third offer was costed at $206 million whereas its proposed workplace determination was costed at $144.9 million, disputing that this was because the Department’s third offer was significantly more generous than its proposed workplace determination; 98

• the motivation behind the difference between the Department’s third offer and its proposed workplace determination was that the latter more truly reflected the Department’s position, adding that the motivation was not to punish employees for voting down the third offer and that the workplace determination was entirely parity driven; 99 and

• further on the issue of performance management he deposed that:

• the existing arrangements were inefficient for several reasons, including that the current arrangements provided for a three point rating scale as opposed to a five point rating scale which he considered provided a better opportunity to provide meaningful feedback,

• the Department’s proposed workplace determination simply referred to the existence of a performance management framework and did not contain aspirational language whereas the Department’s third offer had slightly aspirational language,

• not a lot of disputes over performance management had been brought to the Commission in recent years by either the Department or its employees,

• a right of review under s.33 of the PS Act would remain under the Department’s proposed approach to performance management,

• clause 6.7 in the Department’s third offer merely replicated what was in policy, and

• accepted that whatever was written in an agreement was enforceable and was therefore a right and that should performance management provisions be removed from the determination they would no longer be enforceable and therefore would no longer be a right. 100

Mr Steven Groves

[63] Mr Groves filed three witness statements 101. In those witness statements, Mr Groves inter alia provided an overview of the Commonwealth budget cycle and associated processes, the major elements of the DIBP budget and costings of both the Department’s and CPSU’s proposed workplace determinations (including the assumptions underpinning those costings). Mr Groves also responded to several of the witness statements lodged on behalf of the CPSU, i.e. the witness statements of Mr Swan, Dr Emerson, Mr Christopher Callanan, Professor Martin Watts and Ms Muscat-Bentley. Key aspects of Mr Groves’ evidence included that:

• for the year ending 30 June 2016, DIBP incurred a technical operating loss of $22 million of which $23 million was attributable to movements in the long-term bond rate and the impact that had on the calculation of employee provisions (i.e. the value of accrued but untaken leave);

• the total cost of the Department’s proposed determination was $144.9 million whilst the total ongoing additional cost of the CPSU’s proposal was $613.9 million over three years;

• the Department would be required to run at a significant operating loss in the first year of operation of the CPSU’s workplace determination given that the direct budgetary impact in the first year would be $364.5 million (comprised of $175.5 million representing the one-off cost of the CPSU’s proposed backdated pay increases and the $189 million upfront cost of the ongoing 10 per cent pay increase);

• meeting the cost of the Department’s proposed determination would require cost savings equating to 657 full-time equivalent (FTE) positions over three years, whilst the CPSU’s proposed determination would require cost savings equating to some 1900 FTE positions over three years (excluding any allowance for the cost of redundancies);

• he agreed with Mr Swan and Dr Emerson that decisions on the allocation of funds were a matter for the Government of the day but in respect of their option concerning the Contingency Reserve in the Commonwealth Budget he saw no justification for any such provision;

• disputed aspects of Mr Callanan’s, Professor Watts’ and Ms Muscat-Bentley’s evidence; and

• DIBP was under critical and increasing financial pressure and was struggling to meet the Government’s objectives within current fiscal policy settings.

[64] In his oral evidence Mr Groves disputed that there had been savings to the Department due to the absence of any pay rise to employees for over four and a half years, suggesting that there was no saving if the Department employed more people. 102 Mr Groves further stated that there was no identifiable separate pool of money that was made up of any saving from not having to pay salary increases103. Mr Groves also attested that a one per cent increase in salary incurred a cost in the order of $14 million.104 As to the efficiencies resulting from integration, these were estimated at $270 million over a four-year period, with an ongoing saving of $90 million per annum built into the Department’s base appropriation.105

Mr David Leonard

[65] Mr Leonard tendered two witness statements 106. In those witness statements Mr Leonard provided a very detailed overview of the history of bargaining in the Department and rebutted aspects of the evidence of a number of CPSU witnesses, i.e. Mr Rupert Evans, Ms Natalie Hartman, Mr Muffatti, Ms Muscat-Bentley and Ms Stacey Harris. In his witness statements, Mr Leonard also provided a detailed explanation of the rationale underpinning the Department’s position on various elements of its proposed workplace determination (Mr Leonard’s evidence in this regard will be set out as appropriate when dealing with the matters in issue below). Among other things, Mr Leonard deposed that:

• there were 18 ‘Round One’ bargaining meetings over the period 14 April 2015 to 27 May 2015 which did not produce an agreement, adding that in September 2015 the Department put its first proposed agreement to a ballot of employees with the agreement not voted up;

• there were five ‘Round Two’ bargaining meetings held over the period 26 November 2015 to 3 February 2016 which did not produce an agreement, with the proposed agreement again rejected by employees;

• there were six ‘Round Three’ bargaining meetings held over the period 30 August 2016to28 September 2016 which again did not produce an agreement, with the Department’s third offer again not voted up (the ballot occurred after the CPSU’s protected industrial action had been terminated);

• throughout the course of negotiations the Department’s objective was to make an enterprise agreement that provided for:

• a single set of terms and conditions reflecting the integrated Department,

• a sustainable salary increase, with the Department having an open mind as to how the remuneration offer was to be structured,

• a rationalised allowance structure,

• flexibility to ensure that the workforce could adapt to meet operational demands, and

• a concise set of employment conditions without aspirational content or matters that were appropriately provided for in law or better suited to procedural or policy documents;

• he rejected any suggestion that those who participated in the bargaining process on behalf of the Department had acted in any way unreasonably or contrary to the principles of good faith bargaining, though he accepted that from time to time bargaining representatives on all sides encountered a level of frustration with the process which may have manifested itself in some tension bubbling to the surface during discussions;

• any suggestion that the Department was in some way constrained against its will to put offers which were in strict conformity with the Government’s Workplace Bargaining Policy was totally without foundation;

• the Department’s position throughout bargaining was governed by a range of relevant considerations one of which was the Government’s Workplace Bargaining Policy, with the other two being its financial position and the need to rationalise the entire range of terms and conditions of employment;

• at no stage did the Department revoke agreement previously provided in relation to terms and conditions because the matter was deemed not to meet the Government’s Workplace Bargaining Policy; and

• any suggestion that the Department remained intransigent in the Round Two bargaining meetings had no foundation.

[66] Key aspects of Mr Leonard’s oral evidence included that:

• approximately 2000 employees would not get a pay rise for a couple of years under the Department’s proposed workplace determination, with a number of EL 2 employees unlikely to get any pay increase during the life of the determination; 107

• he was unable to indicate how many employees would lose out were the Commission to include the Department’s proposed composite allowance in the workplace determination it made; 108

• the Department was not negotiating with the APSC as well as bargaining representatives on issues such as the five per cent rule on promotion but rather was giving the APSC arguments as to why it should have policy approval for what it was proposing in respect of those issues; 109

• with regard to the Department’s interactions with the APSC in respect of the Department’s third offer, he adopted a practice of making sure that the APSC had quite good visibility of the Department’s drafting and thinking so as to expedite the approval process, characterising the approach as “taking insurance against having made the wrong judgement” 110

• the Department’s proposed determination differed from its third offer as it was framed around terms which were considered most appropriate for the Department going forward whereas earlier proposed agreements were prepared in an attempt to reach agreement with the workforce; 111

• the Department’s proposed determination removed some elements contained in its third offer that were desirable to employees and replaced them with things that were desirable to the Department, with those changes including the removal of provisions relating to the right to representation, policies and procedures only being introduced or varied following consultation, salary increases only applying to those employees within the salary bands proposed for the workplace determination, the NSCF, and retention periods for excess employees; 112

• he agreed that the Department’s proposed determination sought extensive change from the current DIAC Agreement and s.24 determinations and would entail a significant diminution of existing terms and conditions; 113

• the Department’s third offer was approved by the APSC as consistent with the Government’s Workplace Bargaining Policy, adding that the offer supported the Department’s strategic objectives, fitted within its funding envelope and in the Department’s view was a fair and balanced offer which it could live with; 114

• the Department’s proposed determination retreated significantly from its third offer, accepting that it was less fair to employees and less balanced than the third offer but disagreeing that this was because the Department sought to punish employees for voting down that offer; 115

• the Government’s Workplace Bargaining Policy, affordability and the tolerance of the Department’s Executive for reductions in staff numbers were factors which drove the Department’s various wage offers; 116

• there were approximately 740 ABF employees in receipt of the Use of Force Allowance, acknowledging that the $1,500 per annum Composite Allowance (into which the Use of Force Allowance would be rolled) in the Department’s proposed workplace determination would see these employees lose $700 per annum; 117

• he used the APSC to assist with drafting of the Department’s proposals; 118

• with reference to the APSC email of 22 July 2015 119, the APSC was co-ordinating bargaining for agencies generally in terms of when agreements would be put out to vote;120

• the APSC was an integral part of bargaining for the DIBP agreement though he disagreed that the effect of the APSC’s involvement was that the negotiations with bargaining representatives were almost irrelevant; 121

• he did not believe that APSC approval was sought in respect of the Department’s proposed workplace determination; 122

• he did not canvass the changes between the Department’s third offer and its proposed workplace determination with the APSC nor did he or the Department prepare any document comparing those two documents; 123

it was a conscious decision of the Department’s Executive to “go harder” in the Department’s proposed workplace determination when compared to its third offer; 124

• there were very few matters relating to under-performance in the Department which had come before the Commission, adding that he could not recall a specific example; 125

• the Department did not formally respond to Ms Ryan in respect of her drafting suggestions regarding performance management, though the issue of performance management was discussed on a number of occasions in the negotiations for an agreement; 126

• there was no briefing specifically provided to the Department’s Executive as to the removal of access to the Commission in respect of disputes relating to performance management; 127 and

• he could not recall any specific briefing document being provided to the Department’s Executive outlining the significant changes reflected in the Department’s proposed workplace determination when compared to its third offer, though there were discussions with the Executive regarding the approach to be taken in respect of remuneration and allowances. 128

The CPSU’s case

[67] In its submissions the CPSU contended that following integration the structure of the Department had changed dramatically, with the work demands on employees and organisation of work also changing and the work becoming more complex. The CPSU further contended that this had resulted in large cost savings to the Commonwealth and that productivity had improved.

[68] As to bargaining, the CPSU expressed the view that the Commonwealth had taken an approach in negotiations that it would dictate the terms of bargaining, adding that it did so via the Workplace Bargaining Policy which it strictly applied in the negotiations. As a result, the CPSU continued, the Commonwealth faced a dual challenge in achieving agreement with its employees in the Department – it needed to deal with the complexities associated with the integration of two large agencies with divergent terms and conditions while it insisted on applying a bargaining policy which the CPSU characterised as inflexible and clearly unfair. The CPSU noted that the Commonwealth failed in bargaining.

[69] The CPSU described the Department’s workplace determination as adopting a lowest common denominator approach which sought to reduce terms and conditions. Further, the CPSU contended that its proposed workplace determination should be adopted by the Commission and that the Commission should be cognisant of the interests of employees who it considered had been treated poorly. More particularly, the CPSU stated that its interest was in maintaining existing wages and conditions and that it sought parity for employees who were working side by side doing the same job but on different terms and conditions as a result of integration.

[70] Also in its submissions, the CPSU set out the legislative requirements relevant in this case drawing on the decisions in Australian Municipal, Administrative, Clerical and Services Union v Western Australian Government Railways Commission 129(Westrail), Curragh,130 Health Services Union of Australia v Alkira Centre and others131, Qantas Airways,132 Australian Licenced Aircraft Engineers Association, The v Qantas Airways Limited133 (ALAEA), Australian International Pilots Association v Qantas Airways Limited134 (AIPA), Parks Victoria v The Australian Workers’ Union and others135 (Parks Victoria) and Schweppes136 among others. Having regard to those decisions, the CPSU submitted that the Commission should:

“a. Assess the respective positions of the parties in relation to the bargain and arrive at a conclusion which could be regarded as being an appropriate result in the context of the bargaining which has taken place, had it concluded successfully (Westrail);

b. Not engage in “subjective prognostication” as to the outcome of negotiations had they been concluded (Curragh);

c. Make an objective assessment of the factors set out in the Act to determine the terms that the determination should contain (Curragh);

d. Exercise broad judgement to produce an outcome which is a fair compromise between the legitimate expectations of the respective parties and which also takes the public interest into account (Curragh);

e. Apply the factors in s.275 in a way that has a general bearing on the package of terms to be contained in the Workplace Determination and a more specific bearing on many of the particular claims (Qantas Airways);

f. Deal with matters at issue in a way FWC considers appropriate having regard to the factors contained in s.275 (ALAEA);

g. Consider the public interest in preserving existing industrial standards (Parks Victoria);

h. Determine productivity by reference to the quantity of output relative to the quantity of inputs rather than the costs of labour (Schweppes);

i. Assess and balance the impact of the various terms proposed in the interests of the employer and its employees, and the public interest, and the other statutory considerations within s.275, having regard to the matters within s.577 and s.578 of the Act (AIPA);

j. Objectively assess the statutory factors and make an overall judgement as to an appropriate determination to apply to the operations concerned until the parties replace the determination with a new enterprise agreement (Parks Victoria and Qantas Airways);

• Marine Unit Engineers and Deck Officer Cadet Program – the CPSU’s proposed workplace determination includes clauses stating that participants in Engineers and Deck Officers Cadet Program will be remunerated in accordance with the APS Graduate classification and referencing where further information is available. The Department submitted that the clauses were unnecessary. While we agree that the proposed clause referencing further information is unnecessary, we consider there is merit in providing clarity as to the remuneration for participants in the abovementioned Cadet Program [s.275(a)].

• Placement of crew leaving the Marine Unit – the CPSU’s proposed workplace determination includes a provision which provides that the placement of sea-going marine employees leaving the Marine Unit will be subject to the ABF posting programme and related policies, workforce planning and operational requirements. The CPSU’s proposed clause in based on the Department’s third offer. Beyond that the CPSU offered no rationale for the provision. The Department described the CPSU’s proposed provision as unnecessary. In the absence of any compelling argument as to the need for the proposed provision we agree that the provision is unnecessary.

11. Conditions specific to designated National Surveillance Unit employees

[528] The CPSU’s proposed workplace determination sought to return to the conditions applying to the National Surveillance Unit (NSU) prior to integration. 308 However, in addition to maintaining the maximum hours designated NSU employees can work over a four week period, the CPSU’s proposed provision does not include that aspect of the pre-existing provision dealing with on-call allowance. The CPSU’s submissions provide no rationale for this omission. Ms Jones in her witness statement deposed that the work of NSU employees was at times tedious, physically uncomfortable, highly stressful and also dangerous, adding that it was extraordinarily fatiguing on these individuals. Ms Jones further deposed that it was for these reasons that working hours for NSU employees were limited to 184 hours in a designated four week period and that the Department's proposed increase in hours did not take into account the physical reality and demands on NSU employees.309

[529] Drawing on Mr Leonard’s evidence 310, the Department posited that the composite surveillance allowance was intended to compensate NSU employees for the fact that they are routinely required to be contactable, willing and able to perform work at short notice. The Department submitted that the practical effect of the CPSU’s omission of the on-call allowance was that NSU employees would become entitled to the higher rate of restriction allowance. This, the Department contended, ignored the historical compromise reached in prior rounds of bargaining on this issue. The Department further contended that the CPSU had failed to demonstrate any merit or evidentiary basis for its claim and that absent an explanation from the CPSU the Commission was entitled to proceed with the status quo. As to the maximum hours of work aspect of its proposed provision, the Department submitted that the increase from 184 to 188 hours reflected its proposed increase in the standard working day for former ACBPS employees to 7 hours and 30 minutes per day, adding that Ms Jones failed to recognise that the 188 hour limit is a maximum that could apply.

[530] In the absence of any justification for removal of the on-call allowance payable to NSU employees there is no basis for it to be excluded from the determination. The allowance on commencement will be $20.80.

[531] As to hours of work, no material was put before the Commission explaining how the maximum hours were derived given the standard working day of 7 hours and 21 minutes worked by former ACPBS employees. We note that the existing maximum of 184 hours equates to an average 46 hours per week, which is significantly in excess of the maximum 38 ordinary hours per week in the National Employment Standards. As such, we do not believe the case has been made out to increase the maximum number of hours as proposed by the Department particularly as NSU employees standard hours under the determination we will make will be 7 hours and 30 minutes per day.

12. Dispute resolution

[532] There is no agreement about the terms of the disputes settlement procedure for inclusion in the determination. The key issue in dispute is whether the procedure should provide for arbitration by the Commission other than by consent.

[533] The CPSU seeks the insertion of the model term for dealing with disputes for enterprise agreements as set out in Schedule 6.1 of the Regulations on the basis that it is a rationalised clause which is broadly adopted and strikes a fair balance between the interests of employees and the employer. The CPSU stated that it did not press for additional clauses, such as the preservation of the status quo during dispute resolution or further guidance with respect to work health and safety.

[534] The CPSU highlighted in its submissions the key differences between the dispute resolution term sought by the Department and the model term it advocated. In particular, the CPSU contended that the two most significant differences were:

• the lack of clarity over the steps to be taken at the workplace level under the Department’s proposed clause; and

• the lack of an arbitral role for the Commission in the Department’s proposed clause.

[535] Beyond that, the CPSU contended that:

• the model clause was the preferable provision;

• in contrast to the model clause the Department’s proposed term in respect of the steps to be taken in the workplace introduced a level of complexity and the potential for narrow and technical jurisdictional arguments which was unnecessary and counter-productive;

• by requiring that all steps at the workplace level be exhausted the Department’s proposed term was unnecessarily broad and lacked precision;

• Mr Leonard downplayed the difference between the Department’s dispute resolution clause and the model term as not being significant;

• the ability for the Commission to determine disputes was fundamental to the efficient conduct of industrial disputation and assisted in avoiding industrial disputation as the parties recognised the potential for scrutiny of their actions in an accessible forum;

• it was thoroughly unsatisfactory that the Department sought to require individual employees to take a matter to a court of relevant jurisdiction instead of being able to access an outcome through a specialist tribunal;

• as acknowledged by Mr Leonard under cross-examination, the Department’s position on this issue was a departure from the terms of its third offer; and

• Ms Muscat-Bentley’s evidence should be preferred to Mr Leonard’s evidence on the issue of dispute resolution.

[536] The Department submitted that its proposed clause gave preference to workplace level dispute resolution, highlighting that under its proposed clause the parties to a dispute must first discuss the dispute at the workplace level and, if the dispute remained unresolved, further discuss the dispute with senior management. The Department further submitted that this was in contrast to the CPSU’s proposed clause which it contended only provided one opportunity to resolve the matter at the workplace level.

[537] On the issue of arbitration, the Department submitted that the inclusion in the dispute settlement term of scope for compulsory arbitration in the absence of agreement between the parties was not permissible in a workplace determination. The Department relied on the decisions in Re Woolworths Ltd (t/as Produce and Recycling Centre) (Woolworths) 311and Endeavour Energy v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and Another (Endeavour Energy)312. The Department further submitted that:

• there was no provision in the Act expressly authorising the Commission to deal with a dispute by arbitration in the absence of the parties conferring upon the Commission the power of private arbitration;

• the CPSU’s reliance on the model term was misconceived as the term was not mandatory or a default clause if parties did not agree to a dispute settlement term; and

• no evidence had been advanced to warrant a departure from the scope of its proposed procedure.

[538] Beyond that the Department highlighted that:

• both its and the CPSU’s proposed dispute settlement procedure included a provision preserving the status quo whilst the parties were trying to resolve the dispute, contending that its proposal achieved what status quo clauses ought to achieve, i.e. the continuation of work in accordance with the employer’s managerial prerogative to direct the performance of work without prejudice to the final outcome, and that the CPSU’s proposed clause did not sufficiently tie the status quo to managerial prerogative;

• the balance of its proposed clause allowed a party to a dispute to be represented, included transitional arrangements for pre-existing disputes under previously applicable enterprise agreements and identified for the avoidance of doubt matters that were not within the scope of the dispute resolution procedure under the workplace determination, adding that no bargaining representatives had articulated a reason as to why these clauses were opposed and that each had merit; and

• given the various and complex sources of regulation that applied to APS employment that aspect of its proposed clause identifying those matters that were not within the scope of the dispute resolution procedure reduced the likelihood of disputes improperly being brought under the workplace determination.

[539] In terms of the steps to be taken at the workplace level, the Department’s proposed clause provides as follows:

“12.2 In the first instance, the parties to the dispute must try to resolve the dispute at the workplace level, by discussions between the employee or Employees concerned and the relevant Manager.

12.3 If discussions in clause 12.2 do not resolve the dispute, then the dispute must be referred to senior management for the purposes of further discussions to try to resolve the dispute.

12.4 If:

(a) all appropriate steps able to be taken under clauses 12.2 and 12.3 have been exhausted, and

(b) the dispute is not resolved,

[540] The Department’s proposed clause appears to draw on the dispute resolution term in the Australian Public Service Enterprise Award 2015 314(the Award)except that it uses the word “exhausted” in clause 12.4(a) whereas the equivalent provision in the Award uses the word “taken”. In our view, the latter terminology is less likely to lead to jurisdictional arguments regarding whether or not all appropriate steps at the workplace level “have been exhausted”. For that reason the latter terminology is preferred and will be included in the determination. Further, the Department’s proposed clause provides for escalation of a dispute to senior management in circumstances where initial discussions at the workplace level do not resolve the matter whereas the CPSU’s proposed clause is silent in this regard (though such escalation is not precluded under the CPSU’s proposed clause).

[541] With regard to the issue of arbitration, the High Court in Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission 315 (CFMEU v AIRC) said as follows:

“There is, however, a significant difference between agreed and arbitrated dispute settlement procedures. As already indicated, the Commission cannot, by arbitrated award, require the parties to submit to binding procedures for the determination of legal rights and liabilities under an award because Ch III of the Constitution commits power to make determinations of that kind exclusively to the courts. However, different considerations apply if the parties have agreed to submit disputes as to their legal rights and liabilities for resolution by particular person or body and to accept the decision of that person as binding on them.” 316 (Underlining added)

[542] Against that background, and having particular regard to the underlined text in the above extract from the decision in CFMEU v AIRC, the Commission is unable to require in a dispute settlement procedure that it determine disputes other than where the parties consent to the Commission doing so. Accordingly, the dispute settlement term to be included in the determination we will make will not provide for arbitration other than where the parties consent to that course of action.

[543] We note that the absence of access to arbitration other than where the parties consent is a significant loss for employees. In circumstances where the dispute settlement terms in the DIAC and ACBPS Agreements and the Department’s third offer all provided for arbitration absent consent and in the absence of any evidence that the Agreements’ dispute settlement terms had resulted in large numbers of disputes progressing to arbitration, the Department’s position on this issue appears to us to be little more than opportunistic and deliberately punitive. In our view, the Department’s approach on this issue does little to re-establish co-operative workplace relations. More broadly, we note that s.273 of the Act which sets out the mandatory terms of workplace determinations provides that the model flexibility and consultation terms are to be included in a workplace determination unless the Commission is satisfied that an agreed flexibility or consultation term for the determination would satisfy the relevant statutory requirements set out in the Act. However, in respect of a term about settling disputes, s.273 does not require the model term for dealing with disputes for enterprise agreements as set out in the Regulations to be included in a workplace determination where the parties are unable to reach agreement on the dispute term. While a matter for the Parliament, we would suggest that consideration be given to addressing this anomaly with a view to either mandating the inclusion of the model term or alternatively providing the Commission with discretion to include the model term in circumstances where arbitration without the need for the consent of the parties is a feature of the industrial instrument(s) applying at the enterprise.

[544] The status quo aspects of the Department’s proposed term are consistent with the Award and for this reason will be included in the determination we will make. As to the provisions in the Department’s proposed term dealing with ‘Other matters’:

• we will include in the determination the provision regarding representation, though it will be the second clause in the provision;

• we are concerned that the transitional arrangement provision in the Department’s proposed workplace determination has the potential to disadvantage employees given that the dispute resolution terms of the Agreements both provided for arbitration whereas the determination will not. As such we will not include the Department’s proposed provision in the determination we will make

• by way of background the transitional arrangement provision in the Department’s proposed determination provides that disputes which commenced under an enterprise agreement that previously applied and which had not been concluded at the commencement of the determination will be progressed in accordance the dispute resolution term in the determination; and

• for reasons of clarity we will include in the determination sub-clauses (a) to (c) of which set out matters that a not within the scope of the dispute resolution term, but will not include the proposed clause (d) and (e) as we consider them to be unnecessary.

13. Other conditions and arrangements

[545] The CPSU seeks the retention of provisions from the DIAC Agreement relating to employee representation and freedom of association. In circumstances where the consultation and dispute resolution terms both provide that an employee may appoint a representative of their choice, we do consider it necessary to include a specific provision relating to employee representation in the determination. With regard to freedom of association, in circumstances where the Fair Work Information Statement refers to freedom of association we do not consider it necessary to include a provision relating to freedom of association in the determination. The Act requires that the an employer must give new employees the Fair Work Information Statement either before or as soon as practicable after the employee starts employment [s.125]. This in our view adequately informs employees of their rights in this regard.

[546] The CPSU also seeks the inclusion of a provision relating to occupational health and safety. The CPSU’s proposed provision provides inter alia that all reasonable steps will be taken to provide employees with a healthy and safe workplace consistent with relevant health and safety legislation. The CPSU relied on Mr Muffatti’s evidence which included the statement that historically the Commission and its predecessors had resolved all disputes in relation to health and safety in the workplace and that under the Work Health and Safety Act 2011 (the WHS Act) Comcare did not have the same powers as the Commission.

[547] The Department opposed the inclusion of the provision proposed by the CPSU on the basis that:

• it would create an unsatisfactory situation where its compliance with its work health and safety obligations was governed by two statutory regimes, i.e. the WHS Act and the Act; and

• the burden of enforcing health and safety obligations should not be imposed on the Commission through the workplace determination, particularly as the WHS Act contained a procedure for resolving matters about work and health and safety.

[548] We are not satisfied of the merit of including the provision proposed by the CPSU in the determination given the existence of a separate regulatory framework under the WHS Act [s.275(a)]. Further, we consider the issue is one that is more appropriately addressed in bargaining for an enterprise agreement to replace the workplace determination [s.275(h)].

[549] The CPSU’s proposed determination included provisions drawn from the ACBPS Agreement regarding EL employee conditions. Among other things, those provisions dealt with usage of mobile phones for limited personal use, the provision of airline lounge membership, business class travel for flights of more than 2 hours duration, additional time off and travelling allowance. In respect of EL 2 employees, the provision also dealt with the home garaging of Commonwealth vehicles and parking for those employees who did not home garage a Commonwealth vehicle. The CPSU’s proposed provision limited the home garaging and parking aspects of the provision to those employees who had access to these entitlements prior to the determination we will make coming into effect.

[550] The Department opposed the CPSU’s claim. Specifically, the Department submitted that:

• the Department’s information technology policies regulated the entitlement to and use of work provided mobile phones and portable devices and that no evidence had been led to suggest that the workplace determination needed to supplement this regime;

• Mr Leonard’s evidence was that employees were no longer provided with access to Commonwealth vehicles and as such there was no basis to continue the home garaging arrangements and no resulting inequity between employees necessitating parking entitlements or allowances; and

• the provision of airline lounge membership was a discretionary decision and as such should be excluded from the workplace determination and dealt with as a matter of policy.

[551] We previously determined, in respect of other employees, that the decision to provide airport lounge membership is a matter which is more appropriately dealt with in policy. There is no justification to depart from that approach in respect of EL employees. Our view in that regard applies equally to mobile phone issue. Having regard to Mr Leonard’s evidence, there is no merit in that aspect of the CPSU’s claim regarding the home garaging of vehicles and the provision of parking for EL 2 employees [s.275(a)]. Finally, there is no need to include the CPSU’s proposed provision relating to travelling allowance for EL employees as it would merely replicate what we have determined will apply more generally. In summary, we will not include the provisions proposed by the CPSU providing conditions specific to EL employees.

[552] Lastly, the CPSU’s proposed workplace determination included provisions drawn from the ACBPS Agreement which would require the Department to provide secure parking for employees working shifts and commit to use its best endeavours to continue to negotiate the provision of a discounted parking rate for those employees working at ABF House in Sydney and Brisbane. The CPSU relied on Ms Jones’ evidence which was that the entitlements provided a real benefit to employees and were necessary. Ms Jones’ evidence dealt almost exclusively with the value she attached to the discounted parking rate which the Department had been able to negotiate for employees working at Sydney airport.

[553] The Department described the CPSU’s claim as a discretionary provision which did not bestow any substantive entitlement on employees.

[554] Based on the material before us we are not satisfied of the merits of including the provisions proposed by the CPSU in the determination [s.275(a)].

14. Definitions

[555] There are only minor differences between the Department’s and the CPSU’s proposed determinations. We will generally adopt the Department’s proposed definitions. However, we will amend the definition of ‘Dependant’ in the Department’s proposed determination so that it refers to an employee’s ‘spouse or de facto partner’. As a result, a definition of ‘De facto partner’ will also be included in the determination and the definition of ‘Partner’ will be amended so that it also refers to an employee’s ‘spouse or de facto partner’.

Statutory considerations

[556] We are satisfied that a workplace determination made in accordance with the conclusions we have reached in this decision would satisfy the requirement in s.272(4) that were the determination an enterprise agreement it would pass the BOOT under s.193 and hence also satisfy the requirement in s.267(1)(b).

Conclusion

[557] A copy of the draft determination we intend to make is attached. The determination is in draft form to provide the parties an opportunity to examine the document and identify any issues which go to the implementation of the determination consistent with this decision. To that end the Deputy President will in the coming weeks convene a conference of the parties to work through any such issues. It is our intention that this “tidying up” exercise be completed expeditiously so as to allow the determination to commence operation as soon as possible.

VICE PRESIDENT

Appearances:

Mr P. O’Grady QC together with Mr S. Meehan of Counsel and Mr L. R. Howard of Counsel for the Commonwealth of Australia represented by the Department of Home Affairs

Mr A. Slevin of Counsel for the Community and Public Sector Union

Mr M. Bakhaazi on behalf of the Australian Institute of Marine and Power Engineers

Ms E. Ryan on her own behalf

Mr J. Holmes on his own behalf

Hearing details:

2017

Canberra

October 16, 20 and 24-25

December 5-8 and 18-19.

2018

Canberra

April 16-17.

1 [2018] FWCFB 3415 at [3]-[11].

2 [2017] FWCFB 6887.

3 Exhibit DIBP30.

4 Exhibit CPSU5, see also Exhibits CPSU7 and CPSU8

5 AE888602.

6 Transcript of proceedings (19 December 2017) at PN6400.

7 [2017] FWCFB 6887.

8 Ibid at [2] and [3].

9 Fair Work Act 2009 (Cth) s.601(1).

10 Ibid s.267.

11 [2018] FWCFB 3415 at [9].

12 Ibid s.266(1).

13 [2018] FWCFB 3415 at [5] and [6].

14 PR586132.

15 [2016] FWC 7184.

16 Fair Work Act 2009 (Cth) ss.267(1)(a),(2)and 274(4).

17 Ibid ss.267(1)(a) and (3).

18 Ibid ss.267(1)(b) and 272.

19 Ibid s.272.

20 [2018] FWCFB 3415 at [41].

21 Ibid.

22 Ibid ss.267(1)(c) and 273.

23 Ibid s.273.

24 AE888602, DIAC Agreement at clauses 2.9-2.23.

25 Fair Work Regulations 2009 (Cth) Schedule 2.2.

26 Fair Work Act 2009 (Cth) s.267(4).

27 Exhibit DIBP30; Exhibit CPSU7; Exhibit CPSU8; Exhibit CPSU5????

28 Fair Work Act 2009 (Cth) s.275.

29 [2013] FWCFB 950 at [46]; AWU v Pioneer Construction Materials Pty Ltd PR925916, 19 December 2002, at [32] – [33]; CPSU v Australian Protective Service, PR910682, 29 October 2001, at [12] – [13] .

30 Fair Work Act 2009 (Cth) s.577.

31 Ibid s.578.

32 [2012] FWAFB 6612.

33 Ibid at [33]-[37].

34 Ibid at [39] citing CFMEU v Curragh Queensland Mining Ltd PRQ4464.

35 Parks Victoria v The Australian Workers' Union and others [2013] FWCFB 950 at [49]-[50]; O’Sullivan v Farrer (1989) 168 CLR 210 at 216; Randall v Australian Taxation Office (2010) 198 IR 114 at [11].

36 Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (2005) 139 IR 34 at [23]; See also Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd [2015] FWCFB 540 at [129]-[131].

37 [2012] FWAFB 7858.

38 Ibid at [37]-[46].

39 Transport Workers' Union of Australia v Qantas Airways Limited; Q Catering Limited [2012] FWAFB 6612 at [45] .

40 Ibid citing CFMEU v Curragh Queensland Mining Ltd PRQ4464.

41 Ibid.

42 Ibid at [55].

43 AE890227.

44 PRQ4464.

45 [2018] FWCFB 3415 at [12].

46 Department of Home Affair’s Outline of Oral Submissions – tendered 16 April 2018.

47 Exhibit CPSU20 at RM17.

48 PR Q4464 at [44].

49 Department of Home Affair’s Outline of Oral Submissions – tendered 16 April 2018; see also Transcript of proceedings (16 April 2018) at PN30.

50 (2009) 180 IR 41.

51 Department of Home Affair’s Outline of Oral Submissions – tendered 16 April 2018; see also Transcript of proceedings (16 April 2018) at PN43-PN45..

52 Ibid at PN45.

53 Ibid at PN147-PN149

54 Ibid at PN199-PN212.

55 Ibid at PN213.

56 CPSU correspondence – 12 April 2018.

57 Transcript of proceedings (17 April 2018) at PN580.

58 Ibid.

59 Ibid at PN581-PN583.

60 Ibid at PN584.

61 Ibid.

62 Exhibit DIBP6.

63 Transcript of proceedings (24 October 2017) at PN1061.

64 Exhibit DIBP10 at Attachment MV-2.

65 Transcript of proceedings (24 October 2017) at PN1133-1136.

66 Ibid at PN1162.

67 Ibid at PN1165; PN1179-1182.

68 Ibid at PN1167.

69 Exhibits DIBP8; Exhibit DIBP 9.

70 Exhibit DIPB9.

71 Transcript of proceedings (24 October 2017) at PN1315-1316 and PN1362-1365.

72 Ibid at PN1322.

73 Exhibit DIBP6 at Attachment JC-5.

74 Transcript of proceedings (24 October 2017) at PN1366-1367.

75 Ibid at PN1438-1439.

76 Ibid at PN1467-1469.

77 Ibid at PN1499.

78 Ibid at PN1532.

79 Exhibits DIBP10-DIBP12.

80 Exhibit DIBP10.

81 Exhibit DIBP11.

82 Transcript of proceedings (24 October 2017) at PN1612-1619.

83 Ibid at PN1655-1656.

84 Transcript of proceedings (25 October 2017) at PN1685.

85 Ibid at PN1695-1702.

86 Ibid at PN1714-1739.

87 Ibid at PN1740-1746.

88 Ibid at PN1785.

89 Ibid at PN1787-1800.

90 Ibid at PN1813-1820.

91 Ibid at PN1823.

92 Ibid at PN1843-1846.

93 Exhibit CPSU20 at RM15.

94 Transcript of proceedings (25 October 2017) at PN1856-1870.

95 Ibid at PN1876.

96 Ibid at PN1912-1922.

97 Ibid at PN1923-1959.

98 Ibid at PN1966-1971.

99 Ibid at PN1981-2008.

100 Ibid at PN2024-2107.

101 Exhibits DIBP13-DIBP15.

102 Transcript of proceedings (25 October 2017) at PN2234-PN2236.

103 Ibid at PN2233-2248; PN2236.

104 Ibid at PN2249.

105 Ibid at PN2284-2287.

106 Exhibits DIBP16 and DIBP17.

107 Transcript of proceedings (05 December 2018) at PN2571.

108 Ibid at PN2579.

109 Ibid at PN 2660-2662.

110 Ibid at PN2667; PN2665-PN2669.

111 Ibid at PN2690-PN2691.

112 Ibid at PN2690-PN2804.

113 Ibid at PN2805; PN2915.

114 Ibid at PN2893-PN2909.

115 Ibid at PN2910-PN2914.

116 Ibid at PN2955.

117 Ibid at PN2997-3014.

118 Transcript of proceedings (6 December 2017) at PN3221.

119 Exhibit CPSU17 at page 144.

120 Transcript of proceedings (6 December 2017) at PN3337-PN3347.

121 Ibid at PN3384-PN3396.

122 Ibid at PN3501.

123 Ibid at PN3510-PN3517.

124 Ibid at PN3651-PN3658.

125 Ibid at PN3700.

126 Ibid at PN3728.

127 Ibid at PN3731-PN3738.

128 Ibid at PN3741.

129 (1997) 74 IR 423.

130 Q4464.

131 PR928147.

132 (2009) 180 IR 41.

133 [2012] FWAFB 236.

134 [2013] FWCFB 317.

135 [2013] FWCFB 950.

136 [2012] FWAFB 7858.

137 CPSU Final Submissions at 1.3.5.

138 [2016] FWCFB 7641.

139 Transcript of proceedings (16 April 2018) at PN306.

140 Ibid at PN307-PN309.

141 Ibid at PN321.

142 Ibid at PN3222.

143 Ibid at PN326-PN329.

144 Ibid at PN330-PN331; PN346.

145 Ibid at 335.

146 Ibid at PN342.

147 Ibid at PN362.

148 Ibid at PN372-PN373.

149 Ibid at PN402-PN404.

150 Ibid at PN411.

151 The proposal was set out in correspondence sent by the CPSU’s legal representative to the Department’s legal representative on 12 April 2018 – a copy of the correspondence was provided to the Commission on 16 April 2018; Transcript of proceedings (16 April 2018) at PN422-PN424.

152 Exhibits CPSU22, CPSU23 and CPSU36.

153 Exhibits CPSU24 and CPSU25.

154 Exhibit CPSU26.

155 Exhibit CPSU27.

156 Exhibit CPSU28.

157 Exhibit CPSU29.

158 Exhibit CPSU30.

159 Exhibit CPSU9.

160 Ibid at RE-17.

161 Transcript of proceedings (7 December 2017) at PN4314-PN4315.

162 Ibid at PN4411-PN4414.

163 Exhibit CPSU20 at RM15.

164 Transcript of proceedings (7 December 2017) at PN4471-PN4486.

165 Ibid at PN4497-PN4499.

166 Ibid at PN4537.

167 Ibid at PN4597.

168 Ibid at PN4622.

169 Ibid at PN4637-PN4641.

170 Ibid at PN4848-PN4852.

171 Ibid at PN4863-PN4869.

172 Exhibit CPSU10.

173 Transcript of proceedings (8 December 2017) at PN5060.

174 Exhibit CPSU11.

175 Transcript of proceedings (8 December 2017) at PN5112-PN5114.

176 Ibid at PN5124-PN5132.

177 Ibid at PN5143 and PN5150.

178 Exhibits CPSU12 and CPSU13.

179 Transcript of proceedings (8 December 2017) at PN5238-PN5239.

180 Ibid at PN5257.

181 Ibid at PN5275.

182 Exhibit CPSU14.

183 Transcript of proceedings (8 December 2017) at PN5313-PN5318.

184 Ibid at PN5329-5335.

185 Exhibit CPSU15.

186 Transcript of proceedings (8 December 2017) at PN5424-PN5428.

187 Ibid at PN5458, PN5471 and PN5490.

188 Ibid at PN5498-PN5500.

189 Transcript of proceedings (18 December 2017) at PN5520-PN5528.

190 Ibid at PN5695-PN5703.

191 Exhibits CPSU18 and CPSU38.

192 Transcript of proceedings (18 December 2017) at PN5792.

193 Ibid at PN5795-PN5804.

194 Exhibit CPSU38 at BMB-4

195 Exhibit CPSU19.

196 Exhibit CPSU20.

197 Ibid at RM16 and RM17.

198 Transcript of proceedings (18 December 2017) at PN5976-PN5986.

199 Ibid at PN6000-PN6014.

200 Exhibit CPSU32.

201 Transcript of proceedings (19 December 2017) at PN6114.

202 Ibid at PN6122-PN6129.

203 Exhibit CPSU33.

204 Transcript of proceedings (19 December 2017) at PN6173-PN6178.

205 Ibid at PN6224.

206 Ibid at PN6242.

207 Exhibit CPSU34.

208 Exhibit CPSU35.

209 Exhibit CPSU22 at MW3.

210 Exhibit CPSU23.

211 Exhibits CPSU24 and CPSU25.

212 Exhibit CPSU26 at CH3.

213 Exhibit CPSU27.

214 Exhibit CPSU28.

215 Exhibit CPSU29.

216 Exhibit CPSU30.

217 See AIMPE closing submissions -15 March 2018 at [1].

218 Exhibit AIMPE2.

219 Exhibit AIMPE3.

220 Exhibit RYAN1.

221 [2018] FWCFB 3415 at [18].

222 Exhibits CPSU16 and CPSU17.

223 [2018] FWCFB 3415 at [4].

224 Exhibit CPSU17 at pages 144-145.

225 Exhibit CPSU16 at page 504.

226 Ibid at page 508.

227 Ibid at page 507.

228 Exhibit CPSU19 at NH1.

229 Exhibit DIBP10 at Attachment MV-2

230 Transcript of proceedings (25 October 2017) at PN1785-PN1810.

231 Ibid at PN1745, PN1844 and PN2089

232 Ibid at PN2870-2881

233 Transcript of proceedings (6 December 2017) at PN3658.

234 Legal Services Directions 2017, Appendix B at clause 2(c).

235 [2018] FWCFB 3415 at [41].

236 Exhibit DIBP30 at clause 1.6; Exhibit CPSU8 at clause 5.

237 Exhibit DIBP30 at clause 1.7.

238 Exhibit CPSU8 at clause 6.

239 [2018[ FWCFB 3415 at [2].

240 Ibid at [33].

241 Ibid at [34].

242 Ibid at [35].

243 Ibid at [36].

244 Ibid at [37] and [39].

245 Ibid at [40].

246 Exhibit DIBP16 at paragraphs 60-63.

247 Exhibit CPSU35 at paragraphs 42-47.

248 Exhibit CPSU32 at paragraphs 64-82.

249 Transcript of proceedings (17 April 2018) at PN471-PN473.

250 Fair Work Act 2009 (Cth) ss.324, 326.

251 Ibid at s.279(1).

252 Public Service Act 1999 s.23(4).

253 Exhibit CPSU15.

255 Ibid at paragraph 67.

256 Exhibit CPSU8 at 4.64.

257 CPSU Final Submissions– Volume 4 at page 40.

258 See DIAC Agreement, clause 3.6; ACBPS Agreement, clause 14.1.4.

259 “Approving authority” is defined in s.4 of the LSL Act as including as the Chief Executive Officer of the employing agency with the term Chief Executive Officer defined as including the Agency Head within the meaning of the PS Act.

260 CPSU Final Submissions– Volume 2 at page 345.

261 DIAC Agreement, Clause 7.45.

262 ACBPS Agreement, Clause 17.5.6.

263 DIAC Agreement, Clause 7.10.

264 ACBPS Agreement, Clause 17.5.9.

265 Ibid at clause 17.5.11.

266 Ibid at clause 17.5.18.

267 Transcript of proceedings (8 December 2017) at PN5471.

268 [2018] FWCFB 1691.

269 [2018] FWCFB 3936.

270 Exhibit CPSU34 at paragraphs 74-83.

271 Transcript of proceedings (25 October 2017) at PN2049-PN2107.

272 [2018] FWCFB 3415 at [42].

273 AE888602, DIAC Agreement at clauses 2.9-2.23.

274 See AE888602, DIAC Agreement at clause 2.9-2.19.

275 [2016] FWCFB 7641 at [14].

276 Ibid at Schedule.

277 Ibid at [97].

278 [2018] FWCFB 3415 at [41].

279 See Department of Defence Enterprise Agreement (AE425115) at clause A5; Department of Human Services Enterprise Agreement (AE425884) at clause A9; Department of Agriculture and Water Resources Enterprise Agreement (AE424941) at clause 12; Department of Prime Minister and Cabinet Enterprise Agreement (AE424976) at clause 32; Department of Employment Enterprise Agreement (AE418262) at clause 255; Australian Taxation Office (ATO) Enterprise Agreement (AE425011) at clause 255 and Australian Public Service Commission Enterprise Agreement 2018-2021 (AE500637) at clause 262.

280 67 CPSAR 113.

281 Ibid at 3.

282 A0389.

283 Ibid at clause 8.

284 AE418374.

285 Ibid at clause F2.

286 [2016] FWCFB 7641 at [74]-[75].

287 Exhibit CPSU12 at MS-2.

288 (2015) 246 IR 380.

289 Ibid at [38].

290 Exhibit CPSU9 at clause 736.

291 Exhibit DIBP30 at clause 9.28.

292 AE888602, DIAC Agreement at clauses 11.13-11.15.

293 Exhibit DIBP12 at MV-22.

294 Ibid at MV-21.

295 Ibid at page 7.

296 See Farstad (Indian Pacific) Pty Ltd (Engineer Officers) Offshore Oil and Gas Enterprise Agreement 2015 (AE415626); Teekay Shipping (Australia) Pty Ltd/AIMPE (Engineer Officers) Government Services & Security Fleet Enterprise Agreement 2011 (AE899699); Teekay Shipping (Australia) Pty Ltd/AIMPE (Engineer Officers) Tanker Fleet Enterprise Agreement 2011 (AE898910); Teekay Shipping (Australia) Pty Ltd/AIMPE (Engineer Officers) Dry Cargo Fleet Enterprise Agreement 2011 (AE898987).

297 Transcript of proceedings (8 December 2017) at PN5105-PN5106.

298 Exhibit AIMPE3 at section 6.0.

299 Ibid at section 6.1.

300 [2012] FWAFB 6612 at [35].

301 AE899699.

302 Ibid at Part 6(a), (b).

303 AE890227, ACBS Agreement at clause 22.8.

304 Transcript of proceedings (5 December 2017) at PN2922-PN2935.

305 AE890227, ACBPS Agreement at clause 22.24.2.

306 Ibid at clause 22.24.3.

307 Transcript of proceedings (8 December 2017) at PN5124-PN5132.

308 CPSU Finals Submissions, Claim C68 at Annexure 3 of Volume 3.

309 Exhibit CPSU32 at paragraphs 190-194.

310 Exhibit DIBP16 at paragraphs 271-273.

311 (2010) 192 IR 124.

312 (2016) 244 FCR 178.

313 Exhibit DIBP30 at clause 12.2.

314 MA000124.

315 [2000] HCA 16.

316 Ibid at 30.

Printed by authority of the Commonwealth Government Printer