Craig Rogers v Rail Commissioner
[2020] FWC 5780
•17 NOVEMBER 2020
| [2020] FWC 5780 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Craig Rogers
v
Rail Commissioner
(C2020/6407)
RAIL COMMISSIONER RAIL OPERATIONS ENTERPRISE AGREEMENT 2016
[AE423085]
COMMISSIONER HAMPTON | ADELAIDE, 17 NOVEMBER 2020 |
Dispute about matters arising under the terms of an enterprise agreement – various related issues – agreed jurisdiction for Commission to arbitrate the proper meaning - parties could not agree the questions but common themes identified and considered – obligations during and after redeployment process established by the terms of the agreement assessed and determined in line with authority and relevant evidence informing the objection intention – dispute determined – liberty to apply on one issue – s.739 of the Fair Work Act 2009.
1. The dispute and its context
[1] This decision concerns the determination of a dispute about the proper application of the Rail Commissioner Rail Operations Enterprise Agreement 2016 (the 2016 EA) in the context of some significant change to the operations of trains in and around the greater Adelaide region due to commence on 31 January 2021. At that time, the rail operations presently carried out by the Rail Commissioner and its employees under the terms of the 2016 EA will be undertaken by a private contractor, Keolis Downer. The dispute concerns the rights of the employees and the obligations of the Rail Commissioner in that context, and in particular, in relation to those employees who do not elect to transition to the new employer. For the most part, these rights and obligations are created by Schedule 5 – Rail Operations – Redeployment, Retraining and Redundancy of the 2016 EA (RRR schedule).
[2] This matter is being determined by the Commission as a result of an application lodged under s.739 of the Fair Work Act 2009 (the FW Act) by Mr Craig Rogers, who is an employee covered by the 2016 EA. Mr Rogers is part of a group of employees who are also covered by that agreement who informally operate as part of the Australian Employment Alliance (AEA). 1 The AEA, albeit not operating under that name at the time, represented Mr Rogers and a large group of employees during the negotiations for the 2016 EA through Mr Gary Collis, who was, and is, a bargaining representative for the group.
[3] The Australian Rail, Tram and Bus Industry Union (RTBIU) is covered by the 2016 EA and has chosen to make written submissions concerning this matter but has not otherwise participated in the proceedings.
[4] The Respondent, the Rail Commissioner, is a statutory body corporate established under the Rail Commissioner Act 2009 (SA) (the RC Act) and its functions include the operation of public transport services by train or tram in metropolitan Adelaide. The Rail Commissioner is administratively part of the South Australian Department of Infrastructure and Transport (the Department or DIT). The Tram operations are not, and have never been, covered by the 2016 EA and I observe that these were also outsourced earlier this year.
[5] The dispute was referred to the Commission under clause 23 of the 2016 EA; being the relevant dispute resolution term, and it is common ground that the process required by that provision has been followed. This has included the Commission as presently constituted conducting conciliation proceedings. Both parties have expressly confirmed their concurrence with the Commission continuing to deal with the application and to now determine the matter. 2
[6] It is also common ground that the Commission is empowered by s.739 of the FW Act, and clause 23 of the 2016 EA, to determine the dispute.
[7] Although the parties did not formally agree any facts, the following propositions advanced by the Rail Commissioner 3 set some of the broad context for this matter and are not in dispute:
• Keolis Downer has been appointed as a contractor to provide the relevant rail operations.
• Keolis Downer will commence rail operations on 31 January 2021.
• Keolis Downer will engage employees to perform duties formerly undertaken by employees covered by the 2016 EA.
• Keolis Downer may make offers of employment to current Rail Commissioner employees.
• If a Rail Commissioner employee receives an offer of employment from Keolis Downer, that employee has the sole discretion over whether they accept the offer.
• If the Rail Commissioner employee does not accept the job offered by Keolis Downer or is not offered a job at all, the normal work the employee has been doing will cease at the end of January 2021, however the employee will continue in the employ of the Rail Commissioner.
2. The issues to be determined by the Commission
[8] Regrettably, the parties have not agreed upon the precise issues to be determined by the Commission through this arbitration. Each has provided a different set of questions and responses to those questions. In the absence of that agreement, the Commission provided a set of potential questions that appeared to reflect the issues discussed during the earlier proceedings. These were for discussion purposes only but have been largely adopted by the Rail Commissioner as the basis for making its submissions.
[9] The competing proposals are outlined in the positions of the parties set out later in this Decision. For present purposes it is enough to observe that the questions address the following themes:
“Unassigned” and/or declared excess
If an employee's normal duties cease because their work is being undertaken by an outsourced operator, does that employee become "unassigned" and/or declared "excess" for the purposes of the RRR Schedule and from when does this apply?
Rate of pay once an employee has been declared excess or their normal work ceases
This involves consideration as to what provisions of the 2016 EA determine the pay for an employee from the date normal work ceases and/or they are declared excess until the redeployment process concludes - and what do these provisions require the employee to be paid.
Meaning of “level of remuneration”
What does "level of remuneration" mean in relation to 'Criteria for suitable employment' at Schedule 5, clause 4.2.l (b) of the 2016 EA?
The conclusion of the redeployment process 4
When, and under what conditions, does the RRR process conclude for an employee who is a redeployee pursuant to the terms of the RRR Schedule, clause 4.6?
Does clause 4.6.1 (b) and/or 4.6.1 (d) of the RRR schedule apply to the employees whose normal duties cease because their work is being undertaken by the outsourced operator in this particular case? This involves consideration as to whether this particular outsourcing process falls within the scope of clause 4.6.1(b).
[10] I will return to the questions as part of the consideration of this matter. However, I have ultimately adopted questions based upon the above themes that properly reflect the substance of the dispute between the parties, avoid stating disputed assumptions within the propositions themselves, and which permit the issues to be addressed in a logical sequence. I have also taken into account some clarification of the Applicant’s position, in particular, provided during final oral submissions that has impacted upon the issues in dispute.
3. The immediately relevant terms of the Agreement and related statutory provisions pertaining to the Rail Commissioner
3.1 The terms of the 2016 EA
[11] Clause 5 of the 2016 EA confirms its intended coverage in the following terms:
“5 INCIDENCE AND PARTIES BOUND
5.1 This is an Agreement between the Rail Commissioner, the RTBU and employees classified pursuant to this Agreement.”
[12] The 2016 EA contains various classifications for Rail Operations Employees - including Train Drivers, Operations and Platform Coordinators and Passenger Service Assistants; and Rail Operations Support Employees - including Network Operations Supervisors and Controllers, and Shift Coordinators and Managers. The dispute has potential implications for all these classes of employees.
[13] Clause 6 of the 2016 EA provides as follows:
“6 RELATIONSHIP TO OTHER AGREEMENTS AND AWARDS
6.1 The provisions of this Agreement replace the Award, as it relates to employees appointed to positions classified in accordance with this Agreement. Insofar as there is any inconsistency between a provision of this Agreement and the Award, the provisions of this Agreement will prevail to the extent of that inconsistency.
6.2 This Agreement, the Rail Commissioner’s policies and procedures and provisions of the Public Sector Act 2009 (SA) relevant to public sector employees (as varied from time to time) apply to the employment of employees under the terms of this Agreement. The Rail Commissioner’s policies and other contractual conditions do not form part of this Agreement nor the specific employment contract of employees.
6.3 The parties acknowledge that in developing this Agreement it was not intended to diminish or extinguish any existing terms, conditions, or employment benefits. In the event of any ambiguity or uncertainty arising from the implementation of this Agreement, reference may be made to the Rail Industry Award 2010 and to the policies and procedures in place at the time of implementation of this Agreement, and as varied during the life of this Agreement, in order that such ambiguity or uncertainty may be resolved.”
[14] The 2016 EA also contains aims and objectives in clauses 2 and 3 respectively; however, no party contended that these informed the present dispute.
[15] Clause 17 of the 2016 EA provides as follows:
“17 REDEPLOYMENT, RETRAINING AND REDUNDANCY
17.1 The parties acknowledge that there will be no forced redundancy of employees bound by this Agreement up to and including 1 January 2018.
17.2 From 2 January 2018, an employee, other than a fixed-term employee, who is declared excess to requirements in the Rail Commissioner’s Rail Operations will be subject to Schedule 5 – Rail Operations – Redeployment, Retraining and Redundancy which forms part of this Agreement.”
[16] The RRR schedule is the focus of this dispute and is set out in full below. 5 The schedule must be, and has been, considered by the Commission in the context of the 2016 EA as a whole.
“SCHEDULE 5 – RAIL OPERATIONS – REDEPLOYMENT, RETRAINING AND REDUNDANCY
… …
Operation
This Schedule operates in conjunction with consultation provisions contained in the Rail Commissioner Rail Operations Enterprise Agreement 2016 (the Agreement) and consultation provisions contained in the relevant Award.
This Schedule applies to all agencies/departments identified in Clause 5, Incidence and Parties Bound by the Agreement.
Objectives
The objective of this Schedule is to ensure that proper consultation occurs between the Rail Commissioner, Employees and the Union regarding changes in workforce composition.
The parties acknowledge that:
• Redeployment and retraining is the preferred approach to workforce reductions;
• Forced redundancies should only be used as a last resort;
• With the exception of consultation regarding changes to workforce composition, these arrangements will apply to employees who, in the event of outsourcing or privatisation of Rail Operations (or part thereof), do not transfer to the new business under Transfer of Business arrangements under the Fair Work Act 2009 (SA);
• Where there is a need for genuine redundancies, employees must be offered a Voluntary Separation Package (VSPs); and
• ny reduction in staffing levels should be achieved by:
1. Restricting the use of temporary contracts, casual employment and external employment (i.e. labour hire and agency);
2. Natural attrition; and
3. Voluntary Separation Packages.
The parties further acknowledge that changes to staffing levels, including the offering of VSPs, has a significant effect on employees because it has the potential to lead to, amongst other things:
• The alteration in required skills of ongoing employees and potential retraining;
• The alteration of workloads and/or hours of work for ongoing employees;
• The potential diminution of job opportunities or promotional opportunities; and
• The possible redeployment of employees.
Nothing in this Schedule is intended to remove or limit the operation of Clause 23, Resolving Workplace Concerns or Disputes contained in the Agreement.
Procedure
1 Seriously considering changes to workforce composition
1.1 Notification
1.1.1 When the Rail Commissioner is seriously considering changes to workforce composition, including calling for employees to express an interest in VSPs or potentially forced redundancies, the public sector agency will notify the affected employees and the Union in writing of the intention. The notification will include (but not be limited to):
a) The reason the Rail Commissioner is considering changes to workforce composition;
b) The affected work/process/service delivery;
c) The affected department/location/worksite/unit;
d) The number and classifications of positions including (but not limited to) changes in position duties and/or responsibilities/tasks/workload;
e) In the event of privatisation or outsourcing, applicable Transfer of Business arrangements under the Fair Work Act 2009 (Cth);
f) Any relevant information regarding potential effects of staffing changes on continuing employees, including changes to existing practices and/or changes that the Rail Commissioner considers necessary;
g) Any known potential redeployment and job vacancy options;
h) Data regarding the use of existing labour hire, temporary and casual employees and steps taken to reduce the use of labour hire, temporary and casual employees; and
i) Any other relevant information.
1.1.2 The Rail Commissioner agrees to genuinely consider in good faith any feedback provided by employees and/or the Union. The Rail Commissioner agrees to take all reasonable steps to mitigate adverse effects such as reducing, where practicable, the use of labour hire, temporary and casual staff.
1.1.3 The Rail Commissioner will provide the Union with not less than 14 days or as otherwise agreed to respond to written notification.
1.1.4 Where the total number of positions affected may be 20% or more of the FTE at the worksite, the Rail Commissioner will facilitate reasonable paid time for meeting(s) between employees and the Union.
1.1.5 Where the Union respond to the written notification or requests for further information, the Rail Commissioner will respond within 14 days or as otherwise agreed.
1.2 Meetings with Union
1.2.1 The parties agree to meet and seek to reach agreement on the proposed changes to workforce composition, as soon as practicable after step 1.1 has been completed (unless otherwise agreed).
1.2.2 The Rail Commissioner will give genuine consideration to matters raised by the Union including any proposals to mitigate any adverse effects and any other proposals to avoid the redundancy (for example, job swaps where employees may wish to swap roles).
1.2.3 Where any issues remain unresolved following further consultation, either party may utilise Clause 23, Resolving Workplace Concerns or Disputes in the Agreement, including by referring the matter to the Fair Work Commission, noting however that the Commission will not be empowered to make any order having the effect of determining the composition of the workforce.
1.2.4 The parties agree to maintain the status quo whilst the matter remains in dispute.
1.3 Identification of new workforce composition
1.3.1 Prior to calling for expressions of interest (EOI), the proposed new workforce composition (i.e. full-time equivalent required to undertake the required duties) must have been identified in accordance with consultative processes set out in 1.1 and 1.2, and following any Transfer of Business arrangements applicable under the Fair Work Act 2009 (Cth). The Rail Commissioner will then confirm in writing the new workforce composition to the affected employees and the Union.
1.3.2 An agency cannot use the EOI process to inform/decide what the new workforce/change may be.
1.4 Regional and Remote Localities
In addition to the consultative requirements contained in this Schedule, the following will apply in relation to regional and remote localities:
Where an agency proposes organisational change that will result in an employee who works/resides in a regional or remote locality in South Australia being declared excess, the Chief Executive, Agency Head or delegate must provide details of the proposed organisation change and affected employees to the Commissioner for Public Sector Employment prior to the implementation of the relevant organisational change and the declaration of any employee as excess to requirements.
2. Voluntary Separation Process
2.1 Call for Expressions of Interest (EOIs) for Voluntary Separation Packages (VSP)
2.1.1. The Rail Commissioner will only call for EOIs after the number of genuinely redundant positions has been determined in accordance with the consultation requirements outlined above and following any Transfer of Business arrangements applicable under the Fair Work Act 2009 (Cth), unless otherwise agreed.
2.1.2. The Rail Commissioner will write to employees (i.e. permanent/ongoing employees) in work sites affected by the proposed change requesting EOIs for VSPs. The request will, at a minimum, be sent to employees working in the positions identified as no longer required (i.e. determined to be excess/redundant).
2.1.3. The call for EOIs for VSPs will have a specified closing date and will be open for not less than 21 days.
2.1.4. The call for EOIs will include information regarding how a VSP may be estimated, the number of positions that have been determined to be genuinely redundant, details of the position(s) that have been determined “excess” and an option for employees to discuss and explore reasons why these positions are no longer required. A copy of this notification should be provided to the Union.
2.1.5. Employees may seek assistance from a nominated Human Resource representative to determine an approximate calculation as to what a possible VSP would be without completing an EOI. Such a calculation would only be an approximation and possibly subject to variation.
2.2 Agency considers outcomes of EOI process
2.2.1. As soon as practicable after the EOI period has closed, the Rail Commissioner will consider and consult with the relevant employees and the Union regarding the outcomes of the EOI process. For the purposes of consultation, the Rail Commissioner will provide the Union in writing the outcomes of the EOI process and provide the Union with a minimum of 7 days’ notice to respond, prior to any VSP offers being made.
2.2.2. In the event the Rail Commissioner has determined potential VSP offers for affected employees, if requested, the parties agree to meet to discuss the proposed VSPs as soon as practicable.
2.2.3. Where a meeting is requested, the Rail Commissioner agrees to delay VSP offers to employees until after the meeting has occurred.
2.2.4. Where the Union requests further information or seeks a response, the Rail Commissioner will respond as soon as practicable.
2.2.5. The Rail Commissioner agrees to delay VSP offers to employees until 7 days after a response is provided to the Union.
2.2.6. In the event that the number of suitable applicants for VSPs is greater than the number of positions identified as “excess” the Rail Commissioner will inform the Union of the selection criteria it will utilise to determine which employees will be offered VSPs. The criteria may include (but is not limited to):
• The new workforce composition position descriptions;
• Hours of work;
• Skills, experience and qualifications; and
• Any other factors (such as geographical location).
2.3 Number of EOIs is the same as the number of identified excess positions
2.3.1 In the event the number of EOIs matches the number of identified excess positions, the Rail Commissioner will notify the affected employees and the Union.
2.4 Number of EOIs is less than the number of identified excess positions
2.4.1 Where the number of EOIs is less than the number of identified excess positions, the Rail Commissioner will not unreasonably refuse to offer an employee a VSP.
2.4.2 In the event the number of EOIs is less than the number of identified excess positions, the Rail Commissioner will move to the steps outlined in 3. Process for Identifying Excess Employees.
2.5 Calculation of a VSP
2.5.1 The parties agree that for the purpose of a VSP, an employee will be paid not less than the Department of Treasury and Finance – Targeted Voluntary Separation Packages (TVSPs) as at 1st July 2015.
2.6 Employee offered a VSP
2.6.1 Affected employees will be notified in writing that their EOI for a VSP has been accepted and that they will be paid a lump sum payment of $15,000 plus a VSP as set out in clause 2.5.
2.6.2 The Rail Commissioner must declare that their position is no longer required and therefore “excess” (redundant). Upon receipt of a VSP, their employment in the public sector will cease.
3. Process for identifying excess employees
3.1 Notification to the Union
3.1.1 Where there are insufficient numbers of EOIs to meet the number of excess positions identified in 1.3, the Rail Commissioner will notify the relevant employees and the Union of the following information in writing:
a. The number of remaining excess positions, including job classification/role/worksite location/FTE equivalent;
b. number of affected employees; and
c. The proposed time frames and plan for notification and consultation with affected employees.
3.2 Meeting with Union
Prior to notifying affected employees, per step 3.3, the Rail Commissioner and the Union will meet to discuss the selection criteria to be used for forced redundancies, the proposed time frames and plan for notification and consultation with affected employees.
3.3 Notification to affected employees
3.3.1 The Rail Commissioner will inform the affected employee/s in writing that there were insufficient numbers of EOIs for voluntary redundancies and provide information regarding the number of positions and employees that will no longer be required. A copy of any correspondence will also be provided to the Union.
This will include all relevant information including, but not limited to, why the position/s have been determined to be genuinely redundant, the number of redundant positions, the application of the above selection criteria, and information regarding the timeline and process.
3.3.2 The Rail Commissioner will notify employees of their right to be represented by the Union.
3.3.3 The Rail Commissioner will take all possible steps to mitigate the adverse effect on the employee/s affected, including (but not limited to) consideration of immediate redeployment to a suitable alternative position with the consent of the affected employee/s.
3.3.4 The Rail Commissioner will organise at least one paid meeting with the affected employee/s to discuss the redundancies. The Union will be invited to attend this meeting.
3.4 Notification to redundant employee(s)
3.4.1 The Rail Commissioner will then notify the redundant employee/s and the Union that the particular employees will be made redundant. Prior to notifying a redundant employee, the Rail Commissioner must declare that the employee’s position is no longer required and therefore “excess” (redundant).
3.4.2 The redundant employee/s will be notified in writing that their position is “excess” and may elect to consider a VSP or seek redeployment. In this same notification, the Rail Commissioner will provide the employee with the following:
• The date their position will be made redundant shall be no earlier than 28 days from the date the notification is received;
• nformation regarding taking a VSP and information regarding the redeployment process. This information will clearly outline what the employee’s entitlement would be if they elect to take a VSP at the date of termination, pursuant to step 2.5 and 2.6.
• That the employee may request a paid time meeting with the Rail Commissioner to discuss any aspect of the redundancy and/or redeployment process.
• That the employee is entitled to be represented during the meeting by the Union.
• Should the employee wish to accept the offer for a VSP at this time, they must do so within the timeframe provided, which must be no less than 28 days. Upon acceptance of the VSP, their employment in the public sector will cease upon receipt of the VSP.
4. Redeployment Process
4.1 Commencement of the Redeployment Process and Case Management
4.1.1 Following receipt of written advice of being declared an excess employee, where an employee has elected to become a redeployee (i.e. has decided not to accept an offer for VSP), the redeployee will be assigned a case manager and will participate in the redeployment/retraining program.
4.1.2 A redeployment plan will be established in consultation with the redeployee which aims to identify a suitable alternative ongoing permanent role in the public sector. The plan will also include (but not be limited to):
• details of any training to be provided; and
• skills or duties relevant to a suitable placement and/proposed role.
4.1.3 A copy of the redeployment plan will be provided to the redeployee.
4.1.4 The redeployee’s case manager will have priority access to the notice of vacancies and redeployee will also have access to notice of vacancies.
4.1.5 The excess employee is also expected to cooperate and participate in all reasonable training opportunities or placements.
4.2 Criteria for suitable employment
4.2.1. An ongoing permanent role in any agency in the Public Sector will only be considered suitable for the purposes of redeployment if (unless the employee otherwise agrees):
a. The hours of work remain the same or similar;
b. The level of remuneration is not less than what the employee was earning prior to becoming a redeployee;
c. It is a reasonable distance/location from the employee’s residence to the new place of employment;
d. The classification is not lower than the employee was previously engaged as;
e. The nature of the work is such that it is reasonable to perform, taking into account the employee’s skill and experience;
f. There are no extenuating factors specific to the employee/worksite that would make it unreasonable for the employee to perform the ongoing permanent role.
4.2.2. The above criteria does not limit further discussions and agreements between the employee and their case manager.
4.3 Making of an offer of suitable employment during redeployment program
4.3.1. Within the first 6 months of an employee being declared excess, the applicable case managers/agency representatives must attempt to identify at least one role or placement that is a reasonable match with the employee's skills and capabilities (including with training).
4.3.2. In the event that an offer for an alternative role/position is not made within 6 months of the employee being declared excess, the case manager must meet with the employee and their representative (if applicable) to discuss and review the employees redeployment plan.
4.3.3. The outcomes of these discussions and the action plan for next steps must be provided in writing to the employee and a copy forwarded to the Office for the Public Sector (OPS).
4.3.4. In the event an offer for a suitable ongoing permanent role has not been identified and made within 9 months from the date of them being declared excess, the relevant agency must notify OPS.
4.3.5. The Rail Commissioner will discuss with the employee (and the Union) any reasons that an alternative role has not been achieved. At this stage the CPSE or representative from the OPS will become involved in order to review the process and options available for redeployment.
4.3.6. In the event that an offer of suitable employment has not been identified and made within 12 months of the employee being declared excess, the agency, the CPSE or representative from OPS, and the employee (and Union) will meet to discuss the outcome of the redeployment/retraining program. The parties will discuss:
• Whether the redeployment plan has been complied with by the Agency and the employee;
• Whether all reasonable efforts have been made to identify suitable employment for the employee; and
• Whether there are exceptional circumstances which could make it reasonable to extend the redeployment/retraining program, and/or amend the redeployment plan, to provide further opportunity to identify suitable employment.
4.3.7. For the purposes of 4.3.6, “exceptional circumstances” may include the geographical location of the employee, the unique skills and/or experience of the employee, the age of the employee, or the circumstances of the employee becoming excess, which circumstances provide additional difficulty to the identification of suitable employment for the employee.
4.3.8. Where any issues remain unresolved, either party may utilise Clause 23, Resolving Workplace Concerns or Disputes in the Agreement.
4.4 Notification of a suitable ongoing permanent role
4.4.1 Where an offer of a suitable ongoing permanent role is made to an employee, such notification will be provided in writing. Written notification will also include:
• A contract of employment for the new role;
• A Job and Person Specification for the new role; and
• Information advising the employee that should they not accept the suitable ongoing permanent role, the employee may be separated with 5 weeks’ notice and separation pay outlined in 4.6.3 (provided that the terms of this Schedule have been met). Such information will be clearly outlined to the employee.
4.4.2 An employee will be given a minimum of 14 days to consider whether they wish to accept the suitable ongoing permanent role.
4.5 Deferment of redeployment program
4.5.1. The Rail Commissioner must defer the redeployment period where an employee that has been declared excess is absent from duty by reason of:
• Parental leave; or
• Defence reserves leave; or
• Where an employee is in receipt of weekly payments for a compensable workplace injury or illness and/or subject to a Rehabilitation and Return to Work Plan for such injury or illness.
4.5.2. The Rail Commissioner may approve an application for deferment of the redeployment period by an employee who has been declared excess, on the basis of exceptional personal circumstances by the employee. The Rail Commissioner is required to seek advice from the Commissioner for Public Sector Employment. This decision making function is not to be delegated.
4.6 Conclusion of the Redeployment Process
4.6.1 The redeployment process will end only when the following criteria has been satisfied:
a. The employee has accepted employment in an ongoing role; or
b. For an employee whose position has been determined to be excess as a result of the Rail Commissioner’s decision to privatise, outsource, contract out or the closure/part closure of a service(s) and that employee has been offered employment in a suitable ongoing permanent role and has declined such ongoing employment;
c. The Rail Commissioner and employee (and union if requested by the employee) have negotiated, been offered and accepted an additional separation payment;
d. For employees other than those in 4.6.1(b), the process set out in 4.3 is completed; or
e. The employee has at any stage elected to take a VSP, in accordance with step 4.7.
4.6.2 Where the redeployment process ends, the Rail Commissioner will confirm in writing to the employee the outcome of that process.
4.6.3 Where an employee has been offered employment in a suitable ongoing permanent role and has declined such ongoing employment or the redeployment process set out in clause 4.3 is completed, the following will apply:
a. The employee will be provided in writing a minimum of 5 weeks’ notice of the date of separation.
b. During the notice period, the Rail Commissioner agrees to allow a minimum of one day of paid leave each week to job seek.
c. During the notice period, the employee may give notice of their intention to resign their employment with 24 hours’ notice and be paid the balance of the notice period.
d. A separation payment the equivalent of that provided in clause 4.7.3 will be paid to the employee at the separation date of their employment.
4.7 Separation Payments
4.7.1 At any time while an employee is a redeployee, they may give notice that they wish to accept a VSP.
4.7.2 A redeployee will only be required to provide one weeks’ notice to terminate their employment (or less by agreement).
4.7.3 An employee who indicates that they wish to accept a VSP, in accordance with clause 4.7.1, will be entitled to the following amounts of redundancy pay:
a. An employee who has been a redeployee for between 0 to 3 months is entitled to receive redundancy pay equal to 100% of the VSP prescribed in clause 2.5 plus a lump sum payment of $15,000; or
b. An employee who has been a redeployee for more than 3 months and up to 12 months is entitled to receive redundancy pay equal to 100% of the VSP prescribed in clause 2.5; or
c. An employee who has been a redeployee for more than 12 months is entitled to receive redundancy pay equal to 75% the VSP prescribed in clause 2.5.
5. Disputes
5.1. Where a dispute arises in relation to the operation of this Schedule, the parties may raise a dispute in accordance with Clause 23, Resolving Workplace Concerns or Disputes of the Agreement.
5.2. A dispute may be raised at any stage of this Schedule. Where a dispute is raised in relation to this Schedule, the status quo will remain until the matter is resolved.
5.3. Where the parties cannot reach agreement to resolve a dispute in relation this Schedule, the parties agree that the dispute may be arbitrated by the Fair Work Commission.
Review
The Rail Commissioner and the RTBU will review the implementation of this process (i.e. Schedule 5) no earlier than January 2019.” 6
“Declared excess” means the date of written notice to the employee that their position is no longer required.”
[17] As the positions advanced by the parties require consideration of the wage arrangements operating under the 2016 EA, I observe that the following clauses inform these arrangements:
“13 CLASSIFICATION AND WORK REQUIREMENTS
13.1 Employees will be appointed to positions classified in accordance with the classifications defined at clause 21 of this Agreement. An employee may, subject to their qualifications, experience and fitness, be rostered to undertake any duty for which they are trained and competent to perform.
13.2 A standby employee may be required to perform “other duties” (as determined and agreed by the parties from time to time.)
13.3 Nothing in this Agreement precludes an employee’s appointment to another classification of work within this Agreement, in which case this Agreement will continue to apply.
… …
21 CLASSIFICATIONS & RATES OF PAY
21.1 Classification of Positions
21.1.1 Upon commencing employment, an employee will be appointed to a position classified in accordance with this Agreement, will be paid according to the salary applicable to the classification of that position and will remain on that classification unless reclassified or appointed to another position classified at another level.
21.1.2 Employees will be advised in writing of their classification and any subsequent changes.
21.1.3 The remuneration levels applicable to each classification are set out at Schedule 1 and 3 of this Agreement.
21.1.4 Employees engaged under this Agreement will be appointed to a position classified in accordance with the following classifications.
… ..
21.11 Rates of Pay
21.11.1 The rates of pay applicable to the respective classifications outlined in clause 21 of this Agreement are detailed at Schedule 1 and 3 of this Agreement.
… …
21.14 Aggregate Wage – Suburban Train Drivers Only
21.14.1 The parties have agreed that, in relation to normal rostered work for Suburban Train Drivers, the penalties and allowances provided for Saturday and Sunday time, overtime, shift work, broken shifts, distance payment and annual leave loading will be paid on an averaging basis. This arrangement will be referred to as the ‘aggregate wage’ in respect of such employees.
21.14.2 Employees who are in receipt of the aggregate wage are not entitled to any additional payment in respect of annual leave loading as provided in clause 22.3.
21.14.3 The Aggregate Wage per Week and the Aggregate Percentage used to calculate such rates will be recalculated by the Rail Commissioner to coincide with each wage increase detailed at clause 21.15 and/or the final posting of any major roster change involving Suburban Train Drivers.
21.14.4 The calculations will be provided to the RTBU and its nominated delegates for checking prior to tabling the new rates for employees.
21.14.5 The calculation of the Aggregate Wage will continue to be based on the total number of full-time lines of work available within the Master Roster and the full-time equivalent employees required to fill that roster.
21.14.6 Senior Drivers will be paid an Aggregate Wage, as agreed between the parties.”
[18] Schedule 1 – Weekly Wage Rates – Rail Operations Employees contains weekly wage rates for each of the classifications covered by the schedule, with annual adjustments reflected for the life of the Agreement. This schedule also contains the following provision:
“S.1.2 Aggregate Wage for Suburban Train Driver Classifications
S.1.2.1 The aggregate wage per week and the aggregate percentage used to calculate such rates will be recalculated by the Rail Commissioner to coincide with each wage increase detailed at clause 21.15.2 and/or the final posting of any major roster change involving Suburban Train Drivers.
S.1.2.2 The calculations will be provided to the RTBU and its delegates for checking prior to tabling the new rates for employees.
S.1.2.3 The calculation of the aggregate wage will continue to be based on the total number of full-time lines of work available within the Master Roster and the full-time equivalent employees required to fill that roster.
S.1.2.4 In circumstances involving extended line closures associated with works related to electrification of the rail network during the life of this Agreement, the aggregate wage will not be reduced to take account of fluctuations in roster arrangements, as would normally be the case.
S.1.2.5 The aggregate wage will not be reduced as a result of the implementation of shift harmonisation.
S.1.2.6 The aggregate wage calculation guideline in operation at the date of approval of this Agreement is attached at Schedule 7 – Aggregate Wage Calculation Guidelines.”
[19] Schedules 2 and 4 provide allowances for various shift patterns, equipment, working, training, overtime, penalty payments and various other allowances for relevant classifications and circumstances applicable to Rail Operations and Support Employees respectively. The hours of work provisions and associated payments are also further set out in clause 27 of the 2016 EA. Other than where incorporated into the aggregate wage, all of these allowances and additional payments are contingent upon the existence of the relevant circumstance to provide justification for their payment to the employees.
[20] Schedule 3 – Weekly Wage Rates – Rail Operations Support Employees contains weekly wage rates for each of the classifications covered by the schedule, with annual adjustments reflected for the life of the Agreement. There is no aggregate wage concept set out for the Support employees.
3.2 The Rail Commissioner Act 2009 (SA)
[21] The RC Act relevantly provides as follows:
“4—Establishment of Rail Commissioner
(1) There is to be a Rail Commissioner.
(2) The Rail Commissioner—
(a) is a body corporate; and
(b) has perpetual succession and a common seal; and
(c) is capable of suing and being sued; and
(d) is an instrumentality of the Crown and holds property on behalf of the Crown; and
(e) has the functions assigned by or under this or any other Act; and
(f) has the powers necessary or expedient for, or incidental to, the performance of the Commissioner's functions (including the power to enter into contracts), together with such other powers conferred by or under this or any other Act.”
“5—Appointment etc of Rail Commissioner
(1) The Rail Commissioner will be constituted by a person appointed from time to time by the Governor for the purpose.
(2) The person appointed under subsection (1) will be appointed for a term not exceeding 5 years, and on terms and conditions determined by the Governor.
(3) The Governor may appoint 1 or more persons as the Governor thinks fit to be a deputy of the person appointed under subsection (1), and a person so appointed may act as the Rail Commissioner in appropriate cases.
(4) At the expiration of a term of appointment, a person appointed under this section will be eligible for reappointment.
(5) The Governor may remove a person appointed under this section from office—
(a) for misconduct; or
(b) for incapacity to perform satisfactorily the Commissioner's functions; or
(c) for material contravention of, or failure to comply with, the requirements of this or any other Act.
(6) The office of the Rail Commissioner becomes vacant if the Commissioner—
(a) dies; or
(b) completes a term of office and is not reappointed; or
(c) resigns by written notice to the Minister; or
(d) is disqualified from managing corporations under Chapter 2D Part 2D.6 of the Corporations Act 2001 of the Commonwealth; or
(e) is removed from office under subsection (5).
(7) On the office of the Rail Commissioner becoming vacant, a person may be appointed in accordance with this section to the vacant office.”
“6—Ministerial direction
(1) The Rail Commissioner is subject to the direction of the Minister.
(2) A direction of the Minister under this section must be given in writing.
(3) The Minister must, within 6 sitting days after giving a direction to the Rail Commissioner under this section, have copies of the direction laid before both Houses of Parliament.
(4) If the Minister gives a direction under this section, the Rail Commissioner must cause a statement of the fact that the direction was given to be published in its next annual report.”
“7—Functions
(1) The functions of the Rail Commissioner are as follows:
(a) to construct railways, railway tracks and associated track structures;
(b) to manage, commission, maintain, repair, modify, install, operate or decommission rail infrastructure;
(c) to commission, maintain, repair, modify, install, operate or decommission rolling stock;
(d) to operate or move, or cause the operation or movement of, rolling stock on a railway by any means (including for the purposes of constructing or restoring rail infrastructure);
(e) to move, or cause the movement of, rolling stock for the purposes of operating a railway service;
(f) to act as a rail transport operator for railway operations carried out by the Commissioner;
(g) to hold accreditation (if successful application is made) under the Rail Safety National Law (South Australia) Act 2012 as a rail transport operator in relation to railway operations carried out, or proposed to be carried out, by the Commissioner;
(h) to enter into agreements or arrangements relating to the management of risks associated with railway operations (including where rail infrastructure interfaces with roads);
(i) to operate passenger transport services by train or tram;
(k) to enter into service contracts relating to the operation of passenger transport services under Part 5 of the Passenger Transport Act 1994;
(l) to carry out any other function conferred on the Commissioner by the Minister.
(2) The Rail Commissioner's functions include the carrying out of design work, roadwork and any other necessary or associated work relating to the Commissioner's functions.
(3) The Rail Commissioner will be taken to hold an accreditation under the Passenger Transport Act 1994 to operate passenger transport services by train or tram as operated by the Rail Commissioner from time to time.”
“12—Staff
(1) The Rail Commissioner's staff consists of—
(a) Public Service employees assigned to assist the Commissioner; and
(b) any person appointed under subsection (3).
(2) The Minister may, by notice in the Gazette—
(a) exclude Public Service employees who are members of the Rail Commissioner's staff from specified provisions of the Public Sector Management Act 1995; and
(b) if the Minister thinks that certain provisions should apply to such employees instead of those excluded under paragraph (a)—determine that those provisions will apply, and such a notice will have effect according to its terms.
(3) The Rail Commissioner may, with the consent of the Minister, appoint staff for the purposes of this Act.
(4) The terms and conditions of employment of a person appointed under subsection (3) will be determined by the Governor and such a person will not be a Public Service employee.
(5) The Rail Commissioner may, with the approval of the Minister, under an arrangement with the relevant body, make use of the staff, equipment or facilities of—
(a) an administrative unit of the Public Service; or
(b) an agency or instrumentality of the Crown.”
4. The case for Mr Rogers
[22] The Applicant in his submissions posed the following questions, responses and propositions:
1. "Unassigned" or "Declared Excess"
What are the conditions that trigger the change, from an employee being determined as "unassigned" to "declared excess"?
Applicant’s position
There should be no “classification” to determine that an employee is unassigned as no such classification exists under the current 2016 EA. An employee under the 2016 EA is either working or classified as declared excess. If an employee is declared excess then initially as a first step he or she is either entitled to voluntary separation package, or alternatively, entitled to continue as an employee under the Redeployment, Retraining and Redundancy (RRR) provisions of the 2016 EA.
During final submissions, Mr Rogers accepted that there would be a (short) period between the time and the normal worked ceased and when an employee might be declared excess. He also accepted that during this period, the employee would not be entitled to shift or overtime payments 7 and that Drivers would not be paid the aggregate wage.8
Basis for the position
There is nothing in the 2016 EA that provides for any classification of a person as being unassigned. Indeed, such a classification of a person being unassigned undermines the principle and purpose of Schedule 5 of the 2016 EA.
I apprehend that the Applicant accepts that there are some necessary processes to be undertaken between the cessation of normal work and the declaration of excess. This should be as short as possible. In terms of payments, I apprehend that the Applicant accepts that there is no provision in the 2016 EA that maintains anything beyond the weekly rates in the period between the cessation of normal work and the declaration of being excess.
2. Rate of Pay Once "Declared Excess"
During the timeframe of "declared excess" and appointment into a new 'suitable ongoing permanent role', can an employee receive an average weekly wage that is a reflection of previous gross earnings, when shift work hours and overtime are not rostered?
Applicant’s position
It is one of the fundamental principles of the 2016 EA that during the application of an employee being declared excess that he or she should be entitled to the level of remuneration not less than what the employee was earning prior to becoming a redeployee. The wages of a current employee currently comprise of payments of the following types: a base rate; shift penalty payments; overtime penalty payments; plus applicable allowances.
In general, the shift penalty payments make up to around 20% of workers’ take-home pay. The work which almost all employees are required to complete requires nonstandard working hours for almost all operations and therefore shift penalty payments and overtime penalty payments are an integral part of an employee’s regular pay.
At the time of the negotiation of the 2016 EA this was recognised by the parties involved.
Any idea that there should be a separation of shift penalty and overtime entitlements from the overall pay a worker may be entitled to if the “SA Railways” was outsourced in the future were specifically rejected at two prior employee ballots and then during the negotiation of the 2016 EA. Therefore, the current term of “remuneration” should be regarded as incorporating all types of pay an employee is entitled to receive under the 2016 EA as the alternative was specifically rejected during those negotiations.
The RRR schedule provides that the level of remuneration must not be less than what the employee was earning prior to the redeployment process.
Basis for the position
The evidence of Mr Rogers confirms the nature of standard remuneration for an employee and how that includes on a regular basis not only payments under the base rate but also shift penalty payments and overtime penalty payments and allowances. This is not disputed by the Rail Commissioner.
Furthermore, it is clear from the negotiations that took place leading up to the 2016 EA, that the inclusion of the term “remuneration” in the current version was as a result of a rejection of previous draft proposals which would have excluded such things as shift penalty payments and overtime payments from being continued in the event of SA Railways being outsourced.
The RRR process may continue for 12 months or more and this should be taken into account.
In closing submissions, Mr Rogers clarified that the maintenance of the full level of remuneration was provided by clause 4.2.1 of the RRR schedule. That is, an employee becomes a redeployee when they are declared to be excess and this provision is intended to apply to and from that event to provide the remuneration maintenance.
3. Definition of Remuneration
How is the definition of remuneration to be applied, in particular to 'Criteria for suitable employment': clause 4.2.1 b of the Agreement?
Applicant’s position
The term “remuneration” should be viewed broadly as including not only the base rate of payment but also the standard shift penalty payments and overtime payments which an employee could expect to receive in his or her standard pay.
Basis for the position
In general, the term “remuneration” has always been viewed in a broad manner encompassing all standard payments a worker could expect to receive for his labours.
In the High Court case of Chalmers v Commonwealth [1946] 73 CLR 19, the term “remuneration” with regard to the payments expected to be received by an employee was considered at page 34 by His Honour Justice McTiernan with the comment “the ordinary meaning of rate of remuneration covers rates of remuneration for overtime”. Further His Honour Justice Williams commented at page 37 “the ordinary meaning of remuneration is pay for services rendered”.
Under both the former Industrial and Employee Relations Act of 1994 (SA) and the Fair Work Act 1994 (SA) (SA FW Act) s.4(1) sets out the meaning of the word remuneration as being:
(a) wages or salary; or
(b) payment to or for the benefit of an employee in the nature of piece-work rates, penalty rates, shift premiums, overtime or special work rates; or
(c) allowances;
Such definitions and interpretations of the word “remuneration” should be viewed as a background to the standard meaning of that word within the context of the negotiation and operation of the 2016 EA.
The Applicant seeks to reject the Respondent’s meaning of the word remuneration on the grounds that under the interpretation of enterprise agreements as set out in the judgement of the case of Automotive Food Metals Engineering Printing and Kindred Industries Union v Berri 9 would support a more restrictive interpretation of the meaning of words within each individual enterprise agreement. However, this does not apply. In particular, paragraph [46] of that judgement states the following:
“There is a long line of authority in support of the proposition that a narrow or pedantic approach to the interpretation of industrial instruments (such as enterprise agreements) is to be avoided, and that ‘fractured and illogical prose may be met by a generous and liberal approach to construction”.
It is the Applicant’s view that the use of the term “remuneration” in the 2016 EA cannot be viewed narrowly to solely identify just base rate payments. Wherever the term remuneration is used in the 2016 EA it is essentially used as shorthand for payment, occasionally linked to types of payment but not solely any specific single payment. Indeed, it is important to note that despite the 2016 EA including 27 specific definitions in clause 9 (and the document as a whole running to 106 pages) there is no specific definition for the term remuneration. Most importantly under Schedule 5 there is no requirement for separate consideration of base rates, shift penalty payments or overtime payments, there is just a reference to one type of payment that is overall remuneration.
The RRR provisions, according to the Rail Commissioner, were a “cut and paste” of another agreement and as a result, the use of the term remuneration cannot be regarded as being used consistently throughout the 2016 EA. Rather, the terms of the RRR in the approved version were intended to provide a better outcome that the rejected versions of the enterprise agreement. This history is relevant to the objective facts.
The Rail Commissioner has not provided any objective material which supports their interpretation of the term. Not even Mr Johnson was able to state that he had expressed remuneration to exclusively mean base rate wage and nothing more.
In some circumstances subsequent conduct may be relevant to the interpretation of an industrial instrument. The Rail Commissioner’s February 2020 fact sheet 10 clearly states that “if a Rail Commissioner employee is declared excess and transferred to a role within the Rail Commissioner in a position at a lower classification level, the employee will be paid the average of their previous work payments or gross income they would have received for the first six months, and after six months an employee will receive their substantive wage (base rate) as per the enterprise agreement, cease receiving roster based payments and will be eligible for any applicable increments”. Whilst this February 2020 fact sheet is clearly an incorrect statement of exactly what the Applicant claims to be the ongoing permanent remuneration package it does nevertheless support the view that after being declared excess an employee will be paid their gross income, not just their base rate, and this appears closer to the Applicant’s interpretation of remuneration due under clause 4.2.1 (b).
The rejected version contained reference to an income maintenance policy that would have provided a level of income maintenance beyond the 75% referred to in the draft provision itself. If the Rail Commissioner’s view of the final provision was accepted, the 2016 EA would not represent an improvement, and this was not the common objective understanding of the parties.
4. RRR Process Concludes
When does redundancy apply, if after completion of the 12 month review process "exceptional circumstances" exist, as outlined in 'Making of an offer of suitable employment during redeployment program': clauses 4.3.6 dot point three, and 4.3.7 of the Certified Agreement?
Applicant’s position
There is no set period when upon an employee becoming “declared excess” that they must be forced into redundancy. Upon such an employee being declared excess under the 2016 EA the first stage is a 12 month period under the redeployment, retraining and redundancy provisions set out in schedule 5 during which that employee is subject to a redeployment process. At the end of that 12 months if that employee has not been redeployed, it would then be determined whether exceptional circumstances exist. There is no set minimum period during which such exceptional circumstances may apply.
Basis for the position
The Applicant relies upon the wording of the term set out in schedule 5 of the 2016 EA. Overall if an employee cannot be redeployed in that 12 month period referred to there may still be a circumstance when the employer still cannot satisfy the suitable criteria for redeployment of that employee, i.e. they cannot find a position within his or her wage, skill set, experience, ability to be trained or other complex issues.
During that period there is also participant obligations upon that employee to still actively engage in looking for a job and not just relying upon his or her case manager. Having said that, there is no set time limit for the application of those criteria.
5. Rail Commissioner Scope of Limitations
With regard to 'Conclusion of the redeployment process': clause 4.6.1 (b) of the Agreement, does it sit within the scope of responsibility for the Rail Commissioner to outsource the operation of train services?
Applicant’s position
Clearly the decision by the SA Government to outsource the operation of train services (SA Railways) and the consequences which followed that decision cannot be considered separately from any action by the Rail Commissioner
Basis for the position
It is a nonsense to consider that somehow the actions and consequences of the two entities are not interrelated or that somehow the 2016 EA cannot be affected by the decision to outsource the operation of train services. The Respondent has recently considered that clause 4.6.1 (b) can only be enlivened if the Rail Commissioner made the decision to outsource. If this is correct then, given the status of the Rail Commissioner, if he had not made or complied with a decision to outsource the train services then surely such an outsourcing could not possibly take place as all of the current employees and all other rail assets would remain exclusively under his control and could not be passed on to the new private operator.
It should be noted that pursuant to section 6 of the RC Act that the Rail Commissioner is subject to the direction of the Minister. Furthermore the functions of the Rail Commissioner as set out under section 7 of the RC Act lie with the Rail Commissioner including the management, commission, maintenance, repair, modification, installation, operation or decommissioning of rail infrastructure along with the operation and movement of rolling stock and entering into agreement or arrangements relating to the management of risks associated with railway operations. If, as has been postulated by the Respondent, the Rail Commissioner has been excluded from the decision to outsource then clearly such an outsourcing is impossible.
During the hearing it became clear from the evidence of both Ms Alford and Mr Nikoloski that the functions of both the relevant Department and the Rail Commissioner were so intermingled as to be indistinct. Under section 6 of the RC Act the Minister is required to issue written directives to the Rail Commissioner. However, it is clear from the testimony of Ms Alford and Mr Nikoloski that no such written directives were bothered with. In fact, it is clear that the functions of the Rail Commissioner are almost completely absorbed by the Department, so much so that the Chief Executive of the Department and the Rail Commissioner are one and the same person, Mr Tony Braxton-Smith.
When dealing with corporate entities it could be said that the common law of “ostensible” or “apparent” authority would apply in this situation. 11 In such a situation at common law the principles of applied authority may be regarded as a particular application of estoppel by representation or conduct. Apparent authority also arises where a company, or in this case the Rail Commissioner, has acquiesced in the course of dealings. In the current situation it is also clear that not only does the Department have apparent authority to exercise the duties of the Rail Commissioner but it could also be argued that the Rail Commissioner has by his conduct imparted his actual authority to the Department with regard to all aspects of the 2016 EA including the commencement and operation of the RRR procedures set out in Schedule 5.
In final submissions, Mr Rogers also relied upon two further propositions to support his notion that the approach to clause 4.6.1 (b) of the RRR schedule should extend to include the form of outsourcing that has occurred here. Firstly, that the Commission should imply that the RRR clause dealing with RRR provisions resulting from an outsourcing should come into operation once that outsourcing decision has been made and should then be put into operation during the course of that outsourcing irrespective of delay or confirmation by the Rail Commissioner once his Minister (and Cabinet) has already made the principal decision. 12 Secondly, the good faith bargaining obligations in section 228 of the FW Act applied at the time of the negotiations and the failure of the Rail Commissioner’s negotiators to disclose what they now contend as the meaning of the RRR schedule should be considered in rejecting that approach.
Mr Rogers also posited that if the Rail Commissioner approach to the construction of clause 4.6 was adopted, this would mean that there was no need for subclause 4.6.1 (b) and this should not be adopted.
In terms of the authority 13 relied upon by the Rail Commission, Mr Rogers contends that this had no real application to this matter. That is, the Rail Commissioner has essentially surrendered the execution and functions to the Department. The Department under the Cabinet which controls the operation of the Rail Commissioner, not only as the Rail Commissioner's de facto agent, but also, essentially the body which dictates major policy and then carries it out. Further, here the Rail Commissioner is an “empty shell” or a “figure-head” whose role was to follow and administer the decision made on its behalf.
Essentially the 2016 EA as agreed by both parties grants the Fair Work Commission power to resolve disputes through arbitration. That power is extensive and particularly effective and binding given that is applies with the consensus of the parties granted through the 2016 EA.
[23] Mr Rogers provided a comprehensive witness statement and also relied upon the evidence of Mr Collis.
[24] Mr Roger’s evidence went in the main to the following:
• The negotiations leading to the 2016 Agreement including, in particular, what is now the RRR schedule; and
• The wage and other payments presently received by employees under the Agreement including the proportion of shift and overtime payments.
[25] Mr Collis’ evidence went mainly to the negotiations leading to the 2016 Agreement including, in particular, what is now the RRR schedule.
5. The case for the Rail Commissioner
[26] The Rail Commissioner adopted the questions below and responded as follows:
Question 1
Where an Employee's normal duties cease because their work is being undertaken by an outsourced operator, does that employee become "unassigned" and/or declared "excess" for the purposes of Schedule 5 of the Agreement and from when does this apply?
Rail Commissioner’s position
The word "unassigned" is not synonymous with the term "declared excess" and is not used or defined in the Agreement. "Declared excess" has a precise definition and specific usage in the 2016 EA. Under the terms of the Agreement:
• The employee neither becomes unassigned nor declared excess upon the date of their normal work ceasing. Upon the employee's work ceasing there is a process to be followed under the 2016 EA before an employee is declared excess.
• The employee will subsequently be declared excess on a date to be notified by the Rail Commissioner after the completion of all prerequisite steps as set out above. This includes following completion of the transfer of business to Keolis Downer and only after the VSP process has been completed.
Basis for the position
On the plain words of that clause, Schedule 5 applies to the employee from when they are "declared excess". The term "declared excess" also appears thorough Schedule 5 as a qualifier to several processes.
The term is defined under the heading Review at the end of Schedule 5 as follows:
"Declared excess" means the date of written notice to the employee that their position is no longer required.
Schedule 5 contains a heading - Procedure - under which the detailed process for redeployment and redundancy are prescribed. The stages under that procedure are sequential, as follows:
• Consultation when the employer is seriously considering changes to workforce composition.
• A Voluntary Separation Process ("VSP").
• A process for identifying excess employees after expressions of interest in VSP have been obtained.
• A redeployment process for those excess employees.
The declaration that an employee is "excess" occurs under section 3.4 of the Procedure.
Section 3.1.1 of the Procedure makes it clear that the process for identifying excess employees commences after the call for Expressions of Interest (EOI) in a VSP.
Calls for expressions of interest in a VSP occur under section 2 of the Procedure and only after the transfer of business is completed. Section 2.1.1 states that “the Rail Commissioner will only call for EOIs after the number of genuinely redundant positions has been determined in accordance with the consultation requirements outlined above and following any transfer of business arrangements applicable under the FW Act, unless otherwise agreed.”
The logical flow of the Procedure makes it clear that the process is sequential. First, consultation and information sharing. Secondly, a call for VSPs. Finally, if there are insufficient numbers of EOls, excess employees are then identified and formally notified that they are "excess" in accordance with section 3.4. The date of that notification to the employee will be the date the employee is "declared excess" as defined. This triggers the redeployment process.
The Rail Commissioner will then notify the redundant employees and the Union that the particular employees will be made redundant. Prior to notifying a redundant employee, the Rail Commissioner must declare that the employee's position is no longer required and therefore "excess" (redundant).
The redundant employee/swill be notified in writing that their position is "excess" and may elect to consider a VSP or seek redeployment.
Question 2
What provisions of the Agreement determine the pay for an employee from the date they become "unassigned" and/or or between the date that they are declared excess until the redeployment process concludes - and what do these provisions require the employee to be paid?
The Rail Commissioner’s position
Once an employee's normal duties have ceased and they are subject to Schedule 5, the employee will be entitled to pay in accordance with the terms and conditions of the Agreement. If the employee is not working rosters that incur allowances, penalties, overtime or an aggregate wage, then the employee will not be entitled to them. There is nothing in the RRR schedule to disturb the normal approach.
Basis for the position
The concept of the employee being "unassigned" has no relevance, but the date of being declared excess has, because it triggers the formal redeployment processes in section 4 of Schedule 5.
The pay for an employee who has been declared excess or who is otherwise subject to Schedule 5 is derived from the plain and ordinary meaning of the words used in the 2016 EA. Schedule 5 contains no provisions relating to pay for an employee who has been declared excess or is otherwise subject to its operation. There are no unique provisions for an employee derived from that schedule.
An employee who has been declared excess remains an employee covered by the 2016 EA, including all provisions pertaining to pay. Various provisions of the EA deal with an employee's pay and prescribe how that pay is determined including:
• Clause 21 provides that upon commencing employment, an employee will be appointed to a position classified in accordance with this Agreement, will be paid according to the salary applicable to the classification of that position and will remain on that classification unless reclassified or appointed to another position classified at another level.
• The rates of pay applicable to the respective classifications outlined in clause 21 of the Agreement are detailed in Schedules 1 and 3 of the Agreement.
The employee, regardless of being declared excess or subjected to Schedule 5, will be paid according to the remuneration levels in Schedules 1 or 3, subject to the periodic increases set out at clauses 21.15 and 21.16.
Schedule 1 provides weekly wages for Rail Operations Employees, and provisions for an aggregate wage for suburban train drivers.
Clause 21.14 provides for an aggregate wage for Suburban Train Drivers and the "penalties provided" for the identified items in clause 21.14.1 are otherwise contained in clause 27 including:
• Clause 27.4.1 states that employers may be required to work broken shifts
• Clause 27.5.3 and 27.5.4 refer to payment for overtime worked.
It is clear from the words of the 2016 EA that the "aggregate wage":
• is a mechanism of offsetting penalties for shifts that are otherwise likely required to be worked by the relevant employee;
• would be based on normal rostered work available; and
• would be subject to change if there is a major roster change.
For rail operations support employees, the entitlement to overtime, weekend and shift penalties are based upon the times worked by the employee in clause 29. There is no aggregate wage for these employees.
Schedule 4 of the 2016 EA sets out allowances payable for certain functions or disabilities incurred. It is clear from the language that these payments are conditional on certain criteria being met and the disability or expense being incurred by the employee. Once an employee's normal duties have ceased and they are subject to Schedule 5, the employee will be entitled to pay in accordance with the terms and conditions of the Agreement. If the employee is not working rosters that incur allowances, penalties, overtime or an aggregate wage, then the employee will not be entitled to them.
If the plain meaning of the words is not sufficient (and the Respondent submits that it is), when the relevant clauses are read together, the common intention of the parties should be identified objectively by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to subjective intentions or expectations.
There is no evidence before the Commission of a common intention of the parties that “during the application of an employee being declared excess that he or she should be entitled to the level of remuneration not less than what the employee was earning prior to becoming a redeployee" as asserted by the Applicant and his subjective expectation is not to be a factor in determining the meaning of the language used.
The evidence of the Applicant goes to the asserted intention to improve upon the provisions of the previously voted down agreement, which included a provision that an employee's salary for the purposes of "suitable employment" not be less than "75% of the employee's wage/ salary". That outcome was achieved in that the requirement for the wage/salary to be deemed suitable employment under clause 4.2.1 (b) became "the level of remuneration is not less than what the employee was earning prior to becoming a redeployee". However, the Applicant's evidence fails to establish any common intention that a different method of setting pay would apply from the time which the employee's normal work ceased until the employee secured alternative employment. The evidence referred to by the Applicant is about the tests for suitable employment, and not about wage maintenance until that time.
Question 3
What does "level of remuneration" mean in relation to 'Criteria for suitable employment' at Schedule 5, clause 4.2.l (b) of the Agreement?
The Rail Commissioner’s position
The terms "remuneration level" or "level of remuneration" are synonymous and mean the employee's weekly wages as set out in Schedules 1 and 3. On that basis there is no need to look beyond the plain and ordinary meaning of the clause.
Basis for the position
In the 2016 EA, the full phrase "level of remuneration" is used only in clause 4.2.1 (b) of Schedule 5.
The word "level" must have work to do. Level means “a position on a scale of amount, quantity, extent, or quality”. 14 The synonymous term "remuneration level" is used in clause 21.1.3 of the 2016 EA and states that:
“The remuneration levels applicable to each classification are set out at Schedule 1 and 3 of this Agreement.”
Each classification is set out in the weekly wage table of Schedules 1 and 3 of the 2016 EA. The only "remuneration" that has a "level" for "each classification" is the weekly wage table as defined in the Agreement.
The terms "remuneration level" or "level of remuneration" are synonymous and mean the employee's weekly wages as set out in Schedules 1 and 3. On that basis there is no need to look beyond the plain and ordinary meaning of the clause.
Where entitlements beyond the employee’s Remuneration Level apply in the 2016 EA various other terms are deployed, such as aggregate wage, penalties, overtime. These terms are not referred to in in clause 4.2.1 (b).
Schedule 1.2 operates to define how the Aggregate Wage is to be administratively calculated by reference to the table in schedule 1.1. Schedule 1.2 does not define or point to a “remuneration level” and does not inform the proper meaning of the term “remuneration level”.
The Applicant's evidence goes to its intention of having remuneration based on the employee's previous earnings, including shift penalties, overtime and allowances apply for the purposes of clause 4.2.1 (b). The Respondent's evidence is that no such intention was applied on its part. There is no alternative evidence of a common intention of the parties surrounding negotiations that supports the Applicant's contention.
The evidence of the Applicant refers to an information sheet that was provided to employees post the approval of the 2016 EA in relation to the decision to outsource. The matter referred to relates to an employee who is transferred to a role with a lower classification level, and in that sense is irrelevant as it cannot be regarded as "suitable alternative employment" as defined in clause (d) of the 2016 EA.
The applicable income maintenance policy does not still apply by virtue of clause 6.2 of the 2016 EA and the application of the “TransAdelaide” Income Maintenance Policy provided by the Rail Commissioner. The parties clearly agreed that the previous clause 4.2.3 was not to apply by virtue of re negotiated provisions at clause 4.2. Its deletion was expressly contemplated and intended and cannot survive by virtue of clause 6.3.
Question 4
Do clauses 4.6.1 (b) or 4.6.1 (d) of Schedule 5 apply to the employees whose normal duties cease because their work is being undertaken by the outsourced operator?
Question 5
When, and under what conditions, does the RRR process conclude for an employee who is a redeployee pursuant to the terms of Schedule 5, clause 4.6 of the Agreement?
The more useful question is the second one in the above heading. This is because the relevant issue in dispute is whether a redeployee who has not been "offered employment in a suitable ongoing permanent role" can eventually be involuntarily terminated for redundancy.
Clause 4.6 is intitled: Conclusion of Redeployment Process. It can only therefore apply when an employee is a redeployee engaged in a redeployment process as described in Schedule 5.
The Rail Commissioner is not at liberty to unilaterally end the redeployment process. The placitum to clause 4.6 describes the "only'' criteria upon which the redeployment process can end. This requires each criterion to be applied one by one. When one of the described events occurs, the employee's redeployment processes ends:
a) The employee has accepted employment in an ongoing role; or
b) For an employee whose position has been determined to be excess as a result of the Rail Commissioner's decision to privatise, outsource, contract out or the closure/part closure of a service(s) and that employee has been offered employment in a suitable ongoing permanent role and has declined such ongoing employment;
c) The Rail Commissioner and employee (and union if requested by the employee) have negotiated, been offered and accepted an additional separation payment;
d) For employees other than those in 4.6.l(b), the process set out in 4.3 is completed; or
e) The employee has at any stage elected to take a VSP, in accordance with step 4.7.
There is no contention between the parties that (a), (b) or (e) will end the redeployment process as soon as they occur. They are conditional on a specified future event and that event brings the process to an end. Importantly, these criteria apply to all employees participating in Schedule 5, regardless of whether they are there by reason of outsourcing or not. Accordingly, these sub sections also apply to employees who have been "determined excess as a result of the Rail Commissioner's decision to privatise, outsource, contract out or the closure/part closure of a service(s)".
Subclause (d) is clear on its words that if the redeployment process set out in 4.3 is completed and the employee is not in 4.6.l (b), the redeployment process ends. This subsection, like those in (a), (b) and (e) applies only to employees who have been "determined excess as a result of the Rail Commissioner's decision to privatise, outsource, contract out or the closure/part closure of a service(s)".
The redeployment process in clause 4.3 process is nominally 12 months in duration (clause 4.3.6) subject to extension based on any "exceptional circumstances" as described in clause 4.3.7. Whether there will be any "exceptional circumstances" cannot be determined in advance. They arise only in clause 4.3.6, which is dealing with an assessment that is to be consulted about at that time. The criteria for them in clause 4.3.7 include factors which could change over the course of the 12 months.
For an employee to be covered by clause 4.6.l (b), four criteria must be met:
• the Rail Commissioner must have made a decision to outsource or contract out; and
• the employee must have been offered suitable employment; and
• the employee must have declined that offer.
If this occurs the redeployment process ends. If this does not occur and none of subclauses 4.6.1(a), (c) or (e) apply, the employee is covered by clause 4.6.l (d).
If clause 4.3 applies, a process of up to 12 months applies to the Employee. At that time, the redeployment process ends unless:
• As a result of discussions (or the settlement of a dispute) as envisaged at clause 4.3.6 the process is extended; or
• Exceptional circumstances apply that would make it reasonable to extend the programme.
The Rail Commissioner submits that the provisions concerned are unambiguous and should be afforded the meaning set out above.
In relation to the “Rail Commissioner's decision” for the purpose of clause 4.6.1 (b) the Rail Commissioner contends that:
• The issue here is not one of interpretation but one of fact. Did the Rail Commissioner make the decision? If the Rail Commissioner does not make the decision to outsource then clause 4.6.1 (b) has no work to do.
• The evidence of Anne Alford is that the Rail Commissioner did not make the decision. As a result, clause 4.6.1 (b) has no application to an employee who is declared excess as a result of the decision to outsource work to Keolis Downer.
• There is no evidence in the Applicant's case of a common intention that the words Rail Commissioner in clause 4.6.1 (b) should mean anything other than what they say.
• The powers and actions of the government, as distinct from those of the Rail Commissioner as the employer are distinct. 15 In the case at hand the actions and/or decision of the Rail Commissioner (Tony Braxton-Smith) or when acting in the role, the Deputy Rail Commissioner, Anne Alford.
[116] As a result, I consider that there are no provisions in the RRR that address themselves to the rate of pay to be applied during the redeployment process itself. This means that the normal provisions of the 2016 EA apply, just as is the (agreed) case for the period prior to the declaration of an employee being excess. If an employee is in the RRR process and only if they are otherwise entitled to be paid additional amounts beyond their relevant weekly wage rate based upon the duties and hours they are then working or if due under some other term or condition, 42 this is to be paid. If there are no such entitlements provided by the terms of the 2016 EA, the weekly wage rate would be relevant.
[117] For reasons that I have outlined earlier, there was a significant adjustment in some of the submission on this issue during final submissions. In that light, there was not an opportunity to fully raise the potential consequences of the above finding with the parties. As a result, should there be a need for further clarification on the practical application of the outcome in paragraph [116] above, I will grant leave to apply for a further determination on that aspect.
Meaning of “level of remuneration” in relation to 'Criteria for suitable employment' at Schedule 5, clause 4.2.l (b) of the 2016 EA
[118] The clause is ambiguous when considered in context.
[119] I accept, for the reasons largely set out by Mr Rogers, that the concept of remuneration often connotes a broader application than references to concepts such as wages, base rates or even salary, depending upon the context in which it is used. The reference in those submissions to the South Australian legislation is not directly relevant to this matter but is illustrative of the potential broader use of the term “remuneration”. 43 The elements making up “remuneration” that might be included for different purposes are also context related. I also accept the proposition advanced by the Rail Commissioner that the meaning of the term must be assessed in the context of the 2016 EA as a whole and that the concept of the “level of remuneration” being earned is the focus of the immediate provision.
[120] I do not consider that the phrase “level of remuneration” should be applied as narrowly as contended by the Rail Commissioner or as broadly as that posited by Mr Rogers in the context of its use within the 2016 EA. In addition, I consider that both parties have placed too much emphasis upon where the RRR provision was drawn from. It was not expressly agreed on the basis of the Weekly Paid Agreement and the employees were not told that this drafting heritage was the basis of the provision during the approval process. The 2016 EA must be considered as a whole, including how the notion of “remuneration” or remuneration levels are used within its terms. Whatever the RRR provisions may mean when placed in a different context is not of much assistance to the present matter.
[121] The term “remuneration” is not defined within the 2016 EA and it is used somewhat inconsistently. It first appears in part one of the Agreement, in clause 2.2.4. where the instrument defines an intention to provide “employees with remuneration and benefits which reflect the competitive performance of the organisation.” This appears to invoke a broader use of the term; however, little can be made of this for present purposes given its immediate context.
[122] I have set out the most immediately relevant elements of clause 21 of the 2016 EA earlier in this decision. Clause 21.1.3 refers to the “renumeration levels applicable to each classification” being set out at schedules 1 and 3. This is potentially significant as I accept that the two phrases are objectively likely to intend the same result. Whilst I consider that this is appropriate, I do observe that the Agreement also describes the contents of schedules 1 and 3 as setting out “rates of pay” or “wage rates” 44 and this illustrates that care should be taken in adopting a strict approach to the words used. Further, whilst not of itself determinative, the fact that the term “level of remuneration” is not defined by reference to what benefits are to be included and whether any such elements are averaged over a period of time, is indicative of the fact that the 2016 EA does not contemplate something beyond that which is addressed as a level (already) defined or established by the terms of the Agreement. This tends to reinforce the intended role of the rates and arrangements contemplated in schedules 1 and 2.
[123] I have earlier also set out the main terms of the 2016 EA dealing with the aggregate wage for Train Driver classifications including the operative elements within schedule 1. In addition, schedule 7 provides the detailed guidelines for the calculation of the aggregate wage levels. Clause 3 of schedule 7 defines the concept of the aggregate wage in the following terms:
“3.0 DEFINITIONS
Clause 33.2 Aggregate Wage
So far as normal rostered work is concerned the Parties to this Part of this Award may agree to apply the penalties and allowances provided for Saturday and Sunday time, overtime, shift work, broken shifts, distance payment and annual leave loading (built into the base rate) on an averaging basis and this arrangement will be referred to as the "Aggregate Wage".”
[124] Of potential significance is that although the aggregate wage is recalculated from time to time to reflect roster changes and changes to wage rates and allowances that form part of the calculation, the following example from schedule 7 further defines the nature of that wage:
“AGGREGATE CALCULATION
The total cost of weekly penalties then needs to be incorporated in the following formula to calculate the Aggregate Wage:
Example 45 weeks x (base rate + penalties per week) + 7 weeks (5 weeks A/L and 2 weeks LSL) x base rate = Total earnings per annum 52 weeks x 100 base rate = Aggregate percentage | ||
Therefore; | ||
45 weeks x ($ 780.50 + $ 181.45) | = | $ 43,287.75 |
+ 7 weeks x $ 780.50 | = | $ 5,463.50 |
= Total earnings per annum | = | $ 48,751.25 |
52 weeks | = | $ 937.52 |
x 100 | = | $ 93,752.40 |
base rate ($ 780.50) | = | 120.12% |
Aggregate percentage | = | 20.12% |
FINAL CALCULATION
For the Suburban Train Drivers, Intermediate, Operations Co-ordinators and Senior Drivers, the Aggregate Wage is automatically transposed onto the Control Sheet, and that is the final figure.
For the Suburban Train Drivers, Mainline, a combined Aggregate wage is calculated by using a weighted average of the Aggregate Wage rates from the four Depots (Adelaide, Belair, Gawler and Port Stanvac). Each figure is weighted by the number of lines of work at that depot using the formula:
(Agg Wage-Adelaide x no. of lines at Adelaide) + (Agg Wage-Belair x no. of lines at Belair) + (Agg Wage-Gawler x no. of lines at Gawler) + (Agg Wage-Pt Stanvac x no. of lines at Pt Stanvac) all divided by the total number of lines on the roster for all depots.
The result becomes the Aggregate Wage paid to all Suburban Train Drivers, Mainline, regardless of their depot.”
[125] Further, the aggregate wage as calculated continues to be paid even where there are extended line closures (to allow for electrification works) and the aggregate wage was not reduced as a result of the implementation of shift harmonisation that would otherwise have impacted upon that wage. 45 There is also an aggregate wage calculated for the defined classifications of Train Drivers46 and this reflects the levels in schedule 1. The aggregate wage is also expressly provided for in schedule 1.
[126] In light of the above, based upon the terms of the Agreement I see no objective reason why the concept of the level of remuneration as used in the 2016 EA should not include the different aggregate pay levels for the Drivers. This fits the ordinary and plain meaning of the term and although this leads to a different outcome for Drivers, (as opposed to other classes of employees) the reality is that it is only the Drivers that have the concept of an aggregate wage recognised in the relevant schedules. There is nothing in the context or the other relevant considerations that would support a broader or narrower interpretation of this provision.
[127] I also consider that as intended in the present context, the phrase “prior to becoming a redeployee” is a reference to the commencement of the RRR process for that employee and not necessarily the remuneration being paid at the time the employee is declared to be excess.
[128] As a result, I find that the level of remuneration for present purposes means the relevant rates of pay that are set out in schedules 1 and 3, including the aggregate wage that has been determined under the arrangements contemplated in clause S.1.2 for the different levels of Drivers, that applied prior to the employee concerned becoming a redeployee. However, the level of remuneration for this purpose does not include any (other) allowances, specific shift or disability payments, penalties or overtime payments. This, along with the other elements of clause 4.2.1 of the RRR schedule, set the benchmark requirements for what would be a suitable ongoing role in the Public Sector for the purposes of redeployment.
The conclusion of the redeployment process
[129] Clause 4.6 is clearly intended to provide the circumstances in which the redeployment process concludes. It is necessary for one of the circumstances to apply for a redundancy to be concluded and should be read in conjunction with the RRR schedule more generally.
[130] It is convenient to advance consideration of this issue with the second question; namely, does clause 4.6.1 (b) or 4.6.1 (d) of the RRR Schedule apply to the employees whose normal duties cease because their work is being undertaken by the outsourced operator in this particular case? This in turn requires the determination as to whether subclause 4.6.1 (b) of the RRR schedule applies to the present outsourcing.
[131] For reasons that follow, I find that subclause (b) is intended to deal with nature of outsourcing that has occurred here and applies to the present circumstances.
[132] Despite first impressions, the clause is ambiguous, and the context supports the notion that it should not be applied narrowly. This includes the context in which it was being negotiated, including that it was this form of outsourcing (amongst others) that was being contemplated when the improvements to the RRR provisions were being negotiated. Further, the clause should be read as a whole; namely contemplation of the Rail Commissioner’s decision to privatise, outsource, contract out or the closure/part closure of a service(s). The notion of “privatising” services and the closure of services are more akin to decisions that are made by the Government. In that light, I consider that the objective meaning of the provision is that it applies to circumstances of the kind evident here.
[133] The Rail Commissioner relies upon the decision of the Supreme Court of SA in the matter of Public Service Association (SA) Inc v State of South Australia & Ors 47 where the Court noted:
“This “concession” does not lead logically to a conclusion that clause 25.1 requires consultation by the employer with employees of public hospitals prior to the government making a decision to adopt the new policy in relation to car parking fees at public hospitals. The Chief Executive, Department of Premier and Cabinet, is the statutory employer pursuant to the provisions of the Act. He is not the agent of the Crown and neither does he or she bind the Crown in respect of employees covered by the enterprise agreement as the agent of the Crown. An analysis, founded in principles related to the authority of Cabinet Ministers to bind the Crown in negotiating Government contracts is misconceived. Such an argument misunderstands the distinction between the position of the Chief Executive, Department of Premier and Cabinet, as the statutorily mandated employer for the purposes of the Act and distinct principles relating to Crown agency relevant to the negotiation of government contracts.” 48
[134] I accept that this decision reinforces that there may be a distinction between decisions made by various entities in the State Government and that the employing entity and the Crown, in the sense of decisions made by executive government (Cabinet), are not the same. However, that decision was concerned with proceedings for alleged breach of a consultation obligation that applied to the statutory employer under the relevant State legislation in circumstances where the Government made a policy decision to introduce changes to car parking fees at Government hospitals within the State more generally as part of the 2010/2011 Budget Statement. I consider that this context is important in ascertaining the implication of the decision. In any event, the issue in this case is what the objective intention of the 2016 EA is, having regard to the relevant principles of interpretation that I have set out earlier at some length. In particular, whether the terms of clause 4.4.1 (b) was intended to apply to circumstances such as the current outsourcing decision. The common intention of the parties understood by reference to what a reasonable person would understand by the language in which the parties have expressed their agreement, in the context in which the 2016 EA was made and applies, strongly suggests the broader application of this particular provision was objectively intended.
[135] I turn to the other construction issue concerning clause 4.4.1 of the RRR schedule. I observe that Mr Rogers apparently does not maintain the view that clause 4.6.1 (b) is an absolute obligation to conclude the RRR process. That is, “as long as exceptional circumstances apply, that still means that you're still under the operation of the provisions of the triple R schedule.” 49 The context in which exceptional circumstances apply is as follows:
“4.3.6. In the event that an offer of suitable employment has not been identified and made within 12 months of the employee being declared excess, the agency, the CPSE or representative from OPS, and the employee (and Union) will meet to discuss the outcome of the redeployment/retraining program. The parties will discuss:
• Whether the redeployment plan has been complied with by the Agency and the employee;
• Whether all reasonable efforts have been made to identify suitable employment for the employee; and
• Whether there are exceptional circumstances which could make it reasonable to extend the redeployment/retraining program, and/or amend the redeployment plan, to provide further opportunity to identify suitable employment.
4.3.7. For the purposes of 4.3.6, “exceptional circumstances” may include the geographical location of the employee, the unique skills and/or experience of the employee, the age of the employee, or the circumstances of the employee becoming excess, which circumstances provide additional difficulty to the identification of suitable employment for the employee.”
[136] I observe that the term exceptional circumstances is not conclusively defined and would need to be read in conjunction with definition of suitable ongoing employment (redeployment) provided in clause 4.2.1 and discussed above. That is, unless agreed to the contrary by the employee concerned, the alternative position would need to meet all of the requirements in clause 4.2.1 of the RRR schedule. Where no such position can be found, the processes contemplated in clause 4.3.8 of the RRR schedule would appear to have work to do.
[137] The Rail Commissioner contends, in effect, that the items in clause 4.6.1 (b) and (d) are not mutually exclusive alternatives.
[138] On face value, clause 4.6.1 operates such that where subclause (b) applies its terms must be met for the redeployment process to conclude (with a redundancy rather than a VSP). That is, where an employee whose position has been determined to be excess as a result of the relevant decision set out in that subclause, the employee must be offered employment in a suitable ongoing permanent role and have declined such ongoing employment for the process to conclude without taking a VSP or other agreed outcome. I observe that if this approach is not adopted, the subclause would have no work to do as the RRR process could end on the basis set out in subclause (b) in any event by virtue of clause 4.6.3.
[139] There are some other factors that also support this interpretation. Subclause (d), which references the conclusion of the arrangements in clause 4.3, expressly applies to employees “other than those in 4.6.1 (b)”. Further, the broader objective context, including the communications to the employees as part of the pre-ballot information process, is more consistent with the notion that an offer of employment in a suitable ongoing permanent role would be applied as part of the (improved) RRR process. Finally, the subsections operate as meaning that the RRR process ends “only when the following criteria has been met”. However, it is evident that this would not mean that all the criteria must be met in each case as the distinction between (b) and (d) make such an approach problematic and the criteria are expressed as alternatives. In addition, the construction of clause 4.6.1 as a whole is much more consistent with the notion that the relevant criteria is to be satisfied and in the case of the outsourcing, subclause (b) must be met. This would mean that subclauses (b) and (d) are mutually exclusive but subclauses (a) and (e) may also apply to employees to whom subclause (b) applies. This is consistent with the fact that subclause (d) is the only provision that defers to subclause (b). This is the ordinary and natural meaning of the provision and the context, the structure of the provisions, and other relevant considerations do not lead to a different result. This includes the objectives, to prioritise redeployment and retraining, set out in the Objectives provision contained in the RRR schedule itself.
[140] I accept that the above approach means that it is more difficult to conclude the process where an offer of an ongoing suitable permanent role in any agency in the Public Sector is not made. This is relevant because the objective intention was that the NFR policy was only to apply for a set period and the clear implication is that after that time employees could be subject to a forced redundancy if the required circumstances are met. However, it was not contended by the Rail Commissioner that offers of this kind could not be made to employees in the circumstances of the employees covered by the 2016 EA and the contextual and drafting considerations supporting the above approach to the meaning of the provision are strong. Further, Mr Rogers’ apparent acceptance that clause 4.6.1 (b) does not apply as an absolute, that is, there is no limit to 12 months provided there are exceptional circumstances, is pragmatic and appropriate given the operation of the RRR schedule in its entirety. This is reflected in the determination below to the extent that the terms of the provision allow.
9. Conclusions and determination
[141] For the reasons set out above, I determine that the proper application of the 2016 EA in the context of this dispute is as follows:
“Unassigned” and/or declared excess
If an employee's normal duties cease because their work is being undertaken by an outsourced operator, there will be a period where the employee is not performing normal duties before potentially being declared "excess" for the purposes of the RRR Schedule. This period should only be as long as is reasonably necessary to undertake the steps that are to be taken prior to the making of the declarations of being excess.
Rate of pay once an employee has ceased normal duties and when they have been declared excess
The normal provisions of the 2016 EA apply, just as is the (agreed) case for the period prior to the declaration of an employee as being excess. If an employee is in the RRR process and only if they are otherwise entitled to be paid additional remuneration beyond their relevant weekly wage rate based upon the duties and hours they are then working or due to some other term or condition of employment, this is to be paid. If there are no such entitlements provided by the terms of the 2016 EA, the weekly wage rate would be relevant.
For reasons set out earlier, I grant leave to apply in the event that further clarification on the practical application of the outcome set out in paragraph [116] of this decision is required.
Meaning of “level of remuneration” for the purposes of clause 4.2.1 (b) of schedule 5
The level of remuneration for present purposes means the relevant rates of pay that are set out in schedules 1 and 3, including the aggregate wage that has been determined under the arrangements contemplated in clause S.1.2 for the different levels of Drivers, that applied prior to the employee concerned becoming a redeployee. However, the level of remuneration does not include any (other) allowances, specific shift or disability payments, penalties or overtime payments. This, along with the other elements of clause 4.2.1 of the RRR schedule, set the benchmark requirements for what would be a suitable ongoing role in the Public Sector for the purposes of redeployment.
The conclusion of the redeployment process
Clause 4.6.1 (b) of the RRR schedule is intended to deal with the nature of outsourcing that has occurred here and applies to this dispute.
In connection with employees who have been determined to be excess as a result of outsourcing and other decisions covered by clause 4.6.1 (b), and subject to the caveat below, it is the requirement that such an employee will be offered a suitable ongoing permanent role, and if this is declined, the RRR process will conclude.
However, the RRR process may conclude for such employees on some of the other bases set out in clause 4.6 where the relevant criteria have been met. This includes the acceptance of ongoing employment and a VSP as expressly contemplated by subclauses (a) and (e) receptively of clause 4.4.1. In that regard, I also observe that there is no absolute limit of 12 months to the RRR process and where exceptional circumstances under clause 4.3.7 exist, the period may be extended. The absence of any offered suitable ongoing permanent role as defined in clause 4.2.1 of the RRR schedule as determined above, would be a relevant factor for any employee declared to be excess as a result of a decision covered by clause 4.6.1 (b) including the current outsourcing.
Any dispute about the operation of this provision in a particular case, may be dealt with under clause 23 of the 2016 EA.
[142] I so determine.
[143] Liberty to further apply has been granted as set out above.
COMMISSIONER
Appearances:
M Young of counsel, with J Wither, both with permission for and with Mr Rogers, the Applicant.
S Bakewell, of EMA Consulting with permission, with D Nikoloski for the Rail Commissioner.
Hearing details:
2020
November 4 and 10.
By Video Hearing.
Final written submissions:
November 9 and 12 (advice of the making of the new enterprise agreement).
Printed by authority of the Commonwealth Government Printer
<PR724069>
1 The AEA would appear to have no formal status under the FW Act other than indirectly as provided by Mr Collis being a bargaining agent during any relevant negotiations. I have referred to it as a group for convenience.
2 Confirmed during the hearing – transcript PN12 to PN15.
3 Rail Commissioner Outline of Submissions, 27 October 2020, supported by the evidence of Mr Nikoloski.
4 This combines the 4th and 5th questions posed by the parties.
5 Without the Contents clause.
6 I have been informed during these proceedings that this review was not conducted.
7 Transcript PN1031.
8 Confirmed at transcript PN1033 to PN 1035.
9 [2017] FWCFB 3005.
10 Document CR6 attached to exhibit A1.
11 Northside Developments Pty Ltd v Registrar-General (1990) CLR 146, Hely-Hutchinson v Brayhead Ltd (1968) 1 QB 549 and discussion in Halsbury’s Laws of Australia - Contractual and other dealings at [120-3065]).
12 Relying upon Byrne & Frew v Australian Airlines Ltd [1995] HCA 24 at paragraphs 12 -13.
13 Public Service Association (SA) Inc v State of South Australia & Ors [2012] SASCFC 66.
14 Oxford dictionary.
15 Public Service Association (SA) Inc v State of South Australia & Ors [2012] SASCFC 66 at para [68].
16 Provided on 2 November 2020.
17 Summarised in AMWU v Berri at [114] – paras 12 to 14.
18 [2017] FWCFB 3005.
19 See also Paper Australia Pty Ltd t/a Australian Paper v Australian Manufacturing Workers’ Union [2017] FWCFB 1621 at [21].
20 [1929] AR (NSW) 498 at 503; See also City of Wanneroo v Holmes (1989) 30 IR 362 (at 378-379) and Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at [2].
21 Re Aurora Energy Enterprise Partnership Agreement 2002 – 2005, [2008] AIRC 1074, at para 17; See also National Union of Workers v Plexicor Australia [2008] AIRC 1134.
22 (1993) 40 FCR 511, 517-8.
23 This decision must be applied having regard to the fact that the instrument in that matter was an award of the Commission rather than an enterprise agreement made between the employer and a majority of the employees at the time of approval. See also AWU v Pasminco Australia Ltd and ors (2003) 131 IR 1 for the caution required in this regard.
24 [2013] FWCFB 8557.
25 “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Skilled Engineering Ltd [2003] FCA 260, [18].
26 BP (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, 283 cited by the High Court in Byrne & Frew v Australian Airlines Ltd [1995] HCA 24 at paragraphs 12 -13.
27 [2018] FCAFC 131.
28 Ibid at [197].
29 AB v Tabcorp Holdings Limited[2015] FWCFB 523 at [11].
30 See Construction Forestry Mining and Energy Union v The Australian Industrial Relations Commission and Another [2001] HCA 16; (2001) 203 CLR 645, Kentz (Australia) Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2016] FWCFB 2019 and Endeavour Energy v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2016] FCAFC 82.
31 The evidence of Mr Nikoloski at transcript PN877.
32 Clause 16.
33 An agreement approved under the SA FW Act.
34 Document CR12 attached to Exbibit A1 as an example.
35 Document CR12 attached to exhibit A1.
36 Document CR13 attached to exhibit A1.
37 Exhibit A2.
38 The evidence of Ms Alford.
39 Section 54(3) of the FW Act.
40 Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at 384 per McHugh, Gummow, Kirby and Hayne JJ.
41 This is already occurring.
42 This would not include clause 4.2.1 (b) of the RRR schedule for reasons that are set out below.
43 See also Shorten and Others v Australian Meat Holdings Pty Ltd (1996) 70 IR 360 for a discussion of the term when used in a different context.
44 Including clauses 21.11 and 21.15 and in each of the schedules concerned.
45 Clause S1.2.4 and S1.2.5 of schedule 1.
46 Clause 4 of schedule 7.
47 [2012] SASCFC 66.
48 [2012] SASCFC 66 at para [68].
49 Final oral submissions – transcript PN1004 as an example.
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