Hobsons Bay City Council T/A Hobsons Bay City Council v Karen Loft

[2019] FWC 5320

[2019] FWC 5320

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120—Redundancy pay; s.739—Dispute resolution

Hobsons Bay City Council T/A Hobsons Bay City Council
v
Karen Loft
(C2019/853; C2019/1573)

COMMISSIONER WILSON MELBOURNE, 30 AUGUST 2019

Variation of redundancy pay; Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)]. Resolution of inconsistencies between different Parts of an enterprise agreement. Jurisdiction of the Commission to vary redundancy pay entitlement arising under an enterprise agreement and the NES.

INTRODUCTION

[1] This decision concerns applications by Hobsons Bay City Council (HBCC, Hobsons Bay, or the Council), pursuant to s.739 and s.120 of the Fair Work Act 2009 (the Act) alleging a dispute arising under the Hobsons Bay City Council Enterprise Agreement 2016 - 2019 1 (the HBCC Agreement) as well as variation of the redundancy pay otherwise payable to Karen Loft on the grounds HBCC has obtained acceptable alternative employment for her, which she has refused.

[2] In particular, this decision concerns whether the Commission has the jurisdiction to determine the application to reduce Ms Loft’s redundancy pay. Ms Loft submits that the Commission does not have such a power as the Commission only has a power to reduce entitlements derived from the National Employment Standards (NES) redundancy entitlements under s.120 of the Act. She submits the Commission is not vested with jurisdiction by the HBCC Agreement to reduce redundancy entitlements emanating from the Agreement.

[3] The matter was originally allocated to Commissioner Bissett for determination; however, it was re-allocated to me on 15 March 2019 after an initial unsuccessful conference on 12 March 2019. A mention was then held by me on 25 March 2019 to determine scheduling after which the matter was listed for hearing before me on 13 May 2019.

[4] Mr Rohan Millar of Counsel instructed by Jessica Stojkovksi of Mills Oakley appeared on behalf of HBCC while Mr Angus Mackenzie of Maurice Blackburn instructed by Gretta Nicholls of the ASU appeared for Ms Loft. Permission for both parties to be represented in these proceedings by a lawyer was granted by me pursuant to s.596 of the Act, with me being satisfied that legal representation would enable the matter to be dealt with more efficiently taking into account the complexity of the matter (s.596(2)(a)).

[5] There was no witness evidence led by either party to the dispute.

BACKGROUND

[6] The HBCC Agreement consists of three principal parts – Part A which contains numerous clauses regarding the employment relationship; Part B being select clauses from the Victorian Local Authorities Award 2001 and Part C being select clauses from the Nurses (ANMF – Victorian Local Government Award) 2015.

[7] The parties’ submissions identify up to three different sources of entitlement to redundancy pay for Ms Loft:

•  it could derive from Part A: Appendix A; 2

•  it could derive from Part B: Clause 17.5; 3 or

•  it could derive from the provisions of the National Employment Standards. 4

[8] The benefits that might accrue to Ms Loft under these different sources of entitlement vary considerably. On the one hand Part A: Appendix A entitles Ms Loft to 38 weeks’ severance pay if she were to be treated as redundant. 5 On the other, Part B: Clause 17.5 and s.119 would limit severance pay in the event of redundancy to 12 weeks’ pay for an employee of 10 or more years’ service.6

[9] Hobsons Bay’s Form F1 application seeks an order from the Commission that:

“The Applicant seeks an order that the Respondent’s redundancy pay under clause 4(ii) of Appendix A to Part A of the Hobsons Bay City Council Enterprise Agreement 2016 – 2019 (the Agreement) be reduced from 38 weeks’ to nil (or such other number as the Commission sees fit) pursuant to Clause 17.5.1 of Part B of the Agreement.” 7

[10] At the core of the dispute – but not determined through this decision – are the Council’s contentions about Ms Loft that her circumstances of employment are such that she would not be viewed as being redundant or, to the extent that she is, her situation should not attract a redundancy provision.

[11] HBCC plainly does not want to have to make redundancy payments to Ms Loft after having found her what it believes is acceptable alternative employment. It takes the primary view that Part B: Clause 17.5 permits a reduction in the redundancy pay obligations arising under Part A: Appendix A. It characterises the question “can the enterprise agreement entitlements be reduced by the Commission?” as the substantive issue for determination by the Commission, with Part B: Clause 17.5 specially allowing for such a prospect. 8

[12] It is a matter of record that HBCC endeavours to achieve this outcome through three alternative avenues all directed at the same ultimate end:

•  On 8 February 2019, through an application to vary redundancy pay in a Form 45A application. The Form 45A identifies that the entitlement for which a variation is sought is derived from the Agreement and seeks that redundancy pay be varied to zero weeks’ severance pay. 9

•  On 12 March 2019 when it notified of an alleged dispute arising under an enterprise agreement in a Form F10. The form identifies that the alleged dispute arises under the Agreement; and

•  On 30 April 2019 through submission of a Form F1 application, if that is how to best to characterise it, directly seeking the exercise of the Commission’s power under Part B: Clause 17.5. 10

[13] Ms Loft’s circumstances, from her perspective only, are broadly set out in correspondence dated 4 March 2019 from her solicitors to the Council’s solicitors and copied to Commissioner Bissett in the HBCC application to vary redundancy pay. Relevantly:

•  From Ms Loft’s solicitors 4 March 2019 correspondence:

“4. On 29 July 1999, Ms Loft commenced employment with the Council in the position of Family Day Care Resource Worker. She has been employed by the Council in that role for over 19 years. Her classification under the HBCC Agreement is Band 5, and her hourly rate of pay is $40.7095. Ms Loft is a part-time employee and works 24 hours per week, on Tuesdays, Wednesdays and Thursdays.

5. On 17 December 2018, Ms Loft attended a meeting with Leigh McCallum, Family, Youth and Children’s Services for the Council; Terri Rowe, Manager, Organisation Development for the Council; and Kelly Pound, Coordinator, Early Years for the Council. Neil McKenzie, a delegate of the Australian Municipal, Administrative, Clerical and Services Union (ASU) attended as Ms Loft’s support person. In that meeting, Ms McCallum told Ms Loft that her position was no longer required, and that she would be offered a redeployment position.

6. Ms Loft was handed a letter and a position description for the redeployment position in the meeting. In that meeting, Mr McKenzie asked what would happen if Ms Loft did not accept the redeployment position, to which Ms McCallum replied ‘redundancy’.

7. Shortly after, on 23 December 2018, Ms Loft emailed Ms McCallum rejecting the redeployment offer.

8. On 31 January 2019, Ms Loft attended a further meeting with the same persons at paragraph 5 above. In that meeting, Ms Loft again told the representatives of the Council that she rejected the redeployment offer. Ms McCallum also told Ms Loft in that meeting that, because the Council considered the redeployment position acceptable alternative employment and ‘like-for-like’ with her current position, the Council intended to apply to the Commission for an order reducing her redundancy pay to nil.

9. Ms Loft’s position is that the redeployment position is not acceptable alternative employment or, for that matter, ‘like-for-like’ with her current role. However, for the reasons outlined below, it is Ms Loft’s position that the question of whether the position is acceptable alternative employment does not arise in the current Application on the basis that the Commission has no power to reduce the redundancy entitlement.” 11

•  From the HBCC Form 45A – “Application to vary redundancy pay:

“The employee has been provided the offer of redeployment into alternative employment in the role of Early Years Resource and Support Officer (Playgroups) …

The position is responsible for the facilitation of playgroups, including the development and planning of the program in line with the Victorian Early Years Learning Development Framework.

The employee is currently employed in the role of Family Day Care Resource Worker. The position is responsible for the monitoring and guidance of Family Day Care Educators in the provision of home based child care services …” 12

Compliance with the dispute resolution procedure

[14] The events summarised above include discussions between HBCC and Ms Loft about her situation and the decisions to be taken by the Council, although ultimately, they may have been insufficient discussions. 13 Ms Loft also argues that HBCC has insufficiently followed the “relevant procedural steps” of the dispute resolution procedure in order for the alleged dispute under s.739 to be validly before the Commission.14 Although discussions took place, they were not initiated by Ms Loft and such dispute as remained was ultimately not submitted to the Chief Executive Officer or their delegate for attempted resolution. It is submitted that it cannot have been the intention of the parties to bypass the required steps under the terms of the Agreement.15

[15] The Form F10 application draws upon the terms of Part A: Clause 27 (Prevention and Settlement of Disputes) of the HBCC Agreement which affords the power, including to the Commission, for the raising and progression of disputes arising “in respect of this Agreement, the NES or an award”, with those powers extending to an unresolved dispute being referred to the Commission, which is then empowered in the following manner:

“The parties agree that FWC shall deal with the dispute in two stages.

a) In the first instance, FWC may attempt to resolve the dispute through mediation, conciliation, expressing an opinion or by making a recommendation and,

b) If FWC is unable to achieve a consensus between the parties, FWC may arbitrate the dispute.

All parties will abide by any decision resulting from a matter being referred to FWC for arbitration.” 16

[16] The Form F1 does not explicitly refer to it being an application pursuant to Part A: Clause 27, however submissions to the Commission from both parties indicate that it is accepted by parties that that was the basis upon which the matters raised in the form were progressed.

[17] For her part Ms Loft argues that the Commission has no jurisdiction to determine the application under either potential head of power. 17

[18] In relation to the matters set out within the Form F1, Ms Loft argues that such cause of action as the Council may be endeavouring to establish through the form is misconceived, with it being the case that the document insufficiently draws upon any particular head of power. Further, the form does not sufficiently disclose the jurisdictional basis upon which it is made with it being legally embarrassing. 18

[19] In relation to the F10 application, alleging a dispute arising under an agreement or the NES, and the operation of Part A: Clause 27 it is argued by Ms Loft that the procedural requirements by which disputes may be raised and progressed through the organisation are firstly mandatory and secondly have not been followed. She argues that following the procedural requirements of Part A: Clause 27.1 are mandatory because of the provisions in Part A: Clause 27.5. Ms Loft rejects the proposition put forward by the Council that the steps in Part A: Clause 27.5.1 are optional because it employs the words ‘wherever possible’, given no reason is offered by HBCC as to why compliance was not possible. 19 Ms Loft’s submissions on the extent to which the clause may have been complied with include the following:

1. While discussions were held between the parties, none of these discussions were initiated by Ms Loft as required by Clause 27.1 of the HBCC Agreement; 20

2. No discussions were held before an appropriate Director or Executive as required by Clause 27.1(c) of the HBCC Agreement, nor before the Chief Executive Officer or another authorised officer as required by Clause 27.1(d) of the HBCC Agreement; 21

3. Ms Loft was never provided an opportunity to engage in the dispute resolution process herself. 22

[20] The Council reject what Ms Loft has to say on the subject putting forth that the steps at Clause 27.1 of the HBCC Agreement are not mandatory on the basis of the language used which is markedly different from that of the model term with the use of such wording as ‘wherever possible’ denoting the non-mandatory nature of the clause. 23 Hobsons Bay rely on the Full Bench decision in Australian Workers Union v MC Labour Services Pty Ltd24 for the authority that steps in a dispute resolution clause may be bypassed without affecting the Commission’s jurisdiction where the wording of an agreement allows for such.

[21] HBCC also oppose Ms Loft’s submissions on the grounds that should her interpretation be preferred there would be no ability for disputes arising from the employer to be dealt with by the dispute resolution provisions of the Agreement only by employees, which is not reflected in the wording of the Agreement. 25 It is HBCC’s submissions that the ‘wherever possible’ caveat in Clause 27.1 becomes applicable to the current dispute as it was not possible for Hobsons Bay to undertake these steps and therefore they were not required to. Hobsons Bay strongly oppose an interpretation which limits employer disputes from escalating to the Commission under Clause 27 on the basis that such an outcome would be contrary to the intention of the HBCC Agreement; be contrary to the requirements for approval of the Agreement under s.186(6) of the Act; disallow for the resolution of certain disputes under the Agreement including that of redundancy; and would allow employees to indefinitely stymie the employer’s ability to resolve a dispute by failing to submit the matter to the appropriate Director/Executive Manager, all of which are absurd outcomes.26

Operative effect of the Parts

[22] Beyond the subject of whether there is presently a valid application before the Commission which can be determined, but noting that such matter nonetheless requires determination by me, it is to be noted that a central feature of the dispute between the parties in relation to the Jurisdictional Question 1 is whether Part B: Clause 17.5 continues to have operation within the context of the overall HBCC Agreement. HBCC put forward five reasons why the clause continues to operate:

•  Inconsistency between Part A and Part B: Clause 17.5: The HBCC Agreement contains three Parts – A, B and C with Part A containing some, but not all the terms concerning employees of the HBCC with Parts B and C supplementing the entitlements in Part A rather than acting contrary to them. Clause 6 of the Agreement provides for this distinction stating, “where there is any inconsistency between the relevant clause in Part A, Part B and Part C, Part A of this Agreement will prevail.”  27 While Hobsons Bay concedes that Part A and Part B overlap with respect to the severance entitlements of employees covered by the Agreement, thus activating Clause 6 of the HBCC Agreement, it submits that the issue of severance pay alone is the extent of the inconsistency with the resultant entitlements in Part B remaining in effect given they are not inconsistent with the redundancy entitlements in Part A of the Agreement,28 there is no impossibility of Hobsons Bay adhering to both the provisions in Part A and Part B (except for severance pay), neither is there any direct or indirect inconsistencies between the remaining entitlements.29 Further, Hobsons Bay submit that to exclude the redundancy entitlements in Part B of the Agreement would give these provisions no work to do contrary to Full Bench decision in AMWU v Berri Pty30(Berri) and result in the HBCC Agreement failing to deal with the consequences of the employer having obtained acceptable alternative employment as well as other entitlements;31

•  Different functions are performed by Part A: Appendix A and Part B: Hobsons pay submit that by nature of the language used, Part A of the HBCC Agreement deals with employee entitlements to redundancy whereas Part B deals with employer entitlements to redundancy, being a logical divide between entitlements;  32

•  Part A: Appendix A is not a comprehensive redundancy instrument; Hobsons Bay submit that Appendix A is a relatively short document, containing only four clauses with Part B providing more detailed machinery provisions for how redundancies are to occur. 33 Should Part B be excluded from the Agreement in its entirety this would affect an array of entitlements including an employee leaving during their notice period; job search allowance; transmission of business; and incapacity of the employer to pay redundancy. Hobsons Bay submits that the employer saw no need to include these entitlements in Part A of the Agreement given they were already replicated in Part B,34 this tactic is mirrored throughout the Agreement where many other entitlements in the Agreement are dealt with partially in Part A and partly in Part B;35

•  The parties have deleted inapplicable provisions in Part B: Hobsons Bay submit that the terms in Part B are based on the provisions of the Victorian Local Authorities Award 2001, being the Award otherwise applicable to employees were the HBCC Agreement not in enforce and have been consciously amended to delete various entitlements already provided for in Part A so as to supplement Part A. As such, it must be assumed that the words remaining in Part B: Clause 17 of the HBCC Agreement have work to do otherwise the parties would have removed them; 36

•  The commitment of the parties in Part A: Hobsons Bay submits that Clause 7 denotes the parties commitment to a process of consolidating Parts A and B of the HBCC Agreement as such until the parties have produced and implemented a consolidated version of the enterprise agreement, full effect should be given to the currently agreed terms. 37

[23] In contrast to these matters, Ms Loft argues that Part A of the Agreement provides a comprehensive and exhaustive scheme. Part A: Clause 12 dealing with the subject matter of employment security, together with Part A: Clause 26 dealing with the subject matter of redeployment and redundancy set out principles applying to decisions that may lead to redundancies. Part A: Clause 26.2 together with Part A: Clause 3 deal with what must be done when a redundancy occurs, and Part A: Appendix A sets out the quantum of payment to the individual. Further Part A: Appendix A together with the earlier Part A Clauses 12 and 13 establish the HBCC’s consultation obligations in the event of a redundancy and Part A: Clause 11 “relieves the Council of its obligation to pay redundancy pay where a transmission of business occurs”. 38 Moreover Ms Loft argues that the self-sufficiency of the scheme established within Part A is apparent and a deliberate outcome of the drafting of the Agreement:

“24. That scheme is self-sufficient and coherent. It provides the necessary conceptual apparatus for the provisions to work, the conditions that must be satisfied for employee entitlements to accrue and the quantum of those entitlements. It also provides exceptions to those entitlements, or what the Council calls ‘employer entitlements’. Nothing more than the provisions of Part A is required for an effective scheme dealing wholly with redundancy pay. Indeed, Part A would be unexceptional as a standalone scheme entirely without Part B.

25. Ms Loft says that the scheme evinces an intention to deal completely with employees’ and the Council’s rights and obligations as concerns redundancy pay. The close inter-relationship between the clauses demonstrates this. Those clauses are inter-linked in that the cl 4 of Appendix A entitlement to redundancy pay, and the exceptions in cll 11 and 26.1, all depend for their operation on the satisfaction of one of the circumstances described in cl 1 of Appendix A. They are also inter-linked in that the clauses cross-refer to one another.

26. By contrast, the sub-clauses of cl 17 are inter-linked with each other, but not with the provisions of Part A. As set out in Ms Loft’s submissions, they depend for their operation on an entirely different conceptual apparatus. If the objective purpose of the Agreement was for cl 17.5.1 of Part B to operate on the entitlement set out in Appendix A and dealt with in the other Part A provisions set out above, one would expect the definitions and concepts used in cl 17.5.1 of Part B to mesh with those used in Part A. But they do not. That tells against the Council’s argument that the Part A redundancy pay provisions are not comprehensive.

27. The words of cl 6(d) also show that the Part A provisions dealing with redundancy pay were intended to exhaustively deal with redundancy pay. The Council accepts that the drafters of the Agreement must have had the matters dealt with in Part B in mind when drafting Part A.21 Contrary to the Council’s submissions that does not mean that each clause of Part B must have been intended to have effect. Indeed, the Council accepts that not even each sub-clause in cl 17 was intended to have effect.

28. Rather, it shows the drafters considered the matters dealt with in Part B, and determined not to include them in Part A. If it were otherwise, cl 6(d) would have no work to do. Ms Loft says the better view is that the inclusion of Part B of the Agreement means that the drafters of the Agreement considered the exceptions to the cl 17.3 redundancy pay entitlement and determined not to include equivalent provisions in Part A. Instead, they chose to include only two exceptions to the Council’s obligation to pay redundancy pay: redeployment and transmission of business.” 39 (references omitted)

QUESTIONS FOR DETERMINATION

[24] The matters requiring determination in this decision are set out by Hobsons Bay City Council in the following manner:

Jurisdictional Question 1: Does the Commission have power to reduce the severance pay to which Ms Loft is entitled under cl 4(ii) of Appendix A to Part A of the Enterprise Agreement?

Jurisdictional Question 2: Does the Commission have power to reduce the 12 weeks of redundancy pay to which Ms Loft is entitled under s 119 of the Act? 40

[25] For reason of the submissions made by the parties on the subject of compliance with the dispute resolution procedure, a further question requires determination which I have framed as follows:

Jurisdictional Question 3: Is the dispute alleged in the Form F10 application filed in the Commission on 12 March 2019 validly before the Commission?

RELEVANT PRINCIPLES FOR DETERMINATION OF THE DISPUTE

Principles relevant to a dispute under s.739 of the Fair Work Act 2009 (Cth)

[26] In dealing with a dispute such as this the Commission is not undertaking an exercise of judicial power but is instead exercising a power of private arbitration, with that power deriving from the parties’ agreement to submit their differences for decision by a third party. The resultant arbitrator’s award is not binding of its own force but instead its effect depends on the law which operates with respect to it. 41 It is accepted that while not exercising judicial power, the Commission “may legitimately form and act upon opinions about legal rights and obligations as a step in the exercise of its own functions and powers”.42

[27] The Commission is required to examine whether an enterprise agreement’s dispute settlement procedure “requires or allows” the Commission to deal with the dispute. In order to do so, it is necessary to look at the text of the dispute settlement procedure, understood in light of its industrial context and purpose, to determine whether the dispute, properly characterised, falls within it. 43 The scope of a dispute settlement procedure in an enterprise agreement should not be narrowly construed; “to do so would be contrary to the notion that certified agreements are intended to facilitate the harmonious working relationship of the parties during the operation of the agreement.”44

[28] In characterising the nature of a dispute the Commission is not confined to the application filed to deal with the dispute. 45 The entire factual background is relevant, and may be ascertained from the submissions advanced by the parties on the question of jurisdiction.46 Further, a dispute may evolve during proceedings in the Commission. It may therefore be necessary in some cases when ascertaining the character of a dispute to have regard to both the nature of the dispute alleged in an originating application and the factual circumstances as they evolve.47 The character of the dispute is distinguishable from any relief which may be sought, or granted, following an arbitration of the dispute.48 However, the relief sought may cast light on the true nature of the dispute in some cases.49

[29] If the Commission has jurisdiction to deal with the dispute, the nature of the relief that the Commission may grant will depend on the limitation in s.739(5) 50 and the agreement of the parties as recorded in their enterprise agreement, provided that such relief is reasonably incidental to the application of the enterprise agreement to which the dispute relates.51

[30] Interpretation of an enterprise agreement requires construction of the words of the instrument, with the Full Bench in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited 52 (Berri) setting out the principles for such a task. In that matter, and after an extensive analysis of the subject, the Full Bench summarised the principles to be applied in the following way:

“[114] The principles relevant to the task of construing a single enterprise agreement may be summarised as follows:

1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:

(i) the text of the agreement viewed as a whole;

(ii) the disputed provision’s place and arrangement in the agreement;

(iii) the legislative context under which the agreement was made and in which it operates.

2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.

3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.

4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.

5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.

6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.

7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.

8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.

12. Evidence of objective background facts will include:

(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;

(ii) notorious facts of which knowledge is to be presumed; and

(iii) evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.

15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.” 53

[31] The application of these principles, and especially to those in which ambiguity may be considered was further considered by the Full Bench in United Firefighters Union of Australia v Emergency Services Telecommunications Authority:

“[35] As stipulated in Berri, the starting point for interpreting an enterprise agreement is to have regard to the ordinary meaning of the words used. Further, the text must be interpreted in the context of the agreement as a whole. Principles 7 and 10 elicited in Berri emphasise that ambiguity in a provision within an enterprise agreement must be identified before one is to have regard to evidence of the surrounding circumstances. However, principle 8 makes it clear that, in determining whether ambiguity exists, one may have regard to evidence of the surrounding circumstances. That is, such evidence can be used to identify and resolve any ambiguity.” 54

Principles relevant to the variation of redundancy under s.120 of the Fair Work Act 2009 (Cth)

[32] Section 120 of the Act provides as follows:

“120 Variation of redundancy pay for other employment or incapacity to pay

(1) This section applies if:

(a) an employee is entitled to be paid an amount of redundancy pay by the employer because of section 119; and

(b) the employer:

(i) obtains other acceptable employment for the employee; or

(ii) cannot pay the amount

(2) On application by the employer, the FWC may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that the FWC considers appropriate.

(3) The amount of redundancy pay to which the employee is entitled under section 119 is the reduced amount specified in the determination.”

RELEVANT AGREEMENT PROVISIONS

[33] Some of the relevant clauses from the HBCC Agreement are reproduced in the Attachment to this decision, and not repeated in the body of this decision, unless the context requires. The provisions reproduced in the Attachment are:

PART A:

Clause 6 Relationship to Award Schedules

Clause17.5 Alternative Employment

Clause 26 Redeployment and Redundancy

Clause 27 Prevention and Settlement Of Disputes

Appendix A – Hobsons Bay Redundancy Agreement

PART B:

Clause 17 Redundancy

Clause 17A. Redundancy Disputes Procedure

[34] Where other clauses are referred to in the body of this decision and it is relevant to refer to the content of the clause, the terms of the clause are reproduced in the paragraph in which the discussion takes place.

CONSIDERATION

Jurisdictional Questions 1 and 2

[35] Determination of the two jurisdictional questions posed by HBCC requires consideration both of matters of operation of the Agreement as well as the Agreements interaction with the NES.

[36] Since oral argument took place for these applications the Federal Court has delivered its judgement in the matter of Maribyrnong City Council v Australian Municipal, Administrative, Clerical and Services Union 55(Maribyrnong). Wheelahan J’s judgement has relevance to the disposition of these matters, since the division of the applicable enterprise agreement into Parts is similar to that within the HBCC Agreement and it is the case that many of the operative clauses are identical or similar to that found in the HBCC Agreement. Each party in this matter has provided supplementary written submissions on the subject of Maribyrnong.

[37] It is evident from Maribyrnong that Wheelahan J proceeded on the basis of concessions from all parties that “the Commission does not have power to vary entitlements under enterprise agreements in the same way award entitlements might have been varied under previous legislation”. 56

[38] HBCC queries whether the concession was properly made and whether it is sustainable as a matter of law. It notes that such a concession is at odds with the legislative scheme to vary redundancy entitlements pursuant to the entitlements contained within an enterprise agreement, which can be exercised without the need for a variation of an enterprise agreement. 57 As long as the terms of the agreement are such that the flexibility in variation of redundancy entitlements does not affect the better off overall test (BOOT) assessment at the time of approval, and the NES, (noting the NES entitlements itself provides for variation of redundancy) such a mechanism can exist.58 Hobsons Bay also remarked of the failure of the concession to recognise the dual nature of redundancy entitlements under the NES and enterprise agreement. Whilst citing previous Full Bench decisions Hobsons Bay put forth that conclusions that there was no implied right in an enterprise agreement to vary redundancy entitlements akin to s.120 of the Act left open the possibility of parties being able to expressly include variation of redundancy terms in enterprise agreement similar to s.120 and that such a term was similar to other decisions which had allowed redundancy pay to become void where suitable alternative employment was found without the need for application for variation to the Commission.59

[39] The conclusion of Maribyrnong was arrived at through acceptance by the Court that a variation of an enterprise agreement provision for redundancy for reason of having found acceptable alternative work is one that amounts to a variation of an enterprise agreement to which ss. 207 – 211 of the Act apply, dealing with variations to enterprise agreements. 60

[40] Parallel with this proposition and not determinative of it, Wheelahan J carefully analysed whether it may be said that the Part A covers the field and therefore prevails 61 and ultimately concluded it did prevail, but in some respects only. In particular, he found that Clause 17.7 of Part B, being the disputed clause, was inconsistent with the terms in Part A. That finding was made by the Court after comparison of the terms within the Part B: Clause 17.7 with those in the relevant Part A clauses. The judgement found:

“[56] In relation to the topic of redundancy, there are the following differences between the provisions in Part A of the Agreement, and the old Award provisions in Part B –

(1) Clause 13 of Part A contains more extensive provisions in relation to consultation and redeployment in the event of a potential redundancy than those appearing in Part B. Clause 17A of Part B imposes obligations of consultation, but does not contain provisions about redeployment like those that appear in lause 13.

(2) A significant feature of clause 13 of Part A is the obligation on the parties to consult with a view to redeployment to an appropriate vacancy. Clause 13.5 provides that an affected employee shall be given preference of appointment to vacant positions of the same classification. Clause 13.5 also provides that an employee shall not unreasonably refuse an offer of redeployment. Clause 13.9 provides that in the event that the applicant complies with the redeployment process, then in the event that an affected employee does not accept a reasonable offer of redeployment, or no reasonable offer is able to be made, then the employee may be retrenched, and is entitled to the severance payments provided for in the Agreement. There may be some tension between clauses 13.5 and 13.9 about which I say nothing further, because it is not a principal subject of dispute, and was not the subject of argument.

(3) The entitlement to payments under clause 27 of Part A is more beneficial than the entitlements under clause 17.3 of Part B.

(4) The concept of redundancy is expressed differently. Clause 27.1.1 of Part A refers to “[a]n employee whose position becomes redundant” and provides –

Redundancy may occur where an employee’s position is no longer required by the Council and there is no other suitable employment within Council aligned to the employee’s skills and capabilities.

Clause 17.1.2 of Part B defines redundancy as follows –

Redundancy occurs where an employer has made a definite decision that the employer no longer wishes the job the employee has been doing done by anyone and that decision leads to the termination of employment of the employee, except where this is due to the ordinary and customary turnover of labour.

One difference between the two expressions is that clause 27.1.1 of Part A brings within it the unavailability of other suitable employment within the Council. In clause 17 of Part B, that issue is accommodated by the very different mechanism provided for by clause 17.5, which contemplates that application be made to the Commission for variation of the severance pay prescription, but noting that this is not possible under the current legislation, and further noting that clause 17.5.2 excludes circumstances involving a transmission of business.

(5) The persons excluded from entitlement to severance payments are expressed differently. Under clause 27.1 of Part A, the persons who are excluded are –

a) employees who are redeployed to a suitable and acceptable position within the Council;

b) casual employees;

c) temporary employees; and

d) contract employees.

(6) Under clause 17.8 of Part B, the persons who are excluded are –

a) employees terminated as a consequence of serious misconduct that justifies dismissal without notice;

b) probationary employees;

c) apprentices;

d) trainees;

e) employees engaged for a specific period of time or for a specified task or tasks; or

f) casual employees.

(7) Finally, there is no transmission of business exception in Part A to either the consultation and redeployment provisions in clause 13, or the provisions relating to severance entitlements in clause 27.

[57] I have come to the view that clause 17.7 of Part B of the Agreement cannot sensibly work together with Part A. There are three main reasons for this conclusion. The first is that Part A of the Agreement is concerned not only with severance payments in the event of redundancy, but also with the obligations of consultation and redeployment within the Council that are the subject of clause 13. Clause 27 of Part A is to be construed harmoniously with clause 13, and in the context of the applicant’s commitment to employment security in clause 11.1, which is expressed to be continuous employment with the Council. Clause 17.7 does not address the subject of clause 13, but is inconsistent with it.

[58] The second reason is concerned with the text of clause 17.7. It was accepted by the parties that at least clause 17.3 of Part B is inconsistent with clause 27 of Part A, because the severance benefits under clause 27 are superior. As I have observed, clause 17.7.1 commences with the words –

The provisions of this clause are not applicable…

[Emphasis added]

[59] In the events that are proposed in this case, the relevant part of clause 17 concerning severance payments, namely clause 17.3, will not applicable because clause 27 of Part A will prevail. I am mindful of the principles to which I have referred at [39]-[42], and the need in appropriate cases to overlook infelicities of language in industrial instruments. However, I consider that it requires some looseness of thinking to construe “[t]he provisions of this clause” in clause 17.7.1 of Part B as referring to clause 13 and clause 27 of Part A. The Agreement in this case was the product of negotiation and compromise during the bargaining period, and its purpose was to give effect to that compromise. The product of that negotiation is found in the words of the Agreement. To interpret clause 17.7 of Part B as applying also to clauses 13 and 27 of Part A would be a significant departure from the text of clause 17.7.1 in order to give effect to a supposed intention that, notwithstanding the statements of principle in clause 11 of Part A concerning security and continuity of employment with the Council, clause 17.7 of Part B would also qualify the redundancy provisions in Part A. In my opinion, such a departure from the text would involve error.

[60] The third reason, which builds upon the first two reasons, is that I consider that clauses 11.1, 13, and 27 of Part A evince an intention that the provisions of Part A are to cover the field in relation to the topic of redundancy. My reasons for this conclusion are –

(1) the fact that Part A was the subject of specific negotiation whereas the provisions of the old Awards have been reproduced in a largely indiscriminate way;

(2) the presence of clauses 3.1.1 and 3.1.3 of Part A demonstrate an assumption that there may be inconsistencies, in which case Part A is to prevail;

(3) as I have indicated at [55] above, the wholesale and largely indiscriminate reproduction of the old Award in Part B does not lead me to think that effect must be given to clause 17 of Part B in circumstances where there are elaborate provisions in clauses 13 and 27 of Part A concerned with the topic of redundancy;

(4) the old Award provisions concerning redundancy contain clauses that are themselves redundant in the context of the current legislation, thereby giving support to the idea that the redundancy provisions in clauses 13 and 27 of Part A are to take the place of those in Part B;

(5) the transmission of business exceptions in clause 17 of Part B are expressly tied to that clause;

(6) clause 27.1.1 itself addresses the circumstances in which an employee is not entitled to a severance package, including where there is redeployment to a suitable and acceptable position within Council;

(7) the context of the redundancy provisions in clauses 13 and 27 of Part A is different, and in particular, I refer to the statements of principle in clause 11.1 of Part A concerning secure and continuous employment by the Council, as distinct from job security; and

(8) the several differences that I have identified in [56] above.” 62

[41] The proposition that the Commission does not have power to vary an enterprise agreement’s established scale of redundancy payments is not consistent with earlier decisions of the Full Bench of this Commission on the subject of how the rights established by an enterprise agreement sit with the rights established in the NES. The Full Bench in Maritime Union of Australia v FBIS International Protective Services (Aust) Pty Ltd 63 (FBIS) held that the rights operate in parallel.64 The expression of the proposition in Maribyrnong that the Commission does not have power to vary redundancy entitlements under enterprise agreements does not deal with the FBIS reasoning to the effect that:

•  s.120 is not excluded because of the operation of the enterprise agreement 21 with s.55 (5) allowing terms “that have the same or substantially the same effect as provisions of the NES whether or not such terms are ancillary or supplementary terms”; 65

•  while so, there is no double benefit to be had because of s.55 (6); 66

•  it is possible for an enterprise agreement to require a redundancy entitlement to be paid unencumbered by s.120; 67

•  s.120 “is a provision of the NES relating to the NES redundancy pay entitlement in s 119”. 68

[42] The decision in FBIS confirms that an enterprise agreement may supplement what is within the NES but may not impermissibly remove rights and entitlements. After carefully separating the entitlements which arise under the enterprise agreement and the NES and noting that the core redundancy benefits established by the NES “may be enforced under either source but not both sources so as not “to give a double benefit.”“ 69 FBIS further confirms that the parties to an enterprise agreement are at liberty to set their terms for the disposition of the redundancy benefits in excess of the NES:

“[26] However the entitlement to redundancy pay under the FBIS Agreement does not operate writ large. Whilst it is possible for an enterprise agreement to provide for a term which requires a redundancy entitlement to be paid unencumbered by s.120 of the Act, the FBIS Agreement does not so provide. Clause 2.5.5 of the FBIS Agreement contains exclusions, clause 2.5.5.1(c) of which provides that the redundancy clause shall not apply:

“. . . in a particular redundancy case if the Company arranges suitable alternative employment for the Employee; or the Employee unreasonably refuses to accept such employment”

[27] It is immediately apparent that the effect of this exclusion is that redundancy entitlements under the FBIS Agreement are not payable at all in the circumstances contemplated by the exclusion. For present purposes it is not necessary to decide whether there is any material difference between the phrase “obtains other acceptable employment” in s.120 of the Act and “arranges suitable alternative employment” in clause 2.5.5.1(c). Under clause 2.5.5, unlike s.120, there is no requirement for an application to be made to the Commission before the exclusions may be invoked and there is no possibility in the circumstances contemplated by the exclusions for a reduction of the entitlement rather than a complete loss of the entitlement. It cannot therefore be said that the clause is ancillary or incidental to, or supplements the NES within the meaning of s.55(4) of the Act because to the extent identified above, it is detrimental to an employee. Nor can it be said that the exclusions term in clause 2.5.5 has the same or substantially the same effect as any provision of the NES. Even if it were such a term it cannot displace s.120 by reason of s.61(1) of the Act.” 70

[43] Respectfully, Maribyrnong does not deal with these considerations to any great extent with that likely being a product of the nature of the dispute and argument before the Court. The circumstances which caused the parties before the Court to make the concessions they indicated about the operation of s.120 are not known. In any event the commentary within the judgement on the subject was not determinative of Wheelahan J’s conclusion that declaratory relief should not be given. Consideration of the judgement shows the Court’s conclusion was reached after a comparison of the terms in the agreement’s Part B: Clause 17 and Part A: Clauses 3 and 27. The Court found there was inconsistency in several respects and that in any event discretion for the declarations sought by Maribyrnong should not be exercised. 71

[44] Determination of the two jurisdictional questions posed for determination by HBCC in this matter therefore requires consideration of whether there is inconsistency between the terms for redundancy in Part A with those in Part B.

[45] While not directly relevant to the interpretation of Parts A and B, it is to be noted that Part C also deals with redundancy for those to whom the Part A applies, being nurses employed by the Council. The provisions of Part C: Clause 11 (redundancy) provides that redundancy payments are provided for in the NES (Clause 11.1); that certain entitlements arise in the case of a transfer to low-paid duties (Clause 11.2); that an employee may leave their employment during a period of redundancy notice and have their redundancy benefits preserved (Clause 11.3); employees are entitled to assistance with searching for a new job (Clause 11.4); and that the clause itself does not apply in relation to redundancies “to which legislative power is not referred to the Commonwealth Parliament by the Victorian Referral” (Clause 11.5), being a reference to the “Fair Work (Commonwealth Powers) Act 2009 (Vic) and any legislation that amends, repeals or replaces that legislation” (Part C, Clause 4.1).

Consideration of Jurisdictional Question 1: Does the Commission have power to reduce the severance pay to which Ms Loft is entitled under cl 4(ii) of Appendix A to Part A of the Enterprise Agreement?

[46] Jurisdictional Question 1 is directed to the question of whether the Commission has power to reduce the severance pay to which Ms Loft is entitled under Part A: Appendix A, Clause 4(ii).

[47] HBCC submits the five reasons summarised above support its contention that Part B: Clause 17.5 continues to operate, with it following that the operative parts of the clause allow its applications to proceed, and that in particular, the Commission is vested with power to vary the full redundancy payments prescribed within Part A. This is because Part A: Clause 17.5.1 enables an application to vary “the general severance pay prescription”. That prescription has been increased through the terms of Part A: Appendix A, Clause 4 such that the things within Appendix A have become the “general severance pay” entitlement. The Part B redundancy provisions need to be read alongside the enhancements in Part A with it being the case that:

“There is nothing in the Enterprise Agreement that indicates that the application to vary entitlements should only be as to a component of the entitlement. The general entitlement of employees has been lifted, but the power remains vested in the Commission to vary that general entitlement upon application by the Council.” 72

[48] In response to the submissions put by HBCC, Ms Loft submits that Part A provides a comprehensive scheme for redundancy arrangements starting with the premise that the part is self-sufficient and requires no bolstering, and ends with the argument that the wording of Part B: Clause 17 adds nothing to the interpretation of Part A since it is focused on matters internal to the clause. Importantly, for Ms Loft this contention would mean that there is no capacity within Part A for redundancy pay to be set aside except for instances of redeployment and transmission of business. 73

[49] It is trite to say that the words of an instrument must have some work to do, otherwise they would not be used. Unfortunately, when one is dealing with a single Part of 178 pages, what might otherwise be just another cliché, will most likely be the case. The Full Bench in AMWU v Berri remarked when interpreting enterprise agreements that:

“[44] There is considerable force in the Appellant’s contention that, as a general principle, all words in an enterprise agreement must prima facie be given some meaning and effect. It would seem to follow that the inclusion of a laundry allowance in Appendix 3 of the 2014 Agreement should not be regarded as superfluous or insignificant. Such an approach accords with the principles of statutory construction,  and, as a general proposition, the principles developed in the general law in the context of the interpretation of statutes are applicable to the interpretation of enterprise agreements. As the Full Bench observed in Paper Australia Pty Ltd t/a Australian Paper v Australian Manufacturing Workers’ Union: 74

‘Australian Paper made the submission that no principle of statutory construction has any application to the interpretation of enterprise agreements, and relied upon the proposition stated in Golden Cockerel that the Acts Interpretation Act 1901 (Cth) does not apply to the construction of enterprise agreements in support of that submission. The submission is rejected. It does not follow from the fact that enterprise agreements are not instruments to which the Acts Interpretation Act applies that modes of textual analysis developed in the general law in the context of the interpretation of statutes are incapable of application to enterprise agreements. While it undoubtedly remains necessary in interpreting a particular instrument to pay attention to the peculiar characteristics of that instrument, it is equally the case that there has been a convergence in the approach taken to the interpretation of statutes, agreements and other types of instruments - in particular, in the emphasis on the objective ascertainment of the instrument’s purpose and the move from textual to contextual interpretation. Additionally, many of the grammatical aides to the interpretation of statutes are equally applicable to other types of instruments. In the High Court decision in Royal Botanic Gardens and Domain Trust v South Sydney City Council, Kirby J said “... it would be indefensible for this Court, without good reason, to adopt a different approach in the ascertainment of the meaning of contested language in a contract from the approach observed in respect of legislation”. We therefore do not consider that Golden Cockerel should be taken as an exhaustive statement of the means by which the text of an enterprise agreement might be construed.’ (references omitted)

[45] Berri does not dispute the proposition that the principles of statutory construction can assist in the interpreting enterprise agreements, but submits that an overly technical approach to interpreting industrial instruments, divorced from industrial realities, should be avoided.” (footnotes omitted)

[50] As a whole, the HBCC Agreement comprises three parts. Each of those parts operate according to their properly construed meaning, subject only to the caveats in Part A: Clause 6 (Relationship to Award Schedules). So far as is relevant that clause provides three interpretive aides:

•  The NES are to be read in conjunction with the Agreement. Where the NES “are more beneficial than those provided in this agreement” then the NES applies to the extent of any inconsistency;

•  The Agreement is to be “read and interpreted wholly in conjunction” with the two schedules in Part B and C; and

•  “Where there is an inconsistency” between the respective parts the terms of Part A will prevail.

[51] Neither party brought forward any material that would be admissible evidence of objective background facts either for the purposes of establishing an ambiguity within the terms requiring consideration, or for resolving such ambiguity as there may be. Unfortunately though, there is no question that the clauses are ambiguous or susceptible of more than one meaning, if for no other reason that they are wildly contradictory of each other in certain respects.

[52] I now consider in detail each of the “five reasons” advanced by HBCC.

(1) Whether inconsistency between the Parts/ (2) Whether different functions performed by the Parts

[53] After acknowledging that the severance pay entitlements in Part B: Clause 17.3.1 are directly inconsistent with the matters prescribed within Part A: Appendix A with both clauses dealing with the same thing, HBCC argue that the extent of the inconsistency between the provisions is limited to the severance pay entitlements of employees on redundancy; “In the case of employees with less than 4 completed years’ service, the Part B severance pay is higher, at 4 and 5 completed years’ service the amounts are the same, and beyond 6 years completed service the Part A severance pay will be higher.” 75 HBCC put forth that it is possible for there to be compliance with both clauses submitting that “There is nothing inconsistent with Clause 17.5 of Part B operating in conjunction with Part A. Part A does not deal with the consequences of the employer having obtained acceptable alternative employment for an employee”.76 Finally it is argued that the Part B provisions should be given their intended operation with Clause 17.5 dealing “with the specific situation what an employer may do to vary the redundancy pay obligation were obtained acceptable alternative employment, being an issue not dealt with by the more general provisions of Appendix A to Part A”.77

[54] Against these propositions Ms Loft argued there was both direct and indirect inconsistency between the two parts, drawing attention to the need for the Commission, established in the matter of Glen Cameron Nominees Pty Ltd (t/a Glen Cameron Trucking) v Transport Workers’ Union of Australia 78 (Glen Cameron) to have regard to certain established principles, dealing with the question of resolving the proper construction of an enterprise agreement which incorporated an award. In that matter, the Full Bench held the following on the method or resolving differences between the two:

“[38] The starting point is to determine if the Agreement (with the Incorporated Award) is ambiguous or susceptible to more than one meaning. For the reasons below we do not think it is. While an interpretation of the Agreement (with the Incorporated Award) may not be free from difficulty it is the case that the principles developed in the general law in the context of the interpretation of statutes can usefully be applied.

[39] Also, it is necessary to have regard to the ordinary meaning of relevant words. The first word to consider is “inconsistent”. Essentially, the Incorporated Award terms must be incompatible with the Agreement term in order for the Agreement term to prevail. Assessing inconsistency or incompatibility must be done through the prism of established principles.

[40] As the Deputy President correctly identified,

“[53] Inconsistency has been examined on multiple occasions by the High Court. Section 109 of the Constitution provides that “when a law of a state is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid.” The High Court has generally formulated three approaches to ascertaining the existence of inconsistency. Inconsistency is present where it is impossible to obey both laws, where one law purports to confer a legal right which the other law purports to take away, or where one law evinces an intention to cover the field, that is, it shall be the law on the topic whether or not there is a direct contradiction, this can be express or implied.”

seven working days of notification and provision of information related to the position.

Where two or more employees apply for the same position, appointment shall be determined in accordance with the agreed selection procedures and practices of Council.

Where an employee elects a transfer into a vacant position, and it is agreed that the redeployment is not satisfactory, the option of retrenchment will remain open for a period of two months from the date of the election.

26.2 Redundancy

All redundancies will be in accordance with the Hobsons Bay Redundancy Agreement

included as Appendix “A” which is deemed to form part of this Agreement.

…

PART A: Clause 27 PREVENTION AND SETTLEMENT OF DISPUTES

Should a dispute arise in respect of this Agreement, the NES or an award, between an

Employee and Management, the parties agree to genuinely consult in an endeavour to

reach a consensus.

27.1 The parties encourage the timely resolution of disputes and the management and resolution of Employee Relations (ER) issues at the local level, wherever possible, in accordance with the following process:

a) Should any matter occur which gives Clause for concern to an employee, the employee shall raise such matter with his/her immediate supervisor or an appropriate officer.

b) If the matter is not settled to the employee’s satisfaction, the employee

concerned shall draw such matter to the attention of the relevant manager.

c) If the matter remains unresolved the employee may submit the matter to the appropriate Director/Executive Manager.

d) If the matter still remains unresolved the Director/Executive Manager will refer the matter to the Chief Executive Officer (CEO) (or such other Officer as authorised by the CEO).

27.2 Where a matter of policy is concerned, the matter may be referred by the Chief

Executive Officer or his/her nominee to the next meeting of the Staff Consultative

Committee.

27.3 The aggrieved employee may at any stage involve the local employee representative.

27.4 Senior Management, the Manager Organisation Development or their nominee, and/or an Official or Local Representative of the appropriate union may intervene at any stage of the process determined in sub-clause (1) of this clause to assist in the achievement of a timely and effective resolution of the issue.

27.5 Should a matter remain unresolved following the consultation process determined in sub-clause (1) of this clause, either party may refer the outstanding issue/s to the Fair

Work Commission (FWC).

The parties agree that FWC shall deal with the dispute in two stages.

a) In the first instance, FWC may attempt to resolve the dispute through mediation, conciliation, expressing an opinion or by making a recommendation and,

b) If FWC is unable to achieve a consensus between the parties, FWC may

arbitrate the dispute.

All parties will abide by any decision resulting from a matter being referred to FWC for

arbitration.

27.6 The parties agree that sub-clause 27(1) and 27(5)(a) of this clause shall be followed in an endeavour to reach a consensus on any dispute between the employer and an

employee about a matter/s pertaining to the employment relationship that is not

provided for in this agreement, the NES or an award.

27.7 While the parties are trying to resolve the dispute using the procedures in this term:

a) an employee must continue to perform his or her work as he or she would

normally unless he or she has a reasonable concern about an imminent risk

to his or her health or safety; and

b) an employee must comply with a direction given by the employer to perform

other available work at the same workplace, or at another workplace, unless:

i. The work is not safe; or

ii. Applicable occupational health and safety legislation would not permit

the work to be performed; or

iii. The work is not appropriate for the employee to perform; or

iv. There are other reasonable grounds for the employee to refuse to

comply with the direction.

…

PART A: APPENDIX A – HOBSONS BAY REDUNDANCY AGREEMENT

This Appendix covers the entitlements of employees of the Hobsons Bay City Council, (the Council) arising out of any redundancy situation.

1. INTRODUCTION

Where the Council, as a result of either a structural review conducted by Council, or in the event of a municipal boundary change and/or a ‘de-amalgamation’, or for any other

reason:

a. Decides that any employee’s services or position is not necessary, or

b. Is of the opinion that the work for which the employee was engaged is finished

(except in the case of the expiration of a contracted period of service or completion

of a contracted task), or

c. Is of the opinion that the quantity of work has diminished and has rendered

necessary a reduction in the number of employees; or

d. Substantially alters the duties of any office, or

e. Substantially changes an employee’s mainstream duties and responsibilities,

The Council will consult with the affected employee and the relevant union(s), in

accordance with the procedures contained in this Agreement.

2. MONITORING OF IMPLEMENTATION

The implementation of this Agreement will be monitored by the Consultative Committee.

3. RIGHT OF COUNCIL TO RETRENCH

In the event that an employee is affected by the matters referred to in Clause 1 above and a reasonable redeployment arrangement cannot be made in accordance with Clause 26.1 of this Enterprise Agreement, then the employee may be compulsorily retrenched by the Council and in that event, the employee shall be entitled to the severance payments set out in Clause 4 of this Redundancy Agreement.

4. SEVERANCE ENTITLEMENTS

The severance entitlements of employees whose employment with the Council ceases as a result of any of the matters referred to in Clause 1 of this Redundancy Agreement shall be as follows:

(i) 4 weeks pay in lieu of notice.

plus

(ii) Severance pay calculated on the basis of 2 weeks for each completed year of

service to a maximum of 48 weeks. For the purpose of this clause, “service” means

continuous service by an employee with any Victorian municipality, but where there

has been an interruption of more than 12 months between such periods of

employment, or where any retrenchment payments have been made in respect of

that previous service, any period prior to that interruption or payment shall be

disregarded.

plus

(iii) Payment for vehicles and telephone where these are part of the employment

package.

plus

(iv) Pro-rata long service leave after 5 years.

plus

(v) $2,000 OUTPLACEMENT SERVICE. This can be taken as a lump sum or the

outplacement service will be arranged and paid for by the Council. Payment for

Permanent part-time employees will be on a pro-rata basis.

plus

(vi) $500 FINANCIAL PLANNING SERVICE. This can be taken as a lump sum or the

financial planning service will be arranged and paid for by the Council. Payment for

Permanent part-time employees will be on a pro-rata basis.

plus

(vii) $2,500 SERVICE PAYMENT. This amount will be paid for support to the Council. Payment for Permanent part-time employees will be on a pro-rata basis.

plus

(viii) Counselling on Request.

For the purpose of this Agreement “employees” means any permanent employee of

Council.

…

PART B: Clause 17 REDUNDANCY

17 .1 Definitions

17.1.1 Business includes trade, process, business or occupation and includes part of any such business.

17.1.2 Redundancy occurs where an employer has made a definite decision that the employer no longer wishes the job the employee has been doing done by anyone and that decision leads to the termination of employment of the employee, except where this is due to the ordinary and customary turnover of labour.

17.1.3 Small employer means an employer who employs fewer than fifteen employees.

17.1.4 Transmission includes transfer, conveyance, assignment or succession whether by agreement or by operation of law and transmitted has a corresponding meaning.

17.1.5 Week's pay means the ordinary time rate of pay for the employee concerned.

Provided that such rate shall exclude:

• Overtime;

• Penalty rates;

• Disability allowances;

• Shift allowances;

• Special rates;

• Fares and travelling time allowances;

• Bonuses; and

• Any other ancillary payments of a like nature.

17.2 Transfer to lower paid duties

Where an employee is transferred to lower paid duties by reason of redundancy,

the same period of notice must be given as the employee would have been

entitled to if the employment had been terminated and the employer may, at the

employer's option, make payment in lieu thereof of an amount equal to the

difference between the former ordinary rate of pay and the new ordinary time rate

for the number of weeks of notice still owing.

17.3 Severance pay

17.3.1 Severance pay

An employee, other than an employee of a small employer as defined in clause 17.1.3 hereof, whose employment is terminated by reason of redundancy is entitled to the following amount of severance pay in respect of a period of continuous service.

Period of continuous service Severance pay

Period of continuous service Severance Pay
Less than 1 year Nil
1 years less than 2 years 4 weeks pay
2 years and less than 3 years 6 weeks pay
3 years and less than 4 years 7 weeks pay
4 years and less than 5 years 8 weeks pay
5 years and less than 6 years 10 weeks pay
6 years and less than 7 years 11 weeks pay
7 years and less than 8 years 13 weeks pay
8 years and less than 9 years 14 weeks pay
10 years and over 12 weeks pay

*Week’s pay is defined in clause 17.1 hereof.

17.3.2 Severance pay - employees of a small employer

An employee of a small employer as defined in clause 17.1.3 hereof whose

employment is terminated by reason of redundancy is entitled to the following amount of severance pay in respect of a period of continuous service.

Period of continuous service Severance Pay
Less than 1 year Nil
1 years less than 2 years 4 weeks’ pay
2 years and less than 3 years 6 weeks’ pay
3 years and less than 4 years 7 weeks’ pay
4 years and over 8 weeks’ pay

*Week’s pay is defined in clause 17.1 hereof.

17.3.3 Provided that the severance payments shall not exceed the amount which the employee would have earned if employment with the employer had proceeded to the employee's normal retirement date.

17.3.4 Continuous service does not include any period during which the employee was absent for any of the reasons described in clause 41.4 of this award.

17.3.5 Application may be made for variation of the severance pay provided for in this clause in a particular redundancy situation in accordance with the redundancy case decision [PR032004, 26 March 2004] and the redundancy case supplementary decision [PR062004, 8 June 2004].

17.4 Employee leaving during notice period

An employee given notice of termination in circumstances of redundancy may terminate

his/her employment during the period of notice set out in clause 18 of this award. In this

circumstance, the employee will be entitled to receive the benefits and payments they would have received under this clause had they remained with the employer until the expiry of the notice, but will not be entitled to payment in lieu of notice.

17.5 Alternative employment

17.5.1 An employer, in a particular redundancy case, may make application to the Commission to have the general severance pay prescription varied if the employer obtains acceptable alternative employment for an employee.

17.5.2 This provision does not apply in circumstances involving transmission of business as set in clause 17.7 hereof.

17.6 Job search entitlement

17.6.1 During the period of notice of termination given by the employer in accordance with clause 18.1 of this award, an employee shall be allowed up to one day's time off without loss of pay during each week of notice for the purpose of seeking other employment.

17.6.2 If the employee has been allowed paid leave for more than one day during the notice period for the purpose of seeking other employment, the employee shall, at the request of the employer, be required to produce proof of attendance at an interview or he/she shall not receive payment for the time absent. For this purpose, a statutory declaration will be sufficient.

17.6.3 The job search entitlements under this clause apply in lieu of the provisions of clause 18.3 of this award.

17.7 Transmission of business

17.7.1 The provisions of this clause are not applicable where a business is before or after the date of this award, transmitted from an employer (in this clause called the transmittor) to another employer (in this clause called the transmittee), in any of the following circumstances:

17.7.1 (a) Where the employee accepts employment with the transmittee which recognises the period of continuous service which the employee had with the transmitter and any prior transmittor to be continuous service of the employee with the transmittee; or

17.7.1 (b) Where the employee rejects an offer of employment with the transmittee:

17.7.1(b)(1) In which the terms and conditions are substantially similar and no less favourable, considered on an overall basis, than the terms and conditions applicable to the employee at the time of ceasing employment with the transmitter; and

17.7.1 (b)(2) Which recognises the period of continuous service which the

employee had with the transmittor and any prior transmittor to be continuous service of the employee with the transmittee.

17.7.2 The Commission may vary clause 17.7.1 (b) hereof if it is satisfied that this provision would operate unfairly in a particular case.

17.8 Employees exempted

This clause does not apply to:

• Employees terminated as a consequence of serious misconduct that justifies dismissal without notice;

• Probationary employees;

• Apprentices;

• Trainees;

• Employees engaged for a specific period of time or for a specified task or tasks; or

• Casual employees.

17.9 Incapacity to pay

The Commission may vary the severance pay prescription on the basis of an employer's

Incapacity to pay. An application for variation may be made by an employer or a group of employers.

PART B: Clause 17A. REDUNDANCY DISPUTES PROCEDURE

17 A.1 Clauses 17 A.2 and 17 A.3 hereof impose additional obligations on an employer where an employer contemplates termination of employment due to redundancy and a dispute arises (a redundancy dispute).

17 A.2 Where a redundancy dispute arises, and if it has not already done so, an employer must provide affected employees and their representative including the relevant union or unions (if requested by an affected employee) in good time, with relevant information including:

17 A.2.1 The reasons for any proposed redundancy;

17A.2.2 The number and categories of workers likely to be affected; and

17A.2.3 The period over which any proposed redundancies are intended to be

carried out.

17A.3 Where a redundancy dispute arises and discussions occur in accordance with this clause, the employer will, as early as possible, consult on measures taken to avert or to minimise any proposed redundancies and measures to mitigate the adverse affects of any proposed redundancies on the employees concerned.”

 1   AE423189 

 2   Exhibit Hobsons Bay 4, Hobsons Bay Jurisdictional Submissions, 30 April 2019, Item 2.1; Exhibit Hobson Bay 1, Hobsons Bay Outline of Submissions, 8 March 2019, [30] – [31].

 3   Exhibit Hobson Bay 1, [23].

 4   Ibid, [2].

 5   Hobsons Bay Form F1, Item, 2.1; Exhibit Loft 1, Respondent Reply Submissions, 7 May 2019, [38].

 6   Exhibit Hobson Bay 1, [31].

 7   Exhibit Hobsons Bay 4, Item 2.1.

 8   Exhibit Hobson Bay 1, [27].

 9   From F45A, Applicant to vary redundancy pay, 8 February 2019, Items 1.4 and 1.5.

 10   Exhibit Hobson Bay 1, [3].

 11   Maurice Blackburn correspondence, 4 March 2019, pp.1 – 2.

 12   Form F45A, item 2.1.

 13   Transcript, PN 192 – 200.

 14   Exhibit Loft 2, [14].

 15 Ibid, [13] – [14].

 16   Hobsons Bay City Council Enterprise Agreement 2016 – 2019, AE423189, clause 27.5.

 17 Exhibit Loft 1, [2] – [4].

 18   Ibid, [6] – [9]; Exhibit Hobsons Bay 1, [10].

 19 Exhibit Loft 1, [11] – [17].

 20   Exhibit Loft 2, [13].

 21   Ibid, [14].

 22   Ibid, [15].

 23 Exhibit Hobsons Bay 1, [10] – [11].

 24   Ibid, [13]; with reference to AWU v MC Labour Services, 2017] FWCFB 5032, [38].

 25   Ibid, [17].

 26 Ibid, [19] - [21].

 27 Exhibit Hobsons Bay 1, [28] – [29].

 28 Ibid, [35] – [36].

 29   Ibid, [39].

 30   [2017] FWCFB 3005, [44].

 31   Exhibit Hobsons Bay 1, [36].

 32 Ibid, [45] – [47].

 33   Ibid, [49].

 34   Ibid, [50].

 35   Ibid, [54].

 36 Ibid, [56] – [59].

 37 Ibid, [60] – [62].

 38   Exhibit Loft 1, [23].

 39   Ibid.

 40   Exhibit Hobsons Bay 1, [4].

 41   Construction, Forestry, Mining and Energy Union v The Australian Industrial Relations Commission [2001] HCA 16; (2001) 203 CLR 645 [30]–[32]; cited in Endeavour Energy v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2016] FCAFC 82 at [25].

 42   Construction, Forestry, Mining and Energy Union v Wagstaff Piling Pty Ltd [2012] FCAFC 87 [21], cited in Kentz (Australia) Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia[2016] FWCFB 2019 [52].

 43   CEPU v Thiess Pty Ltd (2011) 212 IR 327 at [42], [47]; CFMEU v AIRC [2001] HCA 16.

 44   SDA v Big W Discount Department Stores PR924554 at [23].

 45   AMWU v Holden Limited PR940366 at [47]; MUA v ASP Shipping Management Pty Ltd[2015] FWC 4523 at [23].

 46 Ibid [47].

 47   MUA v ASP Shipping Management Pty Ltd[2015] FWC 4523 at [19], [23]; R v Bain; Ex parte Cadbury Schweppes Australia Ltd (1984) 159 163 at 168; United Firefighters’ Union v Metropolitan Fire and Emergency Services Board PR973884.

 48   MUA v Australian Plant Services Pty Ltd PR908236; MUA v ASP Shipping Management Pty Ltd[2015] FWC 4523 at [21]-[22].

 49   United Firefighters’ Union v Metropolitan Fire and Emergency Services Board PR973884 at [20].

 50 The Commission must not make a decision that is inconsistent with the FW Act, or a fair work instrument that applies to the parties.

 51   MUA v Australian Plant Services Pty Ltd PR908236 at [63]; Seven Network (Operations) Ltd v CPSU (2003) 122 IR 97 at [31]-[32].

 52   [2017] FWCFB 3005.

 53 Ibid [114].

 54   [2017] FWCFB 4537.

 55 [2019] FCA 773.

 56   Ibid, [54].

 57   Hobsons Bay Submissions on Maribyrnong, 21 June 2019, [8] - [10].

 58   Ibid, [10].

 59 Ibid, [11] – [12].

 60 [2019] FCA 773, [54] – [55]/\.

 61   Ibid, [55].

 62 [2019] FCA 773.

 63   [2014] FWCFB 6737, (2014) 245 IR 287.

 64   Ibid, [25].

 65   Ibid, [23].

 66   Ibid, [25].

 67   Ibid, [26].

 68   Ibid, [30].

 69   Ibid, [25].

 70   Ibid.

 71 [2019] FCA 773, [63].

 72 Exhibit Hobson Bay 1, [65] – [67].

 73   Exhibit Loft 1, [28].

 74   [2017] FWCFB 1621, [21].

 75   Exhibit Hobsons Bay 1, [13].

 76   Ibid, [36].

 77   Ibid, [38].

 78   [2018] FWCFB 3744.

 79   Ibid.

 80   Ibid.

 81   Exhibit Loft 1.

 82   Exhibit Hobsons Bay 1, [46].

 83   Exhibit Loft 1, [26].

 84   Ibid, [28].

 85   Exhibit Hobsons Bay 1, [56].

 86   Ibid, [57].

 87   Ibid, [59].

 88   Ibid, [49].

 89   Exhibit Loft 1, [48].

 90   Exhibit Hobson Bay 1, [62].

 91   Ibid.

 92   Exhibit Loft 2, [58].

 93   Ibid.

 94   Exhibit Hobsons Bay 1.

 95   [2014] FWCFB 6737, (2014) 245 IR 287, [25].

 96   Ibid, [26].

 97   [2017] FWCFB 3005.

 98   [2017] FWCFB 5032, [38].