Independent Education Union of Australia v Catholic Regional College Sydenham

[2011] FWA 1003

Note: An appeal pursuant to s.120 (C2011/3428) was lodged against this decision - refer to Full Bench decision dated 10 May 2011 [[2011] FWAFB 2784] for result of appeal.

[2011] FWA 1003

FAIR WORK AUSTRALIA

DECISION

Workplace Relations Act 1996
s.709 - Application to Commission to have a dispute resolution process conducted (Div 5)

Independent Education Union of Australia
v
Catholic Regional College Sydenham
(DR2010/654)

COMMISSIONER ROE MELBOURNE, 15 FEBRUARY 2011

Alleged dispute concerning inappropriate and improper application of the "due process" procedures as per clause 11 and 25.

[1] On 9 December 2010 the Independent Education Union of Australia (IEUA) made application under s.709 of the Workplace Relations Act 1996 (the WR Act) to Fair Work Australia (FWA) to deal with a dispute in accordance with a dispute settlement procedure. The dispute is pursuant to the Victorian Catholic Education Multi-Employer Agreement 2008 (the Agreement).

[2] The Agreement was made under the Workplace Relations Act 1996 (the WR Act). Therefore, together with the operation of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 and Schedule 19 of that Act in particular, the provision of section 709 of the WR Act is able to be utilised to resolve disputes under the terms of the Agreement.

[3] The IEUA application requires that I conduct the dispute resolution process pursuant to Section 709 of the WR Act and in particular Division 5 of Part 13 of the WR Act.

[4] The dispute relates to actions taken in respect to alleged conduct by a teacher, Ms Wookey, at Catholic Regional College Sydenham. The Catholic Regional College Sydenham is listed at item 179 of Schedule 12 of the Agreement. Schedule 12 of the Agreement is a list of the employers bound by the Agreement. I am satisfied that the Agreement applies to the employment of Ms Wookey.

[5] Clause 10 of the Agreement is the disputes settlement clause. It is titled “grievance procedures”. The scope of matters which are covered by that clause are set out as follows:

“Where there is a dispute between an Employee (or Employees) and the Employer about the application or interpretation of this Agreement (the matter in dispute), the following procedure will apply...”

[6] The dispute concerning the application or interpretation of the Agreement was defined as a result of a conciliation conference I conducted on 22 December 2010.

[7] The Applicant was represented by the IEUA and its industrial officer Mr Dennis Matson, assisted by Mrs K Busk and Ms Wookey. Evidence for the Applicant was given by Ms Loretta Cotter, Deputy General Secretary of the Victorian Branch (the Victorian Independent Education Union, VIEU) and by Mark Mitchell, Organiser of the VIEU. Mr Mitchell was the organiser responsible for the Catholic Regional College, Sydenham in 2010.

[8] The Respondent was represented by Mr Richard West of Minter Ellison. I granted him leave to appear. Representatives from the Catholic Regional College Sydenham and from the Catholic Education Office Melbourne were involved in the conciliation process and the proceedings. Mr Norman Howett, Industrial Relations Manager, Catholic Education Office Melbourne gave evidence for the Respondent.

Jurisdiction and the matter to be determined.

[9] The Respondent argued that Clause 11 Due Process of the Agreement did not have to be followed in the case of Ms Wookey whereas the IEUA argued that the process did have to be followed. The employer argued that it was open to the employer to terminate the employment of Ms Wookey on notice for reasons related to the Employee’s conduct or performance pursuant to Clause 25.1.1(b) of the Agreement. The employer advised Ms Wookey of its intention to terminate her employment pursuant to clause 25.1.1(b) of the Agreement in a letter dated 8 December 2010. That letter stated that “Upon consideration of the information provided to me by both you and other senior staff, I consider that your behaviour constitutes serious misconduct.” The letter then gave Ms Wookey “a final opportunity to provide me with any reasons in writing by 3.00pm on 10 December 2010 which you believe that I should consider prior to terminating your employment...” In the event this deadline for response was overtaken by these proceedings.

[10] I issued the following directions following the conference of 22 December 2010.

“Alleged dispute concerning inappropriate and improper application of the "due process" procedures as per clause 11 and 25.

1. Following the conduct of a conciliation conference in this matter on 21 December 2010 I am satisfied that the dispute is unable to be resolved through conciliation and that the matter shall proceed to arbitration in accordance with Clause 10 - Grievance Procedures, of the Victorian Catholic Education Multi-Employer Agreement 2008 (The Agreement).

2. The parties agreed in the conciliation conference that the matters to be determined in the arbitration are:

• Does Clause 11 Due Process of the Agreement have to be followed prior to dismissal with notice?

• If the answer to the first question is yes then has the process been followed in the circumstances of this case?

• If the answer to the second question is no then what steps are now required to be followed, if any, prior to termination with notice

3. The Applicant will provide an outline of submissions and any evidence on which they rely by Thursday 3 February 2011.

4. The Respondent will provide an outline of submissions in reply and any evidence on which they rely by Tuesday 8 February 2011.

5. The matter will be listed for arbitration on Thursday 10 February 2010 at 9.30am.

6. Ms Diane Wookey will be on paid leave until 18 February 2010.”

[11] It is clear that the first issue to be determined, Does Clause 11 Due Process of the Agreement have to be followed prior to dismissal with notice?, is a matter which is about the application or interpretation of this Agreement. The same is true of the second question, If the answer to the first question is yes then has the process been followed in the circumstances of this case? In some circumstances there may be the potential for some argument about the extent of my jurisdiction to arbitrate matters of the sort set out in the third question, If the answer to the second question is no then what steps are now required to be followed, if any, prior to termination with notice? However, I am satisfied that this is a matter which is about the application or interpretation of the Agreement. Clause 10.3 specifically provides that:

“In arbitrating the dispute the Commission may only: give directions about the process to be followed within the school to resolve the matter in dispute and/or determine the matter in dispute consistent with the limits or standards set by the relevant provisions of this Agreement”.

I regard the answer to the third question as falling within the scope of Clause 10.3 of the Agreement.

[12] The parties agreed that I should arbitrate these three matters and this was reflected in my directions. In the arbitration proceedings the parties confirmed this agreement.

[13] Clearly I cannot arbitrate this matter unless the relevant steps of the disputes procedure have been complied with. I am satisfied based upon the submissions of both parties that every attempt has been made to resolve the grievance by direct discussions including the union representative. This is evidenced by the extent of the correspondence and a number of meetings between the parties. I am satisfied that steps 1 and 2 of the procedure have been followed and exhausted and that Step 3 which is conciliation and then if that is exhausted arbitration has been properly invoked.

[14] I consider the decision of the employer to maintain Ms Wookey on paid leave until 18 February 2010 as satisfying the requirement of Clause 10 of the Agreement that “until the grievance is determined, work shall continue normally in accordance with custom or practice existing before the grievance arose, while discussions take place.”

[15] I am therefore satisfied that as agreed between the parties at the conference on 21 December 2010 and confirmed in the submissions of the parties 1 the jurisdiction exists to arbitrate the three questions in dispute and I am satisfied that it is appropriate to do so. There is no dispute or doubt that the matters of concern which the Respondent has raised with Ms Wookey are matters regarding her conduct or performance.

[16] The position of the Respondent in respect to the three matters for determination is as follows: 2

• The due process requirements of clause 11 are not a pre-condition for terminating an employee with notice for matters regarding an employee’s conduct or performance. The employer contends that it “may” elect to use Due Process if it has concerns regarding an employee’s conduct or performance but it “may” use any other process it deems appropriate provided it is consistent with the Act and the provisions of Clause 25 Termination.



• The Respondent concedes that it has not followed the requirements of clause 11 in respect to Ms Wookey.



• The Respondent concedes that if the due process requirements of clause 11 are a pre-condition for terminating an employee with notice then it must follow all of the steps in clause 11 before terminating on notice.



• The Respondent reserves its right to reconsider its position following this decision and has indicated that it may decide to terminate Ms Wookey summarily, that is without notice, for what it alleges is serious misconduct. The Respondent notes that it has advised Ms Wookey in the letter of 8 December 2010 that it considers her behaviour constitutes serious misconduct.

[17] The position of the Applicant in respect to the three matters for determination is as follows: 3

• The due process requirements of clause 11 must be followed prior to termination with notice for matters regarding an employee’s conduct or performance.



• The processes in Clause 11 have not been followed in respect to the allegations made against Ms Wookey save for the first step in Clause 11.1 although the Applicant says that one element of the requirements of Clause 11.1 concerning the right to be accompanied by a nominated representative was not followed.



• The Respondent is required to follow the steps set out in Clauses 11.2 to 11.5 of the Agreement.

[18] It is therefore clear that there is substantial agreement about the answers to questions two and three posed in the Directions issued on 22 December 2010. I also determine that the answers to questions two and three are that the Due Process requirements of Clause 11 have not been followed in respect to Ms Wookey and that if the Due Process requirements of Clause 11 are a pre-requisite for terminating an employee with notice for misconduct or poor performance then the employer must follow all of the steps in Clause 11 prior to termination. The issue still to be determined is question one. This decision will therefore be largely confined to answering question one. However, it appears to me that answering this question is unlikely to resolve all the matters properly in dispute under Clause 10 of the Agreement. Therefore, regardless of the outcome in respect to the matter dealt with in this decision there will still be some matters in contention between the parties about the appropriate next steps and I propose to convene a further conciliation conference shortly after issuing this decision. There is a possibility that this may lead to further decisions in this matter.

[19] The relevant clauses of the Agreement are Clauses 11 and 25. They are in the following terms:

“11. DUE PROCESS

11.1 Concerns about conduct or performance

11.1.1 An Employer who has concerns with the conduct or performance of an employee shall in the first instance hold discussions with the relevant employee. A record of these discussions shall be held. The Employee shall have the right to be accompanied by a nominee of the Employee in these discussions.

11.1.2 Should the employer still hold concerns regarding the employee’s performance or conduct, following the discussions outlined above, the employer may initiate Due Process as outlined below.

11.2 Instigating the Due Process

11.2.1 To instigate Due Process the Employer or the Principal/Employer's nominee shall advise the Employee in writing of:-

11.2.1(a) the Employer’s concern about the Employee’s conduct or performance;

11.2.1(b) the period of the Due Process, stating the expected timeline of the total process, and the times and dates when review meetings will take place within the timeline;

11.2.1(c) the forms of assistance and counselling as appropriate that will be provided by the Employer to help the Employee address and overcome the Employer's concerns; and

11.2.1(d) the proposed time, date and place of the Initial Meeting of the Due Process.

11.3 The Initial Meeting

11.3.1 At the Initial Meeting:

11.3.1(a) the Employee shall be given an opportunity to seek clarification of any points raised in the Employer's letter and to respond to the concerns raised; and

11.3.1(b) there shall be an attempt to reach agreement regarding the expected timeline of the total process, and the times and dates when review meetings will take place within the timeline.

11.3.2 The Employee shall have the right to be accompanied by a nominee of the Employee at this Initial Meeting and subsequent review meetings.

11.4 Review Meetings

11.4.1 At the review meetings during the period of Due Process :

11.4.1(a) the Employee shall demonstrate how the concerns of the Employer are being addressed; and

11.4.1(b) the Employer shall provide advice to the Employee as to the progress of the Employee in addressing the concerns.

11.5 Concluding the Due Process

11.5.1 At the end of the timeline, the Employer shall advise the Employee in writing as to whether:

11.5.1(a) the Employer's concerns have been satisfactorily addressed; and

11.5.1(b) whether sufficient progress has been made to conclude the Due Process, or whether the Employer intends to extend the period of the Due Process.

11.6 Following the conclusion of the Due Process, if the Employer's intended course of action is to terminate the Employment of the Employee, Clause 25 of the Agreement and the provisions of the WR Act apply."

“25. TERMINATION OF EMPLOYMENT

25.1 Termination by the Employer

25.1.1 An Employer may terminate an Employee’s employment in accordance with this clause:

25.1.1(a) summarily;

25.1.1(b) on notice, for reasons related to the Employee’s conduct or performance;

25.1.1(c) on notice, as a consequence of redundancy.

25.2 Summary dismissal

25.2.1 An Employer may terminate an Employee’s employment summarily where that Employee is guilty of serious misconduct, that is misconduct of a kind such that it would be unreasonable to require the Employer to continue the employment during the notice period.

25.2.2 In such cases salary shall be paid up to the time of dismissal only.

25.3 Notice of termination by the Employer

25.3.1 School Officers, School Services Officers, Education Officers/Senior Education Officers and Catholic Education Office Clerical Employees.

25.3.1(a) The Employer shall give to these Employees the following notice:

Period of continuous service	Period of Notice
Less than 1 year	1 week
1 year but less than 3 years	2 weeks
3 years but less than 5 years	3 weeks
5 years and over	4 weeks

25.3.1(b) In addition to the notice in clause 25.3.1(a) Employees over 45 years of age at the time of the giving of notice who have not less than two years‟ continuous service, shall be entitled to an additional week’s notice.

25.3.2 Teachers and principals

25.3.2(a) The Employer shall give to the teacher or principal the following notice:

Period of continuous service	Period of Notice
Less than 10 years in Catholic education and less than 5 years in their current school	7 weeks, wholly within one term
10 or more years in Catholic education or 5 or more in their current school	12 weeks, 9 of which shall be working weeks

25.3.2(b) For the purposes of this clause working week includes any week during a school term as defined.

25.3.3 Payment in lieu of the notice prescribed in clause 25.3.1 and clause 25.3.2 shall if appropriate notice period is not given.

25.3.4 Employment may be terminated by the Employer giving part of the period of notice specified and part payment in lieu thereof.

25.3.5 Payment in lieu of notice is calculated by taking the amount of salary an Employee would have received on account of ordinary time which the Employee would have worked during the notice period if the Employee’s employment had not been terminated.

25.3.6 The period of notice in this clause shall not apply in the case of an Employee whose employment is for a specified period of time.

25.4 Notice of termination by the Employee

25.4.1 The notice of termination to be given by an Employee shall be:

25.4.1(a) the same as that required of an Employer in clause 25.3.1; or

25.4.1(b) seven weeks in the case of a teacher or Principal; or

25.1.1(c) any lesser period of notice agreed to by the Employer.

25.4.2 Where an Employee fails to give at least four weeks‟ notice or in respect of School Officers and School Services Officers such lesser period of notice as the Agreement requires, the Employer shall, subject to the minimum requirements of the Australian fair pay and conditions standard, have the right to withhold from moneys due up to an amount equal to one week’s ordinary time rate of pay for each week of the required notice not given, up to a maximum of four weeks at the ordinary time rate of pay.

25.5 Time off during notice period

Where an Employer has given notice of termination to an Employee, an Employee shall be allowed up to one day’s time off without loss of pay for the purpose of seeking other employment. The time off shall be taken at a time or times that are convenient to the Employee after consultation with the Employer.”

[20] Clause 25.2 provides that “an employer may terminate an Employee’s employment summarily where that Employee is guilty of serious misconduct” (emphasis added). I do not think that this prevents an employer electing to dismiss an employee with notice for serious misconduct. The clause does not say that “an employer shall terminate an Employee’s employment summarily where that Employee is guilty of serious misconduct” (emphasis added). I do not think that “may” has a mandatory meaning in this context.

[21] It is clear and conceded by both parties that Clause 11 Due Process is not required to be followed in cases where an Employer has the right to dismiss an employee summarily. That is where the Employer has the right to dismiss an employee for serious misconduct. Serious misconduct is defined in Clause 25.2 in a manner similar to the way in which it is defined in the relevant legislation and regulations. It would be entirely illogical to require Due Process to be implemented in a case where the employer has the right to dismiss summarily. It would be equally illogical and unreasonable to deny the employer the right to provide notice in a case where summary dismissal is open and for the action of providing such notice to invoke a Due Process requirement.

[22] Hence I think the question to be determined is “Does Clause 11 Due Process of the Agreement have to be followed prior to dismissal with notice in cases where there are allegations of misconduct or poor performance?” It is clear that Clause 11 does not apply in cases of serious misconduct, “that is misconduct of a kind such that it would be unreasonable to require the Employer to continue employment during the notice period.”

The history of the Clauses.

[23] There is no dispute that for many years the questions of termination and Due Process have been regulated in Victorian Catholic Schools through Awards and Agreements in similar terms to those which currently apply in Clauses 11 and 25.

[24] In 1994 the first Federal Award was made (V0162 Victorian Catholic Schools and Catholic Education Officers Award 1994. This will referred to as the 1994 Award.) and it regulated these matters in almost identical terms to the current Agreement. The parties agreed that the 1994 Award was in substantially the same terms as the earlier Victorian State Award.

[25] In the 1994 Award the provisions in respect to Due Process were in Clause 10 and they were the same as Clause 11 of the Agreement save that:

• they did not include any comparable provision to Clause 11.1.1;



• there was some difference in the phrasing of Clause 11.1.2 when compared to Clause 10.1; and



• the reference to the relevant legislation was different.

Relevantly the provisions of Clause 10.1 included the word “may” as follows:

“10.1 An employer who has concerns with the conduct or performance of an employee may instigate Due Process as outlined in this clause”.

Clause 11.1.2 of the present Agreement reads as follows:

“11.1..2 Should the employer still hold concerns regarding the employee’s performance or conduct, following the discussions outlined above, the employer may initiate Due Process as outlined below.”

[26] In the 1994 Award the provisions in respect to Termination were in Clause 27 and they were the same as Clause 25 of the Agreement save that:

• Clause 27 included provision in respect to redundancy and statement of employment which are not included in Clause 25;



• there are some differences in the provision related to withholding of moneys when required notice is not given to reflect the different legislative environment; and



• there is no equivalent to Clause 27.3 in Clause 25 of the current Agreement.

[27] Clause 27.3 provides:

“27.3  Conduct or Performance

27.3.1 If an employer is considering whether to terminate for reasons related to conduct or performance, the provisions of Clause 10 (Due Process) must be applied.

27.3.2  If the decision is made to terminate the employment of the employee, notice shall be given in accordance with clause 27.5.”

[28] The first Victorian Catholic Schools and Catholic Education Officers Certified Agreement was reached in 1995. The 1995 Agreement provided that the Award applied where the Agreement was silent and the 1995 Agreement was silent in respect to the matters of Due Process and Termination. This approach continued in the 1996 Agreement. In the Award Simplification process, which in respect of this Award was finalised in 1998, the provisions in Clause 27.3 and Clause 10 of the 1994 Award were removed. This was clearly a requirement of the Award Simplification process as these clauses were not consistent with the requirements of Section 89A of the Workplace Relations Act 1996.

[29] The first collective agreement reached after the Award simplification process was in the same year as the simplified Award, 1998. In that Agreement the provisions in respect to Due Process were inserted at Clause 11 and they were in the same terms as that which had applied in the 1994 Award save for the relevant cross references. The provisions in respect to Termination of Employment remained regulated by the Award and the relevant legislation. So clause 11.6 continued to provide that:

“11.6 Following the conclusion of the Due Process, if the employer's intended course of action is to terminate the employment of the employee, Clause 24 of The Victorian Catholic Schools and Catholic Education Offices Award (the Award) and the provisions of the Act apply.”

However it should be noted that the Termination provision in the 1998 Award no longer included the provision which had been at Clause 27.3 in the 1994 Award as that had been removed as part of Award simplification.

[30] The situation in respect to Due Process and Termination was not altered by the 1999, 2001 or 2004 collective agreements. In the current Agreement (2008) the provisions were altered in two ways. Firstly, the Award provision in respect to termination became Clause 25 of the Agreement. There were no changes of substance to the content of the clause as it had appeared in the 1998 Award. Secondly, there were two changes to Clause 11 Due Process. The first sub-clause of Due Process (11.1) was altered to provide for an initial consultation stage and the cross reference in Clause 11.6 was changed to Clause 25 of the Agreement rather than to the relevant Award clause in respect to Termination.

[31] There was no evidence from either of the parties in these proceedings that suggested that the parties intended to or did in fact change the substance of the operation of Due Process between 1994 and the present day save for the introduction of the consultative step in Clause 11.1.1 in 2008. In other words there was no suggestion or evidence from either side that there was a consciously negotiated change of substance in respect to the operation of Due Process save for the introduction of the consultative step in Clause 11.1.1 in the negotiations for the 2008 Agreement. There was no suggestion or evidence that there was any sort of agitation or disputation during the negotiation processes between 1994 and 2008 over the operation of the Due Process provisions, save for the issues surrounding the introduction of a consultative step (11.1.1) in the 2008 negotiations. It was not contested between the parties that the consultative step in Clause 11.1.1 was introduced because the IEUA had a concern that Due Process may have been used too frequently by school principals and that some matters could be better resolved by discussions prior to commencement of Due Process. 4

[32] In summary.

• Since 1994 the Due Process provision has always provided that an employer who has or who continues to have concerns with or regarding “the conduct or performance of an employee may instigate Due Process” (underlining added).



• Since 1994 the Due Process provision has always provided that “following the conclusion of the Due Process, if the employer’s intended course of action is to terminate the employment of the employee” then the provisions of the relevant Termination clause apply.



• In the period from 1994 to 1998 the Termination Clause provided that “if an employer is considering whether to terminate for reasons related to conduct or performance, the provisions of Clause 10 (Due Process) must be applied.” This Clause was not included in the Award or Agreement after 1998.

[33] The custom and practice since 1994 has been that it is common but not universal for concerns about conduct or performance to be dealt with through Due Process and where those concerns have not been resolved through Due Process termination may proceed provided the relevant notice and fair process is followed.

[34] There was no direct evidence of incidences of dismissal with notice for conduct or performance where Due Process had not been used.

[35] Mr Howett gave evidence for the employer that “Due Process under clause 11 of the Agreement is the most common means of addressing concerns with an employee’s conduct or performance, but it is not the only means”. 5

[36] The IEUA gave evidence and made submissions that there were occasions when concerns with an employee’s conduct or performance were dealt with without Due Process. The IEUA submitted that this was confined to situations where:

• the concerns were resolved by agreement between the employer and the affected employee (and where relevant the IEUA); or



• where the concerns related to serious misconduct where summary dismissal was justified; or



• where the concerns related to matters which were outside the meaning of conduct or performance as it related to this provision; or



• where the employer was acting in breach of the Agreement.

Does the word “may” in Clause 11 Due Process have a compulsory or a discretionary and facilitative meaning?

[37] To resolve the matter in dispute I must determine whether the word “may” in Clause 11.1.2 Due Process has a discretionary and facilitative meaning or whether it has a compulsory meaning.

[38] I am satisfied that the meaning of “may” in Clause 11.1.2 is unclear in that on a plain reading of the clause either interpretation is possible. The IEUA contends for one interpretation and the Respondent employer contends for the other. I am satisfied that there are only two possible interpretations of the meaning. Either the employer is obliged to use Due Process in cases where it still holds concerns about the conduct or performance of an employee or the employer has discretion whether or not instigate Due Process depending upon its view of the circumstances. In the first case the word “may” is used because an employer “may” elect not to take further action in respect to concerns about conduct or performance and in such a case dismissal on notice does not occur. In the second case the word “may” is used because the employer has discretion whether or not to use Due Process and hence dismissal on notice could occur.

[39] I should not interpret the words in a strict technical fashion but I must have regard for the context of the Agreement as a whole and the custom and practice in the Catholic School education sector prior to the making of the Agreement. I should give effect to the mutual intention of the parties who made the Agreement provided that the words can be reasonably interpreted to mean what was intended. Either meaning is a reasonable interpretation.

[40] Mr West for the Respondent referred in his submissions 6 to the Full Bench in The Australian Worker’s Union – West Australian Branch v Co-Operative Bulk Handling Limited7. That Full Bench referred with approval to the distillation of the law by Vice President Lawler in Kenneth Watson & Ors v ACT Department of Disability Housing and Community Services (2008),8 including the following:

“…the parties’ presumed intention may be taken into account in determining which of two or more possible meanings is to be given to a contractual provision. What cannot be taken into account is evidence of statements and actions of the parties which are reflective of their actual intentions and expectations. Objective background facts can include statements and actions of the parties which reflect their mutual actual intentions. That is, evidence of the mutual subjective intention of the parties to a contract may be part of the objective framework of facts within which the contract came into existence. It is the mutuality which makes the evidence admissible”. 9

[41] I have adopted this approach.

[42] It is common place that the negotiation for a new Award or Agreement is based upon the wording of the instrument which it is replacing. An examination of the instruments which govern employment in Victorian Catholic schools shows that the instruments are clearly consistent with this approach. Many of the clauses and the overall structure of the instruments are substantially the same in each of the instruments over the period from 1994 to the present. In this situation I am satisfied that it is clearly the mutual intention of the parties that provisions retain their original meaning in subsequent instruments unless there is evidence to the contrary or unless there are relevant changes to the wording.

[43] Mr West for the Respondent in his submissions 10 also referred to the following:

“The High Court (in the judgment of Owen J in South Australian Cold Stores Ltd v Electricity Trust of South Australia (1965) 115 CLR 247 at 264-265) has held that,pending any exceptional circumstances that might point to a contrary intention, the use of the word 'may' prima facie confers a discretion either to do, or not to do, a certain act.

In Finance Facilities Pty Ltd v Federal Commissioner of Taxation (1970) 127 CLR 106 at 134, Windeyer J, the following was said:

While Parliament uses the English language, the word 'may' in a statute means may… it is a word of permission, of authority to do something which otherwise he could not lawfully do. If the scope of the permission be not circumscribed by context or circumstances, it enables the doing, or abstaining from doing, at discretion, of the thing so authorised.

Similarly, in the joint judgment of Dixon CJ, Webb, Fullagar, Kitto and Taylor JJ in Wardv Williams 11:

... you begin with the prima facie presumption that permissive or facultative expressions operate according to their ordinary natural meaning. “The authorities clearly indicate that it lies on those who assert that the word “may” has a compulsory meaning to show, as a matter of construction of the Act, taken as a whole, that the word was intended to have such a meaning” — Re Gleeson [1907] V.L.R. 368, at p. 373.”

[44] I am satisfied that “may’ had a compulsory meaning when it appeared as part of the Due Process provision in the 1994 Award. This fact was confirmed by the existence of Clause 27.3.1 in the 1994 Award which provided that: “If an employer is considering whether to terminate for reasons related to conduct or performance, the provisions of Clause 10 (Due Process) must be applied”. “May” clearly had a mandatory meaning in cases where termination is a possible outcome of concerns held regarding conduct or performance. Clearly the word “may” is used rather than “shall” because an employer could elect not to further pursue concerns about conduct or performance for a range of reasons and in a range of circumstances. However, if the employer does determine to pursue those concerns then the meaning of the 1994 Clause is that Due Process must be used.

[45] I find that the IEUA has established that “may” had a compulsory meaning in the 1994 Award. It is clear that this reflected the mutual intention of the parties at that time. Mr Howett who was the witness for the Respondent accepted that “may” had a compulsory meaning in the 1994 Award.

[46] As discussed earlier, apart from the introduction of a preliminary consultation step in Clause 11.1.1, there has been no significant change to the wording of the Due Process clause in the various instruments which regulate employment in the Victorian Catholic Schools from 1994 to the present Agreement.

[47] The Due Process Clause 10 and Termination Clause 27.3.1 was required to be removed from the relevant Award by the operation of Section 89A of the then Workplace Relations Act. The parties decided to insert Due Process into the 1998 collective agreement but to keep Termination regulated by the relevant Award.

[48] I do not believe that the meaning of “may” in the Due Process clause changes because the reinforcement created by a term similar to Clause 27.3.1 Termination was not included in future instruments. This is particularly the case given that because of the operation of the relevant legislation from 1998 to 2009 this reinforcing Termination term could not be included in the relevant Award and the matter of Termination was still government by that Award. In my view the interpretation would only change if there was evidence that the mutual intention of the parties changed. There was no such evidence presented.

[49] Mr Howett gave evidence for the Respondent. I accept that Mr Howett has very long experience in industrial relations matters for the Victorian Catholic School sector. Although he might not have been at every meeting I am satisfied that he would have been aware of all the major issues of agreement and disagreement during the negotiation process for the various instruments governing employment in Victorian Catholic Schools during the period 1994 to the present. There was nothing in the evidence of Mr Howett that suggested that there was any mutual intention of the parties to change the Due Process clause over the period since 1994 or in the making of the current Agreement in particular.

[50] The only exception to this was the change to insert a consultative step in Clause 11.1.1. The evidence of the Applicant and the Respondent are consistent in respect to the mutual intention in respect this change. However, there is no suggestion that this change was associated with a mutual intent to change the meaning of “may” or the rest of the Due Process clause. Mr Howett’s evidence in a number of places is the effect that there has been no change to the meaning of “may” in the Due Process clause over the long years he has been involved. For example Mr Howett says that “it has never been the position of the CECV or the CEOM that a staff member must go through due process before he or she can be terminated on notice”. 12

[51] Ms Cotter gave evidence for the Applicant. I accept that Ms Cotter has had long experience in industrial relations matters for the Victorian Catholic School sector. She was a part of the negotiating team for the 2008 Agreement. I am satisfied from the evidence that Ms Cotter would have some awareness of the major issues of agreement and disagreement during the negotiation process for the earlier instruments governing employment in Victorian Catholic Schools. Ms Cotter gave evidence that there has been no change to the meaning of “may” in the Due Process Clause over the period of her involvement.

[52] The evidence of Ms Cotter and Mr Howett is that the meaning of “may” in the Due Process clause has not changed in the period since 1994. Based on this evidence and an analysis of the history of the wording of Due Process in the various industrial instruments I am satisfied that there has been no mutual intention of the parties to change the meaning of “may” in the Due Process clause since 1994.

[53] I am satisfied that the management of the conduct and performance of teachers is regarded as a very significant issue for the IEUA and for the employer of teachers in Catholic Schools in Victoria. Due to the nature of their role the performance and conduct of teachers is of vital importance to the employer and is therefore under scrutiny. This is combined with the fact that job security for permanent teachers has traditionally been high when compared to many other sections of the labour market. In addition to this the question of fairness and due process is central to the social justice values of the Catholic School System and there was evidence of this in the proceedings. In this situation it is inconceivable that a significant change to the regulation of Due Process in the industrial instruments governing the employment of Catholic School teachers in Victoria could have occurred without it becoming a major industrial issue.

[54] Neither the Applicant nor the Respondent produced any evidence of significant dispute about a change to Due Process or of a change to the custom and practice in respect to Due Process in the period since 1994. Mr Howett gave evidence that he had informed IEUA representatives of his view that “may” could have a discretionary meaning but the evidence was not detailed and I do not regard it as evidence of significant disputation or change to custom and practice. I am able to draw the conclusion from the evidence, taken together with an inference from the lack of any evidence to the contrary, that there has been no significant change to Due Process since 1994 other than the insertion of the consultative step at Clause 11.1.1.

[55] Much of the evidence of Ms Cotter and Mr Howett was “evidence of statements and actions of the parties which are reflective of their actual intentions and expectations” These are matters which the authorities, particularly those referred to by Mr West for the Respondent, suggest I cannot have regard to. Their evidence certainly established that the parties disagree about the meaning of the word “may” in the Due Process clause and that they held the view that they now hold about the correct interpretation of the word prior to this case. Neither of the parties provided detailed evidence of cases where Due Process had been applied and where it had not been applied where there were concerns about conduct or performance and the employer was seeking to dismiss the employee with notice.

[56] The IEUA drew my attention to a provision for Annual Review Meetings which has been a consistent provision of the collective agreements for Victorian Catholic Schools since 1995. The provision is at Clause 23.8.4 in the current Agreement. The provision provides that the Annual Review Meeting process “may not to be used as a substitute for Due Process.” In this case the word “may” clearly has a mandatory meaning. The Agreement says that it is mandatory in this respect not to use another process to deal with performance matters other than Due Process. I accept that this makes it more difficult to sustain an interpretation that the use of Due Process is intended to be purely a matter for the discretion of the employer.

[57] The Catholic Education Commission of Victoria issued a bulletin in May 2010 concerning Annual Review Meetings which stated “the ARM is not to be used as a substitute for the process of managing performance which is detailed in the Agreement.” 13 Although this is not sufficient evidence in itself, it does suggest that the employer and the IEUA have a mutual intention to see Due Process as the process for managing performance in the Agreement.

[58] The IEUA submitted that the inclusion of the words in Clause 11.6 which links the Due Process and the Termination process is important. Clause 11.6 states that if “following the conclusion of due process” the employer intends to terminate the employment then Clause 25 must be followed. I accept the submission of the employer that this does not of itself make it mandatory to use due process prior to termination under Clause 25. However, I do find that this provision makes it clear that Due Process is about dealing with issues of performance and conduct and that such issues, if not resolved through Due Process, can still lead to termination.

[59] A newsletter issued by the employer in April 2007 described the Due Process provisions under the Agreement as it then stood as follows:

“Due Process places a series of mutual obligations on both the employer and employee that focus on improving the employee’s performance or conduct. The process also provides an employee with a fair and transparent procedure, ensuring natural justice is served.” 14

This is evidence of the mutual intention that Due Process is sometimes a precursor to discipline or dismissal and that it is a part of ensuring a fair process. Given that it enshrines the principle, which is also found in the Fair Work Act, that generally employees should have an opportunity to overcome concerns about conduct or performance prior to dismissal, it is difficult to contemplate why the IEUA would have agreed to alter the provision which had been mandatory to one where it was at the complete discretion of the employer. This suggests that the mandatory meaning was not altered by negotiations for the Agreement in 2008.

[60] In my view the only significant evidence that might suggest a contrary view concerning the application of Due Process was the evidence of Mr Howell concerning the existence of custom and practice where Due Process has not been used prior to the settlement of the current Agreement to deal with some matters where there are concerns about conduct or performance. I will now turn to deal with this matter.

The scope of the “conduct or performance” matters covered by Due Process Clause 11 and Termination Clause 25.

[61] At the commencement of the proceedings I requested the parties to provide advice in respect to the following questions which I believe arose from an initial reading of the submissions and evidence provided by the parties:

“1. Following the process in 11.1.1 under what circumstances would it be possible for the employer not to proceed to 11.2 Due Process.

(a) If the employer decided it was still concerned but not so concerned as to take any further action?

(b) In case of serious misconduct of a kind such that it would be unreasonable to require the employer to continue employment during notice period?

(c) If the employer decided that it was no longer concerned because agreement had been reached between the employer and the employee (and his or her representative where applicable) to an outcome such as a warning or other action short of a dismissal?

(d) If the employer decided that it was no longer concerned because it had issued a warning or other action short of dismissal. If the employee wished to challenge this action he or she could do so through the grievance or dispute settlement procedure?

2. Does the term conduct or performance in 11.1.1 and 25.1.1(b) have the same meaning? Could it have a broader scope in clause 25 but a narrower one in clause 11? In particular:

(a)Does the term in clause 11 include matters such as inability to perform due to incapacity or loss of registration etc? Are these matters included in the meaning of the term in clause 25?

(b) Does the term include matters such as abandonment of employment? Are these matters included in the meaning of the term in clause 25?”

[62] Both parties agreed that the following circumstances did not require the implementation of Due Process in Clauses 11.2 to 11.6 and it was not the custom and practice to apply Due Process in the following cases.

• If the employer decided it was still concerned but not so concerned as to take any further action



• In case of serious misconduct of a kind such that it would be unreasonable to require the employer to continue employment during notice period



• In a case of abandonment of employment which is covered by separate provision in the Agreement



• If the employer decided that it was no longer concerned because agreement had been reached between the employer and the employee (and his or her representative where applicable) to an outcome such as a warning or other action short of a dismissal

I am satisfied that these cases are not in conflict with a mandatory reading of “may” in Clause 11.1.2 either because there are no longer concerns since the matter has been resolved or because the matter is covered by serious misconduct and summary dismissal or other provision of the Agreement.

[63] If the employer decided that it was no longer concerned because it had issued a warning or other action short of dismissal then the Respondent argued Due Process did not apply. Mr Howell gave evidence that an isolated incident of misconduct might result in a warning letter not instigation of Due Process. 15 IEUA agreed that this was custom and practice where agreement was reached. However, IEUA argued that if this was not an agreed outcome Due Process should have been followed. In my view this only becomes a practical issue if the employee wishes to challenge the warning or other action short of dismissal. Regardless of the interpretation of “may” an employee could challenge the action through the grievance or dispute settlement procedure. There is a significant practical difference created by a mandatory meaning for “may” in cases where dismissal is contemplated. However, it is not necessary for me to determine whether or not the employer is obliged to follow Due Process in a case where it is no longer concerned about conduct or performance because it has issued a warning or other action short of dismissal because the dispute in this case only concerns matters where dismissal is contemplated.

[64] Mr West for the Respondent argued that “conduct and performance” have the same meaning in Clauses 11 and 25.1.1(b) but that in Clause 25 the scope is about dismissal for “reasons related to conduct or performance” whilst in Clause 11 it is about “concerns with” conduct or performance in Clause 11.1.1 and “concerns regarding” in Clause 11.1.2. Mr Matson for the IEUA argued that the scope of conduct or performance in the two clauses was the same.

[65] Mr West argued that matters such as “inability to perform the inherent requirements of the job” were related to conduct or performance but were not directly conduct or performance. On this basis they could be covered by Clause 25.1.1 but not by Clause 11 Due Process. In some cases such matters would also clearly not be covered by Due Process because they are covered by summary dismissal even where the employer elects to dismiss with notice. In other cases Mr Matson argued inability to perform the inherent requirements of the job due to illness was not a question of conduct or performance in the ordinary meaning of that term in the context of the Clause 11 Due Process. There is merit in the arguments of both the Respondent and the Applicant on this matter. However, regardless as to whether I approach it from the point of view of the Applicant or the Respondent these matters are not covered by Clause 11 Due Process and do not affect the meaning of “may” in that Clause. It is therefore not necessary for me to determine whether or not the scope of matters contemplated by the words “related to conduct or performance” may be broader than the scope of matters covered by “concerns regarding conduct or performance”.

[66] Loss of teacher registration or registration to work with children is not a matter which is covered by Due Process since it is quite clear that it would be contrary to legislation for a school to continue to employ a teacher in these circumstances and hence the matter would be covered by summary termination which is clearly not covered by Due Process.

[67] The other matter which was raised in proceedings which the Respondent argued was not properly dealt with by Clause 11 Due Process but which may be a matter of conduct or performance within the meaning of those terms in Clause 11 and Clause 25 were matters related to inappropriate sexual, physical or emotional conduct towards students. The Respondent argued that if such matters were within the meaning of conduct or performance and they were by custom and practice not covered by Clause 11 Due Process then a mandatory reading of “may” was unsustainable.

[68] The Respondent through Norman Howett gave evidence of CEOM policy for “Allegations of Misconduct Against Lay Employees in Catholic Schools and Catholic Education Offices.” This Policy has two attached guidelines: “CEOM Procedures for Misconduct Allegations” and “CEOM Procedures for Serious Misconduct Allegations”. 16 Mr Howett gave evidence that the policy and guidelines are recommended for schools but are not mandatory and that they were last revised in 2007. The policy and guidelines are publicly available on the CEOM website.

[69] It is clear to me from a reading of the policy and guidelines referred to by Mr Howett that they relate to cases of alleged inappropriate conduct by an employee towards a child or student. There are numerous references in the policy and guidelines which support this conclusion. These include that:

• Misconduct is defined as inappropriate conduct and the examples given are sexual, physical and emotional conduct towards students.



• The allegation is defined as relating to suggestions that a child or student has been subjected to misconduct of a sexual, physical or emotional nature.



• The principles to be applied related to the responsibility adults have to children and students and to way such allegations are properly dealt with to protect the interests of the student and the employee.



• “The procedures reflect the special responsibility of Catholic education employees towards the students in their care, as well as respect for the dignity of employees and their rights to justice”.

[70] Mr Howett agreed in cross examination that the policy and guidelines were to cover issues of inappropriate conduct by employees towards a child or student and that they did not relate to general matters of conduct or performance such as the allegations against Ms Wookey.

[71] The IEUA submitted what it said was the earlier version of this policy and guidelines 17 and that version makes explicit that the “document provides clear procedures on how allegations of misconduct against students in schools by persons employed in Catholic education are to be dealt with”. The Respondent objected to this evidence as the document was incomplete and not properly identified. I accept this position and do not have regard for this evidence.

[72] The IEUA submitted that it was never the mutual intention that these matters were covered by Due Process because they were covered by a separate policy and process as referred to by Mr Howett. Mr Matson for the IEUA submitted that these matters often involved the police and the Victorian Institute of Teachers.

[73] I accept there is strong evidence of mutual intention of the parties and also of custom and practice that Due Process does not apply in cases where there is inappropriate contact between a teacher and a student. However this could be because there is a mutual intention that this “conduct” is not covered by Clause 11 or it could be because Clause 11 is not mandatory.

[74] In the policy and guidelines referred to by Mr Howett there is reference to summary dismissal as a possible outcome from the investigation of allegations of serious misconduct. In respect to the investigation of allegations of misconduct which are proven but which do not constitute serious misconduct, the guidelines provide: “The principal/employer shall communicate in writing the details of the misconduct and the disciplinary action (eg note on teacher’s file, warning on teacher’s behaviour) to the employee.” 18 There is no reference to dismissal or possible dismissal.

[75] The policy and guidelines referred to by Mr Howett in my view do not provide adequate evidence that Catholic Education Office Melbourne advises schools to dismiss employees for misconduct, which falls short of serious misconduct, without use of Clause 11 Due Process in case of allegations concerning inappropriate contact between a teacher and a student. No evidence was given of any cases where the policy and guidelines had been applied to dismiss an employee for misconduct which falls short of serious misconduct without the use of Clause 11 Due Process.

[76] I also find it hard to accept the argument of Mr Matson that the term “conduct or performance” in Clause 11 and/or Clause 25.1.1 should be read as excluding misconduct, which falls short of serious misconduct, involving inappropriate contact between a teacher and a student. This is not available on an ordinary reading of the words in the context of the Agreement. I could only be persuaded of this if I had clearer evidence of the mutual intention of the parties. The employer certainly argues that Clause 11 does not apply in these cases but the employer argues that it does not and was never intended to apply because the word “may” should be read as discretionary and facilitative. So there is no clear evidence of mutual intention that Clause 11 should not apply because it was outside the meaning of conduct or performance in Clause 11.

[77] There is also inadequate evidence before me to conclude that it was the mutual intention of the parties that Clause 25.1.1(b) should be read as excluding misconduct, which falls short of serious misconduct, involving inappropriate contact between a teacher and a student. I am inclined to the view that Clause 25 should be read as covering the field except for abandonment of employment and possibly inability to perform the inherent requirements of the job. I am therefore inclined to agree with the Respondent that these matters are contemplated by Clause 25.1.1(b). However it is not necessary for me to decide this. Mr West on behalf of the Respondent argues that Clause 25.1.1(b) could have a wider scope than Clause 11 and in this particular respect he may well be correct. I am certainly satisfied that the parties respect the separate policy and guidelines in respect to these matters and do not expect Clause 11 Due Process to be applied in such cases.

[78] In any case after careful consideration of all the arguments and evidence the existence of the separate policy and procedure in respect to inappropriate contact between a teacher and a student does not change my conclusion about the mandatory nature of “may” in Due Process Clause 11.1.2. If this matter is covered by separate policy and is not covered by Due Process Clause 11.1.2 as Mr Matson argues was always the mutual intention of the parties then there is clearly no impact. If the matter is covered by the meaning of “conduct or performance” in Clause 11 then if it is a matter which is serious misconduct, as will commonly be the case in these matters, then it is not covered by Clause 11. If it is not serious misconduct and the matter is covered by the meaning of conduct or performance in Clause 11, then it may be that as contemplated by the policy the concerns may be resolved by a warning or other action short of dismissal but if dismissal is proposed then Due Process would apply.

[79] I have therefore concluded that the proper interpretation of the Agreement is that Clause 11 Due Process must be followed prior to dismissal with notice in cases where there are allegations of misconduct or poor performance. Clause 11 does not apply in cases of serious misconduct, “that is misconduct of a kind such that it would be unreasonable to require the Employer to continue employment during the notice period.”

COMMISSIONER

Appearances:

Mr Dennis Matson for the Applicant.

Mr Richard West for the Respondent.

Hearing details:

10 February

Melbourne

2011

 1   Respondent’s outline of submissions at paragraphs 3 and 4, and Applicant’s outline of submissions at paragraphs 4 and 5.

 2   Respondent’s outline of submissions at paragraphs 5 to 7 and 25.

 3   Applicant’s outline of submissions at paragraphs 37, 40 and 49.

 4   Exhibit IEUA-1 at paragraphs 14 to 17.

 5   Exhibit CEO-2 at paragraph 5.

 6   Respondent’s outline of submissions at paragraph 3.

 7   [2010] FWAFB 4801.

 8 171 IR 392 at [8] to [14].

 9   BP Australia Pty Ltd v Nyran Pty Ltd [2003] FCA 520.

 10   Respondent’s outline of submissions at paragraphs 21 to 22.

 11 (1955) 92 CLR 496 at paragraphs 505 to 506.

 12   Exhibit CEO-2 at paragraph 8.

 13   Exhibit IEUA-1, Attachment 2.

 14   Ibid.

 15   Exhibit CEO-2 at paragraph 5.

 16   Exhibit CEO-2, Attachment.

 17   Exhibit IEUA -4.

 18   Exhibit CEO-2, Attachment.

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