Mr David Perry v Department of Sustainability and Environment

[2013] FWC 2397

[2013] FWC 2397

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Application to deal with a dispute

Mr David Perry
v
Department of Sustainability and Environment
(C2012/6303)

DEPUTY PRESIDENT SMITH MELBOURNE, 26 APRIL 2013

Defence Reserve Service Payment; overpayment of wages.

Introduction

[1] This decision involves an application made by Mr David Perry about the proper application of Clauses 19 and 52 of the Victorian Public Service Workplace Determination 2012 (the Determination). The matter arises under s.739 of the Fair Work Act 2009 (the Act).

[2] Briefly the circumstances are that on 29 May 2012 Mr Perry was suspended with pay from the Department of Sustainability and Environment (DSE) while an investigation was undertaken into alleged misconduct relating to financial irregularities about projects under his control.

[3] Upon his suspension Mr Perry sought approval from DSE to undertake Defence Reserve Service during his suspension period. It was said that DSE consented to Mr Perry undertaking that service. Mr Perry was paid by both DSE and the Department of Defence during this period. Upon Mr Perry’s return to work, DSE instructed him to apply for Defence Service Leave under clause 52 of the Determination. Mr Perry complied with this direction and submitted an application for the period he undertook Defence Reserve Service. Mr Perry alleges that this instruction from the DSE was ‘unlawful’.

[4] This dispute relates to whether or not Mr Perry’s was entitled to receive a full salary from DSE for the period he undertook Defence Reserve Service while suspended with pay under clause 19.8.1(c) the Determination.

[5] Mr Perry also seeks a statement from the respondent that five of the 15 allegations made against him were not substantiated.

[6] The dispute was referred to the Commission pursuant to clause 11 of the Determination. There is no dispute that the Commission has jurisdiction to deal with the dispute.

Background

[7] On 28 May 2012 Mr Perry was advised by letter from Mr Gary Atherton that he was suspended with pay effective from the close of business on Tuesday 29 May 2012 under clause 19.8.1(c) of the Agreement. The reason provided to the applicant for the suspension was that a routine budget review of roading projects in the Upper Murray District had identified a range of irregularities for projects under his control including:

● Prepayment of invoices;

● Splitting invoices;

● Failure to adhere to DSE purchasing requirements; and

● Budget overruns.

[8] During the period of suspension a formal investigation into the irregularities was undertaken.

[9] According to Mr Perry’s submissions, immediately after receiving the suspension letter he informed the Investigations Manager, Andrew Collins, and the Regional Manager, Alan Dobson, he was going to undertake Defence Reserve Service while he was suspended. They both agreed. The applicant alleges that they supported the idea because it would take his mind off the stress of being suspended and investigated. Mr Perry was not requested to take any form of leave to conduct his Defence Reserve Service.

[10] On 13 July 2012 the DSE wrote informing the applicant that his suspension was rescinded as of close of business on 20 July 2012 and that he was free to return to work as of 23 July 2012.

[11] On 30 August 2012 Mr Perry was requested by Jim McGrath to submit a leave request for the Defence Reserve Service. Mr Perry submitted the request although he alleges he did not agree with having to submit the request. Mr Perry alleges that he complied with the direction to apply for leave because he was in fear of being terminated.

[12] In his application form Mr Perry states there were ‘numerous discussions’ with Mr McGrath, Mr Farrell and Mrs Mezgec, and no agreement could be made regarding the leave. The DSE commenced making deductions from his salary to recuperate monies they allege were overpaid.

[13] Attempts were made to resolve the dispute in a recorded meeting on 7 September 2012 between Peter Farrell, Regional Director; Jim McGrath, Business Partner; and David Perry, the Applicant in these proceedings. No agreement was reached.

[14] Mr Perry re-confirmed with Ms Mazgec at a later date that there was no agreement.

[15] The application was lodged in the Commission on 17 December 2012. The application was listed for Conference and Hearing before me on 11 January 2013. After the conference the DSE ceased making deductions from the applicant’s salary for the alleged overpayment of wages until the matter was determined.

[16] The matter was not resolved by conciliation and was listed for Hearing on 20 March 2013. At the hearing, Mr Perry appeared on his own behalf. Mr Henry appeared for DSE.

The Submissions

[17] Mr Perry submits that he was not on Defence Reserve Leave under clause 51 of the Determination because he was suspended with pay pursuant to clause 19.8.1(c) of the Determination. Mr Perry Submitted:

● The letter notifying him of 28 May 2012 stated ‘The suspension will allow you to receive an income while the investigation is underway’.

● Upon informing Mr Collins and Mr Dobson he was going to undertake Defence Reserve Service they agreed and said words to the affect of “it would be a good idea as to take my mind off the stress of being suspended and investigated”. They did not request Mr Perry to take any form of leave to conduct his Defence Reserve Service.

● He was suspended with pay and not on defence leave.

● His request that he be formally notified that five allegations which were not substantiated in the investigation.

● That he should be reimbursed the deductions that DSE made from his salary for the alleged overpayment and that he be formally notified of those allegations not substantiated.

[18] Mr Perry submitted that the discussions relating to him undertaking Defence Service Leave were not in a formal meeting, but rather he used his last opportunity to contact any person at the DSE before his suspension to ‘clarify my ability to conduct reserve service during my suspension with pay’.

[19] The DSE submits that Mr Perry was on Defence Reserve Leave under clause 52 of the Determination. Mr Perry was overpaid a sum of $4,274.45 during this period and as such it sought the recovery of money. The reasons for Mr Perry’s overpayment were said to be:

● Mr Perry was still bound by his contract and the requirements of the 2006 Agreement which precludes payment of salary (apart from make-up pay) while on Defence Reserve Service leave;

● Mr Perry did not provide as much notice as possible of his future absence to undertake Defence Reserve Service as required by the 2006 Agreement;

● Mr Perry was aware that he should not have received payment from the State Government and the Commonwealth Government simultaneously, as he had previously been required to repay money to DSE under similar circumstances;

● Mr Perry chose to interpret Mr Collin’s and Mr Dobson’s remarks that undertaking defence Reserve Service while suspended as approval to receive simultaneous salaries, while knowing that this should not occur.

[20] DSE requests that the salary arrangements put in place by DSE be reinstated and that DSE be allowed to resume recovering the full amount of the overpaid salary from Mr Perry.

The Determination and Relevant Legislation

[21] It is convenient to examine the provision of the Determination.

“52 DEFENCE RESERVE LEAVE

52.1 An Employee required to complete Defence Reserve service may be granted leave up to a maximum period of 78 weeks’ continuous service.

52.2 The Employee will consult with the Employer regarding the proposed timing of the service and will give the Employer as much notice as is possible of the time when the service will take place.

52.3 Where the base salary excluding allowances received by the Employee from the Australian Defence Force or Defence Reserve service during his or her ordinary hours of work is below the Employee’s VPS salary, the Employer will, unless exceptional circumstances arise, pay to the Employee make-up pay for the period of Defence Reserve service.

52.4 Preservation of prior entitlement

For Employees in employment prior to 9 May 2002, any more favourable provision relating to their previous entitlement to Defence Force leave is maintained.”

[22] It is also instructive to set out the terms of the Defence Reserve Service (Protection) Act 2001 (the Reserve Service Act). Relevant provisions are:

“Sec. 17

Hindering employee from serving in Reserves

(1) An employer must not hinder or prevent a person in the employer's employment from:

(a) volunteering to render defence service; or

(b) rendering defence service.

(2) A person who contravenes subsection (1) is guilty of an offence.

Maximum penalty: 30 penalty units.

Note: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.

Sec. 25

No requirement to take leave during defence service

(1) This section applies if a member is employed by a person under a contract of employment, or other arrangement, that allows the member any type of paid or unpaid leave.

(2) The employer must not require the member to take the leave concurrently with all or part of his or her absence on defence service.

(3) Subsection (2) does not apply to the extent that the member agrees to take the leave concurrently with all or part of that absence.

Sec. 33

No additional obligations on employers

(1) To avoid doubt, this Act does not oblige an employer of a member who is, or has been, absent on defence service to do any of the following in respect of the period of the absence:

(a) to pay the member's remuneration in respect of the employment; or

(b) to grant the member's entitlements in respect of the employment (except as provided under this Part); or

(c) to meet the employer's obligations under a workers' compensation law to pay premiums, contributions or similar payments in relation to the member; or

(d) to meet the employer's obligations under the Superannuation Guarantee (Administration) Act 1992 in relation to the member.

(2) Paragraphs (1)(a) and (b) do not apply to the extent that the member would have been entitled to the benefit of the things mentioned in those paragraphs anyway if the member's absence had been for a purpose other than the purpose of rendering defence service.

Example: An employer would still have to pay the wages of a member who rendered defence service while on paid annual leave, since the member's absence on paid annual leave would not relieve the employer from having to pay wages. But once the member ran out of paid annual leave, the employer would not have to pay the member any longer until the member returned from rendering defence service.”

[23] Relevantly, Section 17 of the Reserve Service Act prevents an employer from hindering an employee from serving in the reserves. Section 33(1) of the Reserve Service Act expressly states that there are no additional obligations on employers in respect of payment of remuneration, granting entitlements, payment of workers compensation or to meet the obligations under the Superannuation legislation.

Approach to Construction of an Agreement

[24] In this connection I refer to the often quoted decision of Justice Madgwick in Kucks v CSR Limited. [[1996] 66 IR at 182] His Honour was there considering the approach that should be taken when interpreting an award. However, this same approach has been subsequently adopted when consideration is to be given to the terms of a certified agreement. His Honour summarised the principles involved in these terms:

“Legal principles

It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.

But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.”

[25] Subsequently this approach was adopted by a Full Court of the Federal Court of Australia in United Firefighters’ Union of Australia and Another v Metropolitan Fire and Emergency Services Board. [(2006) 152 FCR at 18] Their Honours said:

“51 The parties agree that the proper approach to the construction of industrial instruments was stated by Madgwick J in Kucks at 184. His Honour’s statement of the principles was followed by a Full Court in Ansett Australia Limited v Australian Licensed Aircraft Engineers’ Association [2003] FCAFC 209 at [8] and by two Justices of the High Court in Amcor Limited v Construction Forestry Mining & Energy Union [2005] HCA 10 at [96] per Kirby J and at [130] per Callinan J. That was the approach which was adopted by the learned primary judge.

52 A narrow or pedantic approach is not to be taken. The intention of the framers of the document is to be ascertained objectively, bearing in mind that they are likely to have been people of a practical bent of mind. Their intention may well have been expressed in ways likely to have been understood in the relevant industry, rather than in “legal niceties or jargon”; see Kucks at 184.

53 Clearly enough, the language of the instrument must be construed in its context, having regard to the subject matter and the wording of the entire agreement; Short v FW Hercus Pty Limited (1993) 40 FCR 511 at 518. The context will include the statutory context in which the agreement is made.”

[26] The reference above to Short v FW Hercus Pty Ltd is to an extract of the decision ofJustice Burchett. In that case His Honour said:

“The context of an expression may thus be much more than the words that are its immediate neighbours. Context may extend to the entire document of which it is a part, or to other documents with which there is an association. Context may also include, in some cases, ideas that gave rise to an expression in a document from which it has been taken. When the expression was transplanted, it may have brought with it some of the soil in which it once grew, retaining a special strength and colour in its new environment. There is no inherent necessity to read it as uprooted and stripped of every trace of its former significance, standing bare in alien ground. True, sometimes it does stand as if alone. But that should not be just assumed, in the case of an expression with a known source, without looking at its creation, understanding its original meaning, and then seeing how it is now used. Very frequently, perhaps most often, the immediate context is the clearest guide, but the court should not deny itself all other guidance in those cases where it can be seen that more is needed. In literature, Milton and Joyce could not be read in ignorance of the source of their language, nor should a legal document, including an award, be so read.” [[1993] 40 FCR at 511]]

[27] In a similar vein Neaves J. in Meat and Allied Trades Federation of Australia v. The Australasian Meat Industry Employees’ Union concluded:

“..The true meaning and effect of the award must be ascertained not by construing the language used in isolation but by construing that language in its setting and context and in light of all the relevant surrounding circumstances.” [[1984] 2 FCR 419 at 426]

[28] Additionally, the comments made by Justice Mason in the decision of the High Court of Australia in Codelfa Construction Pty Ltd v State Rail Authority of NSW [(1982-82) 149 CLR 337] are often cited as an authority. Although that judgment concerned the approach to be taken to the interpretation of the terms of a commercial contract and the circumstances in which a term may be implied, extracts from it are relied upon as relevant to the interpretation of industrial agreements.

[29] Some years later, Justice Mason in K and S Lake City Freighters Pty Ltd v Gordon & Gotch stated:

“Problems of legal interpretation are not solved satisfactorily by ritual incantations which emphasize the clarity of meaning which words have when viewed in isolation, divorced from their context. [[1985] 157 CLR 309]

Conclusions

[30] It is clear that DSE could not prevent Mr Perry from undertaking Defence Service Leave. So much is apparent by the provisions of the Defence Reserve Service (Protection) Act 2001. Similarly, there is no obligation under that Act requiring the employer to pay for any period of Defence Service Leave. However, the provisions of the Determination mean that this employer—the DSE will pay for such periods under particular terms and conditions.

[31] There is no doubt in my mind that the relevant officers consented to Mr Perry attending important defence service in the belief that it was consistent with what was allowed in public sector employment. This is directly referable to Clause 52 of the Determination.

[32] Otherwise, Mr Perry was not on leave and could be recalled to duty at any time and arguably not permitted to take other employment. Being suspended with pay during an investigation is no more than not being required to attend for duty at the employers discretion. Clause 52 of the determination should be construed in accordance with the purpose and context of the rights of reservists undertaking Defence Reserve Service. This involves the balance of Australian national defence and protection of reservists in their civilian workplaces from discrimination, disadvantage and dismissal resulting from their reserve service. An interpretation of the Determination to enable an employee suspended on pay while investigations of allegations of financial misconduct are undertaken to financially benefit is not consistent with the purpose of Determination.

[33] I find that Mr Perry was on Defence Reserve Leave in accordance with the Determination and that the provision of Clause 52 applies. I make no ruling on the matters relating to any disciplinary action taken by DSE although I note that Mr Perry was at all time transparent in his conduct and has sought to grieve about this issue in the proper way.

DEPUTY PRESIDENT

Appearances:

D. Perry the applicant.

C. Henry on behalf of the Department of Sustainability and Environment.

Hearing details:

2013.

Melbourne:

March, 20.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR535830>