National Tertiary Education Industry Union v Deakin University
[2021] FWCFB 6027
•18 OCTOBER 2021
| [2021] FWCFB 6027 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
National Tertiary Education Industry Union
v
Deakin University
(C2021/4489)
VICE PRESIDENT HATCHER | SYDNEY, 18 OCTOBER 2021 |
Appeal against decision [2021] FWC 4139 of Commissioner McKinnon at Melbourne on 14 July 2021 in matter number C2021/1023.
Introduction and background
[1] The National Tertiary Education Industry Union (NTEU) has appealed against a decision of Commissioner McKinnon made on 14 July 2021 1 concerning the redundancy entitlements of Ms Lizeth Rodriguez, a former part-time employee of Deakin University (University). The decision was made pursuant to the dispute resolution powers conferred on the Commission by the Deakin University Enterprise Agreement 2017 (Agreement).2 The NTEU contends that the decision was in error on a number of grounds. Permission is required for the appeal.
[2] The facts of the matter are straightforward. Ms Rodriguez was employed by the University as a Student Advisor, International at its Geelong Waterfront Campus commencing on 3 December 2018 on a part-time basis. Her employment was, to use the parlance in her contract of employment, on a time fraction of 0.5 (that is, she worked half of full-time hours). Her position, work location and classification/rate of pay (Higher Education Worker or HEW 6 Step 1) were specified in her contract of employment. The Agreement applied to her employment at all relevant times.
[3] On 2 December 2019, Ms Rodriguez was offered in writing a maximum-term secondment to the position of International Student Adviser, Specialist Student Support, Student Life at the University’s Burwood campus. This was for the purpose of filling the position whilst the substantive holder of the position was on extended leave. The offer identified that the secondment was expected to commence on 2 January 2020 and finish on 1 January 2021, subject to the right of the University to terminate the secondment at any time on 4 weeks’ notice. The hours of the secondment position were on a 0.8 time fraction basis. The rate of pay was the same (Ms Rodriguez had progressed to HEW 6 Step 2 by this time). The offer was predicated on the basis that, when the secondment terminated, Ms Rodriguez would return to her “continuing part time substantive position of International Student Advisor within Specialist Student Support”.
[4] On 7 October 2020, Ms Rodriguez was advised by the University in writing that, pursuant to clause 69.1 of the Agreement, her position as International Student Adviser was no longer required to be performed and would be redundant effective from 7 April 2021. She was offered, among other things, the option of electing to depart early and receive an early departure payment calculated in accordance with clause 69.4 of the Agreement. At the same time, the University notified the substantive holder of the 0.8 time fraction International Student Advisor position at the Burwood campus that her position was also redundant.
[5] Ms Rodriguez elected to take up the early departure option. The University calculated and paid Ms Rodriguez’s redundancy entitlements on the basis of the 0.5 time fraction of her substantive position, effective from 7 October 2020. The NTEU, on Ms Rodriguez’s behalf, contested this on the basis that Ms Rodriguez was entitled, under the Agreement, to be paid redundancy entitlements calculated on the 0.8 time fraction she was being paid at the time she was notified of her redundancy and accepted the early departure option. The NTEU lodged an application pursuant to s 739 of the Fair Work Act 2009 (FW Act)for the Commission to deal with the dispute on 25 February 2021. The Commissioner arbitrated the dispute pursuant to clause 59.6 of the Agreement. In her decision, the Commissioner affirmed the position of the University and determined that Ms Rodriguez’s redundancy entitlements were to be calculated in accordance with the 0.5 time fraction of her substantive position.
Relevant provisions of the Agreement
[6] Clause 8.1 of the Agreement provides that new employees of the University are to be employed under a contract of employment as follows:
8.1 New staff members will be provided with a contract of employment upon commencement which will include information about the key applicable employment terms including the type of employment, Salary, classification, hours (or expected hours), period and category of Fixed-Term Employment, probation, duties and reporting.
[7] The redundancy provisions of the Agreement are contained in clause 69. Clause 69.1 prescribes the circumstances in which an employee may be made redundant and the means by which an employee is to be notified of redundancy as follows:
69.1 Where the University has genuinely decided that a staff member’s employment is likely to be terminated because the position of one or more staff members is no longer required to be performed for reasons of an economic, technological, structural or similar nature, including:
(a) a decrease in student demand or enrolments in any academic course or unit or combination or mix of courses or subjects;
(b) a decision to cease offering or to vary the academic content of any course or subject or combination or mix of courses or subjects;
(c) for a professional staff member, re-organisation;
(d) financial exigency; or
(e) changes in technology or work methods,
the University will, at the earliest reasonably practicable time, provide advice to the staff member or members concerned and the NTEU that the staff member’s position is redundant. The advice will contain notice of the date on which the employment will end, unless the staff member is redeployed. The University must either provide at least 26 weeks’ notice of the date of termination or make a payment in lieu of all or part of the notice, and advise the staff member of their options under clause 69.2.
[8] The “options under clause 69.2” referred to in clause 69.1 above include, in clause 69.2(b)(i), the right to “elect in writing to depart early”. In this respect, clause 69.3 provides:
69.3 Where the staff member elects to depart early, the benefits will be calculated under the table in clause 69.4.
[9] Clause 69.4 provides:
69.4 A redundancy payment (inclusive of any notice required under the NES) under this clause shall be calculated on the staff member’s Salary at the date of cessation of employment as follows:
Entitlement | Maximum entitlement in number of weeks |
Severance pay of 2 weeks’ Salary per completed year of Service | 52 weeks |
Payment in lieu of the unexpired part of the notice given in 69.1. | 26 weeks |
[10] The term “Salary” used in clause 69.4 above is, for relevant purposes, defined in clause 72 to mean “the rate of pay applicable to a staff member’s classification as specified in Schedules A, C or H of this Agreement…”. Schedule A prescribes the annual salaries for full-time employees in academic or professional roles (including the salary rate for Ms Rodriguez’s classification of HEW 6 Step 2), as well as hourly rates for casual employees. Schedules C and H were not applicable to Ms Rodriguez’s employment.
[11] Clause 11 of the Agreement concerns part-time employment, and provides:
11 Part-time Employment
A staff member may be employed on a part-time basis. Part-time employment means employment for less than the normal weekly Ordinary Hours of Work of a full-time staff member. Entitlements under this Agreement for a part-time staff member will be calculated on a pro-rata basis by reference to the staff member’s Ordinary Hours of Work.
[12] The expression “Ordinary Hours of Work” is defined in clause 72 to mean “the staff member’s ordinary hours of work set out in clause 43”. Relevantly, clause 43.2 sets out the number of ordinary hours of work for a full-time professional (i.e. non-academic) staff member.
The decision
[13] In her decision, the Commissioner first made a finding that the position being made redundant, as notified by the University to Ms Rodriguez on 7 October 2020, was her substantive continuing position at the Geelong campus, and that the position to which Ms Rodriguez had been seconded was not “her” position. 3 The Commissioner noted that the concept of employees holding a “substantive” position was referenced in clauses 7 and 32 of the Agreement.4 The Commissioner rejected the proposition that Ms Rodriguez’s secondment constituted fixed-term employment within the meaning of clause 16 of the Agreement,5 and said:
“[19] Ms Rodriguez’s entitlement to redundancy pay was instead fixed by clause 69 of the Agreement, and in particular, clause 69.4. That clause provides for redundancy pay to be calculated on the employee’s salary ‘at the date of cessation of employment’. ‘Salary’ for this purpose is a defined term and means the rate of pay applicable to the employee’s classification at the time. The definition does not extend to an employee’s hours of work, and nor does clause 69.4 require that redundancy pay be calculated on the employee’s hours of work at the date of cessation of employment.
[20] The Agreement clearly distinguishes between salary and hours of work. Clause 8 provides for new staff members to be provided with a contract of employment upon commencement. The contract is to include information about the key applicable employment terms, including the type of employment, salary (as defined), classification, hours, period and category of fixed term employment (also defined). Salary and hours of work are separate and distinct key terms of employment.
[21] Clause 11 of the Agreement provides for entitlements under the Agreement to be
calculated on a pro-rata basis for part-time employees - by reference to their ordinary hours of work (as defined). This is an ordinary, well understood approach to the conferral of part-time employment entitlements. It does not have the additional effect of imposing a point-in-time at which an employee’s redundancy pay entitlements are to be calculated, or in this case, identifying whether Ms Rodriguez’s entitlement should be calculated on one part-time basis or another.
. . .
[23] The position from which Ms Rodriguez was made redundant was the continuing position to which she was appointed at the Geelong campus. Ms Rodriguez’s redundancy pay entitlement is to be calculated on the basis of terms and conditions of employment applicable to that position, including the 0.5 time-fraction.”
Appeal grounds and submissions
[14] Surprisingly for a matter involving straightforward facts and a single issue of the proper interpretation and application of an enterprise agreement, the NTEU’s notice of appeal contains seven broad-ranging appeal grounds, which in summary form are as follows:
(1) The Commissioner failed to address the issues of law which arose, the arguments addressed to each issue and the findings on each issue.
(2) The Commissioner erred in the proper interpretation of the National Employment Standards in the FW Act, in particular s 119(2).
(3) The Commissioner misconstrued clause 69.4 of the Agreement.
(4) The Commissioner erred by failing to take into account relevant evidence or material considerations relating to when an employee is on secondment and their substantive post is made redundant, namely that their redundancy pay should be based on their current salary.
(5) The Commissioner failed to give reasons or adequate reasons for the decision.
(6) The Commissioner’s material findings of fact were not based on evidence or sound evidence, were contrary to the evidence, were against the weight of the evidence, were erroneous and made in a perverse or capricious manner and/or without regard to the material before her, took into account irrelevant considerations and failed to take into account relevant considerations.
(7) The Commissioner exercised unreasonably the power conferred on her in that she made erroneous findings of fact on points of importance, the decision had an unnecessarily harsh effect, there was a failure to give genuine, proper and realistic consideration to the matter including making adequate inquiry as to the facts, was demonstrably inconsistent with other decisions and discriminated without a rational distinction.
[15] In its submissions, the NTEU said that the question to be determined in the dispute was the construction of clause 69.4 of the Agreement as it related to Ms Rodriguez. In relation to this question, it was submitted that the Commissioner’s reasoning and logic were misplaced and, as a result, the Commissioner misunderstood the precise nature, extent and scope of power which she was being called upon to decide whether or not to exercise, and exceeded her jurisdiction and/or constructively failed to exercise jurisdiction. It was also submitted that the Commissioner made material errors of fact and overlooked a great deal of the evidence adduced at the hearing including that, at the date Ms Rodriguez’s employment ceased, her ordinary hours were 0.8 of full-time hours. In relation to the third ground of appeal (the misconstruction of clause 69.4), the NTEU’s submissions included the following propositions:
• the objectively discernible intention of the parties in the formation of the Agreement was that an employee’s redundancy pay entitlement is to be calculated on the time-fraction applicable to the staff member’s salary at the date of cessation of employment;
• the only way that the words of clause 69.4 can support the construction that the Commissioner found is if additional text is impermissibly added to the clause;
• if the employee and employer had intended for a staff member’s salary as referred to in clause 69.4 to be read as the substantive salary or substantive salary level or salary based on the employee’s substantive role/position, they could very easily have included words to that effect in the clause, but chose not to;
• the words of clause 69.4 should be read in accordance with their plain and ordinary meaning, and the terms of the clause are not ambiguous and do not lack clarity of expression and the language is certain;
• the words of the clause should not be “repaired”, have words read in by implication, or given a remedial interpretation;
• the Commissioner did not articulate what, in substance, was the “well-understood approach to the conferral of part-time employment entitlements” referred to at [21] of the Commissioner’s decision; and
• the Commissioner misconstrued clause 11 when she concluded that it does not impose a point-in-time at which an employee’s redundancy pay entitlements are to be calculated, and this conclusion was equally wrong in respect of clause 69.4.
[16] The NTEU also submitted that the Commissioner’s decision was irrational and unreasonable and that the Commissioner discriminated without a rational distinction, failed to address the parties’ arguments on each issue and the issues of law which arose, failed to accord the NTEU a fair hearing, overlooked submissions worthy of serious consideration, failed to set out findings or provide reasons or adequate reasons, and thereby denied the NTEU procedural fairness.
[17] It was submitted that permission to appeal should be granted because the decision under appeal was attended by sufficient doubt as to warrant its reconsideration, the appeal raises important issues about the correct calculation of severance pay under the Agreement and the operation of s 119 of the FW Act, the decision manifested an injustice and affected the future rights of many other academic staff in the higher education sector, and the legal principles applied in the decision appear disharmonious when compared with other decisions dealing with similar matters.
[18] The University submitted that permission to appeal should be refused because the matter concerned a narrow question of the application of certain provisions of a particular enterprise agreement to an individual employee. As to the application of clause 69.4 of the Agreement to Ms Rodriguez (ground 3 of the appeal), the University submitted that the Commissioner was correct in determining that the redundancy payment was to be calculated by reference to the position being made redundant, which was Ms Rodriguez’s substantive position. It was this position which was the subject of the University’s redundancy notification of 7 October 2020. In electing to leave her employment early pursuant to clause 69.2(b), it was submitted, Ms Rodriguez brought the employment relationship to an end and the seconded position ceased. The construction contended for by the NTEU would not lead to a sensible or fair industrial outcome since it would require the University to pay redundancy entitlements based on a combined time fraction of 1.6 in order to bring to an end two roles with a combined time fraction of 1.3. Further, it was submitted, if Ms Rodriguez’s seconded position had been terminated for redundancy as fixed term employment, she would only have been entitled under clause 16.5 to a payment for the balance of her contract at her 0.8 time fraction, which would have produced a substantially lesser benefit. The University otherwise rejected as without merit the remaining grounds of appeal.
Consideration
Permission to appeal
[19] We consider that permission to appeal should be granted with respect to the NTEU’s third appeal ground since we consider that sufficient doubt attends the question of the proper construction of clause 69.4 of the Agreement such as to warrant appellate consideration.
[20] We refuse permission to appeal in respect of the other appeal grounds because they are not reasonably arguable. The dispute before the Commissioner did not involve any issue of contested fact relevant to the outcome, and required the Commissioner to address only the single question of whether Ms Rodriguez’s redundancy entitlements under clause 69.4 were to be calculated on the basis of a 0.5 time fraction or a 0.8 time fraction. The Commissioner addressed that question directly in the decision in a clear and comprehensible way. There is simply no basis for the extravagant contentions of error contained in appeal grounds 1 and 4-7, and those grounds should never have been advanced. The decision was not attended by any error of fact, no material consideration was disregarded, the NTEU was not denied procedural fairness, the Commissioner gave adequate reasons for her determination as to the outcome, and the decision was not legally irrational. In respect of appeal ground 2, the NTEU never articulated how s 119 of the FW Act is said to be relevant to the determination of the dispute, and we do not consider that it is.
Merits of the appeal – third appeal ground
[21] It is necessary to note at the outset that, notwithstanding that the redundancy entitlements for which clause 69.4 provides consist of the two separate elements of severance pay and payment in lieu of notice, both parties proceeded on the basis that the redundancy entitlements were to be calculated either entirely by reference to a time fraction of 0.5 or 0.8. Accordingly, we will determine the appeal on this basis although, as discussed later, there is arguably room for an alternative approach.
[22] Notwithstanding the verbosity of the NTEU’s submissions, its case that the decision was in error rests entirely on its propounded construction of the requirement in clause 69.4 that a redundancy payment is to be calculated on the employee’s “Salary” at the date of the cessation of employment. The NTEU’s case has as its premise that the term “Salary” encompasses not just the annual rate of pay but also, in the case of a part-time employee, the time-fraction which is applied to that rate of pay. However, as the Commissioner correctly pointed out in paragraph [19] of her decision, the definition of the term “Salary” in clause 72 confines its meaning to the rates of pay set out in the identified schedules to the Agreement (including, as relevant to Ms Rodriguez, Schedule A). Those schedules contain no provision relevant to part-time employment, and it is clause 11 which separately provides for part-time employees to be paid on a pro-rata basis. Clause 11 is not referenced in the definition of “Salary”.
[23] The requirement for a redundancy payment to be calculated on the employee’s “Salary” at the date of the cessation of employment, considered in the context of the Agreement as a whole, has an obvious purpose unconnected with the time-fraction for part-time employees. The annual rates of pay for full-time professional and academic staff in Schedule A contain, at each classification level, 6 annual increments in pay (subject to satisfactory service - see clause 28 of the Agreement). In circumstances where clause 69.1 requires 26 weeks’ notice of termination for redundancy, and clauses 69.2, 69.3 and 69.4 permit an employee to elect to depart early and be paid in lieu of the notice period, the date of the cessation of employment may clearly affect the rate of salary upon which the redundancy payment is to be calculated. Ms Rodriguez’s case illustrates the point. Her rate of pay at her cessation date of 7 October 2020, arising from her election to depart early, was HEW 6 Step 2. However, had she not elected to leave early but rather pursued unsuccessfully the other options of seeking redeployment or a review of the redundancy decision, her termination date would likely have been after her anniversary date of 3 December and her rate of pay would have been HEW 6 Step 3. This serves to identify the practical function of the requirement.
[24] Clause 69 of the Agreement does not, in terms, deal with how a redundancy payment is to be calculated for an employee who, at the time of the termination of their employment, is on secondment to a position that is not their substantive position. Indeed, the Agreement barely deals with secondments at all; they are referred to in clause 16.4(c) but only in connection with the circumstances in which fixed term employees may be engaged. 7 We agree with the Commissioner’s conclusion that Ms Rodriguez was not herself a fixed-term employee by reason of her secondment and continuing part-time employment, accordingly, clause 16 is not relevant to the issue to be determined.
[25] Consideration of the text of clause 69.1 provides the starting point for the resolution of the issue in dispute. The initiating event for the redundancy process for which clause 69 provides is the making of a decision by the University that a “staff member’s employment is likely to be terminated because the position of one or more staff members is no longer required to be performed” as a result of the prescribed reasons. In this case, the University’s correspondence of 7 October 2020, which notified Ms Rodriguez of her impending redundancy, clearly related to Ms Rodriguez’s substantive position at the Geelong Waterfront campus which was the subject of her contract of employment under clause 8.1 of the Agreement. This is what the Commissioner found, and the NTEU did not contend that this finding was in error. Of particular note is the fact that the letter notified Ms Rodriguez that her position would be redundant “effective 7 April 2021”. By that date, Ms Rodriguez would have completed her secondment and returned to her substantive position. It was the fact that this substantive position would become redundant as at that date that caused the University, in the language of clause 69.1, to decide that Ms Rodriguez’s employment was likely to be terminated. Its decision in this respect had nothing to do with Ms Rodriguez’s holding of the secondment position, which was due to end on or about 1 January 2021 anyway (unless earlier terminated on 4 weeks’ notice as per the terms of the secondment offer of 2 December 2019).
[26] Although not explicitly stated, we consider that the “redundancy payment” required by clause 69.4 must logically relate to the position that is made redundant and the date upon which it will become redundant. As a matter of basic principle, the purpose of a severance payment for redundancy is to compensate employees for the hardship caused by termination (including the loss of seniority, loss of security of employment and the possibility of less remunerative or otherwise less satisfactory employment in the future), the loss of non-transferable credits, and the trauma associated with the termination. 8 Having regard to this, we do consider that the severance payment required to be paid under clause 69.4 could, in Ms Rodriguez’s case, be construed as requiring the payment to be calculated by reference to a temporary secondment position which would not be held by Ms Rodriguez as at the date her substantive position became redundant and which was not the cause of the decision of the University to terminate her. The compensation provided by the severance payment must relate, in Ms Rodriguez’s case, to the loss of her substantive position and must therefore, in our view, be calculated by reference to the time fraction of 0.5 applicable to that position.
[27] As earlier stated, both before us and at first instance, the parties advanced their respective cases on the basis that the entirety of the redundancy payment was to be calculated either on a 0.5 or 0.8 time fraction, and did not give separate attention to the element of payment in lieu of notice. On one view, the payment in lieu of notice required by clause 69.4 should be calculated on the basis of what the employee would have earned for ordinary hours over the unexpired period of the 6-month notice period required by clause 69.1. If so, then in Ms Rodriguez’s case, at least part of the notice period would have encompassed her secondment during which she was paid at a 0.8 time fraction (either until 1 January 2021, or for the first 4 weeks of the period having regard to the notice provision in the secondment offer), and the payment in lieu should have been calculated accordingly for that part of the notice period. However, the NTEU has not contended that the decision was in error on this basis and, in that circumstance, we do not propose to take this point further. Certainly, the time fraction as at the end of the notice period on 7 April 2021 would have been 0.5 and it was the termination of the substantive position as at that date for which the notice was required.
[28] For the reasons given, we do not consider that the NTEU has demonstrated, based on the grounds of appeal and submissions it has advanced, that the Commissioner’s determination of the dispute was in error. The appeal will therefore be dismissed.
Conclusion
[29] We order as follows:
(1) Permission to appeal is granted with respect to appeal ground 3. Permission to appeal is otherwise refused.
(2) To the extent of the grant of permission, the appeal is dismissed.
VICE PRESIDENT
Appearances:
E Dalgleish on behalf of the appellant.
W Spargo on behalf of the respondent.
Hearing details:
2021.
Sydney and Melbourne (via video-link):
15 September.
Printed by authority of the Commonwealth Government Printer
<PR734917>
1 [2021] FWC 4139
2 AE424763
3 Ibid at [15]
4 Ibid at [16]
5 Ibid at [17]-[18]
6 Except for HEW 10 - full-time Professional Staff Salaries
7 They are also referred to in clause 63.5, which states no more than that professional staff can apply for secondment in accordance with the University’s policies/procedures.
8 See Redundancy Case [2004] AIRC 287, 129 IR 155at [129], [134], [136]-[142]
0
1
0