National Tertiary Education Industry Union v La Trobe University
[2014] FWC 5806
•9 SEPTEMBER 2014
| [2014] FWC 5806 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739—Application to deal with a dispute
National Tertiary Education Industry Union
v
La Trobe University
(C2014/672)
Educational services | |
DEPUTY PRESIDENT SMITH | MELBOURNE, 9 SEPTEMBER 2014 |
Alleged dispute concerning consultation prior to the implementation of a change proposal; obligations of employees to engage in consultation; impact of a job security clause.
Introduction
[1] This is an application by the National Tertiary Education Industry Union (NTEU) seeking that the Commission determine the proper operation of clauses 8, 9, 68 and 69 of the La Trobe University Collective Agreement 2009 [AE872794](the Agreement). The focus of the application has been on both managing change (clause 68) and job security (clause 69). The controversy arose when the Vice-Chancellor of La Trobe University, Professor John Dewar, announced in an article published in the Australian Newspaper on 5 September 2013 that as a consequence of a $65 million shortfall in the University’s forward budget, there would be inevitable job losses.
[2] This led the NTEU to raise with the University the need to consult as it appeared that it was considering change which would have a significant impact on employees. Set out below is clause 68:
68. MANAGING CHANGE
68.1 The Representatives of an employee or employees may be involved at any stage during consultation on change.
68.2 Where the University is considering change proposals that may have a significant impact on employees, the University will advise the affected employees and the relevant Union(s) in writing as soon as practicable after the proposal has been made.
68.3 Significant impact includes: major changes to the composition, operation or size of the University’s workforce or the skills required, a decision to outsource any functions; the elimination or diminution of job opportunities, promotion opportunities or tenure; proposals regarding flexible delivery of teaching which may involve either the mode of delivery or the timing of delivery of classes; the need for retraining or transfer of employees to other work locations; and the restructuring of organisational units.
68.4 The University shall make budget information available either electronically or by other means and shall notify staff and the Union(s) of the availability of this information shortly after it is adopted by the University.
Consultation on Change Proposals
68.5 The University will notify affected employees and the relevant Union(s) and give prompt consideration to matters raised by the employees and their Union. The University will make available to employees and the relevant Union9s) an Organisational Change Impact Statement (OCIS) that will include:
(a) the rationale for the proposed change;
(b) the details and costings of the proposed change;
(c) who may be affected by the proposed change;
(d) the likely impact the proposed change will have on the positions of the affected employees;
(e) organisational charts detailing the proposed change;
(f) the likely impact upon workloads in the area;
(g) the draft implementation timetable including a date to ratify any decision to change; and
(h) other relevant information.
68.6 After the University has formed a clear intention to change and before a final decision is made the University will consult with employees likely to be affected by the change and the relevant Union(s) concerning the proposed changes detailed in the OCIS, including by meeting with employees who may be represented at these meetings by their Union(s). The University will allow a reasonable time for consultations and shall give consideration to matters raised with a view to reviewing the intention to change and identifying means to mitigate any adverse impact associated with the proposed changes.
Consultation on Implementation of Change
68.7 As early as practicable after reaching a final decision to make changes, relevant employees and the Union(s) will be informed and will be advised how feedback on the OCIS was taken into consideration.
68.8 To the extent that the final decision is materially different to the original proposal included in the OCIS, and the differences have adverse effects on staff, the University shall consult with affected staff and relevant Union(s) about the differences including measures to identify and mitigate any adverse effects. The University shall give prompt consideration to, and feedback on, matters raised in such consultations.
Preference for redeployment to full new vacant positions resulting from organisational change
68.9 Vacant positions arising through organisational change will, where possible be filled by redeployment of existing staff whose positions become redundant.
68.10 The University shall override normal selection and appointment procedures with respect to such positions to ensure that redeployment to suitable vacant positions can occur.
[3] It can be seen that the NTEU take the view that if Professor Dewar had reached the conclusion that job losses were inevitable then he was considering a proposal for change and there should be consultation before any change is implemented. This would then provide the opportunity to the employees of the University and the NTEU to persuade the decision maker to a different course of action which may, as one option, preserve jobs. I shall return later to the concept of consultation and how it has come to be understood.
[4] The NTEU also argue that the University is failing to comply with its obligations under clause 69 of the Agreement by not using compulsory retrenchment as a last resort.
[5] Clause 69 provides:
- 69. JOB SECURITY
69.1 The University is committed to job security. Wherever possible redundancies are to be avoided and compulsory retrenchment used as a last resort. The University reserves the right to use the agreed redundancy procedures and provisions set out in this Agreement when all reasonable attempts to mitigate against such action and to avoid job loss have been unsuccessful.
[6] The University, on the other hand, argues that clause 68 is only enlivened when a concrete proposal for change exits which brings about an Organisational Change Impact Statement (OCIS) and that until that point there is no requirement under the Agreement to consult. The University adds however that it has consulted to the fullest extent possible during all stages of its review of the budgetary needs of the University. In relation to the operation of clause 69, the University argues that to the extent that the clause is more than aspirational then it has complied with the clause.
[7] The NTEU responds by saying that at the time an OCIS is produced, the decision had already been made and it was simply a matter of implementation with no real opportunity to influence the decision maker to another course of action other than one which has a significant impact upon employees.
[8] There is no issue between the parties as to the jurisdiction of the Commission to hear and determine the matter.
The Evidence
During the proceedings, I had the benefit of extensive and detailed evidence. Whilst not exhaustive, I have set out some of the matters raised by the various witnesses.
The NTEU’s evidence
[9] The NTEU called Mr J. Cullinan, Senior Industrial Officer at the NTEU Victorian Division. It was his evidence that:
● In 2012 the University promulgated a five-year strategic plan known as Future Ready; Strategic Plan 2013—2017” (Future Ready).
● The first occasion in which he saw an OCIS relating to the changes proposed to the HR Division as a direct consequence of Future Ready was on or around 7 March 2014. It was at this stage that he formed the view that the University had failed to comply with its obligations under clauses 68 and 69 of the Agreement. 1
● The “Funding Future Ready” (FFR) report, under the heading “Staffing Strategy” stated that “approximately 56% of the University’s 2014 budget is allocated to staff and staff related costs. The Funding Future Ready program has sought, and continues to seek efficiencies from other sources and expenditure but, given that a large proportion of the University’s expenditure is on staff wages and staff related costs, it is inevitable that staffing reduction will be required to meet this objective”. 2
● Under the heading “Recommendations”, Council’s planning for each Funding Future Ready project was suggesting an approximate reduction of 350 staff.
● On 13 March 2014 he authorised the notification of a dispute to the University.
● Local discussions ensued but a resolution was not reached.
● On 23 April, the NTEU notified the FWC of a dispute in accordance with clause 66 of the Agreement.
● The Strategic Plan was not, at any point prior to its announcement, the subject of consultation with the NTEU in line with the terms of the Agreement. 3 He believed the FFR was presented to the NTEU in the form of a proposal.
● The University’s OCIS did not allow the NTEU or its members to meaningfully effect the decision made to address its asserted budget shortfall by way of cuts to spending or its decision made to reduce FTE staffing positions. 4
● He was aware of the financial pressure on many Higher Education institutions, including La Trobe University and recognised the need for change.
● He did not accept that an email sent to all staff in June of 2012 was an attempt to engage with staff about the strategic plan.
● It’s the University belief that there was consultation through various newsletters sent to all staff. For instance, “with the development of the organisational charts is tied up with the development of the change proposal, which is how one translates the targets into a proposal for change that’s then implemented at the university?” 5
● He disagreed and believes that it is the aspiration of most universities to increase revenue and to achieve operating surpluses. When he read it, he understood that it’s saying, “We’re going to get a whole lot more students and that’s going to fund some of these objectives; an increased operating surplus, increased revenue earned for staff dollars.” He doesn’t necessarily jump from that to say, well, that is a change proposal with significant impacts.” 6
[10] Ms Clare Danaher also gave evidence on the NTEU’s behalf. Ms Danaher has been an Industrial Officer in the Victorian Division of the NTEU since 2001, commencing at La Trobe University at the end of January 2014. Her evidence was that:
● The University employs approximately 2,864 full time equivalent (FTE) employees to teach approximately 30,000 students across 6 campuses. 7
● Prior to June this year, La Trobe University had a structure of five Faculties; Business, Economics and Law; Health Sciences; Education; Humanities and Social Science; and Science, Engineering and Technology. 8
● In early February of this year her involvement in the current process of organisational change at the University commenced in that she attended a meeting with Professor McGaw and other University representatives along with other representatives of the NTEU La Trobe branch. It was at this meeting that she became aware of Council’s approval of the “two College model”. “The two college model was the name of a proposed restructure of the academic programs at the University, and, at its simplest level, proposed the consolidation of the 5 existing faculties into two colleges.” 9
● Later in February, she and a number of other union representatives attended a meeting with Professor McGaw and other University representatives. It was her evidence that this is the first time she was made aware by the University of its intention to reduce its workforce by 350 FTE positions. The purpose of this meeting, on the morning of 28 February, was for Professor McGaw to provide information to the Union that was to be presented to an all staff forum, later in the same day, via a power point presentation about the status of the Funding Future Ready (FFR) action plan.
● The breakdown of the presentation was that:
(a) the University had experienced a significant budget shortfall;
(b) there would be a reduction in approximately 350 FTE positions at the University; and
(c) 15% of existing employees would not transition into the new structure;
(d) the University would not be offering any voluntary redundancies. 10
● Her evidence was that the “University did not at that time, and has not since, given her [sic] an organisational change impact statement for the reduction in 350 FTE positions nor the creation, content or implementation of the FFR Action Plan”. 11
The University’s evidence
[11] Professor Brian McGaw is the Deputy Vice Chancellor and Vice President (Future Ready) at the University and has been in this position since 7 October 2013. His evidence covered:
● His role in being “responsible for leading and managing the programs that support the Future Ready strategic plan for the University including the Funding future Ready program. Broadly, this involves liaison with University stakeholders, planning, preparing for, and co-ordinating management of processes which may support the achievement of the Future Ready strategic plan for the University.” 12
● The process of the University’s Future Ready strategic plan, following the appointment of Vice Chancellor John Dewar. This occurred in January 2012.
● His view that “changes were afoot: to education policy, to the way in which government regulates higher education, to technology, and to the sources of higher education funding.” 13
● The University’s Future Ready strategic plan as having been the result of years of reflection and consultation with stakeholders about the University’ position in the higher education industry and also in society in general. 14 He describes its purpose to include “ensuring that the University is successful and sustainable, including to attract and retain students and to provide opportunities for staff to improve their job security”.15
● The strategic plan which identified 5 weaknesses: research performance; course offerings; staff productivity; funding and investment. Professor McGaw believed that these challenges still exist today and have been exacerbated by budget cuts hence the need to develop a strategic plan to raise ideas with the University’s staff, students, the Union and the broader community to address these challenges. 16
● The discussion paper known as the World Ready Discussion Paper entitled “World Ready: La Trobe in 2014” which on 14 June 2012, was provided to the NTEU Branch President Ms Virginia Mansell Lees.
● What he regarded as “significant process of notification and consultation with all stakeholders, including the NTEU”. 17
● His view that that contrary to the matters set out in paragraphs 13-21 of Mr Cullinan’s statement, making reference to the $65 million shortfall and various decisions Mr Cullinan alleges had been made by September 2013 that the University had not:
(a) Decided a response to the $65 million shortfall, other than establishing the ERCC;
(b) Developed any “change proposal in response to the asserted $65 million budget shortfall”;
(c) Proposed or planned job losses;
(d) Identified what options would be considered to close the budget shortfall; or
(e) Determined the content of Funding Future Ready. 18
● His view that:
“....the University had established the ERCC to identify the size of the challenges facing the University and commence a process of identifying potential opportunities for savings and/or revenue generation. Other than a decision to put in place a staff recruitment control process to increase the scrutiny being place over new and replacement staffing requests, no decisions or proposals had been considered or made about staffing reductions or how the University would achieve savings or increase revenue.” 19
[12] Mr Richard Frampton, Executive Director, Student Services and Administration also gave evidence on behalf of the University. Mr Frampton’s outlined his role as being responsible for the management and direction of Student Services and Administration and that he has been employed in this position since 12 August 2013. 20 His evidence covered:
● That there is approximately 169 staff working in Student Administration across all campuses, Divisions and Faculties of the University. The work of the division encompasses the range of the activities associated with the student life cycle: from enrolment, accommodation, finance, scholarships, course administration, assessment and graduation. 21
● In October 2013 Mr Frampton began analysing the work of his department and after investigation and analysis identified three thematic problems:
(a) a lack of customer focus;
(b) role clarity is confused; and
(c) the systems and processes need improvement.
● That in February 2014 a change proposal was developed to consider how changes he identified could be implemented in practice.
● Consultation then took place to discuss these findings. 22
[13] The Interim Chief Financial Officer and Principal Accounting Officer for the University, Mr Peter Enlund, is responsible for the management of 70 staff, financial transaction processing, management and statutory reporting, financial resource planning, including the budgeting, treasury and cash management of the University’s Financial Division. 23
[14] It was the evidence of Mr Enlund that:
● “The University has a procedure in place which drafts a five year financial plan. As a part of this, an annual budget is prepared to comply with regulatory requirements imposed upon the University....” 24
● It is the responsibility of the University’s Council to approve the budget and five year plan as provided for under s.8(3)(b) of the La Trobe Univeristy Act 2009 (Vic). 25
● He has 43 years of experience in practice and corporate environments and 14 years of experience in the higher education industry. 26
● “At no time in any university that I have been involved in, has budget setting, including any identified budget shortfall which needs to be addressed through actions of the University, or the approval of an annual budget by the University Council, been considered or treated by any party as being a proposal for change. Nor has it been the subject of any consultation obligation or voluntary process with the NTEU, other unions or staff generally.” 27
[15] Mr David Tucker, Manager Human Resources Business Partners, recently seconded to the position of HR Project Manager, Funding Future Ready has worked with the University since February 2009. Mr Tucker has been involved in many change proposals including 46 change proposals/OCISs during his employment with the University and believes that the University has complied with clause 68 of the Agreement and has consulted the NTEU on each occasion that a change has been proposed. His evidence was that:
● He believed that significant consultation with staff and the NTEU has taken place relating to World Ready/Future Ready Strategic Plan.
● His role in the HR restructure, which followed on from a Service Quality Survey conducted in 2011 lead on to an extensive Process Review Project. This project was commissioned by the HR Leadership team in 2012. The team, working with an earlier identified need to review and streamline operational processes, made a number of key findings. These were to:
(a) assist in the formulation of the change proposal;
(b) help facilitate consultation on behalf of the University;
(c) assist in revising the change proposal to reflect consultation and feedback; and
(d) assist in implementing the changes. 28
[16] The NTEU did not cross-examine Ms Gabrielle Reilly, General Manager, Slade Partners and her evidence is contained in Exhibit La Trobe 14. Ms Reilly managed the University’s Human Resources Division from January 2010 to August 2013. This role included overseeing the “consultation and communication initiatives that occurred with staff and the NTEU including regarding the development of World Ready, the Future Ready Consultation Draft Plan, the Future Ready strategic plan.” 29
[17] Ms Reilly’s statement outlines the consultation undertaken with the NTEU with regards to each of these initiatives and provides examples of the NTEU involvement in the consultation process.
[18] It is now appropriate that I turn to the history of the development of what is called “Future Ready”.
History leading to the dispute
[19] It is important to point out that La Trobe University is a not for profit organisation, it is a higher education institution established by the La Trobe University Act 2009 (Vic) and under the Act, the primary governance authority of the University is the University Council. 30
[20] When the Vice Chancellor Professor John Dewar was appointed there were a number of challenges facing La Trobe University. The Vice Chancellor decided that the University needed a strategy to deal with those challenges and its future positioning. It needed to have a strategy which addressed: research, course offerings, staff productivity, funding and investment in infrastructure and new technology. This led to a discussion paper entitled World Ready. Following communication with staff, students and the NTEU, the Vice Chancellor then released a document entitled “Future Ready: La Trobe Strategic Plan 2013-2017—Consultation Draft”. This was released in October 2012.
[21] In late November 2012, the Vice Chancellor finalised the strategic plan after considering feedback and “Future Ready” was then released having been adopted by the University Council.
[22] Professor Brian McGaw’s evidence described Future Ready:
In essence, Future Ready articulates that by 2017, the University aims to position itself to deliver outcomes in teaching, learning and research which would place it in one of the top three university’s in Victoria, one of the top 12 within Australia and one of the top 300 internationally. Future Ready proposes that the University will:
(a) undertake research that addresses the most pressing problems of the day;
(b) offer degrees that students want to study, and offer the best possible physical and virtual spaces;
(c) grow in scale by appealing to a diverse range of students;
(d) serve and invigorate the communities around us; and
(e) be financially robust and effective.
The strategic plan sets out a number of goals and objectives to strengthen the University and for the University to be successful. Amongst other matters, it includes targets for learning and teaching targets, for research, engagement targets and supporting strategy targets. 31
[23] The issue which has focussed the concern of the NTEU was the announcement by the Vice Chancellor that there is a $65 million gap which needs attention if the objectives of Future Ready are to be achieved. It is important that this is understood. It is not suggested that the University has a deficit of $65 million but that if the objectives are to be achieved then there needs to be savings of $65 million so that priorities could be adjusted. It was the evidence of both Professor McGaw and Mr Enland (the Interim CFO) that the action was necessary to properly position the University or it would further deteriorate.
[24] From the stage when Council adopted Future Ready, the Vice Chancellor appointed Professor McGaw to oversee its implementation. Faculties were then asked to develop business cases to address the Future Ready initiatives. When the business cases were approved then potential changes could be developed in detail.
[25] The NTEU take the strong view that by the time those faculties were asked to prepare business cases they were doing so within the constraints of decisions taken where the NTEU was not given the opportunity to seek to persuade the decision maker to another course.
[26] There can be no controversy that the impact of seeking to overcome a $65 million shortfall needed to implement the strategy would impact on staff numbers. When labour costs are 56% 32 of the Universities cost structure the loss of staff is inevitable. This is accepted by all of the Universities witnesses.
[27] It needs to be stated at this stage that this decision is not about the wisdom or otherwise of the decision by the Council of the University to implement a strategic plan. An employers’ right to manage and operate its business has long been held to be an area of managerial prerogative which the Commission and its predecessors have been very reluctant to encroach upon. 33 Having made this disclaimer, I quickly add that having now had the benefit of detailed and frank evidence from the University, I am left in no doubt that remedial action is appropriate. The nature of the action is a matter over which the staff and the NTEU may have a view.
The importance of consultation
[28] Consultation can be seen by management to enrich the decision making process at the enterprise by involving employees in the journey. As was put, among other things, in CPSU v Vodaphone [PR911257] and CEPU v Optus [PR912122], the Tripartite National Labour Advisory Council (NLAC) considered this important in 1969.
[29] In 1978 the then Confederation of Australian Industry—National Employers Industrial Council discussed Communication, Consultation and Negotiation in a publication titled “Involving Employees in the Enterprise”. Among other things it stated:
As a first step, however, it is important to understand the distinction between the concepts of communication and consultation.
Communication involves the disclosure of facts, attitudes or decisions in such a way that the significance of the facts and the reasons behind the attitudes or decisions are made clear.
Consultation, on the other hand, involves the discussion with appropriate persons of events, facts, problems and proposals so that these can be widely understood and so the management's eventual decisions can, so far as practicable, reflect or pay regard to the views of those likely to be affected.
Consultation does not mean the abandoning or sharing of management's rights and responsibilities of decision-making. It means that the person having the authority to make decisions does not exercise that authority until he has sought and considered the views of employees who will be affected by his decisions. It follows the consultative meetings ought not to decide or agree upon anything. The purpose is to assist management by obtaining employees views and to assist employees in understanding of management's position.
[30] Justice Logan in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited (includes corrigendum dated 13 July 2010) [[2010] FCA 591] (11 June 2010) concluded:
I commence first with the text of cl 36 and the ordinary meaning of the word “consult”.
The Oxford Dictionary gives the primary meaning of “consult” when, as the agreement does, used as a verb as, “[t]o take counsel together, deliberate, confer; also said of a person deliberating with himself” (Oxford English Dictionary, 2nd Edition, Online version). No different meaning for the word is supplied by Australian idiom, (q.v. the definition in Macquarie Dictionary Online). The word is plainly not used in cl 36 in the sense of deliberating with one’s self.
The imposition of a requirement for one party to consult with another is hardly unique to industrial instruments. I have already made passing reference to coincidental examples of requirements to “consult” in the course of setting out the history of legislative provision in Queensland with respect to railways. A search of current Commonwealth legislation discloses no less than 572 provisions imposing a requirement on a Minister or other official or agency to “consult”. In turn, as a study of reported cases discloses, these are but Australian exemplars of a requirement widely employed in a range of public administration applications by the parliaments of the United Kingdom and elsewhere in the Commonwealth of Nations.
Thus, in Port Louis Corporation v Attorney-General of Mauritius [1965] AC 1111 at 1124 the Judicial Committee observed of a consultation obligation in an ordinance in respect of measures to alter local government boundaries that: “[t]he nature and object of consultation must be related to the circumstances which call for it” and “The requirement of consultation is never to be treated perfunctorily or as a mere formality. The local authority must know what is proposed; they must be given a reasonably ample and sufficient opportunity to express their views or to point to problems or difficulties; they must be free to say what they think.” These observations as to what was entailed in a requirement to consult commended themselves, in the different context of their use in broadcasting legislation, to Toohey J when a judge of this Court in TVW Enterprises Ltd v Duffy (No 2) (1985) 7 FCR 172. His Honour pithily remarked (at 178), “consultation is no empty term.” That same sentiment is evident in the following passage from the judgement of Sachs LJ in Sinfield v London Transport Executive [1970] 1 Ch 550 at 558 concerning a consultation obligation which attended a power to alter bus routes:
It is apposite first to mention that Mr Francis emphasised not once but several times that whatever be the true construction of section 22(3) [which contained the consultation requirement] and whatever order this court might make, it was in the end the executive and no one else who made the decision. If that was intended to intimate that the executive merely looked on consultation as being an opportunity for those consulted to make ineffective representations, it would represent an approach that, to put it mildly, cannot be supported. Consultations can be of very real value in enabling points of view to be put forward which can be met by modifications of a scheme and sometimes even by its withdrawal. I start form the viewpoint that any right to be consulted is something that is indeed valuable and should be implemented by giving those who have the right an opportunity to be heard at a formative stage of proposals – before the mind of the executive becomes unduly fixed.
Such cases have proved influential in the Australian Industrial Relations Commission (industrial commission) for the guidance they offer as to what a requirement to “consult” entails: Construction, Forestry, Mining and Energy Union v Newcastle Wallsend Coal Company Ltd (C2758 Dec 1533/98 S Print R0234) (Full Bench); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Vodafone Network Pty Ltd (C2001/5770 PR911257) (Cmr Smith); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Optus Administration Pty Ltd AW791910 Print L4596) (Cmr Smith). The apprehension in the industrial commission that these cases were of assistance was not, with respect, misplaced. They serve to confirm an impression as to the content of an obligation to “consult” evident from the dictionary meaning of the word. A key element of that content is that the party to be consulted be given notice of the subject upon which that party’s views are being sought before any final decision is made or course of action embarked upon. Another is that while the word always carries with it a consequential requirement for the affording of a meaningful opportunity to that party to present those views. What will constitute such an opportunity will vary according the nature and circumstances of the case. In other words, what will amount to “consultation” has about it an inherent flexibility. Finally, a right to be consulted, though a valuable right, is not a right of veto.
To elaborate further on the ordinary meaning and import of a requirement to “consult” may be to create an impression that it admits of difficulties of interpretation and understanding. It does not. Everything that it carries with it might be summed up in this way. There is a difference between saying to someone who may be affected by a proposed decision or course of action, even, perhaps, with detailed elaboration, “this is what is going to be done” and saying to that person “I’m thinking of doing this; what have you got to say about that ?”. Only in the latter case is there “consultation”. That this is the sense in which “consultation” is used in the QR Agreements is evident from cl 36.1 of the Traincrew Agreement.
On the authorities in relation to the construction of industrial instruments, the context in which a word is used, whatever may be its ordinary meaning, is an important consideration. As to that, the QR employers submitted that, “the vast, geographically spread nature of [their] workforce and the fact of its government ownership and implications of that ownership – can be taken to be well known to all of the negotiating parties when the QR agreements were negotiated, and is therefore part of the ‘industrial context’ which can be taken into account”. I agree. Yet even though these factors were well known, the Traincrew Agreement provided for consultation.
For the applicant trade unions the submission was made that the “industrial context” against which cl 36 fell to be construed also included that it was a clause addressing the subject of change in the workplace. So it is. Such clauses, it was submitted, had a heritage in Australian industrial law which could be traced to the Termination, Change and Redundancy Cases (TCR Cases) in the industrial commission – Termination, Change and Redundancy Case (1984) 294 CAR 175 and Termination, Change and Redundancy Case (No 2) (1984) 295 CAR 673 (TCR Case (No 2).
The obligation in s.145A(1)(a) is ‘to consult [with] employees’. In this context the word ‘consult’ is used as a verb and is defined in the Oxford Dictionary in these terms:
“Consult with. To take counsel with; to seek advice from.”
The definition in the Macquarie Dictionary (5th Edition) is in similar terms:
“1. To seek counsel from; ask advice of. 2. to refer to for information. 3. to have regard for (a person’s interest, convenience, etc.) in making plans. - v.i 4. (sometimes fol. by with) to consider or deliberate; take counsel; confer [L. Deliberate, take counsel]”
The word ‘consult’ means more than the mere exchange of information. As Young J said in Dixon v Roy 6:
“The word ‘consult’ means more than one party telling another party what it is that he or she is going to do. The word involves at the very least the giving of information by one party, the response to that information by the other party, and the consideration by the first party of that response.” [citations omitted]
The right to be consulted is a substantive right, it is not to be treated perfunctorily or as a mere formality. 7 Inherent in the obligation to consult is the requirement to provide a genuine opportunity for the affected party to express a view about a proposed change in order to seek to persuade the decision maker to adopt a different course of action. As Logan J observed in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited (QR):8
“... A key element of that content [of an obligation to consult] is that the party to be consulted be given notice of the subject upon which that party’s views are being sought before any final decision is made or course of action embarked upon. Another is that while the word always carries with it a consequential requirement for the affording of a meaningful opportunity to that party to present those views. What will constitute such an opportunity will vary according the nature and circumstances of the case. In other words, what will amount to “consultation” has about it an inherent flexibility. Finally, a right to be consulted, though a valuable right, is not a right of veto.
To elaborate further on the ordinary meaning and import of a requirement to “consult” may be to create an impression that it admits of difficulties of interpretation and understanding. It does not. Everything that it carries with it might be summed up in this way. There is a difference between saying to someone who may be affected by a proposed decision or course of action, even, perhaps, with detailed elaboration, “this is what is going to be done” and saying to that person “I’m thinking of doing this; what have you got to say about that ?”. Only in the latter case is there “consultation. ...”
We respectfully adopt his Honour’s observations. Similar to the obligation to accord a person procedural fairness, the precise content of an obligation to consult will depend on the context. The extent and significance of a proposed change, in terms of its impact on the affected employees, will have a bearing on the extent of the opportunity to be provided. Hence a change of limited duration to meet unexpected circumstances may mean that the opportunity for affected employees to express their views may be more limited than would be the case in circumstances where the proposed change is significant and permanent. It is also relevant to note that while the right to be consulted is a substantive right, it does not confer a power of veto. Consultation does not amount to joint decision making. 9
[32] It can be seen that the concept of consultation has a long history in Australia and is well respected as an appropriate and beneficial approach for management to take towards organisational change.
[33] There is a corresponding obligation upon those with whom consultation takes place and that is to engage. The old adage can be apt—use it or lose it. All too often it is perceived by some employers that the process of consultation is simply used as a device to delay—to the extent that is true, it undermines the concept and destroys the benefits which can be derived from consultation. This is not to criticise those who oppose change and constructively suggest alternatives, but the consultation process should be a forum to express a view rather than a strategy to stultify decision making. In the end, it is the employer who then takes the responsibility for the change.
Has consultation occurred at La Trobe in accordance with clause 68 of the Agreement?
[34] To the extent that it is relevant, it must be stated at the beginning that this matter is not about consultation at large but about the provisions contained in the Agreement against the background of the decided cases on consultation.
[35] To begin, there is no doubt that both the staff and the NTEU have been kept fully aware of the matters being considered in the Future Ready strategy. At a University with a colleauged environment this is not surprising. The NTEU argue that it was aware of the strategy but it believed that before any decisions were taken which would have a significant impact upon employees, it would have been consulted through the OCIS process. The NTEU has sought to demonstrate that the decision to create a $65 million gap to fund Future Ready necessarily meant that there would be job losses. Indeed, witnesses for the University conceded as much. Therefore, it puts that consultation in terms of the Agreement, should have occurred with the NTEU before the proposal was put to Council for approval. Once approved, it is argued, the framework for job loss is set and the Faculties are simply the vehicles by which the savings are implemented.
[36] The University argues that the strategy adopted under Future Ready did not constitute a proposal for change as no detail could be sensibly considered until the Faculties had examined any practical application of the strategy. In short, there was no proposal for change until an OCIS was undertaken at a Faculty level.
[37] This is not an easy matter. There are strong reasons from both parties to support the contention for which they advocate.
[38] For its part the NTEU state that it is not part of its case that an OCIS should have been provided in June 2013 or February 2014, rather it is submitted that there was an obligation to consult before the decision was made to change.
[39] In approaching this matter I am of course conscious of the often quoted decisions in which construction of agreements should not take a narrow or pedantic approach 34 together with agreements needing to be construed according to the ordinary and natural meaning of words.35 Importantly they should be examined having regard to their context and setting36 and finally, they should be construed using a purposive approach to seek to produce a sensible industrial outcome.37
[40] In examining clause 68, I take it as a whole and not a series of unrelated elements. In this connection, the detail required under the clause would not lend itself to having only one OCIS based upon a strategy. It is clear that the reference to a change proposal in clause 68.2 is directly related to clause 68.5 which details how consultation will take place on such change proposals. Clause 68 taken as a whole seeks to engage employees and the NTEU by providing as much concrete material as possible so that sensible discussion can take place rather than a dialogue on objectives even though those general objectives are carefully articulated. The clause adopts language which requires substance to be attached to a proposal for change which informs the consultation process after a clear intention has been formed and before a final decision is made.
[41] It follows that I would not be persuaded that the adoption of a budget strategy by the La Trobe University Council constitutes a proposal. Or for that matter, a recommendation from the Vice Chancellor to the Council on budgetary matters. Budgets are set all the time in enterprises without the detail of any change which may be necessary to realise a budget. It is notorious that budgets are often varied. A strategy or objective in a governance sense, in my view, does not enliven clause 68 of the Agreement. To take this view could lead to some absurdities in the relationship between industrial parties. In Cooper Brookes (Wollongong) Pty Ltd v. Federal Commissioner of Taxation Mason and Wilson JJ stated:
“There is a similar problem with the related so-called ‘golden rule’ of construction. There are statements of the rule which would confine the courts to the ordinary grammatical sense of the words used unless that produces an absurdity or inconsistency. It is to be noted that Dixon J. in Broken Hill South Ltd. v. Commissioner of Taxation (N.S.W.) (1937) 56 CLR 337, at p.371 observed that departure from the ordinary grammatical sense is not legitimate unless there is "some obscurity or some inconsistency", though it may be that "obscurity" was intended to be a reference to "absurdity". For the reason already given in the discussion of the literal rule, departure from the ordinary grammatical sense cannot be restricted to cases of absurdity and inconsistency. (at p320) In some cases in the past these rules of construction have been applied too rigidly. The fundamental object of statutory construction in every case is to ascertain the legislative intention by reference to the language of the instrument viewed as a whole. But in performing that task the courts look to the operation of the statute according to its terms and to legitimate aids to construction. (at p.320) The rules, as D. C. Pearce says in Statutory Interpretation, p.14, are no more than rules of common sense, designed to achieve this object. They are not rules of law.” 38
[42] Simply because an enterprise adopts a budget does not necessarily mean that there is a proposal for change. A proposal must have substance to it. Indeed focussing on clause 68 of the Agreement, it sets out what is expected to be in a proposal. Those matters are:
(a) the rationale for the proposed change;
(b) the details and costings of the proposed change;
(c) who may be affected by the proposed change;
(d) the likely impact the proposed change will have on the positions of the affected employees;
(e) organisational charts detailing the proposed change;
(f) the likely impact upon workloads in the area;
(g) the draft implementation timetable including a date to ratify any decision to change; and
(h) other relevant information.
[43] These are not matters which are considered when a budget strategy is adopted.
[44] However, once this detail has been established following on from the strategy, it is not appropriate that it be approached in a piecemeal way. The strategy was developed in a holistic way impacting upon the whole of the University and therefore consultation with employees and the NTEU should be approached in the same way. There should be no reason why proposals for change cannot be co-ordinated, collated and then considered at the enterprise level and not only at a subset of that enterprise. There is force in the submission of the NTEU that to the extent a piecemeal approach is adopted, the capacity to influence a proposal for change is difficult.
[45] Whilst there is room for detailed consideration at the Faculty level, the nature of this change at the University is so widespread that the clause needs to be read so as to provide a real opportunity to deal with proposed change on a University wide basis with the benefit of concrete facts which have been discerned from the various OCIS documents. From the evidence it appears that the University has taken a holistic view through its consideration of the various business cases, it is now the turn of the employees and the NTEU to also be able to respond to the global change. The problem with this case is that when the University had a strategy, it did not have the detail and the strategy may have had a significant impact upon employees. When it had the detail, it had already adopted an approach which constrained its employees from then using that detail to influence the strategy.
[46] I want it to be clear that I advance no criticism at the University as it was open and transparent in all its dealings with employees and the NTEU. I have been in a position to step back from the respective detail highlighted by the parties to look at the totality of the issues although the detail of the alteration to the cost base came later.
[47] I find that clause 68 of the Agreement in the current circumstances means that the implementation of change arising from the responses to the OCIS documents should not take place until the employees and the NTEU have the opportunity to respond to the picture which has emerged. Any alternatives can be provided to the Vice Chancellor. It appears to me that this should be achieved quickly as I can see no need for any further material to be produced or a large schedule of meetings to be planned. NTEU has sufficient understanding of all the relevant mattes to be in a position to make an appropriate and comprehensive contribution very quickly. Whilst I will not set aside the confidentiality orders made I will vary them to include other persons (delegates and officers of the NTEU but not the broad membership) with whom the NTEU would wish to discuss its submission. My view is that the NTEU would be able to provide the Vice Chancellor with any proposals within 14 working days of this decision.
[48] The NTEU make the point that it is not only it which has an interest in the material but also non-member employees of the University. This is a strong point, although I note that the NTEU brought the application and no individual has sought to present submission. The NTEU represents its members. Individuals have participated in the early processes conducted by the University but some may wish to revisit their contribution in light of this decision. In this connection I direct the University to advise its staff of this decision. Any member of staff wishing to view, but not copy, the exhibits may do so in a venue, determined by the University, with the exception of the Price Waterhouse Cooper (PWC) report and the Council minutes, however referred to. Employees will also have 14 working days from today in which to make submissions to the Vice Chancellor.
[49] I invite the University to submit another draft order reflecting this decision dealing with the confidentiality of documents.
[50] There is no good reason to start again. I note the offer made by the Chair of the University Council to meet with the NTEU. Without commenting upon the appropriateness or otherwise of this meeting, it does appear to me that within a short period of time the University should be able to demonstrate that it has given proper and genuine consideration to any alternatives advanced by the NTEU. This should require consideration of any recommendations made by the Vice-Chancellor being reviewed by the University Council given this is a University wide change that has its foundations in a policy decided by the Council.
Has proper consideration been given to clause 69 of the Agreement?
[51] I now turn to clause 69 of the Agreement. The NTEU argue that the University has set its face against alternatives to compulsory redundancies. It submits that alternatives could have been:
● natural attrition;
● recruitment control;
● voluntary redundancy;
● early retirement;
● fraction decrease;
● unpaid leave.
[52] The University on the other hand argues that during the OCIS process staff can put forward proposals which that might mitigate against redundancies including part-time arrangements. It is submitted that the evidence suggests that this has been encouraged. Further the evidence also discloses that the University has moved away from the position that there are no voluntary redundancies.
[53] Finally though the University argues that for it to achieve the outcomes sought in “Future Ready” it needs to retain the best possible persons to increase capacity and attract students.
[54] I find that it would be inconsistent with clause 69 to have a policy in favour of only compulsory redundancies and that all alternatives should be examined at the time responses are being given to any OCIS. Each case, in many respects, will stand on its own facts. To avoid doubt there can be no inhibition upon the University seeking to retain its best staff and to be in a position to decline a redundancy request from someone who would advantage the University in the future.
DEPUTY PRESIDENT
Appearances:
S. Keating of counsel with J. Cullinan for the National Tertiary Education Industry Union.
C. O’Grady of counsel on behalf La Trobe University.
Hearing details:
2014.
Melbourne:
June, 4 and 23;
August, 4, 5, 6, 7, 19, 21 and 22;
September 8.
1 Exhibit NTEU 1, paragraphs 42-44.
2 Ibid, paragraph 33.
3 Ibid, paragraphs 11 and 12.
4 Ibid, paragraph 74.
5 Transcript PN1531.
6 Ibid PN1533.
7 Exhibit NTEU 4, paragraph 9.
8 Ibid, paragraph 10.
9 Exhibit NTEU 4, paragraphs 16 and 17.
10 Ibid, paragraphs 19-21.
11 Ibid, paragraph 22.
12 Exhibit La Trobe 3, paragraph 2.
13 Ibid, paragraph 6.
14 Ibid, paragraph 5.
15 Exhibit La Trobe 6, paragraph 13.
16 Exhibit La Trobe 3, paragraphs 6-8.
17 Exhibit La Trobe 6, paragraph 11.
18 Ibid, paragraph 14.
19 Ibid, paragraph 15.
20 Exhibit La Trobe 9, paragraph 2.
21 Ibid, paragraph 5.
22 Exhibit La Trobe 9, paragraphs 22-39.
23 Exhibit La Trobe 15, paragraph 3.
24 Ibid, paragraph 6.
25 Ibid, paragraph 8.
26 Ibid, paragraph 2.
27 Ibid, paragraph 12.
28 Exhibit La Trobe 11, paragraphs 5 and 6.
29 Exhibit La Trobe 14, paragraph 3.
30 Exhibit NTEU 4, paragraphs 6 and 7.
31 Exhibit Latrobe, 3 paragraph 25 and 26
32 Exhibit NTEU3, Tab 14, Item 2—Staffing Strategy.
33 re: Cram Ex parte N.S.W. Colliery Proprietors' Association Ltd and Others (1987) 163 CLR 117 at 136-137.
34 Kucks v CSR Limited (1996) 66 IR 182.
35 University of Western Sydney v Prof Richard Fletcher (2009) 183 IR 256.
36 Ibid; Shop, Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011] FCAFC 67.
37 Amcor Limited v Construction, Forestry, Mining and Energy Union [2005] HCA 10, Kucks v CSR Limited (1996) 66 IR 182.
38 35 ALR 151 at 169.
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