National Tertiary Education Industry Union v Monash University

[2015] FWC 1064

[2015] FWC 1064

FAIR WORK COMMISSION

FURTHER DECISION

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

National Tertiary Education Industry Union
v
Monash University
(C2013/1291)

Educational services
DEPUTY PRESIDENT SMITH	MELBOURNE, 16 FEBRUARY 2015

Impact of temporary impairment payment on redundancy; agreements not to be construed beneficially.

[1] This decision follows an interim decision given in October 2014. 1 The issue for determination in that decision was the amount of redundancy benefit payable to Ms Claudia Doria. Without detailing the earlier decision, there was a finding in favour of Ms Doria, but a question remained in relation to the treatment of monies received from UniSuper in the form of a temporary impairment benefit.

[2] The decision concluded:

[26] I find that the clause 48.4 must be read at least to provide that an offset can only be made where during the period which elapsed since the notice was given under clause 48.2 a benefit was received which would equal that being forfeited in the final payout. In my view to adopt the view urged upon me by the University would be to take a narrow and pedantic view of the operation of the Agreement.

[27] Regrettably this only answers part of the question which has arisen. In this case Ms Doria received a benefit from UniSuper in the form of 60% of her salary paid as a temporary impairment benefit (TIB). Should this be deducted? Intuitively, because it is related to salary, the answer "yes" springs to mind. However deeper analysis is needed. Where is the line drawn? It could not be that monies given to a person from a relative to tide them over during such a period would come into play and be available as an offset. Clearly that is not an incident of employment.

[28] From the material submitted it appears that:

● The benefit is derived from the superannuation scheme.
● The benefit is paid in the form of a monthly pension related to Ms Doria's salary (net of PAYG tax). 
● The benefit paid under the TIB was not recovered, or sought to be recovered from the redundancy payment.
● The benefit appears to be available, within some guidelines, irrespective of the existence of an employment relationship.

[29] I am not satisfied that I have sufficient public submissions to decide this final point and find that it would be appropriate to hear further from the parties. I have received many written submissions in relation to this matter but there appears to me to be a need for a hearing. To this end I will list this matter for further brief submission at 10.00 am on Friday, 28 November 2014. 2

[3] When the matter returned, the National Tertiary Education Industry Union (NTEU) argued that Ms Doria was entitled to receive the full redundancy benefit as the payment made by UniSuper was not one made by the University and that the clause of the Monash University Enterprise Agreement (Academic and Professional Staff) 2009 [AE873347] (the Agreement) should be read as only applying to payments made by the University. It was submitted by the NTEU that agreements should be construed beneficially for employees.

[4] This was important as when Ms Doria was receiving payments from UniSuper, she was on leave without pay from the University. The NTEU argued that there should be no offsetting for payments made by an external body. It submitted:

It is not an offset provision whereby for an employee who receives a payment from an external body during this period, the redundancy payment is to be reduced by that amount. An employee who is unable to work due to ill health may seek financial assistance from various sources, rather than accessing their TIB to cover them for a period when they are not in receipt of salary. Such sources could include, accessing separate private income protection policy with an insurance company, they could utilise their own savings, they could apply for a loan from a financial institution, or draw down on mortgage. They could apply for sickness allowance from Centrelink, or they could obtain financial assistance from family members and/or friends. 3

[5] The NTEU submitted that the payment was not one arising under the Agreement and not a benefit provided by the employer. As such, it was submitted, it should not be used as a deduction from an entitlement under the Agreement.

[6] The next aspect of the argument of the NTEU was concerned with the proper treatment of redundancy:

Industrial tribunals have identified the concerns that arise from redundancy as including the specific injustice that results for employees who are retrenched after lengthy service; and, as a consequence, face problems of re-employment arising from their past specialised skills. The unavailability of alternate work, diminished career and security expectations, and in some cases, their age after having been with an employer for a long period of time.

That’s from the (indistinct) verses, CFMEU. In the termination change and redundancy test case decision, the full bench stated that the purpose of redundancy payments is compensation for non-transferrable credits and the inconvenience and hardship imposed on employees. In establishing the redundancy provisions, the full bench determined in the TCR test case, that the general severance pay proscription could be varied in certain circumstances, such as where the employer obtained for the employee, acceptable alternate employment. In case of succession, assignment, or transmission of business, or in the case of application, based on incapacity to pay by the employer. 4

[7] To begin, Monash submitted that it did not agree with the NTEU that agreements should be construed beneficially for employees. It submitted that an agreement was a compact and that there is no reason why one party or the other should be entitled to beneficial construction. This was contrasted with some beneficial legislation or indeed arbitrated awards in some cases.

[8] It is appropriate to pause and deal with this issue now. I agree that an agreement is a compact between consenting parties and there is no reason to construe an agreement to the benefit of one of the parties against the interests of the other party.

[9] Returning to the balance of the argument, Monash submitted:

● UniSuper is an incident of employment and is contingent upon an employee having been absent from employment due to illness or injury for a period of three months over a period of twelve consecutive months. In addition, it may be reduced if any amount is received under an agreement or award.  5

● That the University requires Ms Doria to be a member of UniSuper in the course of her employment with the University and therefore it is a necessary incident of employment. This could be distinguished from other monies which might be received from other sources.

● The agreement provides two methods for dealing with redundancy. In the first instance a person can accept a voluntary early separation redundancy package 6 or the staff member may be terminated or redeployed.7

● In circumstances where the employees seeks to remain in employment and take advantage of other options, then the time that person remains in employment is deducted from the final payment.

● There is no difference from the position where an employee is receiving salary by way of sick leave and this is deducted.

Conclusion

[10] I note at this stage that clause 26 of the Agreement deals with superannuation and exclusively with UniSuper. This is a fact in support of the contention of Monash that UniSuper is an incident of employment and is against the proposition put by the NTEU that it is not a benefit arising under the Agreement. The matters referred to by Monash in relation to the qualification for UniSuper benefits and its interaction with benefits under the Agreement also, in my view, lead to the conclusion that the temporary incapacity benefit interacts with the Agreement and the employment relationship. Indeed, the payment made for the temporary incapacity benefit is directly related to the level of salary.

[11] It follows therefore that I find that the amount received by Ms Doria can be deducted under clause 48.4. Such a finding is also consistent with my earlier finding that the “period” must relate to monies received.

DEPUTY PRESIDENT

Appearances:

S. Rosenthal for the National Tertiary Education Industry Union.

C. O’Grady of Counsel on behalf of Monash University.

Hearing details:

2014.

Melbourne:

November, 28.

 1   [2014] FWC 7709.

 2   Ibid.

 3   Transcript PN1229.

 4   Transcript PN1241.

 5   UniSuper fact sheet.

 6   See clause 48.2 of the Agreement.

 7   See clause 48.4.

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