National Tertiary Education Industry UnionvMonash University

[2014] FWC 7709

[2014] FWC 7709

FAIR WORK COMMISSION

INTERIM 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	CANBERRA, 31 OCTOBER 2014

Appropriate notice given re: excess; alleged dispute concerning calculation of the number of weeks salary that forms a redundancy payment.

Introduction

[1] On behalf of its member, Ms Claudia Doria, the National Tertiary Industry Education Union (NTEU), has raised a dispute about the proper application of the Monash University Enterprise Agreement (Academic and Professional Staff) 2009 [AE873347] (the Agreement).

[2] There is no issue as to the jurisdiction of the Commission to resolve the dispute in accordance with the Agreement. Ms Doria was made redundant on 8 November 2013 after some five years of service. The dispute involves whether or not Ms Doria was given notice of being excess in accordance with the Agreement and if the correct amount of redundancy was paid.

[3] The NTEU put forward three questions which needed to be answered to resolve the dispute they were:

(a) Did the letter of 30 April 2013 properly trigger the operation of clause 48.2 of the Agreement?

(b) If the answer to (a) is no, are the letters issued by the University to Ms Doria on 9 October 2013 and 8 November 2013 under 48.3 and 48.4 respectively valid?

(c) Has the University correctly calculated Ms Doria’s redundancy pay?

[4] The dispute is focussed on clauses 48-Redundancy Professional Staff and 49—Redeployment Process—Academic and Professional Staff, of the Agreement.

Background

[5] There were efforts to conciliate the matter (which failed) and agreed facts were produced. I don’t propose to recite those again. However I have listed below some further relevant background information:

● Ms Doria was employed by Monash University (the University) from 28 April 2008 until she was compulsorily retrenched on 8 November 2013.

● Ms Doria was employed in the Staff Development Unit (SDU) of the University’s Human Resource Department.

● On 19 March 2013 a meeting was held with Ms Doria where she was advised that the University was considering making her position redundant. 1 This meeting was also attended by a support person for Ms Doria.

● On 18 April 2013 a further meeting was held with Ms Doria and her support person where, in the evidence of Mr Bown, she was advised that her position was redundant. 2

● At this time it was the evidence of Mr Bown that statements from Ms Doria’s support person was that Ms Doria would accept a voluntary early separation package if there was an enhancement to that package given Ms Doria’s health and financial circumstances.

● Another meeting occurred on 26 April 2013 where a negative response was given to the request for an enhanced package and possible redeployment opportunities.

● Mr Bown’s evidence was that discussions with Ms Doria were clear that she was both in a redundancy situation and excess to requirements.

● On 29 April Ms Doria took leave until her termination on 8 November 2013. Her leave was structured as follows:

1. 29 April 2013 to 13 May 2013—paid personal leave with certificate;

2. 14 May 2013 to 26 June 2013—paid annual leave;

3. 27 June 2013 to 8 November 2013—leave without pay.

● On 30 April 2013, Ms Doria was sent a letter from the Deputy Executive Director of the University’s Human Resource Department advising her that she was, in the view of the University, excess to requirements.

● On 8 November 2013 and Ms Doria’s employment was terminated as a result of redundancy.

[6] The letter of 30 April 2013 is one which has created some controversy between the parties. The letter begins:

I write to confirm that as a result of the University’s decision to implement a reorganisation of the staff development unit within Monash HR, your current role is expected to become excess to requirements. [The underlining is mine.]

[7] The letter went on to cite clauses 48 and 49 of the Agreement and state that the University had initiated the redeployment search period which would commence for a period of four weeks from the date of the letter. Further, it outlined the alternative to redeployment namely a voluntary separation package. The letter concluded that in the event that Ms Doria was unsuccessful in obtaining a position within the University through the redeployment process, or if she declined a voluntary early separation package, then after a period of four weeks, the applicable redundancy provisions of the Agreement would apply.

[8] On 20 May the NTEU initiated a dispute and following the various dispute committees outcomes where no agreement was reached, the University advised Ms Doria, on 9 October, of the final stages of her redundancy. On 8 November her employment was terminated.

[9] It is argued by the NTEU that the letter of 30 April did not comply with clause 48 of the Agreement and the NTEU contrasted the language of clause 48.2 where it states:

Where a staff member is advised that he/she is excess to requirements, during the first four weeks following that advice, the staff member may elect to take voluntary early separation. [The underlining is mine.]

[10] The letter written by the University uses slightly different language, in that it did not say “is excess” but rather “is expected to be excess”.

[11] It is argued by the NTEU that this letter did not advise Ms Doria that she was excess to requirements but rather that her role was expected to become excess to requirements. On this basis it was argued by the NTEU that the letter did not conform with the requirements of the Clause 48.2.

[12] The resolution of this question will determine many matters which were subsequently canvassed. However, there is one further matter which arises. It is argued by the NTEU that even if the University has complied with clause 48.2 of the Agreement then they have incorrectly calculated the redundancy pay under clause 48.4(a).

[13] Clause 48.4 provides:

If at the expiry of two months from the date of advice issued to the professional staff member pursuant to clause 48.2 redeployment to a Suitable Vacant Position has not occurred and the staff member has not taken a Voluntary Early Separation or is not accepted a voluntary retrenchment, then the Vice-Chancellor or nominee may exercise one of the following options;

(a) terminate the professional staff member, in which case a professional staff member, shall receive the following payments in lieu of salary, less any period which has elapsed since the notice provided under clause 48.2.

[14] In ordinary circumstances had Ms Doria been terminated within the timeline provided in the letter of 30 April 2013, and given her age and service, she would have been entitled to 12 months pay. However it was the view of the University that it was entitled under clause 48.4(a) to discount the amount to be paid for the period between that time and the time of termination of employment. The University deducted a period which it believed was authorised by the Agreement and provided a final payment of 24.4 weeks, whereas the NTEU submitted that it should be 47.8 weeks.

[15] The difference in the calculations arises because the University deducted, from the final amount, the period of time that Ms Doria was on leave without pay: namely from 27 June until the termination of her employment on 8 November. The NTEU argued that this was inappropriate and inconsistent with the Agreement. It was simply put by the University that the clause refers to a time period and not any payment for that period. In addition, attention was drawn to s.734(5) of the Fair Work Act 2009 (the Act) which relevantly provides:

739 Disputes dealt with by the FWC

…………

(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.

Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).

(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.

[16] I pause to note that the reference to the Act is based upon the proposition by the University that to adopt the reading of the clause advanced by the NTEU would require adding to the clause reference to salary in addition to the period that had elapsed.

[17] The University added that for the period in contention, Ms Doria was in receipt of temporary impairment benefits from Unisuper which constituted 60% of her salary. Two earlier workers compensation claims were rejected by the insurer.

[18] This is the second controversy which arises under the Agreement namely whether or not the phrase “less any period which has elapsed since the notice provided under clause 48.2” refers only to a period, of can it be read to include the deduction where a payment has taken place. Further, must the payment only be salary paid by the University or is the payment made by Unisuper for temporary impairment relevant for the purpose of a deduction?

Approach to construction

[19] This is an often trodden path and reasonably well settled. It is now commonly stated that the Commission should not take a narrow or pedantic approach to the construction of Agreements 3 and that agreements have been drawn by people often with a practical approach. I propose to follow the dicta in several decisions.4 However, there is one area worthy of concentration when it comes to considering the quantum of redundancy that is to be paid. That is, whether or not the construction of an agreement which supports a conclusion that discounting an amount of money based upon salary for a period of time in which no salary is paid, could give rise to an absurdity.

[20] In this connection, as was made clear by a Full Bench, the consequences of adopting a particular type of construction is an incident of a purposive approach. 5 It is against that background that I turn to the two issues requiring resolution.

Consideration and conclusion

[21] Against the background of the approach to be adopted, I turn firstly to the letter written by the Deputy Executive Director of the University’s Human Resource department which advised Ms Doria that her current role is expected to become excess. I cannot accept that this is a technical impediment to the implementation of the clause. The balance of the letter, together with earlier (and later) meetings, followed closely the provisions of the clause. Whilst the use of the language is unfortunate, I cannot find that Ms Doria (and her representatives) was not fully seized of the circumstances which faced her and the letter did act to bring about rights and responsibilities created by clause 48.2 of the Agreement.

[22] In the context and setting of this case I find that the actions taken constituted action under clause 48.2 of the Agreement.

[23] The next controversy to be resolved is more difficult.

[24] To reiterate, the clause relevantly provides:

(a) terminate the professional staff member, in which case a professional staff member, shall receive the following payments in lieu of salary, less any period which has elapsed since the notice provided under clause 48.2.

[25] In the scheme of the clause, it can be seen that timeframes exist where a staff member may still be in receipt of salary. It would be understandable if this was deducted from an amount which would be paid upon the termination of employment. The remuneration received whilst seeking alternative employment is beneficial in the context of the clause. As was stated earlier, it is difficult to see the rationale of deducting money equal to a period where no money is paid. There was no benefit to the employee derived from the employment, other than a continuation of the superannuation contribution and perhaps some accruals. It would not seem to be consistent with the scheme of the clause to then acknowledge a zero benefit from the employment and to deduct monies as a trade off. It does not appear that accrued benefits during a period of searching for alternative employment are offset against a redundancy payout. It seems that it is a salary calculation for salary calculation trade off.

[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). 6

● 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.

DEPUTY PRESIDENT

Appearances:

M. Maloney for the National Tertiary Education Industry Union.

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

Hearing details:

2014.

Melbourne:

July, 14.

Final written submissions:

NTEU—24 July, 31 July, 6 August, 18 August, 19 August, 28 August, 24 September.

Monash University—29 July, 1 August, 18 August, 20 August, 19 September, 24 September.

 1   Exhibit Monash 1 at paragraph 19.

 2   Exhibit Monash 2 at paragraph 16(a).

 3   Kucks v CSR Limited (1996) 66 IR 182 at 184.

 4   Cody v J.H. Nelson Pty Ltd (1947) 74 CLR 629 at 648; K&S Lake City Freighters Pty Ltd v. Gordon & Gotch Ltd (1985) 157 CLR 309 at 315; and Tenix Defence Systems Pty Limited Certified Agreement 2001—2004; PR917548.

 5   [2013] FWCFB 6321.

 6   See letter to Ms Doria dated 13 November 2013.

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