Qube Ports Pty Ltd t/a Qube Ports & Bulk v Construction, Forestry, Maritime, Mining and Energy Union
[2022] FWCFB 53
•6 APRIL 2022
| [2022] FWCFB 53 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.604—Appeal of decision
Qube Ports Pty Ltd t/a Qube Ports & Bulk
v
Construction, Forestry, Maritime, Mining and Energy Union
(C2022/982)
| VICE PRESIDENT HATCHER | SYDNEY, 6 APRIL 2022 |
Appeal against decision [2022] FWC 78 of Deputy President Bull at Sydney on 19 January 2022 in matter numbers C2021/3780 and C2021/3782
Introduction and background
Qube Ports Pty Ltd (Qube) has appealed a decision of Deputy President Bull published on 19 January 2022.[1] It is not in dispute that permission is required for the appeal. The decision concerned two applications made by the Maritime Union of Australia Division of the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU). The first application was made under s 739 of the Fair Work Act 2009 (Cth) (FW Act), and sought that the Commission deal with a dispute pursuant to the dispute resolution procedure in the Qube Ports Pty Ltd Sydney Harbour Enterprise Agreement 2016[2] (Agreement). The dispute concerned whether the position of an employee of Qube, Mr Stephen Johnson, was redundant and whether, as a consequence, Qube was obliged not to unreasonably refuse an expression of interest by him in voluntary redundancy pursuant to clause 13.3.3 of the Agreement. The second application was made under s 526 of the FW Act, and sought that the Commission deal with a dispute about Qube’s indefinite standdown of Mr Johnson pursuant to s 524. The Deputy President determined, in relation to the s 739 dispute, that Qube was to declare that Mr Johnson’s position was redundant and offer him a voluntary redundancy and, as a result, found that it was not necessary to determine the CFMMEU’s s 526 application. In its notice of appeal, Qube contends that the decision was in error on the following grounds:
1. The Deputy President misconstrued Step 4 of the procedure in clause 13.3.3 of Part A of the Agreement at [237] and [238] of his decision, as mandating Qube to declare Mr Johnson's position redundant in circumstances where:
(a)properly construed, having regard to its context and purpose, clause 13.3.3 of the Agreement does not prescribe redundancies where measures can be and have been taken to avoid redundancies;
(b)under Step 4, the employer has the right to determine the number of proposed redundancies required (if any) based on Economic Conditions Data disclosed under clause 13.1.3 and the efficacy of the mitigation measures under Steps 1 to 3; and
(c)clause 21.2.1 of Part A of the Agreement only requires the declaration of redundancies by Qube where it has a need to reduce the size of all or part of its workforce.
2. The Deputy President erred in finding that Mr Johnson’s position has been made redundant at [237] of his decision, in circumstances where Qube did not have a need to reduce the size of all or part of its workforce in accordance with Step 4 of clause 13.3.3 and clause 21.2.1 of Part A of the Agreement and wished Mr Johnson to continue to perform his job once restrictions were lifted on overseas passenger ships entering Australian waters.
3. By reason of the errors in grounds 1 and/or 2, the Deputy President erred in determining that:
(a)in accordance with clause 13.3.3 of the Agreement, Qube was required to action Step 4 between the period 30 April 2020 and 21 December 2020 excluding the period when Mr Johnson was subject to a JobKeeper enabling stand down direction; and
(b) Qube is to declare Mr Johnson’s position at the Port of Sydney Harbour redundant.
The facts of the matter may be summarised as follows. Qube operates a stevedoring business. At the Port of Sydney Harbour, Qube’s operations are confined to the loading and unloading of cargo upon and from passenger cruise ships. As a result of the Covid-19 pandemic, the Commonwealth government has placed restrictions on the operation of passenger cruise ships in Australia. Relevantly, these restrictions have prevented cruise ships entering Sydney Harbour since 18 March 2020, with the consequence that Qube’s operations in that port have been suspended.
Mr Johnson was one of 19 employees who comprised the Qube workforce in Sydney Harbour prior to the suspension of operations. He is engaged by Qube as a “variable salary employee” (VSE) under the Agreement. Under clause 9.6.4 of the Agreement, VSEs are paid a minimum annual salary, paid fortnightly. Their hours are variable in accordance with work demands at the port, and they are entitled to an hourly rate for all hours worked. Where their hourly earnings in a fortnightly period exceed the minimum fortnightly salary, they are paid the greater amount, but where their hourly earnings are less than the minimum fortnightly salary, they are paid the minimum salary amount for the fortnight and the shortfall is carried forward and deducted from any amounts in excess of salary in future pay periods.
On 1 April 2020, Qube notified its Sydney Harbour employees that it was activating the “Negative Circumstances” provisions in clause 13, Economic Conditions of the Agreement. These circumstances exist, in summary, when a loss of work would lead to a significant and ongoing hours shortfall (clause 13.2). Clause 13.3.3 specifies, when the clause is triggered, six steps which are to be taken in response, which include at Step 1, notification and consultation requirements and, at Steps 2 and 3, various mitigation measures which may be taken (some by collective agreement, some by individual agreement and some at Qube’s election). Steps 1-3 are to be completed within 30 days, after which Step 4 is to commence (clause 13.3.6). Step 4 provides:
“●This step will be triggered if mitigation measures in steps 2 and 3 above have not been effective.
●The Company will declare the number of proposed redundancies required based on the Economics Conditions Data and the efficacy (or lack thereof) of the mitigation measures in Steps 1 to 3 above.
●Any Employees other than Supplementary Employees may express an interest to volunteer for redundancy.
●Expressions of interest will not be unreasonably refused.
●The timing of a redundancy being effected may vary for individuals, e.g. to allow for their skills to be replaced.
●In circumstances where there are more expressions of interest received than the declared number of redundancies, the selection of Employees for redundancy will be made in accordance with Schedule 1 to this Agreement.
●In circumstances where the expressions of interest are less than the declared number of redundancies, it may be necessary for the Company to consider implementing compulsory redundancies in accordance with step 5 below.”
The terms “Economic Conditions Data” is defined in clause 2.1(f) as including “earnings, counted hours, all leave balances, workers’ compensation and shift patterns and other relevant information”.
Step 5 in clause 13.3.3 provides for compulsory redundancies where the previous steps have failed to resolve the hours shortfall, and Step 6 concerns reversion when the hours shortfall is resolved. Clause 13.2.4 relevantly provides that any measures taken under clause 13, once triggered, will prevail over any other provisions of the Agreement to the extent of any inconsistency.
After consultation, a number of employees took leave as a mitigative measure. However, from 4 May 2020, Mr Johnson was, together with the other Sydney Harbour employees, stood down pursuant to a JobKeeper enabling direction made under the then-Pt 6-4C of the FW Act (enacted by the Commonwealth government in response to the Covid-19 pandemic), and began receiving JobKeeper payments in lieu of normal remuneration under the Agreement. It is agreed that the operation of the JobKeeper scheme effectively suspended the parties’ obligations under clause 13.3.3 of the Agreement.
Qube ceased to be eligible for JobKeeper payments, and to maintain enabling stand down directions, on 27 September 2020. Qube recommenced paying Mr Johnson’s minimum fortnightly salary from that date but, because he was not working any hours, the whole amount of his salary each fortnight was being carried forward as a shortfall to be debited against future earnings. The clause 13.3.3 process was re-initiated and, after further consultation, Qube offered alternative employment at its Port Kembla operations to all its non-“supplementary” (effectively, other than casual) employees at Sydney Harbour. It was agreed that employees who accepted this offer could return to Sydney Harbour when work there resumed. Mr Johnson refused this offer on the basis that his personal circumstances would not accommodate it. All but one of the other employees accepted the offer.
After Qube rejected a request made by the CFMMEU that voluntary redundancy be offered to Mr Johnson and the other employee who refused the offer, Mr Johnson was stood down pursuant to s 524 of the FW Act on 21 December 2020. The CFMMEU filed its applications on 2 July 2021. In its s 739 application, the CFMMEU contended, among other things, that the proposal to transfer Mr Johnson and the other employee to Port Kembla was not reasonable, and that their positions were redundant under clause 21 of the Agreement. Relevant to the dispute, clauses 21.1.1 and 21.2 provide:
21.1.1 Redundancies will only occur in accordance with the steps outlined in clause 13.3.
. . .
21.2 Redundancy Arrangements
21.2.1In circumstances where the Company has need to reduce the size of all or part of its workforce, it will advise its Employees and the Union, in accordance with this Agreement.
21.2.2 The Company will then make a final declaration of redundancy together with details of the number of surplus people, skills and affected areas and will make this available to its Employees and the Union.
21.2.3Despite any other provision in this Agreement, the Company will not be liable to make any termination payments (including any payment in lieu of notice) or redundancy payment, where:
a.The Company makes or obtains an offer of acceptable alternative employment to or for an Employee, that is on terms and conditions which are no less favourable overall than the Employee's existing terms and conditions with the Company (which includes such an offer of employment within the same port but may reasonably include another port);
. . .
21.2.4 Discussions will be held to determine the availability of alternative employment at other Company sites or ports to reduce or eliminate the need for redundancies.
21.2.5 Where the employment of an Employee is terminated on the ground of redundancy and subclause (c) above does not apply, notice of termination and arrangements including any payments in lieu of notice, will be in accordance with this Agreement.
The remainder of the provisions of clause 21 are concerned with the entitlement and calculation of redundancy pay and with redeployment.
Qube’s position in response to the applications was that Mr Johnson and the other employee were not redundant, the standdown was not indefinite and that, as soon as stevedoring services at Sydney Harbour resumed, the standdowns would be lifted. It also contended that the offer of work at Port Kembla was reasonable.
By the time the dispute came before the Deputy President, only Mr Johnson’s position remained in contention. The parties agreed that the Deputy President should determine the following question:
“In the events that have happened and in circumstances where Mr Johnson has been purportedly stood down by the respondent since April 2020 and has been told that he will be stood down potentially indefinitely, is Mr Johnson’s position redundant?”[3]
The decision
The Deputy President commenced his consideration of the dispute by addressing the question of how clause 13.3.3 of the Agreement was to be interpreted. The Deputy President noted that it was not in dispute that Qube was entitled, in the circumstances then prevailing, to trigger the provisions of clause 13 on 1 April 2020.[4] He was also satisfied that Step 1 had been complied with,[5] and found that Steps 2 and 3 did not resolve Mr Johnson’s hours shortfall, which meant that Step 4 was triggered.[6] In relation to Step 4, the Deputy President said:
“[229] When read as a whole clause 13 Economic circumstances sets outs what the parties must do once the clause is triggered. It is not open to Qube once having advised its employees that it has activated the ‘negative circumstances’ provisions in the Agreement and that it ‘will be implementing the measures in clause 13.3’ to then elect not to complete Step 4 on the basis that Step 4 does not mandate the actions listed.
. . .
[231] While it is accepted that an employer is not compelled to make an employee redundant where the employer no longer required the employee’s job to be performed by anyone because of changes in the operational requirements, Step 4 of clause 13.3.3 states that it ‘will be triggered if mitigation measures in Steps 2 and 3 … have not been effective’, and that Qube ‘will declare the number of proposed redundancies required based on the Economic Conditions Data and the efficacy (or lack thereof) of the mitigation measures in Steps 1 to 3.’
[232] This process as set out in Step 4 has not been undertaken by Qube. Step 4 then provides that upon this process being carried out by Qube employees may express an interest to volunteer for redundancy, which will not be unreasonably refused. Mr Johnson has made it known that he wishes to volunteer for redundancy.” [footnote omitted]
The Deputy President found that Mr Johnson’s position at Sydney Harbour has not been required to be performed since March 2020, this position had not changed, and Qube was not in a position to advise when work at Sydney Harbour would resume.[7] He further found that, as the mitigation measures in Steps 2 and 3 had failed to address Mr Johnson’s hours shortfall “there was no sustainable argument at the time that Mr Johnson’s position at Sydney Harbour was other than redundant as there was no work to be performed and it was unknown when this situation would change” and there was no evidence that any “Economic Conditions Data” indicated that Mr Johnson’s position at Sydney Harbour was not redundant.[8] The Deputy President then said:
“[238] While it is the case that a decision to dismiss an employee based on their position being redundant remains with the employer, in this matter Mr Johnson is entitled to be afforded the terms of the Agreement, which while providing a discretion for Qube at Step 5 of clause 13.3.3 whether to initiate compulsory redundancies, requires at Step 4 that expressions of interest for voluntary redundancy not be unreasonably refused where the mitigation measures in Steps 2 and 3 have not been effective.”
The Deputy President then found that it was not reasonable for Qube to have refused a voluntary redundancy on the basis that it might create a precedent for other employees at Sydney Harbour when there was an entitlement to volunteer for redundancy, or on the basis of an expectation that, at some unknown time in the future, work will return to Sydney Harbour.[9] The Deputy President noted that clause 13.2.4 provides that when clause 13 is triggered, the consequent measures will prevail over any other provisions in the Agreement to the extent of inconsistency, and that clause 21.1.1 provides that redundancies will only occur in accordance with the steps outlined in clause 13.3.[10] In respect of the proposed alternative employment offered at Port Kembla, the Deputy President found that this was not an “acceptable” offer in accordance with clause 21.2.3(a) such as to remove Qube’s liability to make a redundancy payment.[11]
The Deputy President accepted the CFMMEU’s submission that the now-repealed JobKeeper enabling stand down provisions of the FW Act were likely to have allowed the terms of clause 13 of the Agreement to be avoided while they were in operation and, on this basis, found that from 27 September 2020, when the stand down direction to Mr Johnson ceased because Qube was no longer eligible to participate in the JobKeeper scheme, Qube was no longer relieved from complying with Step 4 of clause 13.3.3.[12] The Deputy President said:
“[259] In the period between the cessation of the JobKeeper enabling stand down direction, being the 27 September 2020, and the stand down notice under s.524 of the FW Act issue on 21 December 2020, the provisions of Step 4 of clause 13.3.3 were in operation but were not acted upon by Qube. As held above, Step 4 mandates that Qube take certain actions where the mitigation measures in Steps 2 and 3 have not been effective. Such action should have been taken at least in the period immediately following cessation of the JobKeeper enabling stand down direction and well before the standing down of Mr Johnson under s.524 of the FW Act nearly three months later on 21 December 2020.”
The Deputy President then made the following arbitral determination in resolution of the dispute:
“1. In accordance with clause 13.3.3 of the Agreement, Qube was required to action Step 4 between the period 30 April 2020 and 21 December 2020 excluding the period when Mr Johnson was subject to a JobKeeper enabling stand down direction.
2. During this period Qube failed to comply with Step 4.
3. Qube are to declare Mr Johnson’s position at the Port of Sydney Harbour redundant and offer him a voluntary redundancy.”[13]
Appellant’s submissions
In respect of its first ground of appeal, Qube submitted that the Deputy President had misconstrued the first and second bullet points in Step 4 of clause 13.3.3 as requiring Qube to declare Mr Johnson’s position redundant where the mitigation measures in Steps 1- 3 had not been effective. It submitted that, under Step 4, Qube was not compelled to declare some or any positions redundant, since before making any such declaration:
· Qube must determine that there is a need for redundancies before being able to propose the number of redundancies required and, if Qube determines that no redundancies are required, then there is no proposal that needs to be made. The use of the verbs “proposed” and “required” in the past tense denotes that Qube must make this determination before the declaration.
· In determining whether it proposes any redundancies and, if so, the number, Qube’s assessment must be based on the “Economic Conditions Data” and the efficacy of the mitigation measures in Steps 1-3. The definition of “Economic Conditions Data” indicates that Qube may have regard to any information relevant to determining the number of redundancies such as Qube’s future intentions, the expectation that the hours shortfall will be temporary and the availability of other measures to address adverse economic conditions so as to avoid redundancies.
· In assessing the number of redundancies proposed, Step 4 contemplates that no redundancies are proposed – that is, that the number is zero.
Qube also submitted that clause 13.3.3 must be read in conjunction with clause 21.2.1, which provides that redundancies arise only where Qube has the need to reduce the size of all or part of its workforce, and therefore it is logical that Qube must make a determination that there is a need to reduce the size of all or part of the workforce before making a declaration of the number of surplus employees required to be made redundant. Absent the need to reduce the workforce, it was submitted, it must follow that Qube does not have a basis to declare the number of proposed redundancies. Qube also referred to clause 13.3.9, which provides that the implementation of Steps 1-4 in clause 13.3.3 discharges Qube’s obligation in respect of clause 46, Introduction of Change of the Agreement. It was submitted that clauses 46.2-46.4 are clearly modelled on the standard Termination, Change and Redundancy (TCR) provisions which arose from the test cases to provide for severance pay, and clause 46.2 provides that the obligations in the clause are triggered only where Qube has made a “definite decision to introduce change in production, programme, organisation, structure or technology that are likely to have a significant effect on Employees”, with “significant effects” including “termination of employment and changes to the composition or size of the workforce”. Because clause 13.3.3 is sufficient to acquit Qube’s obligations under clause 46, this suggests it was intended to have a similar operation.
Qube submitted that its preferred construction of Step 4 of clause 13.3.3 is consistent with the orthodox legal and industrial meaning of redundancy incorporated into s 119(1)(a) of the FW Act, namely that a redundancy arises when the employer no longer wishes to have a job performed by anyone. It submitted in the alternative that, even if the Deputy President was correct that an employee’s position could be redundant even though the employer wishes to maintain the role once the temporary circumstances leading to the hours shortfall cease, there is still no obligation on Qube to dismiss an employee. It also submitted that clause 13.3 must be construed in line with the intention of the Agreement, as expressed in clause 13.1.2, to minimise redundancies and promote full-time permanent employment, but the Deputy President’s preferred interpretation of the provision increases the likelihood of redundancies after only 30 days of clause 13 being triggered rather than minimising them. The use of the passive infinitive “are to be followed” in the chapeau to clause 13.3.3 indicates that there is only a general expectation, rather than a positive obligation, to follow the steps in the clause, and this is reflected in the permissive language in those steps, which provide that particular measures “may” be deployed. Qube also submitted that the Deputy President’s construction of Step 4 of clause 13.3.3 would lead to absurd and unintended outcomes, in that it would require Qube to declare employees redundant 30 days after clause 13.3.3 is triggered, even though Qube still wishes to retain their positions and have them resume normal duties after the circumstances which led to the stoppage of work have ceased. It also submitted that his construction would have the practical effect of nullifying an employer’s ability to stand down employees under s 524(1) to avoid redundancies.
As to its second ground of appeal, Qube submitted that the Deputy President’s finding that Mr Johnson was redundant was in error because it involved collapsing the various sequential elements of Step 4 into a single proposition, namely that Mr Johnson must be declared redundant and allowed to apply for voluntary redundancy once the usual duties of his position were unable to be performed from March 2020 and Qube was not able to advise him when he would be able to resume work. It was submitted that the Deputy President did not address and determine whether each element of Step 4 had been satisfied, in that:
· the Deputy President did not find that Qube needed to reduce its workforce in whole or in part, and the uncontested evidence was that Qube had decided not to reduce its workforce, anticipated resuming stevedoring services at Sydney Harbour, and would require its employees including Mr Johnson to provide such services;
· the mere fact that Mr Johnson has no work to perform for an unspecified period as a result of the exceptional circumstances caused by the Covid-19 pandemic is not sufficient to demonstrate his position has been made redundant;
· the second bullet point in Step 4 merely requires Qube to identify the number of proposed redundancies, not to identify specific persons to be made redundant, and there is no requirement for Qube to seek expressions of interest for voluntary redundancies until it declares the number of proposed redundancies;
· once the number of proposed redundancies has been declared, it is not open to Qube to limit the opportunity to make expressions of interest in voluntary redundancy to specific individuals; and
· no Economic Conditions Data supported a decision to declare any positions redundant, and no such data was provided because Qube had focused on avoiding redundancies by offering alternative employment at Port Kembla.
Qube submitted that permission to appeal should be granted because:
· the decision under appeal demonstrates a reasonably arguable case of appealable error in its misconstruction of Step 4 of clause 13.3.3 of the Agreement;
· the appeal raises issues of broader application to other enterprise agreements containing the same or a substantially similar provision to clause 13 of the Agreement, including 19 other agreements applying to Qube or related entities, and 20 other agreements applying to other stevedoring employers;
· the appeal raises an issue of general public importance as to whether an employee’s position is redundant where an employer wishes for the position to be performed and desires to continue the employee’s employment but there is temporarily no work available for that employee to perform in that job due to circumstances outside the employer’s control.
At the hearing of the appeal, Qube also raised in support of its application for permission to appeal and the appeal generally that the Federal Government had announced on 15 March 2022 that cruise ships could return to Australian waters (including Sydney Harbour) on 17 April 2022, and that Qube intended to lift its standdown of Mr Johnson from that date and resume paying him his minimum fortnightly salary.
Qube submitted that its appeal should be allowed and the Deputy President’s determination set aside, and that the Full Bench should determine in lieu that Mr Johnson’s position has not been made redundant, Step 4 of clause 13.3.3 has not been engaged and Qube is therefore not required to allow him to express an interest in voluntary redundancy.
Consideration – permission to appeal
For the reasons which follow, we are not satisfied that the grant of permission to appeal would be in the public interest or that there is a sound discretionary basis to grant permission.
First, insofar as Qube is concerned, there is no evidence that the dispute has any practical implications beyond the particular circumstances of Mr Johnson arising from the Covid-19 pandemic. There is no contest between the parties that the position of all the other employees of Qube who worked at Sydney Harbour at the time that the ban on cruise ship entry commenced in 2020 has been resolved or is no longer in dispute. Nor is there any evidence of any dispute having arisen, in the context of the Covid-19 pandemic or otherwise, from the operation of the economic conditions and redundancy clauses in other Qube enterprise agreements which are in the same or similar terms as clauses 13 and 21 respectively of the Agreement here. Indeed, the evidence before the Deputy President was that the operation of the economic conditions clauses in Qube enterprise agreements during the pandemic did not lead to the need for any redundancies and that there have been no redundancies in stevedoring positions in the Qube business in excess of the last ten years.[14] There is also no evidence of actual or potential disputation arising from the operation of provisions in similar terms to clauses 13 and 21 of the Agreement in relation to enterprise agreements at any other stevedoring business.
Second, even if permission to appeal were to be granted and the appeal upheld, that would not lead to any final resolution of the dispute concerning Mr Johnson. As stated above, Qube asserted in the appeal that, on the basis that the ban on cruise ship entry into Sydney Harbour would be lifted from 17 April 2022, it would end the standdown of Mr Johnson from that date and recommence paying him his minimum fortnightly salary as a VSE. However, there is no evidence that Qube has any actual stevedoring work for Mr Johnson to perform at Sydney Harbour for the foreseeable future. That means that Mr Johnson would simply start accumulating significant shortfalls in hours again which would have to be carried forward to some unknown future date when work resumes. This would be an unviable situation that would inevitably lead to clause 13 being triggered again. In addition, there remains to be determined, if the appeal is upheld, the CFMMEU’s s 526 application concerning Mr Johnson’s standdown from 21 December 2020. Even if this standdown is terminated by Qube from 17 April 2022, that does not remove the Commission’s jurisdiction to arbitrate the dispute the subject of the CFMMEU’s application or its power, in appropriate circumstances, to award monetary compensation in relation to the dispute.[15] In short, the grant of permission to appeal would not lead to any final resolution of the dispute concerning Mr Johnson but would only bring about further litigation and disputation.
Third, we do not accept Qube’s contention that the decision raises any question of general importance or application concerning the industrial concept of redundancy. The standard formulation of the circumstance which gives rises to an entitlement to redundancy pay established by the TCR test cases is now embodied in s 119(1) of the FW Act. The entitlement under s 119 arises, relevantly, when “the employee’s employment is terminated… at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour”. However, the entitlement arising under Step 4 of clause 13.3.3 of the Agreement with which the decision is concerned is of an entirely different nature. As earlier explained, clause 13 as a whole is triggered by the existence of “Negative Circumstances” consisting of a sustained hours shortfall under the remuneration model for which the Agreement provides — not by any decision by the employer that a job is no longer required to be performed by anyone. Step 4 in clause 13.3.3 is triggered when mitigation measures taken under Steps 2 and 3 following the consultation process provided for in Step 1 have not been effective in relieving the problem of the hours shortfall. The specific entitlement in Step 4 that was the subject of the dispute before the Deputy President is not concerned with redundancy pay upon termination of employment, as is s 119, but rather an entitlement on the part of the employee to express an interest in volunteering for redundancy and for such an expression of interest not to be unreasonably refused by the employer. It is only at Step 5 that compulsory redundancies may occur, but the decision was not concerned with Step 5.
The TCR test cases, and s 119, have nothing to say about voluntary redundancy of the kind contemplated by clause 13.3.3. Clause 13 as a whole constitutes a bespoke scheme for dealing with the situation of a sustained hours shortfall arising from economic conditions beyond the employer’s control. As clause 21.1.1 makes clear, redundancies may only occur in accordance with that part of the scheme in clause 13.3. The concept of an “hours shortfall”, which is the initiating circumstance for the operation of clause 13, arises from the equally bespoke remuneration models for VSEs and other categories of employment which have been adopted in the Agreement to accommodate the circumstances of the stevedoring industry. Accordingly, we do not consider that the decision raises any issue beyond the interpretation of clause 13 of the Agreement and its application to the unusual circumstances of Mr Johnson arising from the Covid-19 pandemic.
Fourth, we do not consider that Qube has advanced a persuasive case that the Deputy President erred in the interpretation and application of clause 13. The case essentially turned on the second bullet point in Step 4 of clause 13.3.3. We agree with the Deputy President that the use of the word “will” in the second bullet point connotes a requirement for Qube to make a declaration about the number of redundancies. The underlying premise of clause 13 is, we consider, that a significant and ongoing hours shortfall is unsustainable and must be addressed by the sequence of measures for which the clause provides. These include potential mitigative measures at Steps 2 and 3 designed to serve the objective in clause 13.1.2 of minimising redundancies. There is no dispute that the requisite “Negative Circumstances” to trigger clause 13 existed at the relevant time in 2020, noting that it was Qube that decided to trigger the clause. It is equally not in dispute, at least in the appeal, that the measures in Steps 2 and 3 had not been effective to resolve Mr Johnson’s situation, noting that Qube has not challenged in its appeal the Deputy President’s finding that the offer to Mr Johnson of alternative employment in Port Kembla was not reasonable. That being the case, we do not think that it is open to read clause 13.3.3 as permitting Qube simply to decide not to proceed to Step 4, as it did in Mr Johnson’s case, where the hours shortfall remains ongoing. The declaration referred to in the second bullet point of Step 4 was required once Steps 2 and 3 had proven ineffective, and that requirement was not vitiated by the exercise of the stand down provisions in s 524 of the FW Act.
It may be accepted, at least theoretically, that the declaration required could be for a zero number of redundancies. However, the second bullet point does not contemplate that the determination of the number of redundancies will be arbitrary or simply a matter of subjective judgment; rather (once it is accepted that the mitigation measures in Steps 2 and 3 have been ineffective), the declaration must be based on the “Economic Conditions Data”. While the definition of that term in clause 2.1(f) potentially allows for a range of “relevant information” to be taken into account, any such information must (on the ordinary meaning of the expression) concern some objective fact or circumstance bearing on the matter at hand at the time. We do not consider that Qube’s subjective intention to resume stevedoring activities at Sydney Harbour at some unidentified and unidentifiable time in the future constitutes “Economic Conditions Data” within the defined meaning.
Step 4 was engaged, in Mr Johnson’s case, on or about 27 September 2020 when Qube ceased to be eligible to participate in the JobKeeper scheme. There was simply no relevant information available at that time to indicate that there was, or would be at some ascertainable time in the future, work for Mr Johnson to perform which would remedy his hours shortfall. That remained the case as at the date of Mr Johnson’s standdown on 21 December 2020 (by which time he had accumulated a shortfall of over $14,000 in earnings to be carried forward)[16], as at the date of the hearing before the Deputy President, and as at the date of the hearing of the appeal before us. Based on the criteria established by the second bullet point in Step 4 (and not by reference to the standard definition of redundancy established by the TCR test cases and prescribed by s 119 of the FW Act), Mr Johnson’s position was redundant as at 27 September 2020 and should have been declared as such. If this had occurred, he would have been entitled to express interest for voluntary redundancy and Qube would have been required not to unreasonably refuse that expression of interest.
Fifth, while it may be arguable, as Qube contended, that the relief determined by the Deputy President “rolled up” a number of the steps that would have been required under Step 4, we are not persuaded that it would have made any practical difference to the ultimate outcome of the dispute to deal with each step separately. In particular, we cannot identify any reasonable basis for the refusal of an expression of interest by Mr Johnson for voluntary redundancy as at 27 September 2020.
In summary, the decision the subject of this appeal concerned a particular and somewhat unusual circumstance in the context of a bespoke arrangement agreed by the parties in the form of clause 13. Our consideration of, and decision to refuse, permission to appeal is confined to that narrow context.
Conclusion
Permission to appeal is refused.
VICE PRESIDENT
Appearances:
M Seck of counsel for the appellant.
L Saunders of counsel for the respondent.
Hearing details:
2022.
Sydney (via video-link):
25 March
[1] [2022] FWC 78
[2] AE425619
[3] [2022] FWC 78 at [8]
[4] Ibid at [212]
[5] Ibid at [216]
[6] Ibid at [221]
[7] Ibid at [234]-[236]
[8] Ibid at [237]
[9] Ibid at [239]
[10] Ibid at [240]-[241]
[11] Ibid at [241]-[252]
[12] Ibid at [256]-[257]
[13] Ibid at [261]
[14] Statement of Dan Coulton dated 2 December 2021 at [46]-[47]
[15] Carter v Auto Parts Group Pty Ltd[2021] FWCFB 1015
[16] Statement of Stephen Johnson dated 4 November 2021 at [30]
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