Robert Kielbicki v Commonwealth of Australia as represented by the Commissioner of Taxation T/A Australian Taxation Office - [2024] FWC 3083

[2024] FWC 3083

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.739—Dispute resolution

Robert Kielbicki
v

Commonwealth of Australia as represented by the Commissioner of Taxation T/A Australian Taxation Office

(C2023/7153)

COMMISSIONER MATHESON

SYDNEY, 7 NOVEMBER 2024

Alleged dispute about any matters arising under the enterprise agreement and the NES

Mr Robert Kielbicki (Applicant) has made an application pursuant to s.739 of the Fair Work Act 2009 (Cth) (Act) seeking that the Fair Work Commission (Commission) deal with a dispute in relation to the Australian Taxation Office (ATO) Enterprise Agreement 2017 (Agreement). The Commonwealth of Australia (Respondent) is the respondent to the Application.

Background

The Applicant suffers from illnesses which have on occasion prevented him from attending work. The Applicant has sought to access personal leave on these occasions. A dispute has arisen as the Respondent has not approved applications for personal leave made by the Applicant. The Applicant contends that the Respondent has no discretion to refuse to approve the Applicant’s application for personal leave and if it does have such a discretion, it was exercised unjustly and unreasonably.[1]

Jurisdiction

The Agreement has since been superseded by the Australian Taxation Office (ATO) Enterprise Agreement 2024 (2024 Agreement) which took effect on 28 March 2024 however clause 109.10 of the 2024 Agreement provides for an ensuring power to resolve disputes commenced under the Agreement and it was not in dispute that the Commission has the power to arbitrate the matter.

Submissions of the parties regarding matters for determination

The Commission directed the parties to confer as to the agreed questions for arbitration however the parties were unable to reach agreement.

The Applicant submits that the appropriate questions for arbitration are:

Was the Respondent imbued with a discretion to decline to approve the Applicant’s application for personal leave without pay pursuant to cl.60.16 of the Agreement in circumstances where he had no personal leave credits and was not able to access another type of leave?
If the Respondent was imbued with a discretion to refuse to approve the Applicant’s applications for personal leave without pay pursuant to cl.60.16, were the decisions of the Respondent to refuse to approve the Applicant’s applications for personal leave without pay reasonable taking into consideration cl.4 of the Agreement and any other matters relevant to the exercise of any discretion?[2]

As noted by the Applicant in his submissions:

the first question concerns whether or not the Respondent was entitled, under the terms of the Agreement, to refuse to approve the Applicant’s application for personal leave without pay; and
the second question is directed toward whether the Respondent should have granted approval if it has such a discretion.[3]

The Respondent submitted that the first question put forward by the Applicant should be rejected because it is premised on facts which are not established and which are in some respects contrary to the evidence.[4] In this regard the Respondent submitted:

the Applicant has not identified the days on which he contends the Respondent ought to have granted him unpaid personal leave:
oin his application;
oin response to the Respondent’s request that he does so in the questions for determination by the Commission; nor
oin his evidence or submissions;
in circumstances where the Applicant is unable or unwilling to identify the day or days on which he claims the Respondent was required to grant him unpaid personal leave the Commission does not know and is unable to know whether he had personal leave credits and/or whether he was unable to access any other form of leave;
the Applicant’s evidence suggests that he did, or at least may have, had personal leave credits on at least some of the days for which he claims the Respondent was required to grant unpaid personal leave to him;
there is no basis in the evidence for the proposition that the Applicant was not eligible to be granted any other form of leave on the days on which he was absent and neither his evidence nor submissions touch upon his eligibility to be granted annual leave (clause 55 of the Agreement), purchased leave (clause 56 of the Agreement) or miscellaneous leave (clause 67 of the Agreement).[5]

The Respondent submitted that the second question put forward by the Applicant should be rejected because:

it inverts the test required by the Agreement by asking the Commission to determine whether the Respondent ought to have ‘refuse[d] to grant unpaid personal leave’ to the Applicant when clause 54 of the Agreement makes it clear that personal leave has to be granted;
it is premised on a test of whether each of the Respondent’s decisions was reasonable which does not adequately reflect established principles;
in circumstances where the Applicant has refused to identify the days on which the Respondent ought to have granted him unpaid personal leave the Commission is unable to resolve the Applicant’s claim about the exercise of any discretion conferred on it by the Agreement to grant him unpaid personal leave on any particular occasion.[6]

The Respondent submitted that the sole question that the Commission should determine is whether clause 60.16 of the Agreement confers a discretion upon the Respondent to refuse an application by the Applicant for unpaid personal leave in circumstances in which he had no personal leave credits.[7] The Respondent submitted that clause 60.16 of the Agreement does confer such discretion.

The Respondent also pointed to the following provisions within clause 100 of the Agreement which provide (Respondent’s underlining):

‘100.1 If a dispute relates to:

a) a matter arising under this Agreement; or
b) the National Employment Standards

this clause sets out procedures to settle the dispute.

…

100.5The FWC may deal with the dispute in two stages:

…

b) if the FWC is unable to resolve the dispute at the first stage, the FWC may then:

i)arbitrate the dispute; and
ii)make a determination that it is binding on the parties’.[8]

The Respondent submitted that clause 100 confers a discretion on the Commission as to whether or not it will arbitrate the dispute and it is not bound to do so.[9] In this regard the Respondent referred to the observation of the Commission in Schweppes Australia Pty Ltd v United Voice[10] that:

“Clearly the power given to FWA under the term to arbitrate where the dispute has not been resolved by conciliation is discretionary. The term does not require FWA to arbitrate.

The matters that inform FWA’s discretion to arbitrate are not limited by the term. In my view, relevant considerations will include the nature of the dispute, the position of the parties and other matters FWA is informed of during the course of conciliation.”

The Respondent also referred to AWU v Alcoa World Alumina Australia[11]in which the Commission said it should be:

“…mindful of the care which a third party such as the Commission must take in exercising its discretion to make binding decisions in areas which are described as being within the realm “management prerogative”. Notwithstanding the scope of 5.170LW, the traditional notion of managerial prerogative is not automatically displaced by the width of the Commission’s empowerment which remains a factor to be weighed in determining the relative merits of a claim or counter claim. The extent or otherwise of the intervention of the Commission into an area designated as management prerogative will depend on the circumstances of each matter.”[12]

The Respondent noted that AWU v Alcoa World Alumina Australia[13] concerned a dispute about a disciplinary process in which the AWU sought to have the Commission substitute its own judgment about the appropriate sanction. The Commissioner found that the text of the relevant agreement precluded the Commission from arbitrating a dispute about a disciplinary process which did not result in termination but went on to observe:

“If I am wrong on this jurisdictional question I agree with the respondent that this sort of dispute is one where the Tribunal should not easily interfere in the decisions of management. The opportunity for every verbal counselling session, file note or warning letter issued by Alcoa’s supervisors and managers to be subject to arbitration would inevitably have a debilitating effect on the management of the respondent and erode their ability to properly discharge their duties.”[14]

Hearing

Clause 100.5 of the Agreement’s dispute settlement procedure provides:
‘100.5 The FWC may deal with the dispute in two stages:

a) the FWC will first attempt to resolve the dispute as it considers appropriate,
including by mediation, conciliation, expressing an opinion or making a
recommendation; and

b)        if the FWC is unable to resolve the dispute at the first stage, the FWC may then:
i.         arbitrate the dispute; and
ii.        make a determination that is binding on the parties.

The matter did not resolve through a conference conducted to facilitate the first stage referred to above and the matter proceeded to arbitration in accordance with the second stage. A hearing was held for the purposes of arbitration and the Applicant was represented by the Australian Municipal, Administrative, Clerical and Services Union (ASU).

The Applicant filed submissions on 14 May 2024 and the Respondent filed its submissions on 4 June 2024. The Applicant filed reply submissions on 11 June 2024.

The Applicant filed a witness statement with eight attachments and gave evidence on his own behalf.

The provisions in dispute

Section D of the Agreement is titled “balancing work & personal life” and sets out detailed provisions in relation to personal leave.

Clause 60.16 of the Agreement provides:

‘A delegate may approve unpaid Personal Leave when:

(a)   an employee has exhausted Personal Leave credits; or
(b)   an employee is not entitled to paid Personal Leave; or
(c)   an employee requests unpaid Personal Leave and the delegate determines it is warranted in the circumstances; or
(d)   the delegate determines that it is not appropriate to grant paid personal leave for caring purposes (caring for ‘another person’).’

Summary of Applicant’s submissions

The Respondent’s position is that this clause provides it with discretion as to whether it approves unpaid Personal Leave in the circumstances set out in clause 60.16. It points to the term ‘may’ within the clause in support of this position.

The Applicant submits that the use of the word ‘may’ is facilitative and confers discretion to the Respondent as to how to manage the manner of its compliance with clause 60.16 and consistent with the Respondent’s obligation to provide personal leave it had four choices:

advance personal leave credits pursuant to clause 60.6;
approve unpaid leave pursuant to clause 60.16;
approve additional personal leave credits in special and compassionate circumstances, pursuant to clause 60.19; or
approve other leave under clause 60.20.

The Applicant had exhausted his personal leave credits, had no annual or purchased leave and the Respondent did not approve any additional personal leave credits or other leave. The Applicant submitted that in these circumstances the approval of unpaid personal leave was the only choice which remained available to the Respondent.

The Applicant submitted that the Respondent’s construction, that the word ‘may’ permits the Respondent to decline leave of any kind, is unlikely and ignores the context in which the provision appears.[15] In this regard the Applicant submitted that the relevant context includes:

a comprehensive regime for the provision of personal leave due to absence for sick and caring purposes, which affords a range of alternatives to the Respondent between which it must select; and
a headline provision which unambiguously guarantees employees a right to personal leave.[16]

The Applicant also submitted that a narrow focus on the word ‘may’ divorced from its context in the text of the Agreement would be ‘exemplary of the narrow and pedantic approach deprecated in Kucks v CSR Limited’.[17] The Applicant submitted that:

viewed as a whole, the word ‘may’ can only sensibly describe the choices between the various forms of leave the Respondent is able to approve under the Agreement;[18]
to permit the employer to decline unpaid leave to a worker who meets the criterion in clause 60.1(a), in the absence of advancing personal leave credits or compassionate leave, would defeat the right conferred by that clause.[19] In a footnote to his submissions, the Applicant says this is not to say that a Commonwealth agency must necessarily permanently retain an incapacitated employee as s.29(3)(d) of the Public Service Act 1999 (Cth)(PS Act) provides that a prescribed ground for termination is an ‘inability to perform duties because of physical or mental incapacity’ and per s.40(1) of the FW Act, the PS Act prevails over the term of the fair work instrument.

The Applicant submitted that even if the Agreement did confer a discretion on the Respondent to decline the leave:

it was obligated to exercise the discretion in a manner that was just and reasonable, having regard to the nature of the discretion and the ‘principles-based’ decision making framework, set out in clause 4 of the Agreement;[20]
the course of action adopted by the Respondent was not appropriate[21] and the denial of unpaid leave was unreasonable and ought not have occurred;[22]
consistent with the principle in the Australian Federated Union of Locomotive Enginemen v State Rail Authority of NSW[23] the Commission ought intervene to avoid an injustice to the Applicant.[24]

Clause 4 of the Agreement sets out the following principles (Agreement Principles):

‘4. Principles and values-based employment framework

4.1This Agreement provides a principles-based decision-making framework. The following principles underpin all provisions in this Agreement:

(a)   providing a safe, secure and fair environment;
(b)   assisting employees to balance their work and personal commitments;
(c)   the ATO being as flexible as it can, taking into account the employee’s preferences and personal circumstances;
(d)   fostering strong cooperative relationships between the ATO and its employees;
(e)   safeguarding the health and wellbeing of employees;
(f)    respecting and valuing diversity;
(g)   preventing discrimination and harassment;
(h)   treating employees fairly and impartially;
(i)     making the most efficient use of resources; and
(j)     supporting sustainable environmental management’.

They will be supported by policies and guidelines as appropriate’.

The Applicant submitted:

in relation to the principle in clause 4.1(b), permitting an employee who is ill to manage that illness would serve the objective of ‘assisting employees to balance their work and personal commitments’; [25]
in relation to the principle in clause 4.1(c):
othis principle suggests that the preferences and circumstances of an employee should be the primary consideration in the exercise of discretion, except to the extent that they unreasonably prejudice the interests of the employer;[26]
othe prejudice to the Applicant of being denied personal leave without pay, including potential adverse disciplinary consequences, is self-evident;
oas the leave is unpaid, there are minimal financial consequences for the employer;
othere is no evidence on which the Commission could be satisfied that the Respondent has been ‘as flexible as it can’ and this weighs in favour of a grant of unpaid leave;[27]
in relation to the principle in clause 4.1(e):
othe Agreement Principles make clear that a core tenet of the Agreement is concern for the health and wellbeing of employees and approving personal leave without pay for the Applicant is consistent with that principle;
odeclining leave to an injured or ill employee would burden the advancement of that object and this weights in favour of a grant of unpaid leave;[28]
in relation to the principle in clause 4.1(i), concerned with ‘making the most efficient use of resources’:
othe Agreement Principles acknowledge the desirability of efficiency in the use of resources;
oin certain circumstances, grants of unpaid leave which are particularly disruptive could be inconsistent with this principle[29] however in this matter there is no evidence of unmanageable disruption to the Respondent’s operations;
owhen the Applicant is at work he performs to a high standard and promptly;
othe nature of the Applicant’s work is comprised of brief, discreet tasks and the potential for disruption caused by non-attendance is minimal;[30]
oto the extent that some disruption may be inferred as an ordinary consequence of absence, this weighs only lightly against a grant of unpaid leave in the circumstances of the matter.[31]

The Applicant submitted that:

· the Respondent was not at liberty to deny the Applicant, an ill employee unable to work as a consequence of his condition, access to leave without pay;[32]
· even if it did have such a discretion, in all the circumstances the denial of unpaid leave was unjust, unreasonable and ought not have occurred and the Commission ought intervene to avoid injustice to the Applicant.[33]

The Applicant sought that in resolution of the dispute the Commission should order the Respondent to treat the Applicant’s application for personal leave without pay as having been granted. [34]

Summary of Applicant’s evidence

By way of summary, the Applicant gave evidence that:

he commenced employment with the Respondent on 15 March 2016;[35]
he is currently employed as an APS 3 Service Delivery Officer in the Client Account Services business line;[36]
in his role:
ohe responds to enquiries from clients to support them to meet their obligations to manage their taxation and superannuation affairs;
ohe performs a range of analytical and problem solving activities in response to requests by agents and clients, while providing customer service in a multi- channel environment;
ohe currently undertakes processing and telephony work;
oroughly half of his direct case work time is spent on processing work and half on telephony work;
otelephony work is usually allocated to him before his lunch break for health reasons and he may also be asked to undertake telephony work in the afternoon if his health allows it;
ohe is mainly assigned to work concerning additional tax on superannuation contributions and this type of work is undertaken by many staff members across several teams at the site in which he works as well as at least two other Respondent sites;
ohis processing work is delivered to him through a case management system and he undertakes each case as it comes;
omost cases have a service standard of 14 to 28 days;[37]
the time he takes to complete the tasks is generally or more quickly than the standard expected, he has not received any complaints or had concerns raised with him about his performance at work and his managers have told him they are very happy with the quality of work he performs;[38]
he has a number of medical conditions and also slipped while having a shower in September 2023 which aggravated the arthritis in his lower back;[39]
as a result of his medical conditions he has had to take time off work and has from time to time exhausted his personal leave credits;[40]
some of his absences from work had been determined by the Respondent to be ‘unauthorised absences’ and he did not have any annual or purchased leave credits on those dates;[41]
on each occasion that his absence was determined to be unauthorised he had:
onotified of his need for unplanned leave in accordance with clause 54.4 of the Agreement;
oapplied for leave in accordance with clause 54.5 of the Agreement; and
oprovided satisfactory documentation in accordance with clauses 60.10, 60.12 or 60.13 of the Agreement;[42]

it had never been suggested to him on an occasion he took leave that he was not genuinely unfit for work or had not provided satisfactory documentation.[43] In this regard the Applicant pointed to an email from his Team Leader dated 27 September 2023 which stated:

‘You now have provided documentation to support your ongoing absence from work. I confirm that I have received documentation for all absences to 26 September 2023.

Refusing applications for unpaid personal leave does not bring into question your health condition, nor does it question the validity of medical certificates provided. It is also not a direction for the you to return to work whilst you are unwell.’

The Applicant attached to his witness statement[44] various emails showing circumstances where his absences were deemed as unauthorised. This included:

an email from James Thurling to the Applicant dated 28 July 2023 (28 July 2023 Refusal) in which Mr Thurling:
o   suggested the Applicant let him know of his absence on Wednesday by phone at 8.05am;
o   indicated that the Applicant had provided a medical certificate;
o   stated that the Applicant’s absences over the prior 12 months had included 18 days personal sick leave, 111.78 days leave without pay, 33.5 days annual and purchased leave used in lieu of personal leave, as per agreed access to clause 60.21 of the Agreement;
o   indicated the Applicant currently had no paid leave credits available;
o   indicated that notwithstanding the Applicant’s notification of absence and provision of a medical certificate to cover the absence, any leave absence may be considered unauthorised;
o   he considered all of the Applicant’s absences on a case-by-case basis and had reviewed the advice and documentation provided but on that occasion, the absence for Wednesday 26 July and Thursday 27 July was deemed as unauthorised;
o   the reason for that decision was due to ongoing operational requirements and the need for duties assigned to the Applicant to be completed – in particular Tax Time increased call loads, to which the Applicant had been rolled onto when he had been at work, and large volumes of on hand activities;
an email from Mr Thurling to the Applicant dated 31 July 2023 (31 July 2023 Refusal) in which Mr Thurling states that the Applicant had stated that he had notified via phone call at 8.45am that morning that he would not be attending work that day and that on that day his absence was deemed unathorised;

an email from Mr Thurling to the Applicant dated 10 August 2023 (10 August 2023 Refusal) indicating that:
o   the Applicant had let him know of his absence by voicemail at 7.42am and had shared medical certificates covering his absences from 31 July 2023 to 7 August 2023 via email;
o   his absences over the past 12 months included 18 days personal sick leave, 113.83 days leave without pay and 34.46 days annual and purchased leave used in lieu of personal leave as per agreed access to clause 60.21 of the Agreement;
o   the Applicant had no paid leave credits available;
o   notwithstanding the notification of absence and provision of a medical certificate to cover the absence, any leave absence without leave credits may be considered as unauthorised;
o   he considered all of the Applicant’s absences on a case-by-case basis and had reviewed the documentation provided but leave outside that previously approved as leave without pay and leave not covered by the available leave credits is deemed unauthorised in accordance with clause 54.7 of the Agreement;
o   the reason for the decision was due to ongoing operational requirements and the need for duties assigned to the Applicant to be completed – in particular tax time increased call loads and large volumes of on hand activities;
o   the Applicant had not had a chance to consolidate his skills following his complaints training in mid July;
o   for absences on Tuesday 8 August, Wednesday 9 August and Thursday 10 August he would await any documentary evidence and statement before making a decision regarding those absences;
o   he would continue to consider each instance of leave on its individual merits;
o   as per communicated prior expectations, during the duration of the Applicant’s pain management course, the Applicant was required to provide documentary evidence if he was unfit to work for the part of the day the course was not undertaken, i.e. 7am to 9am as per the standard hours, unless the Applicant notified to work outside his standard hours at the end of the day;
o   refusing applications for unpaid personal leave did not bring into question his health condition, personal circumstances nor medical certificates and it was not a direction for the Applicant to return to work whilst he was unwell. Rather, it was a reflection of the business climate, to meet business needs and because the Respondent required staff at work to perform their duties;
o   due to these operational requirements future requests for unpaid personal leave may not be approved;
o   unauthorised absence was a serious matter and recurring or lengthy unauthorised absences may result in termination of employment;
o   the Applicant’s pain management course was supported and authorised as it was a known planned leave event every Tuesday and Friday over a six-week period that was planned in the schedule;
o   it was hoped that the course led to an improvement in the Applicant’s health and/or the management of the Applicant’s health condition and an improvement in the Applicant’s work attendance;
an email from Mr Thurling to the Applicant dated 18 August 2023 (18 August 2023 Refusal) in which Mr Thurling indicates:
o   the Applicant advised him of his absence the day prior via voicemail at 6.28am;
o   the Applicant had not yet provided documentation to support absences taken from 8 August 2023 to 17 August 2023;
o   he understood that the Applicant would be using his ‘Recurring Medical Certificate’ to cover partial absences on Tuesday 8 August and Friday 11 August bringing his total usage to 30.4 hours;
o   the Applicant’s absences over the prior 12 months had included 17 days personal sick leave, 117.3 days leave without pay and approximately 32.9 days annual leave and purchased leave used in lieu of personal leave, as per agreed access to clause 60.21 of the Agreement;
o   the Applicant had 2.62 hours of purchased leave credits available;
o   while he appreciated that the Applicant had notified of his absences as soon as practicably possible, he had not provided documentation to support the absences;
o   that it was important that the Applicant continue to provide documentation to support his ongoing absences for Mr Thurling’s consideration;
o   that he had previously advised the Applicant that any leave absence without leave credits may be considered unauthorised;
o   that he considered all of the Applicant’s absences on a case-by-case basis and as no evidence had been supplied to support the Applicant’s absences on 9, 10, 14, 15, 16 or 17 August 2023, in the absence of available leave credits, nor documentation, he could not support the leave application as leave without pay;
o   the period of leave would be deemed unauthorised in accordance with clause 54.7 of the Agreement;
o   the reason for the decision was due to the ongoing operational requirements and the need for duties assigned to the Applicant to be completed, in particular Tax Time increased call loads and large volumes of on hand activities;
o   the Applicant had not had a chance to consolidate his skills following complaints training in mid-July;
o   he had considered the Applicant’s recurring medical certificate, and Applicant’s request that this be used to support his absences on 8 and 11 August 2023;
o   in the absence of available leave credits, and with operational requirements including the need for duties assigned to the Applicant to be completed, he could not support the use of leave without pay for these absences and the leave had been deemed as unauthorised in accordance with clause 54.7 of the Agreement;
o   in respect of the Applicant’s absences on 8, 9 and 10 August 2023, as it had been seven days since the absence and he had still not received any documentary evidence, he had made the decision based on the information at hand;
o   refusing applications for unpaid personal leave did not bring into question his health condition, personal circumstances nor medical certificates and it was not a direction for the Applicant to return to work whilst he was unwell. Rather, it was a reflection of the business climate, to meet business needs and because the Respondent required staff at work to perform their duties;
an email from Mr Thurling to the Applicant dated 25 August 2023 (25 August 2023 Refusal) in which Mr Thurling indicates:
o   the Applicant advised him of his absence by voicemail at 8.19am that day;
o   the Applicant had informed him, via phone call on Tuesday 22 August 2023, that his pain management course for the week had been postponed until next week;
o   the Applicant had shared medical certificates covering his absences from 21 August 2023 to 24 August 2023 via email that morning;
o   the Applicant’s absences over the prior 12 months had included 17 days personal sick leave, 117.3 days leave without pay and approximately 30.9 days annual leave and purchased leave used in lieu of personal leave, as per agreed access to clause 60.21 of the Agreement;
o   the Applicant had 7.35 hours of personal leave and 4.82 hours of purchased paid leave credits available;
o   notwithstanding the Applicant’s notification of absence and provision of a medical certificate, as previously communicated leave absence without leave credits may be considered unauthorised;
o   he considered all of the Applicant’s absences on a case-by-case basis however leave outside of that previously approved as leave without pay and leave not covered by the Applicant’s available leave credits was deemed unauthorised;
o   the reason for this was due to ongoing operational requirements and the need for duties assigned to the Applicant to be completed, in particular Tax Time increased call loads and large volumes of on hand activities;
o   the Applicant had not had a chance to consolidate his skills following complaints training in mid-July;
o   the Applicant had advised in advance that his pain management course had been postponed and he intended to work on Tuesday and Friday as he did not require leave on those days to attend;
o   as the Applicant did not attend work as planned, Mr Thurling also determined that those leave events would be considered unauthorised;
o   refusing applications for unpaid personal leave did not bring into question his health condition, personal circumstances nor medical certificates and it was not a direction for the Applicant to return to work whilst he was unwell. Rather, it was a reflection of the business climate, to meet business needs and because the Respondent required staff at work to perform their duties;
an email from Mr Thurling to the Applicant dated 31 August 2023 (31 August 2023 Refusal) in which Mr Thurling indicates:
o   the Applicant let him know of his absence that day via a phone call at 8.56am;
o   the Applicant had been advised via phone call on Tuesday 22 August 2023 that his pain management course sessions had been postponed to that week;
o   the Applicant had shared medical certificates covering his absences from 25 August 2023 to 30 August 2023 via email;
o   the Applicant’s absences over the prior 12 months had included 18 days personal sick leave, 116 days leave without pay and approximately 33.2 days annual leave and purchased leave used in lieu of personal leave, as per agreed access to clause 60.21 of the Agreement;
o   the Applicant had 7.35 hours of personal leave and 4.11 hours of purchased paid leave credits available;
o   he considered all of the Applicant’s absences on a case-by-case basis however leave outside of that previously approved as leave without pay and leave not covered by the Applicant’s available leave credits was deemed unauthorised;
o   the reason for this was due to ongoing operational requirements and the need for duties assigned to the Applicant to be completed, in particular Tax Time increased call loads and large volumes of on hand activities;
o   the Applicant had not had a chance to consolidate his skills following complaints training in mid-July;
o   the Applicant had advised in advance that his pain management course had been postponed and he intended to work on Tuesday and Friday as he did not require leave on those days to attend;
o   as the Applicant did not attend work as planned, Mr Thurling also determined that those leave events would be considered unauthorised;
o   refusing applications for unpaid personal leave did not bring into question his health condition, personal circumstances nor medical certificates and it was not a direction for the Applicant to return to work whilst he was unwell. Rather, it was a reflection of the business climate, to meet business needs and because the Respondent required staff at work to perform their duties;
an email from Mr Thurling to the Applicant dated 8 September 2023 (8 September 2023 Refusal) in which Mr Thurling indicates:
o   the Applicant let him know of his absence via a phone call at 8.01am the previous day;
o   the Applicant’s absences over the prior 12 months had included 18 days personal sick leave, 118.3 days leave without pay and approximately 34.91 days annual leave and purchased leave used in lieu of personal leave, as per agreed access to clause 60.21 of the Agreement;
o   the Applicant had 7.35 hours of personal leave, 6.89 hours of annual leave and 5.66 hours of purchased paid leave credits available;
o   while he appreciated that the Applicant had notified of his absence as soon as practically possible, he had not provided documentation to support the absences;
o   he considered all of the Applicant’s absences on a case-by-case basis however as no evidence had been supplied to support the Applicant’s absences on 5, 6, 7 and 8 September 2023 and in the absence of available leave credits he was unable to support the Applicant’s application for leave without pay and the leave would be deemed unauthorised;
o   the reason for this was due to ongoing operational requirements and the need for duties assigned to the Applicant to be completed, in particular Tax Time increased call loads and large volumes of on hand activities;
o   the Applicant had not had a chance to consolidate his skills following complaints training in mid-July;
an email from Mr Thurling to the Applicant dated 25 September 2023 (25 September 2023 Refusal) in which Mr Thurling indicates:
o   the Applicant let him know of his absence via a phone call at 8.15am that day;
o   the Applicant’s absences over the prior 12 months had included 16 days personal sick leave, 118.29 days leave without pay and approximately 34.91 days annual leave and purchased leave used in lieu of personal leave, as per agreed access to clause 60.21 of the Agreement;
o   the Applicant had 6 hours of purchased paid leave credits available;
o   he appreciated that the Applicant had notified of his absence as soon as practically possible;
o   he considered all of the Applicant’s absences on a case-by-case basis however as no evidence had been supplied to support the Applicant’s absences on 12 15, 18, 19, 20, 21 or 22 September 2023 and in the absence of available leave credits he was unable to support the Applicant’s application for leave without pay and the leave would be deemed unauthorised;
o   the reason for this was due to ongoing operational requirements and the need for duties assigned to the Applicant to be completed, in particular Tax Time increased call loads and large volumes of on hand activities;
o   the Applicant had not had a chance to consolidate his skills following complaints training in mid-July;
an email from Mr Thurling to the Applicant dated 26 September 2023 (26 September 2023 Refusal) in which Mr Thurling indicates:
o   the Applicant let him know of his absence via a phone call at 7.37am that day and shared medical certificates covering his absences from 14 September 2023 to 26 September 2023;
o   he had reviewed the documentation provided and due to ongoing business requirements and priorities was unable to support leave without pay for the period of absence (being Monday 25 September 2023 and Tuesday 26 September 2023) and the absences would be deemed unauthorised;
o   the reason for this was due to ongoing operational requirements and the need for duties assigned to the Applicant to be completed, in particular Tax Time increased call loads and large volumes of on hand activities;
o   the Applicant had not had a chance to consolidate his skills following complaints training in mid-July;
o   the Applicant’s absences over the prior 12 months had included 16 days personal sick leave, 120.47 days leave without pay and approximately 35.73 days annual leave and purchased leave used in lieu of personal leave, as per agreed access to clause 60.21 of the Agreement;
o   the Applicant had no leave credits available;
an email from Mr Thurling to the Applicant on 27 September 2023 in which Mr Thurling responds to an email from the Applicant in which the Applicant indicated he had told Mr Thurling that he would provide documentation to support his absences. In this email Mr Thurling:
o   acknowledges that the Applicant advised he would be providing documentation to support his continued absence from the workplace however at the time of actioning his leave request it had not been provided and due to payroll cutoff he needed to notify the Applicant of his decision;
o   confirming that the Applicant had provided documentation for all absences to 26 September 2023;
o   states that refusing applications for unpaid personal leave did not bring into question the Applicant’s health condition nor the validity of the medical certificates provided and it was not a direction for the Applicant to return to work whilst he was unwell;
o   states the refusal was a reflection of the current business climate and the need for service delivery to continue to meet business needs and because staff were required to be at work to perform their duties;
o   states that his inability to support the Applicant’s ongoing request for leave without pay was based on the requirement to continue to meet operational demands and provide a service to the community;
o   indicates that the area of the business in which the Applicant worked was continuing to experience increased call loads and large volumes of on hand activities;
an email from Mr Thurling to the Applicant dated 9 October 2023 (9 October 2023 Refusal) in which Mr Thurling indicates:
o   the Applicant had shared medical certificates covering absences from 27 September 2023 to 6 October 2023 via email over the weekend;
o   he was unable to support the Applicant’s application for leave without pay for the period between 27 September 2023 and 6 October 2023 and the absences had been classified as unauthorised;
o   the Applicant’s absences over the prior 12 months had included 16 days personal sick leave, 118.47 days leave without pay and approximately 31.73 days annual leave and purchased leave used in lieu of personal leave, as per agreed access to clause 60.21 of the Agreement;
o   the Applicant had 2.29 hours of purchased leave credits available and 3.32 hours of annual leave;
o   the reason for the refusal was due to ongoing operational requirements and the need for duties assigned to the Applicant to be completed, in particular Tax Time increased call loads and large volumes of on hand activities;
o   the Applicant had not had a chance to consolidate his skills following complaints training in mid-July;
an email from Mr Thurling to the Applicant dated 20 October 2023 (20 October 2023 Refusal) in which Mr Thurling indicates:
o   the Applicant had let him know of his absence via email at 8.28am that day and shared medical certificates covering his absences from 10 October 2023 to 16 October 2023 via email the evening prior;
o   the Applicant’s absences over the prior 12 months had included 15 days personal sick leave, 121.51 days leave without pay and approximately 31.69 days annual leave and purchased leave used in lieu of personal leave, as per agreed access to clause 60.21 of the Agreement;
o   the Applicant had 7.15 hours of purchased leave credits available;
o   leave outside that previously approved as leave without pay, and leave not covered by the Applicant’s available leave credits was deemed as unauthorised;
o   the reason for the refusal was due to ongoing operational requirements and the need for duties assigned to the Applicant to be completed, in particular Tax Time increased call loads and large volumes of on hand activities;
o   the Applicant had not had a chance to consolidate his skills following complaints training in mid-July;

an email from Mr Thurling to the Applicant dated 24 October 2023 (24 October 2023 Refusal) in which Mr Thurling indicates:
o   the Applicant had let him know of his absence via email at 8.51am that day and shared medical certificates covering his absences from 16 October 2023 to 20 October 2023 via email the prior night;
o   due to ongoing business requirements and priorities, he was unable to support leave without pay for the period of absence between 17 October 2023 and 20 October 2023 and the absences would be classified as unauthorised;
o   the Applicant’s absences over the prior 12 months included 15 days personal sick leave, 124.51 days leave without pay and approximately 31.69 days annual leave and purchased leave used in lieu of personal leave, as per agreed access to clause 60.21 of the Agreement;
o   the Applicant had no leave credits available;
o   the reason for the refusal was due to ongoing operational requirements and the need for duties assigned to the Applicant to be completed, in particular Tax Time increased call loads and large volumes of on hand activities;
o   the Applicant had not had a chance to consolidate his skills following complaints training in mid-July;
an email from Claire Dwyer to the Applicant dated 3 November 2023 (3 November 2023 Refusal) in which Ms Dwyer indicates:
o   the Applicant shared medical certificates covering absences from 23 October 2023 to 26 October 2023 via email;
o   due to ongoing business requirements and priorities, she was unable to support leave without pay for the remaining time in the period between Monday 23 October 2023 and part of Thursday 26 October 2023 and the absences had been classified as unauthorised;
o   the Applicant’s absences over the past 12 months included 15 days personal sick leave, 124.51 days leave without pay and approximately 31.69 days annual leave and purchased leave used in lieu of personal leave, as per agreed access to clause 60.21 of the Agreement;
o   the Applicant had no paid leave credits available;
o   the reason for the refusal was due to ongoing operational requirements and the need for duties assigned to the Applicant to be completed, in particular Tax Time increased call loads and large volumes of on hand activities;
o   the Applicant had not had a chance to consolidate his skills following complaints training in mid-July;
an email from Mr Thurling to the Applicant dated 8 December 2023 (8 December 2023 Refusal) in which Mr Thurling indicates:
o   the Applicant shared medical certificates covering absences for 17 November 2023 and 27 November 2023 via email;
o   for part of the days of 17 and 27 November 2023 purchase leave credits had been utilised;
o   due to ongoing business requirements and priorities he was unable to support the Applicant’s application for leave without pay for the remaining partial day on Friday 17 November 2023 and remaining partial day on 27 November 2023 and as a result all absences had been classified as unauthorised absence;
o   the Applicant’s absences over the past 12 months included 14.6 days personal sick leave, 105.11 days leave without pay and approximately 32.49 days annual leave and purchased leave used in lieu of personal leave, as per agreed access to clause 60.21 of the Agreement;
o   the reason for the decision was due to ongoing operational requirements and the need for duties assigned to the Applicant to be completed – in particular call loads and large volumes of on hand activities for the Applicant’s work types.

The Applicant also filed a letter dated 24 October 2023 from the Acting Assistant Commissioner which communicated to the Applicant that during the last five years he had had long periods of extended absences, that the Respondent had extended a range of supports and interventions to assist his return to work which had not been successful and for that reason the Respondent was considering terminating his employment for non-performance of duties under s.29(3)(c) of the Public Service Act 1999 (Cth) (PS Act).[45] The reasons for this decision as set out in the letter were, by way of summary:

since 1 July 2022 to the date of the letter the Applicant had been absent from the workplace for a total of 247.93 days, including 168.33 days of leave without pay, and continuous periods of absence from 2 August 2023 to 6 October 2023 and 10 October 2023 to 24 October 2023;
in the prior five year period the Applicant had a significant number of absences;
the Respondent had extended assistance to the Applicant including provision of a Rehabilitation Case Manager, adjustments to working arrangements, approval of eight weeks purchased leave, approval of a reduction of hours to enable access to treatment;
the Applicant had exhausted available paid personal leave credits;
Mr Thurling had explained to the Applicant that approval of unpaid Personal Leave – sick was discretionary, that when it was not approved the absence may be deemed unauthorised and that continued unauthorised absences could lead to the termination of his employment;
the Application was absent from the workplace from 2 August 2023 to 6 October 2023 and after completing a single day of work on 9 October 2023, recommenced leave and had been absent since this time;
the Respondent had attempted to engage the Applicant to support him during his absences, including seeking consent to work with his treating practitioners, and the Applicant denied this request;
the Applicant’s non-attendance:
ocaused significant disruption to business line operations;
oimpacted upon service standards and resulted in delays;
orequired the Applicant’s work to be given to other team members;
ohas a cost impact including loss of productivity.

However the Applicant’s employment was not terminated and he gave evidence that:

he attended his doctor, had his medical capacity reviewed and obtained a medical certificate which recommended a graduated return to work consisting of three days a week, five hours a day, working at home, except for one day each fortnight with a delayed start time and usual reasonable adjustments;[46]
he discussed his proposed return to work on 26 October 2023 with his Director who accepted the arrangements and the arrangements were approved.[47]

Summary of Respondent’s submissions

The Respondent submitted that the Commission should approach the construction of the Agreement having regard to the following propositions:

The Respondent submitted that construing clause 60.16 as conferring discretion on the Respondent whether or not to grant unpaid personal leave accords with the ordinary meaning principle as the prefatory words:

‘A delegate may approve unpaid Personal Leave when…’ (Respondent’s underlining)

connote a discretion, which is conferred on the delegate.[48] The Respondent submitted that subparagraphs (a) to (d) then go on to identify four occasions when that discretion is enlivened.[49]

The Respondent submitted that on the Applicant’s argument, the word ‘may’ must be understood as meaning ‘must’ so that the clause would read as if it said:

‘A delegate must approve unpaid personal leave when…’

and his submissions do not offer a reason why, if that was the parties’ objective intention, the clause did not simply say so.[50]

The Respondent also submitted that its construction coheres with the general leave provisions in clause 54 of the Agreement and, in particular:

clause 54.1 which expressly provides that all leave is subject to approval by the delegate; and
clause 54.7 which provides that any absence from duty that is not approved by the delegate is an unauthorised absence.[51]

The Respondent submitted that it is clear from clause 54 that the Agreement reposes a discretion in the Respondent whether or not to approve any application for leave.[52]

The Respondent submitted that there are further contextual considerations which support its construction within the structure of clause 60 itself including the following:

clause 60.1 deals with personal leave for sickness purposes (‘Personal Leave – Sick’) and personal leave for caring purposes ('Personal Leave – Carer’s) and does not differentiate between paid and unpaid personal leave. The Respondent submitted that that the words ‘will be able to access Personal Leave as follows’ in the prefatory words to clause 60.1 does not confer a right to ‘take’ personal leave in accordance with clause 60.1 without the Respondent having any discretion whether to grant such leave because the construction is precluded by express words within clause 60. In particular, the Respondent submitted:
oclause 60.17 confines an employee’s entitlement to Personal Leave – Carer’s to up to two days per occasion and confines the purpose of such leave to where an employee is required to provide care or support to a member of their immediate family or household because of personal injury or illness, or unexpected emergency affecting the member;
oclauses 60.24 and 60.25 impose further constraints on an employee’s right to take Personal Leave – Carer’s;[53]
clauses 60.10 – 60.15 further restrict an employees right to be granted Personal Leave by reference to various evidentiary requirements. The Respondent submitted that the Applicant’s construction does not grapple with how an unqualified right to take unpaid Personal Leave would apply to an employee who has not complied with one or more of these requirements;[54]
the Respondent submitted that clause 60.19 confers a further discretion on the Commissioner to approve the taking of further personal leave credits to an employee where special and compassionate circumstances exist by use of the word ‘may’ and that clause 60 uses ‘may’ deliberately to distinguish a discretion from an obligation.[55]

In relation to the Agreement Principles the Respondent submitted that clause 43.1 of the Agreement provides that the Respondent and employees agree on the importance of an appropriate balance between working and personal lives and the clause acknowledges that the Agreement reflects an attempt to strike a balance between the needs of employees and the needs of the Respondent to be able to effectively run its business (Respondent’s underlining).[56] The Respondent submitted that this is also appropriately reflected in the Agreement Principles set out in clause 4 of the Agreement and can be seen in the underlined words set out below:[57]

‘4.1 This Agreement provides a principles-based decision-making framework. The following principles underpin all provisions in this Agreement:

a) providing a safe, secure and fair environment;
b) assisting employees to balance their work and personal commitments;
c) the ATO being as flexible as it can, taking into account the employee’s preferences and personal circumstances;
d) fostering strong cooperative relationships between the ATO and its employees;
e) safeguarding the health and wellbeing of employees:
f) respecting and valuing diversity;
g) preventing discrimination and harassment;
h) treating employees fairly and impartially;

i) making the most efficient use of resources; and
j) supporting sustainable environmental management’. (Respondent’s underlining)

The Respondent submitted that the Agreement principles aim for a balance between being flexible toward the Applicant while still allowing the Respondent to manage its business.[58]

The Respondent referred to Australian Municipal, Administrative, Clerical and Services Union v Commissioner of Taxation[59] and submitted that in a different but analogous context the Federal Court has recognised that clause 4 of the Agreement is concerned with principles and does not assist with ascertaining the proper construction of substantive provisions of the Agreement.[60] This matter involved allegations of a breach of the Agreement and allegations of misrepresentations as to workplace rights regarding working from home arrangements implemented during the COVID-19 pandemic and was concerned with the proper construction of clause 50. The Court said: ‘Clause 4 involves principles. It says nothing specific about the proper construction of cl 50.’[61]

The Respondent submitted that there was no occasion to effectively rewrite the clear and unambiguous language of clause 60.16 which coheres with the text of the Agreement as a whole in order to confer an unqualified right for the Applicant to be granted unpaid leave which is at odds with those express provisions.[62]

The Respondent also submitted that as the Agreement has been made in accordance with Part 2-24 of the Act, the Agreement:

must be read in conjunction with, and must not exclude, any provision of the National Employment Standards (NES);[63]
prevents the Australian Public Service Enterprise Award 2015 (APS Award) from applying to the Respondent’s employees;[64] and
was required to be assessed by the Commission as passing the better off overall test against the APS Award as a condition of approval.[65]

In this regard the Respondent submitted it is significant that the right that the Applicant says exists in clause 60.16 does not exist in either the NES or APS Award and indeed clause 17.4 of the APS Award provides (Respondent’s underlining):

‘17.4 Where paid personal/carer’s leave credits are exhausted, an Agency Head may grant additional leave with or without pay. In exceptional circumstances and at the employee’s request, an employee may be granted leave without pay while paid personal/carer’s leave credits remain. To avoid doubt, this clause supplements the entitlement to two days unpaid carers’ leave per permissible occasion provided for by the NES.’

The Respondent submitted that the Applicant had not led any evidence to suggest the parties to the Agreement intended to confer a new and novel entitlement on the Respondent’s employees to take (and be granted) an unlimited amount of unpaid personal leave which far exceeded anything they would be entitled to by the NES or the APS Award.[66]

The Respondent noted that the Applicant sought to rely on Australian Federated Union of Locomotive Enginemen v State Rail Authority of NSW[67] as authority for the proposition that when the Commission is seized of a dispute arising under a term of an enterprise agreement which reposes a discretion in the employer (Respondent’s underlining):[68]

‘…the proper test to be applied and which has been applied for many years by the Commission is for the Commission to examine all the facts and not to interfere with the right of an employer to manage his own business unless he is seeking from the employees something which is unjust or unreasonable’.

The Respondent submitted that a test to that effect has been endorsed by the Commission in other matters,[69] with reference to Matthew Richardson v Ambulance Victoria[70]and Lend Lease Project Management and Construction (Australia) Pty Limited v Construction, Forestry, Mining and Energy Union.[71] The Respondent submitted that the test is a practical way for the Commission to show appropriate (but not excessive) deference to the managerial prerogative referred to in AWU v Alcoa World Alumina Australia.[72]

The Respondent submitted that the test:

assumes that the party which seeks to prevail upon the Commission to interfere with the decision made by the employer will put ‘all the facts’ before the Commission; and
indicates that the employer’s exercise of its discretion should not be interfered with in the absence of it being shown to be either ‘unjust’ or ‘unreasonable’.[73]

The Respondent submitted that:

· the test is not an inquiry into whether or not the decision lawfully made by management was ‘appropriate’ and nor does it require the employer to establish that its decision was reasonable; and
· it is for the employee who seeks to persuade the Commission to interfere with the employer’s exercise of its discretion to establish that this discretion was exercised unreasonably or unjustly.[74]

In this regard the Respondent submitted that the Applicant has not sought to provide evidence to the Commission that could be capable of persuading the Commission that the Respondent’s decision to refuse to grant unpaid leave on each occasion was unjust or unreasonable.[75] In particular, the Respondent submitted:

the Applicant has not identified the day or days which he claims he was absent and that the Respondent unjustly or unreasonably refused to grant him unpaid personal leave and instead brings his application to the Commission on an ‘all or nothing’ basis;
it would not be appropriate for the Commission to determine the Applicant’s claims without reference to ‘all the facts’ that relate to each instance he disputes;
the Applicant’s witness statement does not identify:
owhat specific duties he had been allocated on each day (or any particular day) on which he was absent;
owhether he had any credit of personal leave available which he could access on each day on which he was absent;
othe time he was required to commence work on each day on which he was absent;
othe time at which he notified the ATO of his absence on each day on which he was absent;
othe medical evidence which supported his absence on each day he was absent;
owhen he forwarded his application for unpaid personal leave to his manager on each occasion on which he was absent.[76]

Further, the Respondent submitted:

the evidence does not establish that the Applicant notified the Respondent of his unplanned absences ‘as soon as practicable’ as required by clause 54.4 of the Agreement.[77] In this regard the Respondent submitted:
oup until 26 October 2023 the Applicant’s regular hours of work were 7.00am to 2.51pm;
othe Respondent’s phone lines that the Applicant services are open from 8am each day;
oPart 2 of the Respondent’s ‘Attendance Management Guidelines’ requires employees to notify an appropriate manager as soon as practicable of any unscheduled inability to attend work, the type of leave the employee wishes to apply for, whether they will be obtaining medical advice/documentation and where possible the expected length of time they are likely to be away;
owhile the Applicant has not sought to identify the days on which he claims the Respondent ought to have granted him unpaid personal leave, he has attached emails to his witness statement and from these emails it appears the Applicant:
§failed to notify the Respondent of his absence prior to his scheduled start time of 7am on eight occasions;[78]
§has not provided any evidence of if, or if so, when, he notified the Respondent of his absence on all other occasions;
§did notify the Respondent of his absence on an (unidentified) number of occasions at a time which is not identified;
§did notify the Respondent of his absence prior to his scheduled start time on a single occasion;[79]
othe Applicant has not led any evidence which could establish it was not reasonably practicable for him to have notified the Respondent of his unexpected absence prior to his regular start time on each day;[80]
the evidence does not establish that the Applicant always provided satisfactory documentation in respect of his unplanned absences in accordance with clause 60.10 of the Agreement;[81]
the evidence establishes that the Applicant’s unplanned absences have generally caused inconvenience to the Respondent and on each occasion on which the Respondent declined to approve the Applicant’s taking of unpaid personal leave it informed him of its reasons for doing so, including that his absences had impacted its operational requirements.[82] In this regard the Respondent submitted that it is unsurprising that the Applicant’s pattern of regularly not attending a rostered shift, and notifying the Respondent of his absence until after his rostered start time, when he worked in a scheduled environment, would inevitably disrupt the Respondent’s operations;

the evidence does not establish that the Applicant did not have personal leave credits to draw on for each occasion in which he was absent. In this regard the Respondent submitted:
oclause 60.3 provided that the Applicant was credited with one week of paid personal leave on each yearly anniversary of his engagement and a further day of paid personal leave on each monthly anniversary of his engagement;
oover the period during which the Applicant claims the Respondent was required to grant him unpaid personal leave (which appears to commence in late July 2023 and run until November 2023) he would have accrued approximately four days of personal leave;
othe Applicant has not sought to explain why these credits were not available to him to access on any of the days on which he claims the Respondent was required to grant him unpaid personal leave;
othere are references in some of the emails which the Applicant has included in the attachments to his statement to him having personal leave credits on some of the occasions on which he was absent;[83]
the evidence does not establish that the Applicant was ineligible to apply for, and be granted, any other form of leave in circumstances where the Agreement confers a range of leave entitlements which the Applicant would be eligible to apply for;[84]
the evidence demonstrates that the Respondent has already undertaken a range of steps to support the Applicant over a number of years, including by allowing him to work flexibly.[85]

The Respondent submitted that the Applicant has failed to establish that the Respondent’s decision not to grant unpaid personal leave to him on any day was ‘unjust or unreasonable’ so as to warrant the Commission interfering with its exercise of the discretion conferred on it by clause 60.16 of the Agreement.[86]

What are the issues for determination?

Having considered the issues raised by the Applicant and Respondent, in my view, the first matter to be determined is whether:

the Respondent is required to approve personal leave in the circumstances described in clause 60.16; or, rather
clause 60.16 provides the Respondent with the discretion to approve or decline an application for personal leave.

In the case of a finding that clause 60.16 provides the Respondent with the discretion to decline an application for personal leave, the next matter for consideration is whether the Respondent’s exercise of its discretion under clause 60.16, having regard to all the facts, was unjust or unreasonable so as to warrant the interference of the Commission in the Respondent’s decision making.

If there is no finding that the Respondent’s exercise of discretion under clause 60.16 was unjust or unreasonable, there would be no basis for the Commission to interfere with the right of the Respondent to manage its business. However in the case of a finding that, having regard to all the facts, the Respondent’s exercise of its discretion under clause 60.16 gave rise to an outcome that is unjust or unreasonable, it would be open to the Commission to make a finding about whether the Applicant’s applications for unpaid personal leave should have been approved.

Does clause 60.16 require the Respondent to approve personal leave in the circumstances described in clause 60.16 or does it provide the Respondent with discretion to decline to approve unpaid Personal Leave?

The answer to this first matter is dependent on the proper construction of the Agreement.

The principles regarding the interpretation of enterprise agreements are well settled. In AMWU v Berri Pty Ltd[87], a Full Bench of the Commission summarised those principles as follows:

“1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:

(i)the text of the agreement viewed as a whole;

(ii)the disputed provision’s place and arrangement in the agreement;

(iii)the legislative context under which the agreement was made and in which it operates.

2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.

3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.

4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.

5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.

6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.

7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.

8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aid the interpretation of the agreement.

11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.

12. Evidence of objective background facts will include:

(i)evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;

(ii)notorious facts of which knowledge is to be presumed; and

(iii)evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.

15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”[88]

In James Cook University v Ridd,[89] the Full Court of the Federal Court of Australia summarised the principles as follows (references omitted):

“(i) The starting point is the ordinary meaning of the words, read as a whole and in context.

(ii) A purposive approach is preferred to a narrow or pedantic approach — the framers of such documents were likely to be of a “practical bent of mind”. The interpretation “turns upon the language of the particular agreement, understood in the light of its industrial context and purpose”.

(iii) Context is not confined to the words of the instrument surrounding the expression to be construed. It may extend to “... the entire document of which it is a part, or to other documents with which there is an association”.

(iv) Context may include “... ideas that gave rise to an expression in a document from which it has been taken”.

(v) Recourse may be had to the history of a particular clause “Where the circumstances allow the court to conclude that a clause in an award is the product of a history, out of which it grew to be adopted in its present form...”.

(vi) A generous construction is preferred over a strictly literal approach, but “Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties”.

(vii) Words are not to be interpreted in a vacuum divorced from industrial realities but in the light of the customs and working conditions of the particular industry.”[90]

The Full Court of the Federal Court in WorkPac Pty Ltd v Skene[91] articulated the approach to be adopted as follows:

“[197] The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context. The interpretation “… turns on the language of the particular agreement, understood in the light of its industrial context and purpose …”. The words are not to be interpreted in a vacuum divorced from industrial realities; rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament. To similar effect, it has been said that the framers of such documents were likely of a “practical bent of mind” and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced.”

As noted in the decisions referred to above, the starting point in considering the proper interpretation of the Agreement is to consider the ordinary meaning of the words, read as a whole and in context.

Clause 60 of the Agreement deals with personal leave. Clause 60.1 provides:

‘An employee will be able to access Personal Leave as follows:

a) Personal Leave for sick purposes (Personal Leave – Sisk) taken by an employee because of a personal illness, or injury, of the employee; or

b) Personal Leave for caring purposes (Personal Leave - Carer’s) taken by an
employee to provide care or support to:

i.a member of the employee’s immediate family or household; or
ii.another person for whom the employee has a caring responsibility,

who requires care or support because of:

a. a personal illness, or injury, of that person; or
b. an unexpected emergency affecting that person’.

Clause 60.1 describes the circumstances in which personal leave can be accessed but read in context, it does not provide an unqualified right to access personal leave if those circumstances exist. This is because the balance of the clause sets out certain conditions of access. In the case of paid parental leave an employee will need to have accrued personal leave credits (clause 60.2, clause 60.3, 60.4, clause 60.5) or have personal leave credits advanced to them (clause 60.6). Clause 60.7 deals with deferral of accrual dates in circumstances where more than 30 calendar days of leave without pay have been taken (clause 60.7), clause 60.8 deals with recognition of prior service and clause 60.9 provides for a reduction in personal leave credits in certain circumstances.

Clauses 60.10 – 60.15 deal with the requirements for satisfactory documentation and, by way of summary, set out the circumstances when the delegate may approve personal leave without requiring satisfactory documentation for absences and clarify that other applications for personal leave are required to be supported by satisfactory documentation (clause 60.10), state that for EL2 employees the delegate may require satisfactory documentation before approval to take or continue on personal leave (clause 60.11), describe what constitutes satisfactory documentation in relation to the circumstances in which the leave can be accessed (clause 60.12) and set out requirements for satisfactory documentation in respect of an employee who suffers from a recurring medical condition (clauses 60.13 – 60.15).

The detailed framework in clause 60 establishes that there is no unfettered right to personal leave and that certain conditions need to be met in order for the leave to be accessed. Further, clause 54 of the Agreement is clear in that ‘all leave is subject to approval by the delegate’. While clause 54 does not stipulate the conditions of access it plainly introduces a process of oversight.

Clause 60.16 only comes into play when at least one of the circumstances described in that clause are present. Those circumstances are that:

a)an employee has exhausted Personal Leave credits; or
b)an employee is not entitled to paid Personal Leave; or
c)an employee requests unpaid Personal Leave and the delegate determines it is warranted in the circumstances; or
d)the delegate determines that it is not appropriate to grant paid personal leave
e)for caring purposes (caring for ‘another person’).

Where at least one of those circumstances are present the chapeau to clause 60.16 states that a ‘delegate may approve unpaid Personal Leave’. The clause does not state that the delegate ‘must’ approve the leave but rather, the clause is clear on its face that the leave ‘may’ be granted and in this respect confers discretion on the delegate as to whether it should be granted in the circumstances referred to in that clause. The Agreement Principles do not change that construction and there is no other basis for reading the term ‘may’ as a ‘must’. As noted by the Respondent neither the NES or APS Award provide an unqualified right to an uncapped amount of unpaid personal leave in the circumstances described in clause 60.1 or otherwise and the text of the Agreement, read as a whole and in context, does not establish a common intention of the parties to provide such an entitlement.

I find that clause 60.16 provides the Respondent with the discretion to approve or decline an application for personal leave in the circumstances described in that clause.

Was the Respondent’s exercise of its discretion under clause 60.16 unjust or unreasonable?

The principle in Australian Federated Union of Locomotive Enginemen v State Rail Authority of NSW[92] was expressed as follows:

‘It seems to us that the proper test to be applied and which has been applied for many years by the Commission is for the Commission to examine all the facts and not to interfere with the right of an employer to manage his own business unless he is seeking from the employees something which is unjust or unreasonable. The test of injustice or unreasonableness would embrace matters of safety and health because a requirement by an employer for an employee to perform work which was unsafe or might damage the health of the employee would be both unjust and unreasonable.’[93]

In Lend Lease Project Management and Construction (Australia) Pty Limited v Construction, Forestry, Mining and Energy Union[94] the Full Bench of the Commission stated:

‘It may be accepted that the above principle is one which should be taken into account and given significant weight in the exercise of an arbitral discretion concerning whether the Commission should intervene in relation to a lawful business management decision by an employer. However to elevate the XPT Case principle into an immutable rule applicable to any employer decision is to overstate the effect of the principle.…[95]’

I am guided by the principle in Australian Federated Union of Locomotive Enginemen v State Rail Authority of NSW[96] and consider that in order to interfere with the right of the Respondent to manage its business I would need to be satisfied that the way in which the Respondent exercised its discretion was unjust or unreasonable.

The Applicant’s evidence establishes that his applications for unpaid personal leave have not been approved on a number of occasions. The Respondent contends the evidence before the Commission does not establish a complete picture as to the circumstances surrounding the non-approval on each occasion.

In my view, a finding cannot be made that, as a general proposition, whenever an employee has no personal leave credits and was not able to access another type of leave, the exercise of discretion to refuse the request would be unjust and/or unreasonable. The facts surrounding each instance of the exercise of the discretion would, in my view, need to be known, in addition to the broader context in which the requests are made.

In this regard the Applicant has provided evidence as to various occasions on which his unpaid personal leave was refused and the reasons provided by the Respondent for the refusal are set out in that evidence on most of those occasions. In particular:

the reasons for the 28 July 2023 Refusal, 10 August 2023 Refusal, 18 August 2023 Refusal, 25 August Refusal, 31 August 2023 Refusal, 26 September 2023 Refusal, 9 October 2023 Refusal, 20 October 2023 Refusal and 24 October 2023 Refusal were stated as ongoing operational requirements and the need for duties assigned to the Applicant to be completed – in particular Tax Time increased call loads, and large volumes of on hand activities;
the reasons for the 8 September 2023 Refusal and 25 September 2023 Refusal were stated as being due to:
othe Applicant failing to supply evidence to support his absences
othe Applicant not having leave credits available;
oongoing operational requirements and the need for duties assigned to the Applicant to be completed, in particular Tax Time increased call loads and large volumes of on hand activities;
the reasons for the 3 November 2023 Refusal were stated as being due to ongoing business requirements and priorities;
the reasons for the 8 December 2023 Refusal were stated as being due to ongoing business requirements and priorities, ongoing operational requirements and the need for duties assigned to the Applicant to be completed – in particular call loads and large volumes of on hand activities for the Applicant’s work types.

It appears that the Applicant may have resolved at least some of the concerns regarding meeting evidentiary requirements by providing medical certificates later. However, there is a common theme that emerges from the reasons being that there was a large volume of work and a need for it to be completed. The evidence establishes that the Applicant has had a significant number of unplanned absences and that the absences have continued despite supports the Respondent has extended to the Applicant to assist him in managing his health condition. I accept that continued and frequent unplanned absences to the extent and incidence of the Applicant’s absences would impact the Respondent’s operations and cause some disruption.

While I have empathy for the Applicant’s personal circumstances, clause 60.16 provides the Respondent with the discretion to approve or decline an application for personal leave. While the Agreement Principles emulate matters such as fairness, balance, flexibility, safety, health and wellbeing, the decisions made to refuse the leave need to be considered in context and the Agreement Principles do not contemplate an unlimited right to flexibility or approved time away from work. It is entirely reasonable for the Respondent to have regard to both its interests and the interests of its employees in deciding what is fair in the particular circumstances and the Agreement Principles do not stand in the way of it doing so. I am not persuaded that the exercise of the discretion to refuse the Applicant’s applications for unpaid personal leave is contrary to the Agreement Principles in circumstances where the Applicant’s unplanned absences have been so extensive over a lengthy period and where considerable support has been made available to the Applicant.

I note that the Applicant has submitted that he would incur prejudice if denied personal leave without pay, including potential adverse disciplinary consequences. Despite the characterisation of the absence, a person should not be directed to attend work in circumstances where they are unable to due to illness and Mr Thurling appears to have contemplated this in his emails to the Applicant where he stated refusing applications for unpaid personal leave ‘did not bring into question [the Applicant’s] health condition, personal circumstances nor medical certificates and it was not a direction for [the Applicant] to return to work whilst [he] was unwell’. If the Applicant is unfit for work due to illness it would be futile to require his attendance, notwithstanding that frequent unplanned absences would likely result in disruptions to operations. It is also difficult to see how disciplinary action could be considered an appropriate response to circumstances where a chronic health condition prevented attendance, regardless as to the characterisation of the absence or label affixed to the absence. Dependent upon the circumstances, this may raise considerations around whether an employee is able to perform the inherent requirements of the role and as noted by the Applicant, s.29(3)(d) of PS Act provides that a prescribed ground for termination is an ‘inability to perform duties because of physical or mental incapacity’. However, that is a matter distinct from the question as to whether the category of leave provided for on a discretionary basis in clause 60.16 should be granted.

In the determination of the dispute and having regard to all the circumstances I am not persuaded that the exercise of the discretion conferred on the delegate in clause 60.16 was unreasonable or unjust and I decline to interfere with the exercise of that discretion so as to reverse the Respondent’s decision to decline to approve the Applicant’s applications for unpaid personal leave.

COMMISSIONER

Appearances:

Mr P Dean, Counsel with Mr J Lapidos of the Australian Municipal, Administrative, Clerical and Services Union on behalf of the Applicant.
Mr C Rawson of Australian Government Solicitor, with Ms J Harmon and Ms S Sword on behalf of the Respondent.

Hearing details:

2024.
By Video using Microsoft Teams.
June 13.

[1] Applicant’s submissions at [5].

[2] Applicant’s submissions at [9].

[3] Applicant’s submissions at [10].

[4] Respondent’s submissions at [6].

[5] Respondent’s submissions at [6].

[6] Respondent’s submissions at [6].

[7] Respondent’s submissions at [8].

[8] Respondent’s submissions at [11].

[9] Respondent’s submissions at [15].

[10] [2012] FWA 643.

[11] [2012] FWA 9222.

[12] PR915827 at [58].

[13] [2012] FWA 9222.

[14] [2012] FWA 9222 at [110].

[15] Applicant’s submissions at [40].

[16] Applicant’s submissions at [40].

[17] 66 IR 182.

[18] Applicant’s submissions at [41].

[19] Applicant’s submissions at [42].

[20] Applicant’s submissions at [44].

[21] Applicant’s submissions at [43].

[22] Applicant’s submissions at [54].

[23] Australian Federated Union of Locomotive Enginemen and State Rail Authority of New South Wales (1984) 295 CAR 188.

[24]Applicant’s submissions at [54].

[25] Applicant’s submissions at [46] – [47].

[26] Applicant’s submissions at [48].

[27] Applicant’s submissions at [49].

[28] Applicant’s submissions at [50].

[29] Applicant’s submissions at [51].

[30] Applicant’s submissions at [52].

[31] Applicant’s submissions at [52].

[32] Applicant’s submissions at [55].

[33] Applicant’s submissions at [54].

[34] Applicant’s submissions at [57].

[35] Applicant’s witness statement at [1].

[36] Applicant’s witness statement at [4].

[37] Applicant’s witness statement at [5] – [8].

[38] Applicant’s witness statement at [8] – [9].

[39] Applicant’s witness statement at [10] – [11].

[40] Applicant’s witness statement at [12].

[41] Applicant’s witness statement at [12].

[42] Applicant’s witness statement at [13].

[43] Applicant’s witness statement at [14].

[44] Applicant’s witness statement, Attachment RK2.

[45] Applicant’s witness statement, Attachment RK3.

[46] Applicant’s witness statement at [16].

[47] Applicant’s witness statement at [17].

[48] Respondent’s submissions at [27].

[49] Respondent’s submissions at [27].

[50] Respondent’s submissions at [28].

[51] Respondent’s submissions at [30].

[52] Respondent’s submissions at [30].

[53] Respondent’s submissions at [34].

[54] Respondent’s submissions at [35].

[55] Respondent’s submissions at [36].

[56] Respondent’s submissions at [37].

[57] Respondent’s submissions at [38].

[58] Respondent’s submissions at [39].

[59] [2022] FCA 1225.

[60] Respondent’s submissions at [39].

[61] [2022] FCA 1225 at [292].

[62] Respondent’s submissions at [40].

[63] Fair Work Act 2009 (Cth), s.55(1).

[64] Fair Work Act 2009 (Cth), s.56.

[65] Respondent’s submissions at [41].

[66] Respondent’s submissions at [43].

[67] (1984) 295 CAR 188; Print F6941.

[68] Respondent’s submissions at [44].

[69] Respondent’s submissions at [45].

[70] [2024] FWC 1313 at [53] – [54].

[71] [2015] FWCFB 1889 at [28].

[72] Respondent’s Submissions at [45] with reference to AWU v Alcoa World Alumina Australia[2012] FWA 9222.

[73] Respondent’s submissions at [45].

[74] Respondent’s submissions at [47].

[75] Respondent’s submissions at [48].

[76] Respondent’s submissions at [48].

[77] Respondent’s submissions at [48].

[78] 31 July 2023 (8:45am), 10 August 2023 (7:42am), 25 August 2023 (8:19am), 31 August (8.56am), 25 September 2023 (8:15am), 26 September 2023 (7.37am), 20 October 2023 (8.28am), 24 October 2023 (8.51am).

[79] Respondent’s submissions at [51].

[80] Respondent’s submissions at [52].

[81] Respondent’s submissions at [53].

[82] Respondent’s submissions at [54] with reference to Applicant’s Witness Statement, RK-2 at pages 2 and 5.

[83] Respondent’s submissions at [55] with reference to Applicant’s Witness Statement, RK-2, see for example the emails from Mr Thurling dated 18 August 2023, 8 September 2023, 9 October 2023 and 20 October 2023.

[84] Respondent’s submissions at [56].

[85] Respondent’s submissions at [56].

[86] Respondent’s submissions at [57].

[87] [2017] FWCFB 3005.

[88] Ibid, [114].

[89] [2020] FCAFC 123.

[90] Ibid, [65].

[91] [2018] FCAFC 131, 264 FCR 536.

[92] Australian Federated Union of Locomotive Enginemen and State Rail Authority of New South Wales (1984) 295 CAR 188.

[93] (1984) 295 CAR 188 at 191.

[94] [2015] FWCFB 1889.

[95] [2015] FWCFB 1889 at [27].

[96] Australian Federated Union of Locomotive Enginemen and State Rail Authority of New South Wales (1984) 295 CAR 188.

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