Shirley Cronin v Water Corporation
[2022] FWC 630
•27 MAY 2022
| [2022] FWC 630 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Shirley Cronin
v
Water Corporation
(C2021/8015)
| DEPUTY PRESIDENT BEAUMONT | PERTH, 27 MAY 2022 |
Alleged dispute about any matters arising under the enterprise agreement
This decision concerns an application made by Ms Shirley Cronin under s 739 of the Fair Work Act 2009 (Cth) (the Act) for the Commission to deal with a dispute in accordance with the dispute settlement procedure in clause 39 of the Water Corporation Enterprise Agreement 2021 (the Agreement).[1]
It is uncontroversial that Ms Cronin’s position was made redundant on 5 December 2021. However, the dispute between the parties is whether the new role assigned to Ms Cronin constitutes ‘Suitable Alternative Employment’ or ‘Alternative Employment’, as defined under clause 37.2 of the Agreement.
There are certain implications for Ms Cronin depending on that finding. If Suitable Alternative Employment cannot be identified and Ms Cronin is unwilling to undergo reasonable training or retraining, and declines an offer of Alternative Employment, this will oblige Water Corporation to provide Ms Cronin with a severance payment and leave payments. Much then hinges on whether the new role assigned to Ms Cronin constitutes Suitable Alternative Employment or Alternative Employment.
The new role assigned to Ms Cronin is that of Principal Costing and Systems (Principal or Principal role). Ms Cronin previously held the role of Manager – Costing Systems and Analytics (Manager or Manager role). Ms Cronin argues that the position of Principal constitutes ‘Alternative Employment’, whereas Water Corporation says it is Suitable Alternative Employment. The definitions of the two terms are set out at clause 37.2 of the Agreement as follows:
Term Meaning Suitable Alternative Employment Permanent employment that is substantially similar to and overall, no less favourable than, the Employee’s current terms and conditions which they are capable of performing with minimal training and will not require them to change their place of residence. Alternative Employment Employment that does not meet the definition of Suitable Alternative Employment and is less favourable overall in comparison to the Employee’s current terms and conditions.
In light of the preceding context, Water Corporation submits that the issue can be reduced to one question. Namely, is the employment that has been offered to Ms Cronin, being the Principal role, Suitable Alternative Employment for the purposes of clause 37.2 of the Agreement. I similarly agree that this is the controversy to be determined. I further note, that it is uncontroversial that: (a) there is a dispute between Ms Cronin and Water Corporation; (b) the dispute has been properly notified to the Commission; and (c) the requirements of the dispute settlement procedure have been complied with.
In response to the question asked, namely is the Principal role Suitable Alternative Employment, for the following reasons I have determined that the answer is ‘yes’.
The restructure and the new role
In November 2021, Water Corporation announced a restructure of the Finance Group. This restructure amalgamated the Strategic Finance Business Unit and Group Finance Business Unit to create one new business unit titled, ‘Financial Services’ (Restructure).[2]
Ms Deb Evans, Head of Financial Services, gave evidence about the merger of the Strategic Finance Business Unit and Group Finance Business Unit into the one business unit and the subsequent organisational structure adopted. She acknowledged that as Head of Strategic Finance at the time, she had been involved in creating the new organisational design for the Restructure.[3]
Ms Evans explained that she worked with Mr Dean Page, Chief Financial Officer, Mr Geoff Archard, Senior Principal from People & Capability (P&C), and Mr Ray Curtis, Acting Head Group of Finance (the Working Group) to establish a new organisational structure.
Ms Evans said that before the new structure was designed, the Working Group focused on grouping together relevant functions and accountabilities that would help deliver a fit for purpose and forward looking operating model.[4] Once the functions and activities of each business unit were grouped together, the Working Group considered how best to structure the teams including fitting the existing roles into the new structure.[5]
Regarding Ms Cronin’s role of Manager, Ms Evans said that the Working Group decided that the role would provide the same services in the new structure.[6] Ms Evans detailed the following:
a) the functions of the role would still be required but there would be a greater emphasis on benchmarking for internal and external use;
b) the role would sit in the Financial Accounting and Reporting team because the role focused on determining costing guidelines and frameworks which were then to be applied to the business; and
c) the role, or rather Ms Cronin, would continue be the Subject Matter Expert (SME) for SAP FICO, Water Corporation’s financial system.
Ms Evans further explained that the Working Group had been tasked with deciding whether the role was one of ‘Section Manager’ or ‘Principal’.[7] It was said that a ‘Section Manager’ generally had multiple direct reports,[8] in contrast to a ‘Principal’ who provided technical expertise and knowledge, but did not necessarily have direct reports.[9] Ms Evans stated that the Working Group decided that Ms Cronin was performing work equivalent to a ‘Principal’ level role because it was a standalone role that did not require any direct reports.[10]
Although the Manager role reported to the Head of Group Finance, the Working Group thought it appropriate that Ms Cronin report to a Section Manager in the new structure.[11] The Working Group held the view that Ms Cronin was a SME and did not have any people reporting to her at the time of the Restructure.[12] In their view, these factors were strong indicators that the role was a Principal role.[13]
It is relevant to note at this point that before the Restructure, Ms Cronin was said to have had two direct reports.[14] However, one of the roles was vacant for a substantial period and was eventually given up by way of a budget saving, and the second, was vacant for periods because the person assigned the role took up ‘acting up’ opportunities across the business.[15]
Ms Evans recalled her involvement in the development of the job description (JD) for the Principal role.[16] She worked with Ms Rochelle Lonsdale, Senior Advisor P&C, to write the JD,[17] examining the current responsibilities of the Manager role and what she wanted to add or change to the role.[18] Ms Evans said that there was not a lot of change to Ms Cronin’s role and a majority of duties and accountabilities were retained.[19]
However, Ms Evans noted that having received a draft of the JD from Ms Lonsdale, she considered that the JD needed to reflect a greater emphasis on making sure cost accounting principles were correctly applied within Water Corporation through developing strong relationships with Finance Managers, ensuring a focus on keeping up to date with new technologies and developments in financial software/systems, and to remove the direct reports.[20] The changes were made by Ms Lonsdale and thereafter Ms Evans sent the JD through to Mr Curtis for approval.[21]
Having been approved by Mr Curtis, the JD for the Principal role was sent to a Classification Panel for review.[22]
Ms Lonsdale provided some context about the Classification Panel and its processes. She explained that at Water Corporation, roles are classified by the Classification Panel which consists of two Senior Advisors from P&C who are trained to use the Korn Ferry Job Evaluation Methodology (Methodology).[23]
Ms Lonsdale stated that she established an ‘extraordinary class panel’ for the restructure which consisted of three class panel members (Panel).[24] The Panel was said to have been established to contend with a large volume of JDs arriving from the Restructure, which needed independent classification. The members on the Panel included Ms Carole Borserini, Acting Senior Principal, P&C, who gave the following evidence in the proceedings.
Ms Borserini explained that Panel members were provided the JD for a role prior to the Panel meeting. They review the JD individually using the Methodology, before meeting to discuss the JD and their individual ratings, with a view to determine a consensus rating.[25] This rating and any other feedback about the JD was provided back to the relevant P&C representative who submitted the JD to the Panel for review.
Ms Borserini elaborated on the Panel’s use of the Methodology which outlined five elements for consideration when classifying a role.[26] Those elements included: (a) Know-how; (b) Planning, Organising and Integrating Knowledge; (c) Communications and Influencing Skills; (d) Problem solving; and (e) Profile. Ms Borserini stated that once the Panel had classified a role, it used another classification chart to determine the final Water Corporation job level.[27]
The Panel initially assessed the Principal role as being a Level 7 role.[28] However, Ms Borserini provided feedback to Ms Lonsdale about the wording of the JD which was amended accordingly and resubmitted to the Panel on 26 October 2021. The Panel thereafter assigned the Principal role as a Level 7 job role. Ms Borserini provided a detailed explanation of her evaluation of the Principal role as follows:
I got a Level 7 rating by applying the elements in the Methodology:
a. Know-how = E+. Due to the essential criteria including a degree and substantial experience the relevant rating is E+.
b. Planning, Organising and Integrating Knowledge = I. Most roles at Water Corporation are an ‘I’. The Principal Role requires knowledge and planning in one specific area (primarily costing) and therefore is an ‘I’ level. To be an ‘II’ the role must look after multiple distinct streams of work and this level is only used for some senior management roles.
c. Communicating and Influencing Skills = 3. The Principal Role requires a reasonably high level of influencing skills as demonstrated through the JD, particularly in relation to stakeholder management and supporting recommendations for Chief Financial Officer approval, and communicating to the broader business to ensure they are adopted and implemented. Therefore the required level is a ‘3’ because the role has the ability to change behaviour.
d. Problem solving = 33%. This element is somewhat structured because a role cannot have higher problem solving accountability than it’s manager’s role. 33% is an Experienced Specialist which is appropriate for the Principal Role because it works independently within a wide range of procedures and standards, selects from professional principles to address variable situations, maintains and improves existing work processes and methods and works to a short term horizon. The role as described in the JD requires a higher level of problem solving (analysing, reasoning creating) than a Professional Specialist at 29%. I did not rate the Principal Role as a 38% because this percentage would usually only be applied to Section Managers. In any event, if I had determined that the Principal Role was a 38%, under the Methodology the role would still be classified as a Level 7.
e. Profile = A1. Most roles at Water Corporation are classified as ‘A1’ which is the Analysis, Advisory level. This level is associated with functional support roles, including finance, and involves developing, implementing and advising on the application of Policy, which is clearly reflected in the Principal Role JD.[29]
It is of course uncontroversial that during the Restructure, Ms Cronin’s former role as Manager was made redundant and Ms Cronin was provided with the Principal role on the basis it was Suitable Alternative Employment. It was Ms Borserini that conducted a review of the suitability of the Principal role for Ms Cronin, after Ms Cronin raised that the Principal role was not Suitable Alternative Employment.[30]
Meetings were held between Ms Borserini, Ms Cronin and her support person on 16 November 2021 and 22 November 2021. At the latter meeting, Ms Cronin was said to have expressed concern about the reporting lines given that in the Principal role she would now be reporting to a Section Manager role.[31]
Ms Borserini explained that it was uncommon that a Level 7 role would report to a ‘Head of Business Unit’ at Water Corporation.[32] Relying on information provided by Water Corporation’s Employee Relations team, Ms Borserini detailed that the Level 7 role was paid within the pay scales of the Agreement and did not have senior leadership accountabilities of a ‘CLC role’.[33] Ms Borserini stated that 91.74% of Level 7 roles report to a manager/manager equivalent role or team leader, with 8.26% reporting to a Head of Business Unit or regional manager.
Regarding reference to a ‘CLC’ role, Ms Borserini further explained that a ‘CLC’ role or ‘Common Law Contract’ role was one which provided a significant level of leadership or management within Water Corporation and was paid above the pay scales in the Agreement.[34] In contrast, an Agreement role was paid within the pay scales of the Agreement and included lower level management roles.[35]
Ms Borserini noted that CLC roles were generally Section Manager positions and above, and were usually a Level 8 or higher, although there were some Level 7 CLC roles that could also be ‘Managerial roles’ or ‘Senior Principal roles’.[36] However, regarding ‘Principal roles’, Ms Borserini observed they were almost always an Agreement Level 7 because of the type of responsibility they held, and that ‘Principal roles’ usually reported to a Section Manager rather than directly to a Head of a Business Unit.[37]
Ms Borserini detailed that from 2013 to 2018, Ms Cronin’s position in its data system was recorded as CLC Level 7, and thereafter was an Agreement Level 7.[38] Explaining further, Ms Borserini stated there had been a change around 2017/2018 in the criteria for assessing CLC and Agreement Level 7.[39] The criteria used when determining whether a Level 7 role was a CLC or Agreement role, included, said Ms Borserini, consideration of whether the role led a Section or Technical/Operations Advisory Team or the role led people that manage a team or manages a team of technical experts.[40]
Ms Borserini expressed that in her view, if Ms Cronin’s former Manager role were to be assessed against the criteria today, it would not be considered a CLC role, particularly in circumstances where the role only had one or two direct reports.
Ms Borserini also recalled that Ms Cronin expressed concern that the Principal role had similar accountabilities to a former Level 6 role in the old structure.[41] In response, Ms Borserini said she informed Ms Cronin that some accountabilities would be similar, and it was to be expected that the Principal role would have overlap between a Level 6 and Level 7 role, and that there was also overlap between her Manager role and the Principal role.[42]
In response to Ms Cronin’s consternation that she had lost her direct reports, Ms Borserini said that she informed Ms Cronin that whilst not holding direct reports, she could still access resources from other levels to assist her as the SME.[43]
The Agreement and Suitable Alternative Employment
As noted, much hinges on whether the Principal role constitutes Suitable Alternative Employment or Alternative Employment. The Agreement illuminates the meaning of those terms at clause 37.2 and thereafter sheds light on why they are of relevance:
37.2 Definitions
Term Meaning Redundancy A situation when the job performed by the Employee ceases to exist or becomes surplus to requirements Service The Employee’s total length of continuous service with Water Corporation including prior continuous service in the Corporation. Suitable Alternative Employment Permanent employment that is substantially similar to and overall, no less favourable than, the Employee’s current terms and conditions which they are capable of performing with minimal training and will not require them to change their place of residence. Alternative Employment Employment that does not meet the definition of Suitable Alternative Employment and is less favourable overall in comparison to the Employee’s current terms and conditions.
37.3 Redundancy
(a) If an Employee’s job becomes redundant, Water Corporation:
·may redeploy them within Water Corporation to Suitable Alternative Employment or Alternative Employment in accordance with clause 37.4;
·will pay them a severance payment in accordance with clause 37.10 and payment for leave entitlements in accordance with clause 37.11, if they can’t be redeployed within Water Corporation and their employment is terminated…
37.4 Redeployment and Retraining
(a)Water Corporation will determine the suitability of alternative employment after consultation with the Employee and their nominated representative and consideration of the Employee’s specific circumstances.
(b)The dispute settlement procedure outlined in clause 39 will apply to any dispute between an Employee and Water Corporation about whether a position falls within the definition of Suitable Alternative Employment as defined in clause 37.2.
(c)If an Employee’s position is made redundant Water Corporation may offer them Alternative Employment where Suitable Alternative Employment is not available. Offers of Alternative Employment must be accepted within 3 weeks of their position becoming redundant. If an Employee accepts an offer of Alternative Employment, the Employee will be eligible for Redeployment Income Maintenance in accordance with clause 37.7.
(d)If Suitable Alternative Employment cannot be identified, the Employee is unwilling to undergo reasonable training or retraining and they do not accept an offer of Alternative Employment, then they will be entitled to receive a severance payment and leave payments in accordance with clauses 37.10 and 37.11, upon termination of employment…
37.6 Trial Period in Alternative Employment
(a)If an Employee accepts an offer of Alternative Employment, Water Corporation will provide them with a trial period of 3 months. During or at the conclusion of the trial period, the Employee may elect to resign if the employment is not suitable, in which case Water Corporation will pay the entitlements provided in clause 37.10.
Ms Cronin’s submissions
Ms Cronin submitted that the legal definition attributed to the term ‘substantially similar’, presumedly as referred to in the definition of Suitable Alternative Employment, was that of being ‘similar in importance, degree, amount, placement or extent’. Ms Cronin submitted that the Principal role did not satisfy this definition because:
a) the reporting structure had changed and represented a reduction in status;
b) ‘Manager’ had been removed from the title;
c) there was no discretion as to the work Ms Cronin would perform and that which she could allocate to others;
d) the JD included Level 6 ‘Analyst’ tasks; and
e) there were no direct reports.
Expanding upon her initial submission, Ms Cronin stated that before the Restructure the Manager role she held was that of a Section Manager, she had two direct reports, and reported into a Head of Business Unit. In contrast, said Ms Cronin, the Principal role, had no direct reports, reported to a Section Manager (who was formally her peer in the hierarchy), and the Section Manager continued to report to a Head of Business Unit.
Ms Cronin stated that in her Manager role, she was part of the Business Unit’s Lead Team (since 2008). This Lead Team met regularly to set the strategic direction of the Business Unit, establish priorities, share information, and discuss resourcing and other related issues. Ms Cronin submitted that the Principal role no longer sat on the Lead Team, noting that this had been communicated by the Chief Financial Officer who had sent a Water Corporation wide email to the business listing the Lead Team members to the exclusion of Ms Cronin. Ms Cronin reported that she received questions from her peers regarding her exclusion from the Lead Team and her no longer being a Section Manager.
Ms Cronin highlighted, that over the past 14 years she had held direct leadership responsibility which had furthered her professional development. Furthermore, while her team was small, leadership was a valid dimension of her role which Water Corporation had, in her view, sought to downplay.
In respect of her remuneration, Ms Cronin identified that whilst her role was classified as a Level 7 under the Agreement, she had, since 2018, been in receipt of a salary commensurate with Level 8, being above the top pay band for Level 7 in the Agreement.
Expanding upon this point, Ms Cronin submitted that the Agreement described Level 7 as having 10 increments for the purpose of salary entitlement. Level 7(1) paid $140,438 in contrast to Level 7(10) which paid $150,771. Ms Cronin further submitted that where an individual graded as Level 7(1) had achieved a performance rating of ‘Meeting’ or above, they could receive a higher salary under the Performance Pay Scales with increments 1-3. ‘A1’ attracted remuneration of $154,673 and ‘A3’ attracted remuneration of $161,047. Ms Cronin pointed out that she was on Level 7 – A3 and her salary was $162,634 (above the highest level in the Agreement).
According to Ms Cronin, the JD for the Principal role showed that the role was merging the redundant role of Manager (Level 7) with a Senior Analyst – Costing (Level 6). It was therefore Ms Cronin’s contention that the Principal role was junior to her former position with many accountabilities being included that would have been performed by the people who reported to her former role, instead she would now be performing those duty tasks herself.
Respondent’s submissions
Water Corporation submitted that the clause central to the dispute was clause 37 of the Agreement, noting that clause 37.3(a) provided that if an employee’s job became redundant, Water Corporation may redeploy them to Suitable Alternative Employment or Alternative Employment, in accordance with clause 37.4.
Water Corporation further submitted that clause 37.4(c) of the Agreement provided that it may offer an employee Alternative Employment where Suitable Alternative Employment is not available (emphasis added). Therefore, according to Water Corporation, the starting point was that it must endeavour to find Suitable Alternative Employment for an employee whose role is made redundant.
Regarding the term Suitable Alternative Employment, Water Corporation observed that there were limited authorities dealing with phrase, albeit the Commission and its predecessors had in the past extensively considered the concept of ‘acceptable alternative employment’.
Water Corporation noted that ‘suitable’ in its ordinary sense may be taken to mean whether something is right or appropriate for a particular person,[44] and whilst ‘suitable’ and ‘acceptable’ may have slightly different meanings, the authorities dealing with the latter term were relevant and apposite.[45]
Reference was made to three decisions of the Commission where the term ‘acceptable alternative employment’ had been considered. Those decisions included Oscar Oscar Group Services Pty Ltd v Lees,[46] Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia (Feltex),[47] and Ryan v Insurance Australia Group Services Pty Ltd & Insurance Manufacturers of Australia Pty Ltd (Ryan).[48] In Feltex, it was said that ‘acceptable alternative employment’ is not necessarily identical employment and that it had been previously held that employment was ‘acceptable’ notwithstanding inconvenience to employees and some detrimental alteration to the terms and conditions of employment.[49] Clarification was provided in Ryan that a feeling of loss of status or importance within an organisation, was not a factor that warranted consideration when determining whether a position was comparable.[50]
Water Corporation submitted that suitability must be considered in context and an objective assessment undertaken.[51] In its view, the Principal role was substantially similar to, and considered on an overall basis, no less favourable than the Manager role because the Principal role:
(a) was a Level 7 role which was the same level as the Manager role, and was substantially similar in terms of responsibilities with no material change in status, given its classification at an equivalent level to Ms Cronin’s previous role;
(b) had substantially similar duties and accountabilities as the Manager role, as evidenced in the JDs for both roles;[52]
(c) included a level of skill and experience relative to the Manager role, and Ms Cronin would effectively be performing the same work in the Principal role; and
(d) the Principal role attracted the same benefits and remuneration as the Manager role.
In respect of the JD and the classification of the Principal role, Water Corporation emphasised that the Working Group determined that the majority of functions Ms Cronin was performing would still be required in the new structure but the JD for the role needed to be updated to reflect some changes. Water Corporation added that both the Principal role and Manager role had been appropriately classified at Level 7 in accordance with the Methodology, therefore the Principal role was of equivalent complexity and status to the Manager role, notwithstanding any superficial differences that may exist between the two roles.[53]
In response to Ms Cronin’s argument that the Principal role was not suitable, Water Corporation remarked that what Ms Cronin sought was an identical position rather than a suitable position, and no such position existed.[54] It was the Water Corporation’s position that clause 37.2 did not require it to provide an employee with an identical role, but rather one that was ‘substantially similar’ to her former position.[55] In this respect, Water Corporation argued that it was required, and had endeavoured, to provide Ms Cronin with a role that was as close in status and accountabilities as possible to her former position when the two roles were considered as a whole.
Principles of interpretation
The principles that govern the interpretation of enterprise agreements are well-established. In WorkPac Pty Ltd v Skene (Workpac),[56] the Full Court of the Federal Court elucidated the following:
The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context: City of Wanneroo v Holmes (1989) 30 IR 362 (Holmes) at 378 (French J). The interpretation “turns on the language of the particular agreement, understood in the light of its industrial context and purpose”: Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 (Amcor) at [2] (Gleeson CJ and McHugh J). The words are not to be interpreted in a vacuum divorced from industrial realities (Holmes at 378); 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 (Holmes at 378-379, citing George A Bond & Company Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503 (Street J)). 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: see Kucks v CSR Ltd (1996) 66 IR 182 at 184 (Madgwick J); Shop, Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011] FCAFC 67 at [16] (Marshall, Tracey and Flick JJ); Amcor at [96] (Kirby J).[57]
In that same decision, the Full Court of the Federal Court voiced that where a term is undefined, unless there is a contrary indication, it ought to be presumed that the draftsperson intended that the term have its ordinary meaning.[58] And so, despite the broad purposive approach to be adopted when interpreting industrial agreements, that cannon of construction regarding the ‘ordinary meaning’ remains applicable as a starting point.[59]
The Full Bench decisions of the Commission in AMWU v Berri Pty Ltd (Berri),[60], and the earlier decision in AMIEU v Golden Cockerel Pty Ltd,[61] embrace such principles. Berri affirmed that the interpretation of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words.
Where there is a dispute over the interpretation of an enterprise agreement the resolution will turn on the language of the agreement, having regard to its context and purpose.[62] Context might appear from the text of the agreement as a whole, the disputed provision’s place and arrangement in the agreement, and the legislative framework under which the agreement was made.[63] However, the task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome.[64]
Statutory context
Insofar as clause 37 is concerned, it is unremarkable to find a provision in an enterprise agreement that provides for a redundancy payment. Of course, the NES prescribe a minimum standard for redundancy pay in s 119, and s 120 permits the Commission, in certain circumstances, to vary an amount of redundancy pay to which an employee is entitled under s 119. In this respect s 120 provides:
(1) This section applies if:
a) an employee is entitled to be paid an amount of redundancy pay by the employer because of section 119; and
b) the employer:
(i)obtains other acceptable employment for the employee; or
(ii)cannot pay the amount.
(2) On application by the employer, the FWC may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that the FWC considers appropriate.
(3) The amount of redundancy pay to which the employee is entitled under section 119 is the reduced amount specified in the determination. (italics my emphasis).
Section 55(4) of the Act permits an enterprise agreement to include terms that are ‘ancillary or incidental’ to the operation of an entitlement of an employee under the NES or that supplement the NES. However, those terms that are ancillary or incidental to, or that supplement, the NES, must not be detrimental to an employee in any respect when compared to the NES. Section 55(5) permits an enterprise agreement to include terms that have the same or substantially the same effect as provisions of the NES, whether or not such terms are ancillary or supplementary terms.
Section 55(6) of the Act provides that if an enterprise agreement includes terms permitted by ss 55(4) or (5) then if such terms give an employee an entitlement that is the same as an entitlement under the NES, the enterprise agreement terms operate in parallel with the employee’s NES entitlement. But the employee will not be given a double benefit. The provision of the NES ‘relating to the NES entitlement apply, as a minimum standard’ to the enterprise agreement entitlement.
To the extent that the redundancy pay entitlement in an agreement provides an entitlement, the effect of which is the same or substantially the same as the NES entitlement in s 119, then as s 55(6)(b) makes clear, the provisions of the NES relating to the NES entitlement apply as a minimum standard to the enterprise agreement entitlement that is the same as the NES entitlement.[65]
What is evident from the words in s 120 is that the section only applies if the employee ‘is entitled to be paid an amount of redundancy pay by the employer because of section 119’.[66] However, the inclusion of redundancy pay entitlements that are more generous than the NES scale is authorised by s 55(4)(b). The analysis in the Full Bench decision in Maritime Union of Australia v FBIS International Protective Services (Aust) Pty Ltd,[67] demonstrated that ‘it is possible for an enterprise agreement to provide for a term which requires a redundancy entitlement to be paid unencumbered by s 120 of the Act, where that entitlement is more beneficial to employees than that prescribed by s 119.[68]
Whilst s 120 of the Act speaks of varying redundancy pay in circumstances where an employer has obtained other ‘acceptable employment’ for an employee, the Agreement provides that where Water Corporation cannot identify Suitable Alternative Employment and the employee is unwilling to undergo reasonable training or retraining and they do not accept an offer of Alternative Employment, then the employee will be entitled to severance payment and leave payments upon termination of employment.
While Water Corporation has referred to several authorities that have considered the operation of s 120 of the Act, and in particular the phrase ‘other acceptable employment’, those same authorities may prove to be little assistance when determining whether the Principal role is Suitable Alternative Employment. In short, this is because the Commission is asked to determine whether the Principal role is substantially similar to and overall, no less favourable than the Manager role – the question is not whether Water Corporation has obtained other acceptable employment for Ms Cronin.
However, the authorities referred to by Water Corporation are not absent utility. Water Corporation submitted that ‘suitability’ must be considered in context and an objective assessment undertaken.[69] As to whether the Principal role is Suitable Alternative Employment that is to be determined, in my view, by way of an objective analysis involving a comparison between the terms and conditions that apply currently and those terms and conditions applicable in the Principal role.
Suitable Alternative Employment
The Agreement informs the reader at clause 37.2 that to constitute Suitable Alternative Employment, the ‘Employment’ must be: (a) permanent; and (b) substantially similar to and overall, no less favourable than, Ms Cronin’s current terms and conditions which she is capable of performing with minimal training and that she is not required to change her place of residence.
It is accepted that the starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context. Whilst there is perhaps a tendency to interpret first the meaning of ‘substantially similar to and overall, no less favourable…’, in my opinion, the first issue to grapple with is identifying the terms and conditions of Ms Cronin’s current ‘employment’ and those that will exist on redeployment.
At this juncture, it is important to highlight that the definitions of Suitable Alternative Employment and Alternative Employment do not refer to a ‘position’, ‘role’ or ‘job’, but rather ‘permanent employment’. There is no express requirement that a position or role must, for example, be ‘substantially similar to and overall, no less favourable than…’ to constitute Suitable Alternative Employment. However, it does appear implicit in the meaning of the term.
The Agreement defines the term ‘Redundancy’ as a situation where the ‘job’ of an employee ceases to exist or becomes surplus to requirements (see clause 37.2). Clause 37.3 of the Agreement is similarly prefaced on an employee’s ‘job’ becoming redundant and clause 37.4(b) speaks of the utilisation of the dispute settlement procedure (clause 39) where there is a dispute as to whether a position falls within the definition of Suitable Alternative Employment. Clause 37.4(c) of the Agreement also refers to an employee’s position being made redundant.
Returning to clause 37.4, it is evident that the Agreement contemplates the utilisation of the dispute settlement procedure in circumstances where a dispute arises about whether a ‘position’ falls within the definition of Suitable Alternative Employment. However, I do not consider that the reference to ‘position’ limits a comparative exercise as one being between two JDs; namely, that of the Principal role and the Manager role. That is not to say that the JDs of both roles are not material considerations. However, in my view the comparative exercise extends to a consideration of the ‘current terms and conditions’ and those ‘proposed’ in the redeployment, as is evident from the definition of both Suitable Alternative Employment and Alternative Employment.
As to where the ‘current terms and conditions’ sit, the Agreement sets out the obligations (or entitlements) of employees and Water Corporation in respect of matters such as hours of work, types of employment, breaks, allowances, leave, and the like. The evidence before me leads to an uncontroversial conclusion that the terms and conditions set out in the Agreement are equally applicable to Ms Cronin irrespective of whether she occupies the Principal role or Manager role. Ms Cronin will continue to be covered by the Agreement and it will continue to apply to her in her employment. The consideration is a relevant one, given that it is the Agreement that sets out the definitions, obligations and entitlements pertaining to redundancy, redeployment and retraining for Agreement covered employees.
Concerning the terms and conditions set out in the Agreement, there is no evidence before me to suggest that Ms Cronin’s hours of work, location of work, leave entitlements, or any other terms as provided for by the Agreement, will differ. In this respect, Ms Cronin’s terms and conditions on redeployment will be substantially similar to and overall, no less favourable, than those in her current role.
However, the specific accountabilities and scope of Ms Cronin’s current role and the Principal role are not necessarily illuminated by the Agreement.
The scope of the Agreement is set out in clause 3. It extends to Water Corporation and its employees that fall within the classifications outlined within Schedule A – Rates of Pay.
Schedule A – Rates of Pay, provide that the employees covered by the Agreement will be paid according to the tables in the Schedule and Appendix C – Groundwater Operations. Appendix C - Groundwater Operations has no relevance to these proceedings. Therefore, the focus sits squarely on Schedule A, ‘Section A: Salaried Employees’. Under Section A: Salaried Employees are two further sections – ‘A.1 Salary Pay Scales’ and ‘A.2 Performance Pay Scales’.
Under Section A.1 Salary Pay Scales is ‘Table 1 – Normal Salary Scales’. In the first column of Table 1 are the ‘Salaried Classification Levels’. There are seven Salaried Classification Levels ranging from L1 – L7. Each level is further divided by pay points, of which there are ten, ranging from 1-10. The Agreement is silent in respect of distinguishing between the different classification levels in terms of duties, responsibilities, tasks or examples of work or roles undertaken.
Section A.2 Performance Pay Scales sets out that Water Corporation will conduct performance-based reviews in August/September each year, provided the employee has a performance agreement in place each year. Regarding those employees sitting at Salaried Levels 6 and 7 (see Schedule A Section A.2 Performance Pay Scales (b) Salaried Levels 6 & 7) the following is provided:
Performance Based Salary Scales will operate in the following way for salaried levels 6 and 7:
(i) If an Employee reaches the top of the normal scale, they will be eligible for the Performance Based Salary Scale, subject to their performance. To access the scale an Employee will need to have a Performance Agreement in place and achieve a performance rating of 'Meeting'. Performance ratings will only be valid once they are confirmed through a management process designed to ensure consistency across Water Corporation.
(ii) Water Corporation expects that between 80% and 95% of employees at the top of their normal pay ranges will be eligible for entry to the Performance Pay Salary Scales, by meeting the following criteria:
• Having a performance agreement in place; and
• Achieving a performance rating of 'Meeting' or higher.
(iii) Once an Employee has reached the top of the normal scale, a performance rating of
'Meeting' or higher, will result in the following movements:• 'Meeting' - Salary level A 1
• 'Exceeding' - Salary level A2
• 'Outstanding' - Salary level A3.
(iv) Once an Employee has been promoted to the Performance Based Salary Scale, if they achieve a performance rating of 'Meeting' at the next review, this will result in a movement of one increment, but not beyond A3 (e.g. from A 1 to A2 or from A2 to A3).
(v) If an Employee achieves a performance rating of 'Exceeding' this will result in a movement of two increments (e.g. from A 1 to A3). If an Employee scores a performance rating of 'Exceeding' when they are already at A2 the Employee will move to A3 and be paid lump sum B1. If an Employee scores a performance rating of 'Exceeding' when they are already at A3 the Employee will remain at A3 and be paid lump sum B1.
(vi) If an Employee achieves a performance rating of 'Outstanding' this will result in a movement of three increments (e.g. from A 1 to A3 plus lump sum B1. If an Employee is already at A2 when they achieve an 'Outstanding' rating, the Employee will move to A3 and be paid lump sum B2. If an Employee scores an 'Outstanding' performance rating when they are already at A3, they will remain at A3 and be paid lump sum B2.
It is apparent from the abovementioned content of the Agreement, and as already identified, that the Agreement does not provide clarity on the duties and responsibilities performed under each classification level, and further, while performance assessments are clearly contemplated under the Agreement, the Agreement does not detail duties, responsibilities, tasks or work that are to be subject to a Performance Agreement. On this basis, it is not unreasonable to surmise that the ‘current terms and conditions’ referred to in clause 37.2 of the Agreement are found not only in the Agreement, but clearly elsewhere.
The consideration of the Agreement does not however finish at this point. Ms Cronin gave evidence that her classification is Level 7-A3, noting that this was the highest classification available to her,[70] and her salary was over that prescribed for this classification. The letter from Water Corporation of 8 November 2021, regarding her redeployment, set out that subject to the variations within the letter, that all other terms and conditions of Ms Cronin’s employment would remain the same.[71] No argument was pressed by either party that Ms Cronin’s classification or remuneration would change as a result of the redeployment to the Principal role, albeit Ms Cronin protested that the classification of the Principal role was wrong.
Turning to the further terms and conditions of Ms Cronin’s employment, in 2015 Ms Cronin received an Offer of Employment (First Employment Contract) for the position of Costing & Compliance Manager.[72] Clause 2 of the First Employment Contract stipulated that Ms Cronin was required to perform the duties set out in her position description. No position description was attached to the First Employment Contract, but clause 5 of the First Employment Contract set out that Ms Cronin’s employment was also governed by the General Terms and Conditions of Employment (Leaders and Managers) (General Conditions). The General Conditions included clause 2, titled ‘Your role’, and whilst noting there were specific duties and responsibilities attached to Ms Cronin’s position, she was also obliged to follow lawful and reasonable directions, and so on.
In 2017, Ms Cronin was offered the position of Manager – Costing, a position which was covered by the Water Corporation Enterprise Agreement 2014 (2014 Agreement) (Second Employment Contract).[73] At clause 3.1 of the Second Employment Contract, Ms Cronin was required to ‘perform the duties reasonably associated with your position, as well as other duties which you are capable of performing, as required by the Corporation’.[74] At clause 24 of the Second Employment Contract, Ms Cronin was informed that the ‘Letter of Offer, the General Terms and Condition of Employment and the 2014 Agreement) set out the express terms of the employment agreement.
In 2018, Ms Cronin received a letter of 12 January 2018, detailing a change in position title and reporting line (2018 Letter).[75] The 2018 Letter provided that Ms Cronin’s new position title would be Manager-Business Intelligence, she would report to the Head of Group Finance, and her terms and conditions of employment were to remain unchanged.[76] As already noted, the letter from Water Corporation of 8 November 2021, also set out that subject to the variations within the letter, all other terms and conditions of Ms Cronin’s employment would remain the same.[77] Insofar as the general terms and conditions of employment are concerned, there appears to be no difference between the Manager role and the Principal role.
It can also be discerned from the contractual documents, specifically the Second Employment Contract and the letters of 12 January 2018 and of 8 November 2021, that the specific duties or accountabilities assigned to Ms Cronin at the time of the restructure were those associated with her role. Considering the evidence tendered by both parties, I consider it reasonable to proceed on the basis that the Water Corporation adopted JDs to outline the specific duties, responsibilities and/or accountabilities of roles within its organisation. However, clearly duties also extended to those that Ms Cronin could perform, as required by the Water Corporation.[78]
In preparation for these proceedings, Ms Cronin sought from Water Corporation, a JD for ‘position 653’ and an earlier version of the JD for ‘653’. In an email dated 1 March 2022 from Water Corporation’s Specialist – Employment Relations, Ms Erin Belser, to Ms Cronin, Ms Belser confirmed that the JDs for the positions of Costing & Compliance Manager (2015) and Manager – Business Intelligence (2018) had the same position number - 653.
In Ms Lonsdale’s evidence, she similarly referred to a position description or JD for Ms Cronin’s Manager role. The JD attached to Ms Lonsdale’s witness statement at Annexure RL-2, set out a position number of 653 and was titled ‘Manager – Costing’. It showed that the last review date was November 2012, and the Job Level was 7.
The JD for Manager-Costing set out that the position’s purpose in the following terms:
Manages the development, implementation and maintenance of sound cost accounting systems and practices for consistent application across the organisation.[79]
The key accountabilities of the Manager – Costing were set out in the JD as follows:
Business Reporting
§ Develops, implements and maintains organisation wide standards, procedures and methods for cost accounting.
§ Develops cost accounting principles and implements costing systems applicable to promote efficient and accurate cost accounting.
§ Liaises with other organisation members for delivery of information to Economic Regulator.
Financial Analysis
§ Develops and documents cost accounting methodologies for on-costs or surcharges.
§ Develops and documents cost accounting methodologies for allocation of overheads and internal charging mechanisms.
§ Manages the preparation of Operating Subsidy claims.
§ Provides analytical support for all reportable financial output (Scheme Profitability, Benchmarking, BPR).
Systems
§ Ensures that financial software meets the business needs for reporting costing and productivity performance.
§ Business Process Representative for SAP FI/CO, leads the development of software / system developments as they pertain to financials.
§ Manages the Corporation’s costing systems.
Stakeholder Management
§ Builds and manages relationships with key internal and external stakeholders to ensure the achievement of business objectives.
Safety, Health and Environment § Responsible for the provision and maintenance of a safest working environment for the team as defined in the Occupational Safety and Health Act 1984. Leadership § Leaders at the Water Corporation take personal ownership, put safety first and make decisions with the whole of the organisation in mind. They focus on continually improving safety performance, customer service and productivity. Water Corporation leaders design, develop and implement business plans in line with the organisations strategic direction. Engagement, development and mentoring are essential elements of our leadership model
Ms Evans explained that she had been involved in reviewing and drafting the JDs for impacted roles in the Restructure,[80] and regarding the JD for Ms Cronin’s new role, the exercise involved looking at the existing JD for the Manager role with a view to adding or changing what it was she wanted from the role. Ms Evans stated that there was not much to change in the existing JD other than to include an increased focus on benchmarking.[81]
The evidence of Ms Lonsdale and Ms Evans details that there were several iterations of the JD for the Principal role.[82] At Annexure RL-6 of Ms Lonsdale’s witness statement was a copy of the JD that appears to have been the last version sent between Ms Lonsdale and Ms Evans. The JD was titled ‘Specialist Costing and Systems’, had a position number of 653 and the Job Grade was to be determined by the ‘class panel’. It is however known that the position was later classified as Level 7 and named ‘Principal’.
The position purpose of the JD set out:
As the technical expert, develop, enhance, implement and maintain cost accounting systems and practices for consistent application across the Corporation and aligned with corporate objectives. Provide expert advice on costing, costing models and financial systems.
The key accountabilities included additional detail in respect of ‘Business Reporting’. Whilst removing the accountability of liaising with other organisational members for delivery of information to the Economic Regulator, accountabilities now included:
· Manage the review of capitalisation rates and overhead allocations for forecast and budget.
· Provide detailed analysis and insights on input costs including both fixed and variable, to assist internal management make fully informed business decisions to achieve corporate objectives.
A new focus area was added, titled ‘Cost Accounting Methodologies’, which incorporated the following accountabilities (noting slight differences in the JDs provided by Ms Lonsdale and Ms Cronin respectively):
· Provide leadership to the Corporation on financial management and accounting issues, with a particular focus on costing.
· Ensure organisation wide business practices align with agreed costing policies and guidelines.
· Provide advice and guidance as a technical expert on matters relating to cost allocation using financial systems functionality.
· Develop and manage cost accounting models including the Corporation’s Full Absorption Costing model and liaise with Pricing to ensure integrity of Scheme Profitability results.
· Responsible for making recommendations in relation to value of costing and internal recharging practices to ensure that costs are appropriately allocated and recorded against assets and activities.[83]
· Provide leadership to the Corporation on financial management and accounting issues, with a particular focus on costing.
· Ensure organisation wide business practices align with agreed costing policies and guidelines through coaching and ongoing training tailored to meet the needs of both financial professionals (detailed) and business leaders dealing with external parties (high level principles).
· Provide advice and guidance as a technical expert on matters relating to cost allocation methodologies that are the best fit for particular costing situation.
· Develop and manage cost accounting models including the Corporation’s Full Absorption Costing model and liaise with Pricing to ensure integrity of Scheme Profitability results.
· Responsible for identifying and supporting recommendations for CFO approval in relation to value of costing and internal recharging practices to ensure that costs are appropriately allocated and recorded against assets and activities and communicate these to the broader business to ensure they are adopted and implemented.[84]
Changes were also made to the focus area of ‘Financial Analysis’, which, except for the first two accountabilities in the former JD (which were retained although the language differed slightly), saw the replacement of the remaining two accountabilities with the following: ‘[O]versee and coordinate the collation and reporting of benchmarking data for internal use and external reporting’.[85]
The focus area of ‘Systems’ was minimally changed with the inclusion of the additional key accountability of providing ‘advice and recommendations as a technical expert on matters relating to cost allocations using financial systems functionality’,[86] and the accountability that as the SME, the role would keep up to date with new technologies and developments in financial software / systems and make recommendations on the best fit for Water Corporation.[87]
Regarding ‘Stakeholder Management’, an accountability which had been added under this focus area was the development and mentoring of ‘Finance business partners’, with a view to improve their knowledge of cost drivers and levers for improving efficiency.
Ms Cronin expressed that the JD for the Principal role showed that the role merged the redundant role of Manager and that of ‘Senior Analyst Costing’ – a role that sat at Level 6.[88] Ms Cronin’s submission was not absent merit. From the JD for the position of Senior Analyst – Costing dated 4 March 2016 (Job Grade Level 6), it could be seen that in respect of Cost Accounting Methodologies, the key accountabilities were remarkably similar. Further, it appeared that there was an overlap in accountabilities between the Principal role JD (or the Specialist Costing and Systems JD) and that of the ‘Senior Analyst Costing’ in respect of two accountabilities falling under the focus area of ‘Business Reporting’.
Ms Borserini gave evidence that Ms Cronin had expressed to her concern that the Principal role had similar accountabilities to the Level 6 role in the old structure.[89] The Water Corporation acknowledged that it confirmed that some accountabilities would be similar, and it was to be expected that the Principal role would have overlap between Level 6 and 7 classifications.
In answering the question proffered for arbitration, consideration turns to whether the focus areas of the Principal role and its associated key accountabilities are substantially similar to and overall, no less favourable than, those Ms Cronin performed in the Manager role.
At this stage however, it is important to again re-emphasise that the question asked of this Commission is not simply answered by engaging in a comparative exercise between the focus areas and key accountabilities of the Manager role as against the Principal role. To reduce the assessment to that would be to attribute to the term Suitable Alternative Employment too narrower a meaning.
The term Suitable Alternative Employment speaks of ‘permanent employment’ and an employee’s ‘current terms and conditions’. I accept the proposition that the determination of a position as Suitable Alternative Employment requires, as part of the assessment, examination of the focus areas and accountabilities of the new role in comparison to the old. However, complete reliance on this aspect of the assessment would conceivably result in an interpretation that fails to have regard to the context and purpose of the clause.
To determine whether the Principal role is Suitable Alternative Employment, it is necessary to weigh up on an objective basis the material variations in the terms and conditions of the proposed permanent employment against those to which Ms Cronin is currently entitled. The definition of Suitable Alternative Employment refers to permanent employment that is ‘substantially similar to and overall, no less favourable’. It seems to me that the objective assessment contemplated by clause 37.2 is one where the permanent employment is viewed to determine whether it is substantially similar, and an assessment made as to whether ‘overall’ it is no less favourable than the current terms and conditions capable of being performed.
The phrase ‘substantially similar to and overall, no less favourable than’ is not defined or otherwise clarified in the Agreement. The ordinary meaning of the word ‘substantial’, as defined in the Macquarie Dictionary, is:
adjective 1. of a corporeal or material nature; real or actual.
2. of ample or considerable amount, quantity, size, etc.: a substantial sum of money.
3. of solid character or quality; firm, stout, or strong.
4. being such with respect to essentials: two stories in substantial agreement.
5. wealthy or influential: one of the substantial residents of the town.
6. of real worth or value: substantial reasons.
7. relating to the substance, matter, or material of a thing.
8. of or relating to the essence of a thing; essential, material, or important.
9. being a substance; having independent existence.
10. Philosophy relating to or of the nature of substance rather than accidents.
–noun 11. something substantial.
[Middle English substancial, from Late Latin substantiālis]
–substantiality /səbstænʃiˈæləti/ (say suhbstanshee'aluhtee), substantialness, noun
–substantially, adverb[90]
The word ‘similar’ takes on the ordinary meaning of ‘having likeness or resemblance, especially in a general way’.[91]
Adopting an approach to interpretation which is not overly technical and is premised on the ordinary meaning of the words used in the definition of Suitable Alternative Employment, ‘substantially similar’ means that the likeness or resemblance between the accountabilities, duties or responsibilities of the two roles, is considerable, actual, and material. When one considers the meaning of the term ‘substantially similar’, it does not require Ms Cronin to be appointed into an identical role.
Water Corporation advanced a proposition that it had endeavoured to provide a role to Ms Cronin that was as close in status and accountabilities as possible to her former position when the two roles were considered as a whole. I do not consider the proposition misplaced. The evidence before me shows a material resemblance between the accountabilities falling under the auspices of the Principal role and the Manager role.
Whilst the parties placed reliance on the JDs to demonstrate the focus areas and key accountabilities of both roles, my consideration extended to what duties in practise Ms Cronin performed which were not fully captured in JDs. This was in addition to the accountabilities Water Corporation contemplated Ms Cronin performing in the Principal role which were not fully captured in the Principal JD.
In my opinion, the accountabilities of the two roles under consideration are not precisely the same, the Principal role does not include some accountabilities which previously sat under the Manager role and does include some of the accountabilities that fell under the Level 6 Analyst position. However, insofar as it is a newly established position, it is a position that has drawn upon accountabilities which appear to have previously sat predominately in the Manager role and in part, that of the Analyst role, with a view to establishing a position which provides Water Corporation with the SME for SAP FICO.
I do not disbelieve the evidence of Ms Evans, who after all played an instrumental part in establishing the Principal role, when she explained that the functions of the Manager role would still be required but there would be a greater emphasis on benchmarking for internal and external use (see the key accountability of ‘[O]versee and coordinate the collation and reporting of benchmarking data for internal use and external reporting’).[92]
In Water Corporation’s view, it considered that there were two elements of the Principal role which appeared to be similar to the Level 6 Analyst JD. Those being:
(a)manage the review of capitalisation rates and overhead allocations for forecast and budget;
(b)develop and manage cost accounting models including Water Corporation’s Full Absorption Costing model and liaise with Pricing to ensure integrity of Scheme Profitability results.
Ms Cronin asserted that work of the Principal role, presumedly the key accountabilities, were junior to her former role and that many of the accountabilities would have been performed by the people who previously reported to her role. I do not discount Ms Cronin’s view entirely, but it is not the case that the Principal role mirrors all the key accountabilities assigned to the Level 6 Analyst position. Whilst some of the accountabilities of the Level 6 role appear to have been adopted, it is evident that the key accountabilities of the Principal role are substantially similar to the Manager role – in brief, the role is one of a technical SME with both leadership and management of project/process components.
Water Corporation acknowledged that whilst there were similar elements between the Level 6 Analyst role and Principal role, the Principal role would not be doing the work of the Level 6 role. The Principal role would oversee the review referred to at paragraph [102(a)], which should be more than a desktop analysis, and the work would be performed by the larger team in ‘FPA’, with the Principal role having a project management type role in the process. As to the work referred to at paragraph [102(b)], the principles and rules would be set by the Principal role, said Water Corporation, but the role would access resources in the ‘FPA’ to undertake the work, rather than doing the work herself or himself.
Ms Evans gave evidence that the Principal role would continue, as had the Manager role, to be the Water Corporation’s: (a) SME for the determination and application of cost accounting principles; (b) SME in SAP FICO; (c) position responsible for completing benchmarking activities; (d) position responsible for determining rules around allocating support costs to capital projects, rolling these out to the business and undertaking a quality assurance role to ensure that the rules were being applied; and (e) position responsible for determining overhead rates that were charged to jobs carried out for and charged to external parties, rolling these out to the business and undertaking a quality assurance role to ensure that the rules were being applied.[93] There was no evidence led to the contradict Ms Evans’ account in this respect.
While the JDs articulate key accountabilities and focus areas as does the evidence of witnesses, there are other factors that also have bearing. Prior to its amendment, the JD for the Manager Role (position number 653) recorded that there were two staff that directly reported into the role. However, the irrefutable evidence was that the Manager role did not have any people actually reporting into it at the time of the Restructure.[94] In this respect, the Manager role and Principal role were identical in that neither actually had direct reports to manage and as such were absent this accountability – notwithstanding Ms Cronin’s submissions to the contrary – noting the temporary Analyst role of Jean Liu, and that of James Filev, prior to him being seconded to a different role in 2020.
It was therefore also understandable that the Principal role did not sit within the ‘Lead Team’, because as observed by Ms Evans, the role was one of technical expert, rather than a true ‘Section Manager’ role that had much broader scope and oversight of their section.[95] On this point, it was also understandable why Water Corporation did not consider an exclusion from the Lead Team in the Principal role as detracting from a contention that the Principal role and Manager role were substantially similar. From the evidence, it appeared that the Manager role, as it existed leading up to the Restructure, did not assume supervisory responsibilities as a key accountability of the role. It follows that the removal of supervisory accountability did not on any objective level render the Principal role substantially dissimilar or overall less favourable.
Revisiting Ms Cronin’s argument on why the Principal role was not Suitable Alternative Employment, Ms Cronin pressed, in part, that her reporting structure had changed hence resulting in a reduction in status. Prior to the restructure, Ms Cronin had reported into the Head of Group Finance (see the letter of 12 January 2018). Whilst not persuaded that a reporting line constitutes a term and condition of employment in this current context, it nevertheless remains that while the letter of 12 January 2018 informed Ms Cronin that her position would report to the Head of Group Finance, all other terms and conditions of her employment remained unchanged. The Second Contract, in Schedule 1, provided that Ms Cronin would report to the Business Analysis Manager, ‘or as otherwise directed by the Corporation’. It was therefore always open to the Water Corporation, whilst Ms Cronin occupied the Manager role, to change her reporting line.
Concerning Ms Cronin’s argument that Principal role had no discretion regarding work to be performed and allocated to others, the contention was unable to be sustained on the evidence adduced. It was apparent that the Principal role retained discretion over the work performed and that it would be empowered to allocate work to others.[96]
Conclusion
In light of the abovementioned reasons at paragraphs [59] to [109] of this decision, I have concluded that the Principal role is Suitable Alternative Employment. This is because I have found that the Principal role retains the same classification within the Water Corporation as the Manager role, there is no difference in remuneration, there is no difference in the obligations and entitlements found under the Agreement or in the general terms and conditions expressed in the employment contract, and the key focus areas and accountabilities of the two roles are substantially similar and overall no less favourable than Ms Cronin’s current terms and conditions.
From the evidence given, there was no suggestion that Ms Cronin was not capable of performing the Principal role or that she would be required to change her place of residence. The evidence, which was not challenged, was that Ms Cronin possessed skills, competence and experience to perform the accountabilities of the Principal role.
While the loss of the ‘Manager’ title and removal from the Lead Team under the Principal role, has given rise to an argument of loss of status, as can be seen from the analysis of the accountabilities between the two roles and findings at paragraph [109] of this decision, I do not consider that these factors detract from a conclusion that the permanent employment in the form of the Principal role is substantially similar to and overall, no less favourable than, the Manager role.
Ms Cronin impugned the classification process of the Principal role in her submissions. However, having considered the evidence led, including reference to Annexure 15 of Ms Cronin’s Further Submissions (a document said to provide a clear framework regarding the classification of roles at the Water Corporation), I do not consider that the evidence of Ms Lonsdale, Ms Evans or Ms Borserini shows a departure from the classification framework at Annexure 15, that warrants departing from the finding that the classification level of the Principal role and Manager role were the same (Level 7).
Issues were also raised regarding the consultation process that had been engaged in by the Water Corporation and the bearing this had on whether the Principal role was Suitable Alternative Employment. However, the contentions pressed have no relevancy to the determination of whether the Principal role was Suitable Alternative Employment as defined in clause 37.2 of the Agreement. Such contentions go more to whether the obligations under the Agreement have contravened.
Finally, in Ms Cronin’s submissions she referred to the decision of Viva Energy Australia Pty Ltd v Dan Amann (Viva).[97] The decision provides no assistance concerning that which was asked of the Commission– namely to determine whether the Principal role is Suitable Alternative Employment. Viva involved an application made under s 120 of the Act and the task before the Commission in that case was to consider whether the company had obtained ‘other acceptable employment’. That was not the exercise before this Commission as currently constituted.
DEPUTY PRESIDENT
Appearances:
Mr Michael Loly on behalf of the Applicant;
Mr Nicholas Ellery on behalf of the Respondent.
Hearing details:
Thursday 24 March 2022 (video hearing)
[1] [2021] FWCA 2535; PR729361; AE511338.
[2] Witness Statement of Ms Deb Evans, [15] (Evans Statement); Witness statement of Mr Geoff Archard, [17], Annexure GA-2 (Archard Statement).
[3] Evans Statement (n 2) [17].
[4] Ibid [20].
[5] Ibid [21].
[6] Ibid [23].
[7] Ibid [25].
[8] Ibid [26].
[9] Ibid [27].
[10] Ibid [28].
[11] Ibid [29].
[12] Ibid.
[13] Ibid.
[14] Archard Statement (n 2) [23].
[15] Ibid.
[16] Evans Statement (n 2) [31].
[17] Ibid.
[18] Ibid [32].
[19] Ibid [33].
[20] Ibid [35].
[21] Ibid [36].
[22] Ibid [38].
[23] Witness Statement of Ms Rochelle Lonsdale, [14] (Lonsdale Statement).
[24] Ibid [18].
[25] Witness Statement of Ms Carole Borserini, [19] (Borserini Statement).
[26] Ibid [22].
[27] Ibid [23].
[28] Ibid [35].
[29] Ibid [40].
[30] Ibid [51].
[31] Ibid [61].
[32] Ibid [62].
[33] Ibid.
[34] Ibid [69].
[35] Ibid [70].
[36] Ibid [71].
[37] Ibid [72].
[38] Ibid [73].
[39] Ibid [74].
[40] Ibid [75].
[41] Ibid [64].
[42] Ibid.
[43] Ibid [65].
[44] Sinisa Krstic v Electricity Networks Corporation T/A Western Power[2019] FWC 7962, [64] (Kristic).
[45] Ryan v Insurance Australia Group Services Pty Ltd & Insurance Manufacturers of Australia Pty Ltd[2014] FWC 8268,
[83] (Ryan).
[46] [2012] FWA 3901.
[47] (2006) 158 IR 428 (Feltex).
[48] Ryan (n 45).
[49] Feltex (n 47) [89].
[50] Ryan (n 45) [85].
[51] Krstic (n 44) [64].
[52] Evans Statement (n 2) [33], [48]; Annexure DE-2; Archard Statement (n 2) [33], [34]; Borserini Statement (n 25) [64].
[53] Evans Statement (n 2)[48] – [50]; Annexures DE-2, DE-3; Archard Statement (n 2) [30], [33] – [36].
[54] Archard Statement (n 2) [19] – [25].
[55] Ibid [31] – [36]; Annexure GA-4.
[56] [2018] FCAFC 131 (Workpac).
[57] Ibid [197].
[58] Ibid [202].
[59] Ibid [202].
[60] [2017] FWCFB 3005 (Berri).
[61] [2014] FWCFB 7447 (Golden Cockerel).
[62] Ibid.
[63] Berri (n 60) [114] point 1; Ibid [41] point 8.
[64] Berri (n 60) [114] point 2.
[65] Maritime Union of Australia, The v FBIS International Protective Services(Aust) Pty Ltd[2014] FWCFB 6737, [29] (FBIS).
[66] DL Employment Pty Ltd v AMWU[2014] FWCFB 7946, [80].
[67] FBIS (n 65).
[68] Ibid [20] - [33].
[69] Krstic (n 44) [64].
[70] Witness Statement of Ms Shirley Cronin [57] (Cronin Statement).
[71] Form F10 Annexure A3.
[72] Cronin Statement (n 70) Annexure 6.
[73] [2014] FWCA 8513; PR558300; AE411420.
[74] Ibid Annexure 7
[75] Ibid Annexure 1.
[76] Ibid.
[77] Form F10 Annexure A3.
[78] Cronin Statement (n 70) Annexure 7;Annexure 6.
[79] Lonsdale Statement (n 23) Annexure RL-2.
[80] Evans Statement (n 2) [30].
[81] Ibid [33].
[82] Lonsdale Statement (n 23) [29] – [40]; Ibid [32] – [38].
[83] Lonsdale Statement (n 23) Annexure RL-6.
[84] Cronin Statement (n 70) Annexure 8.
[85] Lonsdale Statement (n 23) Annexure RL-6.
[86] Ibid; Cronin Statement (n 70) Annexure 8.
[87] Cronin Statement (n 70) Annexure 8.
[88] Ibid [48].
[89] Borserini Statement (n 25) [64].
[90] Macquarie Dictionary (online at 12 May 2022) ‘substantial’.
[91] Macquarie Dictionary (online at 12 May 2022) ‘similar’.
[92] Lonsdale Statement (n 23) Annexure RL-6.
[93] Evans Statement (n 2) [49].
[94] Ibid [29].
[95] Ibid [55].
[96] Evans Statement (n 2) [63] – [64]; Borserini Statement (n 25) [65] – [66], Annexure CB-10.
[97] Viva Energy Australia Pty Ltd v Dan Amann[2021] FWC 898.
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