Sinisa Krstic v Electricity Networks Corporation t/a Western Power

[2019] FWC 7962

[2019] FWC 7962

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Sinisa Krstic
v
Electricity Networks Corporation T/A Western Power
(C2019/5406)

DEPUTY PRESIDENT BEAUMONT PERTH, 29 NOVEMBER 2019

Alleged dispute about any matters arising under the enterprise agreement - redundancy entitlement under agreement – meaning of ‘alternative role’

[1] In June 2019, Electricity Networks Corporation T/A Western Power (Western Power) restructured its Property and Fleet Function. Mr Sinisa Krstic was the Property Team Leader in the Function, however as a result of the restructure his position became redundant – a fact that was uncontentious. Western Power proposed to place Mr Krstic into the position of Senior Property Specialist, but he declined the position, contending it was unsuitable.

[2] On the basis that the alternative position was unsuitable, Mr Krstic asserted Western Power was obliged to provide him with redundancy and other payments under clause 23 of the Western Power and Australian Services Union Enterprise Agreement 2017 1(Agreement). Western Power disagreed, contending it had complied with the Agreement by offering the alternative role of Senior Property Specialist and, accordingly, Mr Krstic was not entitled to be paid a redundancy package in accordance with cl 23(c) of the Agreement.

[3] This decision concerns Mr Krstic’s application made under s 739 of the Fair Work Act 2009 (Cth)(Act) for the Commission to deal with the dispute in accordance with the dispute resolution process in cl 26 of the Agreement. The parties agreed the dispute resolution process had been complied with, and as part of that process they had exhausted all attempts to conciliate an agreed outcome. A request was made that the matter proceed to arbitration, and therefore it was necessary to ascertain the issues for determination.

[4] In brief, the parties agreed that the issues were whether:

a) on a proper construction of the Agreement, there is, or is not, a requirement that the ‘alternative role’ referred to in cl 23(b)(ii) of the Agreement is one that must at least be suitable; and

b) the position of Senior Property Specialist is suitable (in circumstances where it is determined that the alternative role is required to be suitable).

[5] I have concluded on a proper construction of the Agreement, there is not a requirement that the ‘alternative role’ referred to in cl 23(b)(ii) of the Agreement, is one that must at least be suitable. I consider that cl 23(b)(ii) has a plain meaning. It is not ambiguous. My reasons follow.

Background

[6] Mr Krstic commenced employment with Western Power in 2010 as a Business Analyst. He assumed his role as a Property Team Leader in the Property and Fleet Function in October 2013, employed on a permanent, full-time basis. 2 Mr Krstic reported into Mr Boots, the Planning and Strategy Manager of the Property and Fleet Division.3

[7] Western Power has a classification structure that sits separate to that provided for in the Agreement. That structure can be found in the document titled ‘HR Formal Leader Toolkit Western Power’s Classification Structure.’ 4 As a Property Team Leader, Mr Krstic’s position was classified under that structure in the ‘Formal Leader Work Stream at Career Level F1.’5 The position description for Property Team Leader similarly displayed a Career Level of F1.

[8] It is not in dispute between the parties that the Agreement covered and applied to Mr Krstic. 6 Section 4.3 of the Agreement provides a definition of ‘Professional Workstream’. The parties agreed that this classification was relevant regarding the work undertaken by Mr Krstic as a Property Team Leader. The term ‘Professional Workstream’ was defined in the Agreement as:

Roles which contribute expertise to technical or non-technical functions such as Engineering, Design, Project Management, IT, Legal, Finance and Accounting, Marketing, transmission & distribution network management and Human Resources. Applies to Professional Supervisory roles which primarily engage in the same work as the employee they manage or supervise including where the main focus is on people and management issues. Excludes roles that perform predominately administrative, business & operational support activities and/or Branch Management and above.

[9] Under the Agreement, Mr Krstic was classified under the pay point of S7.1P. Again, the Agreement pay point was reflected in the position description of Property Team Leader which stipulated ‘EA Pay Point 7.1P.’ However, Counsel for Mr Krstic submitted that there was somewhat of an anomaly because, under his employment contract and individual flexibility agreement, Mr Krstic received remuneration equivalent to pay point 8.1P. This was the case, notwithstanding that the aforementioned documents referred to the pay point of 7.1P.

[10] Mr Boots gave evidence that Mr Krstic was responsible for leading a team of two people in the strategic management of Western Power’s property portfolio. 7 Western Power owns operational and non-operational properties.8 Mr Boots stated that in simple terms the non-operational properties were land and buildings that Western Power may use at a future point.9 Operational properties included depots, substations and operational work places.10

[11] As far as Mr Krstic’s role was concerned. Mr Boots stated that Mr Krstic performed work such as: (a) managing the acquisition, leasing and disposal of properties and property interests; (b) negotiating easements to protect Western Power’s assets; (c) undertaking evaluations to provide advice to the business on property transactions; (d) advising the business about maintaining an optimal property portfolio; and (e) ensuring the delivery of timely commercial property transactions. His evidence was that Mr Krstic provided views on property transactions, and he would consider Mr Krstic’s advice in formulating proposals to be presented to the Investment Committee, Executive and Chief Executive Officer. 11

[12] During the hearing, Counsel for Mr Krstic emphasised that the position of Property Team Leader had managerial and leadership responsibilities. Turning to the position description of the position, it is observed that the position of Property Team Leader included the key accountabilities of: (a) managing the activities of the Property Team; (b) developing and maintaining processes associated with acquisition, retention and disposal of properties and property interests; (c) managing the portfolio of property investments - balancing operational demand with financial diligence; and (d) managing talent though the effective execution of employee performance outcomes though established system and processes, and the ongoing development of employees.

[13] Before, Mr Krstic took extended annual leave from 3 May 2019 until 30 July 2019, he was informed of the possibility of a restructure of the Property and Fleet Function, and that the restructure could potentially have an effect on his role as the Property Team Leader. 12

[14] Ms Aiken gave evidence that before Mr Krstic took annual leave, he provided Mr Andrew Ling, Area Manager, with his personal email address. 13 On 20 June 2019, Mr Ling emailed Mr Krstic to inform him that the restructure process was about launch and summarised the main areas of change that would impact the Planning and Assets Team.14 Mr Krstic was informed that there would no longer be a specific Planning and Assets Team, the role of Team Leader would no longer exist, and he would be directly appointed into the position of Senior Property Specialist – retaining all existing benefits and ‘TFR unchanged.’15 The Senior Property Specialist role was classified as ‘Professional Other Work Stream at Career Level P3’.

[15] Ms Aiken gave evidence that in a practical sense the F1 and P3 Career Levels represented separate career streams that ran parallel to one another. 16 The only practical difference in the roles was the removal of supervisory responsibility for two direct reports.17 Mr Krstic did not agree with Ms Aiken’s evidence and drew the Commission’s attention to the differences between the two position descriptions.

[16] On 25 June 2019, Mr Gavin Hobbs (Head of Function for the Property and Fleet Function) emailed additional information to Mr Krstic about the proposed changes and provided a copy of the proposed Property and Fleet structure. 18 Ms Aiken’s evidence was that Mr Krstic was invited to give feedback during the consultation period – attached to her witness statement was an email from Mr Hobbs which included the paragraph:

If you would like to give feedback on the proposed changes please complete the following form – Feedback on Proposed Changes Form. We will give genuine consideration to your feedback before making any final decisions. The consultation period will conclude on Monday 1 July 2019. 19

[17] On 26 June 2019, Ms Aiken stated that she emailed Mr Krstic to confirm that his role of Property Team Leader was a proposed redundant role and Western Power was pleased to offer him the role of Senior Property Specialist. 20

[18] By email dated 28 June 2019 to Ms Aiken, Mr Krstic requested a full retrenchment package on the basis that the role of Property Team Leader was a genuine redundant position as according to the Act. Mr Krstic continued that he did not accept the offer (presumedly the Senior Property Specialist position) of a demotion into a lower position at the same pay, as it was not a reasonable redeployment position. Mr Krstic also explained how the lower position would affect his future job prospects.

[19] On 5 July 2019, Mr Krstic emailed Ms Aiken and Mr Hobbs a grievance form (an email). His email stated to the effect that he felt his concerns were not being adequately addressed, he was under pressure to provide feedback absent adequate representation and was disadvantaged given he was currently overseas. Mr Ling responded by email, stating that a meeting would be arranged to discuss Mr Krstic’s grievance when he returned from annual leave. 21 A letter of 5 July 2019, was sent to Mr Krstic confirming the redundancy of his position and the offer of the Senior Property Specialist role.

[20] While Mr Krstic was due to return to work on 30 July 2019, he did not. Instead he embarked on personal leave, supported by a medical certificate that set out he was unable to work from 30 July 2019 until 30 August 2019. A further medical certificate was provided for the period 30 August 2019 until 30 September 2019. Mr Krstic had not returned to work at the time of the hearing, on 25 November 2019.

The Agreement and the redundancy package

[21] Central to this dispute is the interpretation of cl 23 of the Agreement, which is titled ‘Redeployment, Retraining and Redundancy’. Clause 23 states:

(a) Redeployment and Retraining

(i) In the event of a change in Western Power’s operational requirements an employee’s roles may become redundant. Prior to making an employee redundant Western Power will take steps to manage a reduction in the number of role by natural attrition. Where this process is not sufficient redeployment and retraining will be actively pursued before roles are made redundant.

(ii) The provisions of this clause do not apply to an employee engaged in accordance with this Agreement as a temporary, fixed term, casual, trainee or probationary employee. Nothing in this clause affects Western Power’s rights to terminate an employee’s employment under this Agreement.

(iii) Redeployment may include transfer or relocation between metropolitan and country locations, or vice versa. Exceptional personal circumstances or undue hardship will be taken into account in assessing whether an alternative offer is reasonable. Where possible employees will be provided with redeployment opportunities for a maximum trial period of six (6) months in total. Employees who are required to pursue redeployment will cooperate fully.

(iv) An employee who has been redeployed into a new position at a lower level will retain their pre-redeployment enterprise agreement classification rate of pay for forty-eight (48) months from the date that the employee is advised in writing that their position is redundant.

(v) Employee substitution can occur with an employee whose position has been identified as redundant if suitable matches can be made. Substitution can only occur where Western Power and both employees agree with such arrangements.

(b) Redundancy

(i) In the event of a change in Western Power’s operational requirements an employee’s roles may become redundant.

(ii) If an employee’s role becomes redundant and there is no alternative role under the provisions of Retraining and Redeployment for the employee in Western Power, the employee will be entitled to the redundancy payments contained within this clause. Western Power will determine a fair and transparent method and criteria for selecting employees for redundancy.

(c) Payments

(i) Notice

An employee shall receive twelve (12) weeks’ pay in lieu of notice where the employment terminates within one (1) month of being advised their role is redundant.

In all other circumstances, an employee will be entitled to notice of termination due to redundancy, or payment in lieu of notice, in accordance with this Agreement.

(ii) Termination of Payments

An employee shall receive a termination payment based on three (3) weeks’ pay for each year of service to a maximum of seventy-five (75) weeks’ pay.

(iii) Separation Payment

Employees who are made redundant will receive a payment of $5,000 for the express purpose of seeking financial, lifestyle, counselling and career planning advice.

(iv) Leave Entitlements

An employee shall receive payment for accrued and pro-rata annual leave and long service leave entitlements. Employees with three (3) years’ service or more will be eligible for pro-rata long service leave entitlements.

(v) Calculation of Payments

All payments under this clause shall be based on an employee’s rate of pay and associated conditions, including annualised arrangements and pro-rata arrangements.

(d) Adequate Alternative Role

An employee will not be entitled to receive any redundancy payments or termination payments, or notice or payment in lieu of notice, contained within this clause in circumstances where:

(i) The business or part of the business of Western Power, is before, during or after the date of the Agreement, transmitted or outsourced from Western Power to another employer (new employer); and

(ii) The new employer offers to employ the employee of Western Power on terms and conditions which, on balance, are the same as or no less favourable than the terms and conditions on which the employee is employed by Western Power; and

(iii) Any accrued entitlements to sick leave and redundancy be preserved and transferred to the new employer; and

(iv) Any accrued entitlements to annual leave and long service leave are paid upon transfer of the employee to the new employer or transferred to the employee’s employment with the new employer; and

(v) Benefits of the GESB Defined Benefit Superannuation Plan continue unchanged as if the employee was a State Government employee or an alternative benefit is offered and accepted by the employee; and

(vi) The continuity of the employment of the employee with Western Power is accepted as continuous by reason of such transmission or outsourcing.

(e) No Other Payments

(i) There shall be no entitlement to any termination payment for an employee made redundant other than provided under this clause. In any event, the maximum payment for an employee made redundant, shall not exceed eighty-seven (87) weeks’ pay as provided for in clause 23(c)(i) and (ii) above.

Mr Krstic’s submissions

[22] At the core of Mr Krstic’s case regarding the interpretation of cl 23, was that properly construed, cl 23(b)(ii) of the Agreement required that any ‘alternative role’ meet a test of suitability. Mr Krstic surmised that the nub of Western Power’s argument was the proposition that an employee could be denied redundancy payments under cl 23(c) in circumstances where there was any available role whatsoever; a proposition he characterised as absurd.

[23] It was submitted that the statutory context was one where the Agreement had been made under Part 2-4 of the Act. Mr Krstic advanced that the principal object of the Act addressed by Part 2-4 was ‘to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by …(f) achieving productivity and fairness through an emphasis on enterprise-level collective bargaining…’. Mr Krstic contended that the argument of Western Power was inconsistent with any basic notion of fairness and that a construction that produced unfairness should be avoided if possible.

[24] The purpose of cl 23 was, according to Mr Krstic, threefold. It imposed obligations on Western Power prior to the company making an employee’s substantive role redundant, provided compensation if a role was made redundant, and established conditions whereby payment of compensation was excluded. However, the principle purpose was to provide an employee with compensation if their role was redundant, together with imposing obligations on Western Power.

[25] Further, Mr Krstic submitted that the word ‘alternative’ qualified the word ‘role’. The use of the compendious phrase was properly understood to impose a condition on the kind of role that disentitled an employee to redundancy payments. Mr Krstic proposed that cl 23 contemplated an alternative role in exchange for the loss of redundancy payments. On that basis he said, there must be some reciprocity or equivalence in that exchange. There could only be meaningful reciprocity or equivalence if the ‘alternative role’ was one that had the same or similar characteristics as the employee’s role; there was after all, in Mr Krstic’s view, a quid pro quo.

[26] As it was, Mr Krstic stated the word ‘alternative’ must be given some work to do. In Mr Krstic’s opinion, the word ‘alternative’ was to be construed to mean ‘acceptable’ or ‘suitable’. It was not the case that those words were implied into clause 23(b)(ii). It was simply the case that the meaning attributed to ‘alternative’ was such that ‘acceptable’ or ‘suitable’ formed part of the meaning. It therefore followed that a loss of the redundancy payment under cl 23(c) would occur only if the proposed alternative role was suitable, meaning sufficiently similar to the substantive role.

[27] Counsel for Mr Krstic drew to my attention the Federal Court decision in CMP Manufacturing Pty Ltd v Barbieri 22 (Barbieri). In that case, Bromberg J considered various grounds of appeal, including one where it was said that the primary judge had erred in holding that the Mr Barbieri’s entitlement to retrenchment pay under his employment contract was not excluded because he was not offered an ‘alternative’ position within the meaning of cl 11 of the employment contract.

[28] The contentious contractual clause in Barbieri, referred to the company being ‘unable to offer you or facilitate an offer of an “alternative position”’. In the judgment, Bromberg J stated that ‘[I]f “alternative position” meant any position without qualification then the word “alternative” is given no work to do…The parties to the contract of employment must have intended the word “alternative” to be operative in qualifying or imposing some condition upon the nature of the position that may be offered to Mr Barbieri’. 23 After taking into account the purpose and subject matter of the clause, Bromberg J concluded that an ‘alternative position’ to that of Mr Barbieri’s existing position as contemplated by cl 11, connoted a reciprocity or an equivalence of exchange.

[29] With regard to the position of Senior Property Specialist, Mr Krstic submitted that suitability must be assessed by having regard to whether the Senior Property Specialist role had sufficient similarity to Mr Krstic’s substantive position. In that respect, it was said that a comparison of the nature and character of the two roles demonstrated that the position was unsuitable because: (a) it lacked the character and duties of Mr Krstic’s substantive role, that is the management and supervision of staff; and (b) was not within the ‘Formal Leader’ work stream. In addition, amongst other submissions, it was said that Mr Krstic’s position had delegated financial authority and access to training reserved for the ‘Formal Leader’ Workstream.

Western Power’s submissions

[30] Western Power submitted that cl 23(b)(ii) did not specify that the ‘alternative role’ needed to be either ‘reasonable’, ‘acceptable’ or in any way broadly equivalent to the role previously occupied by an affected employee. What Mr Krstic proposed was a requirement to read between the words ‘no’ and ‘alternative’, the word ‘suitable’. Western Power advanced that the word ‘alternative’ was not used in the clause in a definitional sense. It was not a definitional term.

[31] Clause 23(b) required the reader to return to cl 23(a). Whether or not there was an alternative role was determined by subparagraph (a). Referring to cl 23(a), Western Power observed that in dealing with redeployment and retraining, the clause failed to specify any requirement that the identified alternative role was required to be either ‘reasonable’, ‘acceptable’ or otherwise equivalent to the role that the affected employee previously occupied. Western Power contended that, quite to the contrary, cl 23(a) of the Agreement expressly contemplated an employee’s redeployment into a new position at a lower level (see cl 23(a)(iv)). Further, the Agreement specified safeguards which were required to be respected, notably - clauses 23(a)(i) and 23(a)(iv).

[32] Western Power noted that the only reference to the notion of reasonableness in cl 23 was to be found in cl 23(a)(iii). That particular provision regulated the circumstance where an employee was required, on account of her or his redundancy, to either transfer or relocate ‘between metropolitan and country locations, or vice versa’. It was only in those circumstances where ‘exceptional personal circumstances or undue hardship will be taken into account in assessing whether an alternative offer is reasonable’.

[33] With respect to Mr Krstic’s contention that it was an absurd proposition for an employee to be denied redundancy payments under cl 23(c) in circumstances where there was any available role whatsoever, Western Power submitted, technically, the company could place an employee in any position. However, it was not the case that this was absurd or that Western Power could be vindictive or silly. Clearly, the Agreement had imposed stringent obligations to ensure job security. Before making an employee redundant, Western Power was required to take steps to manage a reduction in the number of roles by natural attrition (see clause 23(a)(i)). Where that process was insufficient, redeployment and retraining were required to be actively pursued (see clause 23(a)(i)). If redeployed, and the position was at a lower level than that of the previously held position, Western Power was obliged to retain the employee’s pre-redeployment enterprise agreement classification and rate of pay for a period of 48 months (four years) (see clause 23(a)(iv)).

[34] Counsel for Western Power explained it was correct that an Accountant could potentially be placed in the position of a Clerk, but as a Clerk, that employee would continue to receive their accountant rate of pay for a period of four years. It was open to that employee to reject the Clerk position, but such rejection would not result in the provision of payment pursuant to cl 23(c); or the employee could accept the Clerk position and within that four-year period seek alternative employment options internally or externally.

[35] It was Western Power’s position that there was no absurdity. The Agreement worked to ensure job security by imposing the aforementioned stringent obligations. It was not, said Western Power, designed to help employees receive a redundancy pay packet in circumstances where they had been offered a perfectly good job, declined the same, all because they considered their status was downgraded. Western Power submitted that in circumstances of redundancy, cl 23 operated with the dual purpose of permitting Western Power to retain valued employees in roles it believed their talents and experience brought value, while providing employees with security of employment.

Consideration

Principles of interpretation

[36] The principles that govern the interpretation of enterprise agreements are well-established. Drawing attention to the decision of the Full Federal Court in WorkPac Pty Ltd v Skene, 24 (Workpac) Counsel for Mr Krstic referred specifically to the following passage to elucidate the principles:

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). 25

[37] In that same decision, the Full 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. 26 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.27

[38] The Full Bench decisions of the Commission in AMWU v Berri Pty Ltd 28(Berri), and the earlier decision in AMIEU v Golden Cockerel Pty Ltd,29embrace 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.

[39] 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. 30 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.31 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.32

[40] It is important to observe that the parties agreed that the dispute concerns an entitlement to a redundancy payment under the Agreement, not the National Employment Standards (NES). An opportune starting point, however, is the statutory context.

Statutory context

[41] 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.

[42] 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 of 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.

[43] 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.

[44] 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. 33

[45] 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’. 34 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 Ltd35demonstrated 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 119.36

[46] In the decision of DL Employment Pty Ltd v Australian Manufacturing Workers' Union 37(DL Employment)the company asserted that there was an implied term of the enterprise agreement, namely a provision allowing for the avoidance of a redundancy pay entitlement where the employer had obtained acceptable or suitable alternative employment. There was of course no express term to that effect. The company relied upon the tests adopted for the implication of contractual terms on the basis of business efficacy.38 However, the Full Bench was unpersuaded that the contractual test was applicable where the agreement was an industrial instrument made under statute, with a ‘legislative character’.39

[47] Counsel for Mr Krstic confirmed that it was not Mr Krstic’s submission that the Commission should imply into the Agreement the test of ‘suitability’ or the words ‘acceptable’, ‘suitable’ or ‘reasonable’ to qualify the ‘alternative role’. However, it was Mr Krstic’s submission that the Commission should in effect conclude that the word ‘alternative’ connoted ‘acceptable’ or ‘suitable’. The meaning to attribute to it included ‘acceptable’ and/or ‘suitable’. On that basis, contended Mr Krstic, the loss of the redundancy payment under cl 23(c) would occur only if the proposed alternative role was suitable – meaning sufficiently similar to the substantive role.

What does the word ‘alternative’ mean in the context of cl 23 of the Agreement?

[48] The question then is whether the word ‘alternative’ in cl 23(b)(ii) can be taken to mean ‘suitable’ or ‘acceptable’. The word is not a defined term in the Agreement. Its ordinary meaning, as set out in the Macquarie Dictionary, is:

Noun 1. A possibility of one out of two (or, less strictly more) things: remaining neutral as an alternative to attacking.

2. one of the things thus possible: they chose the alternative of attacking.

3. a remaining course or choice: we had no alternative but to move.

-adjective 4. Affording a choice between two things, or a possibility of one thing out of two.

5. (of two things) mutually exclusive, so that if one is chosen the other must be rejected: alternative results of this or that course.….  40

[49] Its use in the clause does not in my view give rise to ambiguity, confound the reader, or suggest that the parties contemplated the word had any other meaning other than its ordinary meaning. I consider the relevant provisions of the Agreement to be clear and unambiguous. Further, attributing to ‘alternative’ its ordinary meaning does not therefore mean that the word is absent work to do.

[50] An entitlement to a redundancy payment under cl 23(c) of the Agreement occurs in certain circumstances. Clause 23(b)(ii) informs us that, first, the employee’s role needs to become redundant. This appears self-explanatory given the subject matter of the clause. Clause 23(a) states that in the event of a change in Western Power’s operational requirements, an employee’s role may become redundant. However, the Agreement obliges Western Power to manage role reduction first, by attrition, and thereafter redeployment and training.

[51] For a redundancy payment to be forthcoming, cl 23(b)(ii) requires that there be ‘no alternative role under the provisions of Retraining and Redeployment for the employee in Western Power..’. Reference to ‘under the provisions of Retraining and Redeployment,’ is, in my view, a reference to the heading at cl 23(a) - ‘Redeployment and Retraining’.

[52] Clause 23(a)(iii) speaks to a redeployment including a transfer or relocation between metropolitan and country locations, or vice versa. It goes on to say that ‘exceptional personal circumstances or undue hardship will be taken into account in assessing whether an alternative offer is reasonable’. The clause expressly caters for the concept of ‘reasonableness’ with respect to an ‘alternative’ offer. That is, an assessment of reasonableness is required and is so expressed in the terms of cl 23(a)(iii). That assessment requires that both exceptional personal circumstances and undue hardship are to be taken into account.

[53] Similarly, where cl 23 seeks to qualify the term ‘alternative role’ it does so expressly; cl 23(d) is illustrative of this point in its ‘heading’. Although not relevant to the circumstances at hand, as the application does not pertain to a transfer of employment, nevertheless this subclause refers to an ‘[A]dequate Alternative Role’ and then goes on to state that the offer of employment with the new employer must be on terms and conditions that on balance are the same or no less favourable. Clause 23(b)(ii) is silent on the adequacy of the role and cl 23(a) makes no stipulation about the terms of and conditions of the role.

[54] The obligation to pursue redeployment and cooperate fully under cl 23(a)(iv) may result in an employee being placed in an alternative role, referred to in cl 23(b)(ii), of a lower level than that of the substantive role. The parties to the Agreement have clearly contemplated such an occurrence given the inclusion of cl 23(a)(iv). Clause 23(a)(iv) evinces that priority is placed on maintaining a rate of pay that accords with the pre-redeployment enterprise agreement classification, rather than the level of the role being maintained. Such an approach aligns with Western Power’s submission that the Agreement works to ensure job security.

[55] Western Power had submitted that the purpose of cl 23 was to provide security of employment for its employees, whilst allowing Western Power to retain employees in roles where it considered their talents and experience brought value. On any objective basis, this would appear to have been the common intention. The obligations placed upon Western Power are suggestive of such. There is, after all, the imposition of the obligation to turn to natural attrition before making positions redundant. Western Power must thereafter pursue redeployment and retraining before making a position redundant. On securing an alternative role, notwithstanding the classification level being lower, Western Power must maintain the pre-redeployment enterprise agreement classification rate of pay for four years – in and of itself seems most extraordinary.

[56] Yet, it is not Western Power that simply bears the burden of obligation under cl 23. Employees can be required to pursue redeployment, and in doing so, cooperate fully. A reasonable person would understand by the language of cl 23, that an ‘alternative role’ could be of a lower level than that which the employee previously occupied and, notwithstanding this, the employee could be required to pursue redeployment and, in doing so, cooperate fully. On its face this may appear absurd in circumstances where the alternative role attracted a lower rate of pay under the Agreement. However, the obligation on the employee is coloured by reasonableness when one considers that whilst that alternative role could be of a lower level, the Agreement classification rate of pay could not, for a period of four years.

[57] Counsel for Mr Krstic directed attention to the decision of the Federal Court in Barbieri. The argument advanced by Counsel appears to have been derived from the passages of Bromberg J in Barbieri, most notably at paragraph [41]. Little time is dedicated to the decision because of its irrelevance.

[58] However, the following points are salient. Bromberg J’s analysis was limited to the construction of the word ‘alternative’ framed within a particular contract of employment. The word was read by reference to the purpose of that particular contractual clause – as was appropriate. It was not an industrial instrument where particular principles of interpretation apply. The word was not couched within a clause such as that of cl 23, where there were several obligations placed upon Western Power, and that of the employee. The employee bore no obligation under the relevant contractual clause, and all that was required was that if the employer was unable to offer, or facilitate an offer of an alternative position, then eligibility for a retrenchment payment arose

[59] The word ‘alternative’ in cl 23 has work to do without importing, or otherwise finding its meaning somehow tacitly encompasses ‘suitable’ or ‘acceptable’. It simply differentiates a role, which is an available role mutually exclusive to the employee’s existing or substantive role. Where there is no alternative role then an entitlement to redundancy pay under cl 23(c) arises. An employee can of course choose not to take the alternative role, but a redundancy payment under cl 23(c) is only triggered where there is ‘no alternative role’.

[60] Mr Krstic submitted that Western Power’s argument was inconsistent with any basic notion of fairness. 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. The task is always one of interpreting the agreement produced by the parties. 41 As an aside, being redeployed into a role of a lower level and yet retaining the pre-deployment enterprise agreement classification rate of pay for four years would appear to not only be fair, but a bargain well struck on behalf of the employees.

[61] By now it would be evident that the ordinary meaning of ‘alternative’ prevails. It is mot juste. An overly technical approach to interpretation has been avoided and deference given also to a purposive approach. On a proper construction of the Agreement, there is not a requirement that the ‘alternative role’, referred to in cl 23(b)(ii) of the Agreement, is one that must at least be suitable.

Is the Senior Property Specialist role suitable?

[62] The conclusion reached does not necessitate consideration of the issue of whether the Senior Property Specialist role was suitable. For the sake of completeness however, the issue is traversed.

[63] Mr Krstic advanced that suitability must be assessed by reference to whether there is sufficient similarity to the substantive role. In this respect, a comparison was required between the nature and character of Mr Krstic’s substantive role and that of the role of Senior Property Specialist. The suitability ‘test’ that Mr Krstic relies upon appears to be drawn from a body of law that has considered the word ‘acceptable’ as referred to in s 120(1)(b) of the Act. A section already referred to, which permits a reduction in redundancy pay that an employee would otherwise be entitled to under the NES, if the employer has obtained other ‘acceptable’ employment.

[64] However, here the context is one where the word ‘suitable’ is situated in a clause significantly different to s 120 of the Act, and within the confines of an industrial agreement. The word ‘alternative’, is to be understood as meaning ‘suitable’, without it having ever been stated. The meaning tacit. ‘Suitable’ in its ordinary sense, may be taken to mean whether something is right or appropriate for a particular person. Of course, suitability must be considered in context and an objective assessment undertaken. The Property Team Leader position no longer exists, and the work performed by the team that Mr Krstic led, that is the Planning and Assets team, was dispersed to newly created areas.

[65] The Property Team Leader role was classified as Career Level F1 under the HR Formal Leader Toolkit Western Power’s Classification Structure. 42 In contrast, the Senior Property Specialist position was classified as a Career Level P3. Career Level F1 sat within the Formal Leader Workstream, and Mr Krstic’s position was ‘Front-line Management’. Career Level P3 was in the Professional Other/Engineering Workstream and the description of the Career Level stated, amongst other things in the ‘Leader Toolkit’, ‘[T]hese positions are seen as subject matter experts accountable for providing high level and sound technical guidance’.

[66] However, it is important to note that the classifications within the Agreement are somewhat different to the ‘Leader Toolkit’, encompassing the Business Support Workstream, Professional Workstream and Operational Workstream only. However, the Professional Workstream accommodates ‘[P]rofessional Supervisory roles which primarily engage in the same work as the employee they manage or supervisor including where the main focus is on people and management issues’. 43 Hence why Mr Krstic was covered by the Agreement.

[67] The Senior Property Specialist position no longer required Mr Krstic to supervise two staff members, it was not within the ‘Formal Leader’ Workstream and did not have the delegated financial authority that Mr Krstic purported the leadership position had. It is acknowledged that there was dispute about whether the Property Team Leader position had delegated financial authority, but I am satisfied that not much hinges on that when the totality of the evidence is considered. There was clearly some difference between the two roles.

[68] However, having heard from Mr Krstic and Mr Boots about the duties and responsibilities of the two positions, and having considered the position descriptions of both, in addition to the classification of the positions under the Agreement and the HR Formal Leader Toolkit Western Power’s Classification Structure, and being ever so mindful of context pre-restructure and post-restructure, I am satisfied that the position of Senior Property Specialist was ‘suitable’.

DEPUTY PRESIDENT

Appearances:

J Nicholas for the Applicant

R Wade for the Respondent

Hearing details:

2019:

November 25,

Perth.

Printed by authority of the Commonwealth Government Printer

<PR714510>

 1   AE426510; [2017] FWCA 6679.

 2   Witness Statement of Andrew Boots (Boots Statement) [11]; Exhibit Book p 1-7.

 3   Witness Statement of Samantha Aiken (Aiken Statement) [14].

 4   Aiken Statement [13], Exhibit Book p 50-76.

 5 Aiken Statement [13].

 6   Western Power and Australian Services Union Enterprise Agreement cl 2.

 7 Boots Statement [14].

 8 Boots Statement [14].

 9 Boots Statement [15].

 10 Boots Statement [15].

 11 Boots Statement [17].

 12 Aiken Statement [26]; Boots Statement [39].

 13 Aiken Statement [26].

 14 Aiken Statement [27].

 15 Aiken Statement [27].

 16 Aiken Statement [30].

 17 Aiken Statement [30].

 18 Aiken Statement [34].

 19   Aiken Statement [34]; Exhibit Book Annexure 9.

 20 Aiken Statement [35].

 21 Aiken Statement [37].

 22 [2018] FCA 622.

 23 [2018] FCA 622 [41].

 24 [2018] FCAFC 131.

 25 [2018] FCAFC 131 [197].

 26 [2018] FCAFC 131 [202].

 27 [2018] FCAFC 131 [202].

 28   [2017] FWCFB 3005.

 29   [2014] FWCFB 7447.

 30   [2014] FWCFB 7447.

 31   Berri point 1 [114]; Golden Cockerel point 8 [41].

 32   Berri point 2[114].

 33   Maritime Union of Australia, The v FBIS International Protective Services(Aust) Pty Ltd[2014] FWCFB 6737 [29]

 34   DL Employment Pty Ltd v Australian Manufacturing Workers' Union[2014] FWCFB 7946 [80].

 35   [2014] FWCFB 6737

 36   Maritime Union of Australia, The v FBIS International Protective Services (Aust) Pty Ltd[2014] FWCFB 6737 at [20]-[33]

 37   DL Employment Pty Ltd v Australian Manufacturing Workers' Union[2014] FWCFB 7946.

 38   BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266.

 39   DL Employment Pty Ltd v Australian Manufacturing Workers' Union[2014] FWCFB 7946 [81].

 40   Macquarie Dictionary Publishers, Macquarie Dictionary Online (at 29 November 2019) ‘alternative’.

 41   Berri point 2[114].

 42 Aiken Statement [13].

 43   Schedule 4.3 of the Agreement.