The Community and Public Sector Union v University of Newcastle

[2016] FWC 5755

[2016] FWC 5755

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

The Community and Public Sector Union
v
University of Newcastle
(C2016/4242)

Educational services
COMMISSIONER SAUNDERS	NEWCASTLE, 16 AUGUST 2016

Application to deal with a dispute – proper construction of an enterprise agreement – relief granted

[1] The University of Newcastle (University) has made a decision to outsource various services currently provided by employees working within its Infrastructure and Facility Services (IFS) business unit. This organisational change process has given rise to a dispute between the Community and Public Sector Union (CPSU) and the University in relation to the proper construction of clause 22.1.1 (Dispute) of the University of Newcastle Professional Staff Enterprise Agreement 2014 (Enterprise Agreement).

[2] The CPSU filed an application to deal with the Dispute pursuant to s.739 of the Fair Work Act 2009 (Cth) (Act).

[3] There is no dispute between the parties and I am satisfied on the evidence that the Dispute is one which falls within the scope of disputes that may be dealt with in accordance with the dispute settlement procedure in clause 75 of the Enterprise Agreement. Clause 75.7 empowers the Fair Work Commission (Commission) to arbitrate a dispute in the event that the dispute cannot be resolved by mediation and/or conciliation.

[4] The parties participated in conciliation of the Dispute before a different Member of the Commission, but were unable to resolve the Dispute by agreement. Accordingly, the parties requested that I arbitrate the Dispute and “make a determination” in relation to it in accordance with clause 75.7(ii) of the Enterprise Agreement.

[5] There is no dispute between the parties as to the relevant facts in relation to the Dispute. By consent, the parties tendered an Agreed Statement of Facts 1 and did not adduce any other evidence. A copy of the Agreed Statement of Facts is set out in annexure A to this decision. It is apparent from the Agreed Statement of Facts that there has been no attempt by either side to adduce evidence of surrounding circumstances to assist in determining whether an ambiguity in the Enterprise Agreement exists.

[6] Nor is there any dispute between the parties in relation to the principles to be applied concerning the proper construction of the Enterprise Agreement. Those principles were considered and summarised by a Full Bench of the Commission in AMIEU v Golden Cockerel[2014] FWCFB 7447.

[7] Each party filed detailed written submissions in support of their arguments concerning the proper construction of clause 22.1.1 of the Enterprise Agreement. In addition, the parties made oral submissions during the arbitration of the Dispute on 16 August 2016.

Clause 22.1.1 of the Enterprise Agreement

[8] Part D of the Enterprise Agreement deals with managing change within the workplace at the University. A copy of the whole of Part D of the Enterprise Agreement is set out in annexure B to this decision.

[9] Clause 22.1.1 provides as follows:

“Where a position is no longer required the incumbent may become a detached staff member. The detached staff member will be notified in writing as soon as possible.”

[10] At the heart of the Dispute is a controversy between the parties as to when an employee may become a detached staff member. The University contends that it may notify an employee that they are a detached staff member when the University has made a decision that the detached staff member’s position will no longer be required in the future. The CPSU submits that the University is not permitted to issue a notice to a detached staff member pursuant to clause 22.1.1 of the Enterprise Agreement unless and until the detached staff member’s position is no longer required by the University.

[11] The outcome of this Dispute has practical implications because the University has already issued notices pursuant to clause 22.1.1 to various employees in circumstances where it has made a decision that those employees’ positions will no longer be required from September or October 2016, but those positions are still required until that time. The reason the University will no longer require those positions to be performed by any of its employees after September or October 2016 is that the duties and services provided by the employees are being outsourced to a third party.

[12] In my view, the construction contended for by the CPSU is the correct interpretation of clause 22.1.1 of the Enterprise Agreement, for the following reasons.

[13] First, clause 22.1.1 uses the present tense “is no longer required” [emphasis added] to describe the state of affairs which must exist before a staff member may become a detached. That is, a position must no longer be 2 required in order for the “incumbent” to potentially become a detached staff member.3 Having regard to the circumstances which presently exist, it is appropriate to ask whether the University presently no longer requires the positions being occupied by the “incumbents” to whom notices have been given under clause 22.1.1 of the Enterprise Agreement. The answer to that question is that the University does require those positions and will continue to require them until the services are outsourced to a third party in September or October 2016.

[14] Secondly, the University rightly points out that the relevant expression is not limited to “a position is no longer required”, but is in fact “where a position is no longer required”. The University contends that the word “when” rather than “where” would have been used if the parties to the Enterprise Agreement had objectively intended for the right to issue the notice to be limited to circumstances in which the position was in fact no longer required. In the context in which the word “where” is used in clause 22.1.1 its ordinary meaning, in my view, is “in a position, case etc, in which: where ignorance is bliss, ‘tis folly to be wise”. 4 Applying that definition to the opening expression in clause 22.1.1 results in the expression reading “In a case in which a position is no longer required …” In my view, that is the way in which a reasonable person would construe the language used by the parties in clause 22.1.1 of the Enterprise Agreement.

[15] Thirdly, once a staff member receives a notice from the University in accordance with clause 22.1.1 of the Enterprise Agreement, they become “a detached staff member”. The use of the word “detached” in the context where a position is no longer required suggests that the staff member to whom the notice has been sent is no longer “attached” to their position. It would, in my view, be a strain on the language used in clause 22.1.1 to interpret the provision in such a way so that an employee whose position was still required by the University was a “detached staff member” because they had received a notice to that effect from the University.

[16] Fourthly, the second sentence in clause 22.1.1 requires the detached staff member to be notified in writing “as soon as possible”. In my view, that requires the notice to be sent “as soon as possible” to the time at which the state of affairs contemplated by the expression “where a position is no longer required” is satisfied. The University contends that the relevant state of affairs is satisfied when the University makes a decision that a position will no longer be required in the future, as distinct from a present state of affairs “where a position is no longer required”. In my opinion, it would be necessary to read additional words into clause 22.1.1 to give effect to the construction for which the University contends. In particular, clause 22.1.1 does not deal with a decision to no longer require a position in the future, but instead focuses on a present state of affairs in which the position is no longer required.

[17] Fifthly, if the University’s construction of clause 22.1.1 were correct, the employees to whom notices were sent under clause 22.1.1 in May 2016, on the basis that the University had made a decision that their positions would no longer be required in September or October 2016, would be entitled to elect to immediately accept what is in effect a redundancy package under clause 22.1.2, 5 even though the University still required their position to be filled by an employee and that would continue to be the case for another four or five months (ie from May until September or October 2016). The right to a redundancy payment ordinarily only arises when the employer no longer requires the position in which the employee has been working to be filled by an employee. The construction for which the CPSU contends would result in employees only becoming entitled to a redundancy payment under the Enterprise Agreement after their position was no longer required by the University. There is a coherence between such an outcome and the usual position with respect to redundancy payments.

[18] Sixthly, if an employee to whom a notice under clause 22.1.1 has been given elects to either seek redeployment within the University or seek employment outside the University, then the University is obliged:

• wherever possible, to endeavour to redeploy the employee into a position within the University equal to the employee’s substantive position at the time they were declared detached (clauses 22.2.3 and 22.3.3 of the Enterprise Agreement); and



• to allocate suitable temporary work to the employee. Wherever possible, the employee will continue to work at the same work value/classification level during the period of detachment (clauses 22.2.4 and 22.3.4 of the Enterprise Agreement).

[19] These obligations do not, in my view, sit comfortably with a circumstance in which the position occupied by the “detached staff member” continues to exist after the notice has been sent to the employee under clause 22.1.1. By way of example, although it would be possible for the University to comply with its obligation to allocate suitable temporary work to a detached employee by allocating the employee the same duties and responsibilities in the same position in which they had been employed (potentially for some considerable time) at the time they received the notice, it is, in my view, a strain on the language of clause 22 of the Enterprise agreement to say that such a direction is the allocation of “suitable temporary work” to the detached employee. In my opinion, the obligation on the University to attempt to redeploy the detached employee into a position and allocate suitable temporary work to the employee envisages a situation in which such steps need to be taken because the detached employee no longer has a position and needs meaningful work to do during the redeployment period. This is part of the context in which clause 22.1.1 needs to be construed within Part D of the Enterprise Agreement.

[20] Seventhly, the effect of construing clause 22.1.1 in the way contended for by the CPSU is that an employee could not be given a notice under clause 22.1.1 until their position was no longer required and the giving of that notice would provide the detached staff member with a period of four weeks from the date of the notice to make their election under clause 22.1.2 and then, depending on election made by the employee, a further 26 week redeployment period before the University could terminate the employment of the detached staff member on the grounds of redundancy under clause 22.2. Upon being dismissed on the ground of redundancy, the employee would be entitled to the generous redundancy benefits set out in clause 22.4.1. On any view of it, such conditions of employment would be considered as generous to employees when measured against most other industries. These considerations could lend weight to an argument that, as a matter of industrial fairness to the employer, it should be permitted to give the notice under clause 22.1.1 at a time when it decides that it will no longer require the positions in the future, thereby shortening the overall lengthy period before an employee could be dismissed on the ground of redundancy. 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.” 6

[21] Eighthly, the University submits that if the CPSU’s construction of clause 22.1.1 is correct, then there would be a period of up to 6 weeks 7 where a staff member to whom a notice had been sent under clause 22.1.1 and who decided to accept a severance package would have no work to do (because their position was no longer required) and could not be directed by the University to undertake any other work. The University contends that the parties could not have objectively intended for such an outcome.

[22] In my view, the University would be entitled, in the circumstances referred to in the previous paragraph, to:

(a) direct the detached employee to be seconded, transferred or placed (following consultation) into another role; 8

(b) allocate suitable temporary work to the employee as a detached staff member; 9 or

(c) direct the employee to carry out duties consistent with their terms of employment, classification structure and descriptors set out in the Enterprise Agreement, 10

in the period of up to six weeks between the giving of the notice under clause 22.1.1 and the cessation of employment on the ground of redundancy. Because the University has these rights, I am of the view that the construction of clause 22.1.1 for which the CPSU contends does not give rise to irrational, capricious, or unintended consequences.

[23] Finally, the principal purpose of the redeployment and redundancy clause (clause 22 of the Enterprise Agreement) is to afford employees a very good opportunity, if their position is made redundant, to seek redeployment (for up to 26 weeks) or accept a generous severance package. In my view, the principal purpose does not advance or detract from the competing constructions of clause 22.1.1 put forward by the parties. Accordingly, I consider purpose to be a neutral matter in my consideration of the proper construction of clause 22.1.1. Neither party put submissions to the contrary.

Conclusion

[24] For the reasons set out above, on the proper construction of clause 22.1.1 of the Enterprise Agreement, the University is not permitted to issue a notice to an employee under clause 22.1.1 unless and until the employee’s position is no longer required by the University.

[25] I was informed at the arbitration of the matter that, in the event that I found against the University in relation to the proper construction of the Enterprise Agreement, the University did not oppose, or seek to make further submissions in relation to, the remedy sought by the CPSU in its s.739 application. I consider that relief along the lines sought by the CPSU in its application is appropriate, having regard to the agreed facts and my conclusion as to the proper construction of clause 22.1.1 of the Enterprise Agreement. Accordingly, I will determine the Dispute by issuing an order PR584335 in the following terms together with this decision:

“Further to the decision [2016] FWC 5755 issued on 16 August 2016 and pursuant to s.739 of the Fair Work Act 2009 (Cth), the Commission orders the University of Newcastle to withdraw the detachment notices issued by it to employees in the Infrastructure and Facilities Services area, other than those employees who have already notified the University of their election for voluntary redundancy, and not re-issue a detachment notice to any such employee until such time as the position occupied by the particular employee is no longer required by the University of Newcastle.”

COMMISSIONER

Appearances:

Mr M Burns, solicitor, on behalf of the applicant.

Mr M Kelly, Associate Director ER & HR Partnering, University of Newcastle, on behalf of the respondent.

Hearing details:

2016.

Newcastle:

August, 16.

Annexure A

Annexure B

 1   Exhibit 1

 2   “Is” is the 3rd person singular present indicative of “be” (Macquarie Dictionary, Revised Third Edition)

 3   There is only a possibility, rather than a certainty, that the “incumbent” will become a detached staff member after the University no longer requires the “incumbent’s” position because the “incumbent” may be transferred or placed by the University into some other role pursuant to clause 24.1 of the Enterprise Agreement.

 4   Macquarie Dictionary (Revised Third Edition)

 5   See clauses 22.2.5, 22.3.5 & 22.4 of the Enterprise Agreement

 6   AMIEU v Golden Cockerel[2014] FWCFB 7447 at [41(10)]

 7   The 6 week period is comprised of the four week election period under clause 22.1.2 and the further two week period within which the separation package could be taken under clause 22.1.2 of the Enterprise Agreement.

 8   Under clause 23 or clause 24 of the Enterprise Agreement

 9   Under clause 22.2.4 or clause 22.3.4 of the Enterprise Agreement

 10   Under clause 6.1 of the Enterprise Agreement are

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