Vincent Rees v Water Corporation T/A Water Corporation WA
[2022] FWC 1126
•27 MAY 2022
| [2022] FWC 1126 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Vincent Rees
v
Water Corporation T/A Water Corporation WA
(C2022/805)
| DEPUTY PRESIDENT BEAUMONT | PERTH, 27 MAY 2022 |
Alleged dispute about matter arising under the Water Corporation Enterprise Agreement 2021; meaning of Suitable Alternative Employment; whether new position constitutes Suitable Alternative Employment
This decision concerns an application made by Mr Vincent Rees 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 Mr Rees’ position was made redundant on 5 December 2021.[2] However, the dispute between the parties is whether the new role assigned to Mr Rees constitutes ‘Suitable Alternative Employment’ or ‘Alternative Employment’ as defined under clause 37.2 of the Agreement.
There are certain implications for Mr Rees depending on that finding. If Suitable Alternative Employment cannot be identified and Mr Rees is unwilling to undergo reasonable training or retraining and declines an offer of Alternative Employment, this will oblige Water Corporation to provide Mr Rees with a severance payment and leave payments. Much then hinges on whether the new role assigned to Mr Rees constitutes Suitable Alternative Employment or Alternative Employment.
The new role assigned to Mr Rees is that of Principal Group Finance (Principal or Principal role). Mr Rees previously held the role of Manager – Group Finance (Manager or Manager role). Mr Rees 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, the parties submitted that the issue could be reduced to one question. Namely, is the employment that has been offered to Mr Rees, being the Principal role, Suitable Alternative Employment or Alternative Employment for the purpose 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 Mr Rees 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 or Alternative Employment, I have determined that it is Suitable Alternative Employment. My reasons follow.
The restructure and the new role
On 5 August 2021, Water Corporation notified all employees in the Strategic Finance and Group Finance business units (Business Units) that a review of the operating model would be undertaken.[3]
On 8 November 2021, Water Corporation announced a restructure of the Business Units resulting in the amalgamation of the Strategic Finance and the Group Finance Business Units to create one new business unit, titled, ‘Financial Services’ (Restructure).[4]
The Restructure had implications for Mr Rees. The role he had been permanently employed in, the Manager role, which sat under the Group Finance business unit, was made redundant. Mr Rees was notified about the redundancy of his role on the same day the Restructure was announced. Mr Dean Page, Chief Financial Officer and Ms Deb Evans, former Head of Strategic Finance,[5] informed Mr Rees that his Manager role would be made redundant effective 5 December 2021.[6]
During the meeting on 8 November 2021, Mr Rees was provided with a letter.[7] The letter stated that Water Corporation had identified two redeployment options and Mr Rees was to identify his preferences for those options, which were:
(a) the role of ‘Manager – Group Finance’ (two roles available) (Option 1); or
(b) the role of ‘Principal – Group Finance’ (two roles available).[8]
On 12 November 2021, Mr Rees returned a signed copy of the letter, confirming that his preferred option was Option 1, and that his preference was to be appointed to one of the two roles through a ‘skills matching process’.[9] This in turn meant that there would be no interview for Mr Rees, but rather his skills and expertise would be assessed to determine if he was the preferred candidate for Option 1.
On 24 November 2021, Mr Page sent Mr Rees a letter confirming that, following a ‘skills matching process’, he had not been appointed to either one of the two available roles of ‘Manager – Group Finance’.[10] The role of ‘Principal – Group Finance’ had been identified as Suitable Alternative Employment for the purposes of the Agreement.
On 30 November 2021, Mr Rees sent Mr Page a letter indicating that he did not agree that the Principal role was Suitable Alternative Employment.[11]
Come 1 December 2021, Mr Page replied to Mr Rees reiterating that Water Corporation considered the Principal Role to be Suitable Alternative Employment and if Mr Rees was dissatisfied with that assessment, he could raise a dispute in accordance with the dispute resolution procedure set out in the Agreement.[12]
On 2 December 2021, Mr Rees raised such dispute and on 6 December 2021, Mr Rees was placed in the Principal role.[13]
It is uncontroversial that Water Corporation has classified the Principal role as Level 7, the same classification level as the Manager role. Further, the remuneration for the Principal role and pay point remains the same as the Manager role, $162,047 per annum, equivalent to Level 7A3.[14]
Ms Evans, who after the Restructure assumed the position of Head of Financial Services, gave evidence about the merger of the Strategic Finance business unit and Group Finance business unit, and the subsequent organisational structure adopted.[15] She acknowledged that as Head of Strategic Finance at the time, she had been involved in creating the new organisational design for the restructure.[16]
Ms Evans explained that she worked with Mr Page, Mr Geoff Archard, Senor Principal from People & Capability (P&C), and Mr Ray Curtis, Acting Head Group of Finance (collectively the Working Group) to establish the new structure.[17]
Prior to the Restructure, Mr Rees was performing the Manager role for the Asset, Planning and Delivery Group (APDG).[18] Ms Evans described there being three other employees who were also performing the Finance Manager role.[19] Hence, previously there had been four ‘Manager – Group Financial Performance’ positions servicing six Groups.[20] The Work Group decided that in the new structure there would be two roles available for the position of ‘Manager – Group Finance’, and two roles available for the position of ‘Principal – Group Finance’.[21]
One of the ‘Manager – Group Finance’ roles would service three Groups being Strategic Performance Group (SPG), Finance Group (FG) and APDG.[22] The second ‘Manager – Group Finance’ role would service the Customer Community Group, Information and Technology Group and People and Safety Group. Both new managerial positions would be classified as Level 8 roles.[23]
Ms Evans expressed that the scope of the Manager – Group Finance role in the new structure was broader and now assumed the leadership for three Groups within Water Corporation.[24] Ms Evans stated that the Manager-Group Finance in Mr Rees’ team assumed managerial responsibility for APDG, FG and SPG, whereas in his Manager role, Mr Rees had only supported APDG.
The Principal role now offered Mr Rees the opportunity to provide support to FG and SPG and the business units within those groups, said Ms Evans.[25] Ms Evans further explained that the Principal roles had been established to partner with the Manager to address activities identified as requiring improvement during the review process.[26] These included but are not limited to:
(a) the allocation of work: three Groups were to be serviced in the new structure with more Business Units to support;
(b) the consistent application of financial principles and rules, with the Principal role providing a clear first point of contact for the provision of technical financial, tax, budgeting, and commercial advice;
(c) acting as a communication conduit into Financial Services business unit to provide information from those groups; and
(d) mentoring to finance team members.[27]
Insofar as reporting lines were relevant, Ms Evans gave evidence that Mr Rees now reported into a 'Manager - Group Finance’, in contrast to reporting to a ‘Head of’ as he had done in the Manager role.[28] This was because the Financial Services business unit had increased in both size and scope compared to the former individual business units.
Elaborating on ‘dotted reporting lines’, Ms Evans gave evidence that before the Restructure, Mr Rees had reported into Mr Curtis who was performing the role of Acting Head of Group Finance, and also had a dotted reporting line to Mr Hambleton, who was the General Manager of APDG.[29] Ms Evans explained that this meant that Mr Rees was available as a finance contact for Mr Hambleton, assisting him with reporting on the financial position of the group and preparing budgets, and acting as a conduit into the Group Finance business unit.[30] After the Restructure, Mr Rees continued to report into Mr Curtis, but Mr Curtis had now assumed a Manager – Group Finance role.
Mr Rees similarly gave evidence that prior to the Restructure, he occupied the Manager role and reported to the Head of the Group Finance business unit.[31] Further, he noted, that he had an indirect reporting line to the General Manager, APDG.[32]
Whilst the new structure did not provide for a dotted reporting line to the General Manager of all three Groups, the Principal role would indirectly support General Managers in their financial support capacity, said Ms Evans.[33]
Ms Evans acknowledged that the Manager role had previously been responsible for three direct reports.[34] However, she expressed the view that people management had not been a key component of Mr Rees’ former role, given his former team was small and only looked after APDG.
Ms Evans expanded upon this point noting that the management duties Mr Rees had previously performed were limited to managing the day to day workload of his team and developing their performance plans and agreements.[35] As a Principal, Mr Rees would be expected to lead and mentor not only the financial resources supporting the manager but also to provide leadership to ‘Heads of Business Units’ and the Groups more generally.[36]
Regarding access to resources to assist with duties in the Principal role, Ms Evans detailed that if Mr Rees required assistance with a specific project such as operationalising the impact of a new accounting standard or providing training for new business case assessment processes, he would be able to access resources within the Financial Services business unit.[37]
Ms Evans acknowledged that prior to the Restructure, Mr Rees sat on the Lead Team for the Group Finance business unit,[38] and attended the extended Lead Team meetings for the APDG Group, which included representatives also providing corporate support services such as IT and Human Resources.[39] In the Principal role, he would no longer be doing this, as he had no direct reports.
According to Ms Evans, the ‘Business Unit Lead Team’ consisted of all Section Managers who all oversaw a number of functions and as a result had a team or a number of teams reporting to them.[40] Ms Evans explained that the purpose of the Lead Team was to determine how the business unit could achieve its business plan, decide resource allocations and discuss any obstacles.[41] At the Lead Team meetings, the Section Managers were expected to update Ms Evans on the progress of their teams, as well as their peers within the business unit.[42]
In respect of the extended Lead Team meetings, Ms Evans explained that Mr Rees would have attended these meetings as the representative for finance, presenting the financial information of the Group at the extended Lead Team meetings.[43] While strategy was discussed in these meetings, it was confined to business unit level, rather than the strategic direction of Water Corporation.[44]
Ms Evans gave evidence that the Principal role was a newly created role which meant she did not need to compare accountabilities in an old job description (JD).[45] Ms Evans said that between 22 October 2021 and 25 October 2021, she worked with Ms Lonsdale to finalise the drafting of the JD,[46] and thereafter it was sent to the Classification Panel for review.
Ms Lonsdale provided some context about the Classification Panel and its processes. She explained that at Water Corporation, roles were classified by the Classification Panel which consisted of representatives from P&C who are trained to use the Korn Ferry Job Evaluation Methodology (Methodology).[47]
Ms Lonsdale stated that she established an ‘extraordinary class panel’ for the Restructure which consisted of three of Water Corporation’s usual class panel members (Panel).[48] The Panel was said to have been established to contend with a large volume of JDs arriving from the Restructure, which needed independent classification.[49] The members on the Panel included Ms Carole Borserini, Acting Senior Principal, P&C.
It was Ms Lonsdale’s view, and she informed the Panel of the same, that the Principal role was intended to be a high level technical advisor who would partner with the Manager for Group Finance and provide Group lead teams with expert financial advice.[50] Ms Lonsdale explained that this would enable the Manager to have a greater strategic partnership role and the Principal would help the Manager to deliver their work.[51]
Ms Lonsdale provided context regarding leadership nomenclature within Water Corporation. She explained that seniority was not only determined by leading a team.[52] Expanding upon this point, Ms Lonsdale stated that leaders within Water Corporation were referred to as ‘Lead’, ‘Team Leader’ or ‘Manager’.[53] Team Leaders were able to be classified at Levels 5, 6, or 7. Managers were able to be classified at levels 6,7, or 8. [54]
With respect to the position of ‘Principal’, Ms Lonsdale gave evidence that Principal positions were always a Level 7 and Senior Principal positions within the business, were all classified Level 8.[55] Ms Lonsdale noted that whilst Principal positions and Senior Principal positions were not technically ‘leaders’ because they did not lead a team, this did not mean that their role was less senior than other roles.[56] Ms Lonsdale explained that such positions had a technical focus, rather than a leadership focus – and that these types of positions were often relied upon by the relevant business unit lead teams for strategic input and guidance.[57] Ms Lonsdale added that ‘Principals’ were sole contributors and technical experts in their field.[58]
Ms Borserini explained that within Water Corporation positions were classified by a classification panel utilising the Methodology.[59] As noted, at the time of the Restructure, Ms Borserini was a core member of the Classification Panel and appeared to have been well versed in the application of such Methodology.[60] Ms Borserini confirmed that Panel members were required to review the JD using the Methodology, before meeting to discuss the JD and their individual ratings - with a view to determine a consensus rating.[61]
Ms Borserini said that the consensus rating about the JD was provided back to the P&C representative who drafted and submitted the JD to the Classification Panel for review.[62]
Ms Borserini elaborated on the Classification Panel’s use of the Methodology which outlined five elements for consideration when classifying a role.[63] 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.[64]
It was acknowledged by Ms Borserini that Ms Lonsdale had asked her to sit on a Panel and on 25 October 2021 had provided the Panel with the JD for the Principal role, of which, two were available.[65] Ms Borserini stated that Ms Lonsdale had informed the Panel that the Principal role would report to the Manager of Group Finance.[66]
Ms Borserini gave evidence that she classified the Principal role as Level 7 by applying the Methodology.[67] She gave a detailed account regarding such application.[68]
In respect of the differentiation between what Water Corporation referred to as ‘common law contract’ (CLC) and ‘enterprise agreement contract’ (EA Contract) roles, Ms Borserini explained that Water Corporation employs its employees under the two different employment contracts.[69] A CLC role (also known as a ‘no scale’ role) sat outside the Agreement and was a role that required a high level of leadership and accountability.[70] In contrast, said Ms Borserini, an EA Contract role was one that sat within the levels of the Agreement and included most roles in Water Corporation, including some lower level leadership roles which were not at the same level of leadership as required in a CLC role.[71]
Ms Borserini confirmed that Mr Rees had been engaged under an EA Contract since June 2017.[72]
The Agreement and Suitable Alternative Employment
As observed, 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
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.
Mr Rees’ submissions
Mr Rees submitted that the Restructure had caused a substantial down-grade in status from his being a Section Manager and managing three staff, to becoming part of a finance support labour pool, ‘thrown in’ with lower levels and a graduate.
Insofar as the motivation of Water Corporation was concerned, Mr Rees submitted that from his own knowledge and experience, it was apparent that Water Corporation had an ‘unofficial policy’ of not paying redundancies. Mr Rees continued that in circumstances where a redeployment role is deemed Alternative Employment, an employee may elect to take a severance package. Mr Rees referred to his evidence where he requested that the Principal role be classified as Alternative Employment in a meeting on 14 December 2021. Mr Archard was said to have responded in that meeting to the effect, ‘there will be no redundancies paid’.[73]
Mr Rees drew to the Commission’s attention that Water Corporation requires the approval of an ‘Investment Business Case’ as a prerequisite for any substantial change that is to be made to the organisation. That Investment Business Case, submitted Mr Rees, was required to outline the risks and impact on full time equivalent positions and to quantify financial implications. Whilst Water Corporation had been requested to provide this document on 13 April 2022, it had declined to do so. Mr Rees pressed that such document would have illuminated the real motives, internal commitment, and intentions of Water Corporation.
Mr Rees noted that whilst his terms and conditions of employment were primarily governed by the Agreement, in addition to his employment contract, prior to his current employment contract of 15 May 2017, he was employed under a CLC for ‘Managers and Leaders’, and this reflected the seniority of his role.
Mr Rees submitted it was Water Corporation’s decision to return him to an EA contract, where special accommodation of his terms had been made to address the ‘above Agreement’ salary he received.[74]
Regarding the legal definition attributed to the term ‘substantially similar’, presumedly as referred to in the definition of Suitable Alternative Employment, Mr Rees submitted that it meant, of being ‘similar in importance, degree, amount, placement or extent’. Mr Rees further submitted, that for a role to be ‘substantially similar’, it must be assessed against the actual role he performed immediately prior to the restructure, not a hypothetical role described by a position description which was over 11 years old. In this respect, Mr Rees referred to a JD dating back to April 2010 which, had been referred to by Water Corporation in its initial response to his application under s 739.
Mr Rees identified that there appeared to be a discrepancy in the Water Corporation’s evidence regarding the JD it had relied upon in respect of comparing the Principal role to the Manager role. Mr Rees noted, that notwithstanding Water Corporation’s reference to the JD dating back to April 2010 in its initial response to his application, Water Corporation had confirmed in email correspondence that the JD had not changed in 2015 or 2018, as had been suggested by Mr Rees. However, in Water Corporation’s Outline of Submissions, submitted Mr Rees, it had advanced that the relevant JD was ‘Manager – Financial Management, which was last reviewed in September 2016.
Mr Rees pointed out that in the context of the dispute, the JD had been required to establish the salary for the Level 7 Principal role, the undertaking of the skills match exercise and for drawing the conclusion that the redeployed role was Suitable Alternative Employment. However, Mr Rees went on to say that to establish whether a role was Suitable Alternative Employment, it was necessary to assess the actual role held immediately prior to the Restructure and at no stage did any JDs reflect his prior role.
Ms Rees submitted that the Principal role did not satisfy the definition of ‘substantially similar’ because:
a) he had previously held the Section Manager role;
b) was titled ‘Manager’;
c) reported to a Head of business unit;
d) had three direct reports;
e) had a ‘dotted’ line to the General Manager of APDG;
f) was a member of the Business Unit and Group Management Lead Team; and
g) had clear and discrete financial accountabilities for a Group (which was higher than a business unit).
Mr Rees argued that whilst the Water Corporation had maintained that its classification process was objective and independent, this had not been supported by its own evidence. To support his contention, Mr Rees referred to Water Corporation having not followed its own ‘Classification Process’ framework. Mr Rees highlighted that under the Classification Process, the classification of a position can be initiated through business cases, vacancy management or employee request. If classification arose as part of a business case, detail regarding changes to the position should be summarised in the business case documentation – yet, pointed out Mr Rees, this documentation had not been provided.
It was Mr Rees’ view that as Water Corporation had failed to follow numerous processes, it was unable to demonstrate the Principal role was Suitable Alternative Employment.
Mr Rees identified the differences between the accountabilities and focus areas he had held under the Manager role JD and the Principal role JD as follows:
Accountabilities (previous Manager role) Focus Areas (Principal role) Process Management Finance and Business Technical Focus Financial Business Strategy Business Management Business Relationships Business Strategy Ethics and Compliance Business Relationships People Management Business Performance Ethics and Compliance
Mr Rees argued that the organisational chart was a hierarchical depiction of the reporting relationships between levels and that the importance of a role was determined by its position on the organisational chart and the reporting structure. Mr Rees re-emphasised that the Principal role had no direct reports and reported into a Section Manager. The Section Manager was said to have been a peer in the former hierarchy.
His removal from the Group Finance Management Lead Team as well as the APDG Management Lead Team, meant, said Mr Rees, that he had been down-graded in status, responsibility, and leadership to being a member of a diverse but junior team with colleagues that included graduates. He would therefore no longer participate in setting the strategic direction of the Business Unit and Group or contribute to its establishment of priorities.
Respondent’s submissions
The 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 becomes 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 provides 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 in the Agreement it had a clear and unambiguous meaning. It followed, submitted Water Corporation, that the test for Suitable Alternative Employment was confined to the wording in the Agreement definition. Contrary to Mr Rees’ assertion, Water Corporation pressed that the test for Suitable Alternative Employment was not based upon seniority, expertise, or length of service.
Touching on the word ‘suitable’, Water Corporation submitted that in its ordinary sense, it may be taken to mean whether something is right or appropriate for a particular person,[75]and whilst ‘suitable’ and ‘acceptable’ may have slightly different meanings, the authorities dealing with the latter term were apposite.[76]
The Respondent extracted the following propositions from decisions where there had been consideration of the term ‘acceptable alternative employment’:
(a) suitability must be considered in context and an objective assessment undertaken;[77]
(b) the assessment of whether alternative employment is acceptable is a matter to be determined on an objective basis;[78]
(c) when undertaking this assessment, it is not necessary to find identical employment. Alternative employment has been found to be acceptable notwithstanding inconvenience to employees and some detrimental alteration to the terms and conditions of employment;[79]
(d) the objective test of acceptability is that the alternative work bears a sufficient comparability to the original work and is not unreasonably removed from the employee’s original duties, skill set, qualifications and other terms and conditions of employment. The test is whether there is sufficient correlation between the relevant indicia of the current work and the alternative employment proposed;[80]
(e) an alternative position does not need to meet the personal preferences of an employee; and[81]
(f) employees should not unreasonably refuse offers of alternative employment just to access redundancy pay.[82]
Water Corporation pointed particularly to the decision of Ryan v Insurance Australia Group Services Pty Ltd & Insurance Manufacturers of Australia Pty Ltd (Ryan),[83] where the Deputy President set out the factors which were held not to be considerations of whether a position is a comparable position:
(a) feelings of loss of status or importance within an organisation;
(b) whether the employee disliked the new role;
(c) whether the employee feels uncomfortable about the new role; and
(d) whether the employee is unhappy or dissatisfied with the process of consultation leading to a position being made redundant.
Water Corporation submitted that considered objectively, the Principal role was Suitable Alternative Employment for the purpose of clause 37.2 of the Agreement. It premised its argument on the role being substantially similar to, and considered on an overall basis, no less favourable than the Manager role because:
(a) it 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 (via the Methodology) at an equivalent level to Mr Rees’ previous role;
(b) it had substantially similar duties and accountabilities as the Manager role, as evidenced in the JDs for both roles, but also when one considered the work Mr Rees actually performed in the Manage role;[84]
(c) it included a level of skill and experience relative to the Manager role, and Mr Rees 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.
Water Corporation submitted that the evidence showed it had followed a robust process when writing the JD for the Principal role and when classifying that role. It further contended that as the Principal role was a completely new role, it was not necessary to capture all the accountabilities of the Manager role.
In respect of determining suitability, Water Corporation pressed that it had assessed Mr Rees’ actual role and the work he was performing prior to the Restructure and had considered the relevant skills and competencies, and whether the Principal role was commensurate with these.
Water Corporation observed that what Mr Rees appeared to seek was an identical position to his former role with respect to elements such as leadership and reporting lines, yet clause 37.2 of the Agreement did not require Water Corporation to provide an employee with an identical role. Water Corporation submitted that the removal of the word ‘Manager’ did not have any impact on the suitability of the Principal role, but rather, went towards a perception of the role being suitable.
Water Corporation submitted that Mr Rees had not been demoted in status because most of the Level 7 Agreement roles did not report to a ‘Head of’, and whilst Mr Rees had reported to a ‘Head of’ in his Manager role, this was very uncommon at Water Corporation – such that it was an anomaly.
Whilst Mr Rees spoke of his financial accountability in the Manager role, Water Corporation contended that Mr Rees did not have ‘clear and discrete financial accountabilities’ for the APDG Group. Water Corporation’s accountabilities framework and processes were owned by ‘Heads of Business Units’ and higher level roles, who were responsible for making decisions that had financial consequences.
Water Corporation acknowledged that in the Manager role, Mr Rees looked after a small team which serviced one Group.[85] However, it was said that a ‘Section Manager’ role within the business typically managed a larger team and the ‘Manager – Group Finance’ in the new structure was responsible for servicing three Groups. Water Corporation argued that people management was not a key component of Mr Rees’ Manager role, and his supervisory responsibilities had been limited.[86]
In response to Mr Rees’ assertion that the Principal role was a demotion, Water Corporation noted that Mr Rees had been absent from work since April 2021 and had not resumed in the new role, hence he would not know if the work was effectively the same as his former role.
Principles of interpretation
The principles that govern the interpretation of enterprise agreements are well-established. In WorkPac Pty Ltd v Skene (Workpac),[87] 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).[88]
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.[89] And so, despite the broad purposive approach to be adopted when interpreting industrial agreements, the cannon of construction regarding the ‘ordinary meaning’ remains applicable as a starting point.[90]
The Full Bench decisions of the Commission in AMWU v Berri Pty Ltd (Berri),[91] and the earlier decision in AMIEU v Golden Cockerel Pty Ltd,[92] 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.[93] 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.[94] 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.[95]
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 National Employment Standards 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.[96]
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’.[97] 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,[98] 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.[99]
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 the 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 or is equivalent in former ‘Acts’, 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 Employee’s current terms and conditions which they are capable of performing.. – the question is not whether Water Corporation has obtained other acceptable employment for Mr Rees.
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.[100] As to whether the Principal role is Suitable Alternative Employment, is 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 to 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, Mr Rees’ current terms and conditions which he is capable of performing with minimal training and that he is not required to change his 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 Mr Rees’ 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 word ‘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 Mr Rees irrespective of whether he occupies the Principal role or Manager role. Mr Rees will continue to be covered by the Agreement and it will continue to apply to him in his 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 Mr Rees’ hours of work, location of work, leave entitlements, or any other terms as provided for by the Agreement, will differ. In this respect, Mr Rees’ terms and conditions on redeployment will be substantially similar to and overall, no less favourable, than those in his current role.
However, the specific accountabilities and duties of Mr Rees’ 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 falls 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 section, 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 is 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. Mr Rees gave evidence that his classification is Level 7-A3, noting that this was the highest classification available to him under the Agreement, and his salary was over that prescribed for this classification. No argument was pressed by either party that Mr Rees’ classification or remuneration would change as a result of the redeployment to the Principal role, albeit Mr Rees protested that the classification process regarding the Principal role lacked transparency.
Turning to the further terms and conditions of Mr Rees’ employment, in 2017 Mr Rees received an Offer of Employment for the position of Manager - Group Financial Management (the Employment Contract). The Employment Contract provided that Mr Rees was required to perform the duties associated with his position, as well as other duties he was capable of performing. No position description was attached to the Employment Contract. Mr Rees was also informed that he was now covered by the Water Corporation Enterprise Agreement 2014.[101]
In 2018, Mr Rees was informed that his position title had changed to Manager – Group Financial Performance and he would be responsible of the APDG. Mr Rees was informed that all other terms and conditions of his employment would remain unchanged.
It can be discerned from the contractual documents, that the specific duties or accountabilities assigned to Mr Rees at the time of the restructure were those associated with his position. 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 Mr Rees could perform, as required by Water Corporation.[102]
During the hearing, it became evident that there were two JDs potentially applicable to the Manager role. For the skills matching exercise in relation to the Level 8 managerial role, Ms Evans had relied upon the JD with the position number (No.) 44156 bearing the title, Manager Financial Management, to assess whether Mr Rees was suitable for the Level 8 position.[103] This JD had been last reviewed in September 2016.
JD No. 44156 differed in position number and title to the one attached to the Form F1 Response of the Respondent. This was the same JD as referred to by Ms Erin Belser of Water Corporation in her email to Mr Rees’ representative,[104] namely No. 41858, Finance Manager.
Ms Evans conceded, appropriately in my view, that the JDs referred to by Water Corporation for the Manager role did have different numbers and position titles, however she noted that whilst she had utilised a JD with a different position number and title, the JD nevertheless covered the duties and responsibilities of Mr Rees’ former role. There is no reason to disbelieve Ms Evans’ evidence in this respect because she was well positioned to speak to the duties and responsibilities of the Manager role given her involvement in the Restructure.
I have considered both JDs. JD No. 41858 provided that the role encompassed the following:
Manage the budgeting and forecasting, business reporting, costing, and general accounting activities of the assigned Group. Provide financial management advice and recommendations to the General Manager and Group Lead Team on business strategies and direction. Ensure consistency within the Group with overall strategic financial objectives of the Finance Group.[105]
The position purpose for JD No. 44156 was articulated in the following terms:
Manage the budgeting and forecasting, business reporting, costing, and general accounting activities of assigned Branches/Regions. Provide financial management advice and recommendations to the Branch/Regional Business Managers on business strategies and direction. Ensure consistency within the operating Group with overall strategic financial objectives of the Finance and Corporate Services Group.[106]
The overlap between the ‘purpose’ of the two positions is significant. In effect, they mirrored each other, describing substantially the same position. Ms Evans was clearly correct when arriving at the view that she did.
The position purpose of the Principal role, that is Principal – Group Finance (JD No. 21704012), was drafted in the following terms:
Partner with the Manager Group Finance and the Financial Services Lead Team to provide financial management advice and recommendations on business strategies and direction for assigned Groups. Contribute to the management of the budgeting and forecasting, business reporting, costing, and general accounting activities of assigned Groups.
Act as an initial point of contact and develop an ongoing relationship to collaborate with the assigned Groups to provide financial and commercial expertise, to enhance achievement of their business plan and corporate objectives with the financial resources they have allocated and to advocate on their behalf within the Finance Group for additional resources where required.
However, it must be remembered that the ‘Manager’ role as referred to in the purpose of the JD for the Principal role, was not equivalent to the Manager role once held by Mr Rees. Ms Evans gave detailed evidence that the two newly formed Managerial roles were classified Level 8 given the breadth of scope and responsibility they had.
The accountabilities of JD No. 41858 were set out in the JD as follows
Process Management Contribute to optimise the [sic] Manage Finance, Manage Performance Reporting, Manage Treasury & Taxation and Provide Financial Management Services Processes as defined in and in accordance with the Water Corporation Accountabilities Framework. Financial · Analyse and interpret financial data as required.
· Ensure compliance within the Group with the Policies, Standards and Procedures.
Business Management · Provide and ensure a pro-active and value adding range of financial management services to the Group.
· Represent the Group’s interests within the Finance Group.
· Provide consultancy to the business on finance and accounting issues.
· Manage the production and analysis of monthly financial management reports and Business Performance Reports.
· Manage the Group budget process.
Business Strategy · Provide a close financial link to related Planning and Capital activities of the Group.
· Pro-actively assist to improve the Group’s financial processes in line with corporate directions and continuous improvement.
· Provide strategic advice to the General Manager and Group Lead Team on capital investment proposals and on overall program for the Group in terms of financial and commercial implications on business performance.
Business Relationships · Manage alignment and relationship with the Group Lead Team to provide pro-active and value-added financial services.
· Represent Financial Management Branch interests by promoting financial business acumen and providing advice on financial policy, correct accounting treatment of transactions, taxation implications, and continuous improvement in financial processes and procedures.
· Develop and build finance functional links where reporting lines do not directly link to Financial Management Branch.
· Contribute to the shared corporate financial direction of Financial Management Branch and advocate positive change in keeping with Process Improvement directions.
People Management · Optimise the management, development and deployment of people to ensure the Financial Management Branch team has the capability to deliver required business outcomes.
· Build an effective team, team communication processes, and team commitment to continuous improvement.
Business Performance · Accountable for financial and business performance of the team, including operating costs, efficient use of resources and meeting performance targets and objectives. Ethics and Compliance Ensure all of the team’s activities comply with relevant legislation, regulatory requirements, corporate policy and ethical standards.
The key accountabilities of the Principal role were expressed as follows:
Finance and Business Technical Focus · Responsible for managing initial engagement with each assigned Group lead team on financial and commercial issues taking into account the different drivers for each group.
· Review and provide expert advice on business cases both in terms of the process, content, justification, financial input, commerciality, and validation of realisable benefits to improve quality and likelihood of success.
· Analyse, interpret and provide insights on financial management and Business Performance Reports for assigned Groups so that the resources can be reallocated and reprioritised as required to deliver maximum benefit against corporate objectives and business plans.
· Keep each assigned Group informed on progress against budgets and financial initiatives.
· Work with the Financial Services team to ensure assigned Groups comply with all financial policies, standards, and procedures to ensure proper corporate and financial management, governance, and propriety within the Corporation.
· Develop and mentor assigned Groups’ lead teams to build their financial skills and knowledge including how to prepare better business cases, budgeting and implications on the Corporation’s and the State’s financial positions.
· Assist with the Group Budget and forecast process in accordance with the Corporation’s timetables for approval by the Group Lead Team.
· Contribute to optimise the Manage Finance, Manage Performance Reporting, Manage Treasury & Taxation and Provide Financial Management Services Processes as defined in and in accordance with the Water Corporation Accountability and Empowerment Framework
· Encourage and support a focus on continuous improvement on workflows and processes through coaching and by providing insightful analysis and benchmarking of assigned Group’s activities so that they can be adjusted to improve productivity and the efficiency of service delivery.
· Share best practise learnings with Finance Business Partnering and across the Corporation with aim of ensuring optimised allocation of funding.
Business Strategy · Pro-actively drive improvements to the assigned Groups financial processes in line with corporate directions and continuous improvement.
· Provide strategic advice to the assigned Groups on all investment proposals and on overall programs in terms of financial and commercial implications on business performance.
· Contribute in the development of assigned Group’s strategies
· Provide strategic advice on how to prioritise expenditure with the aim of achieving budgets, embed an understanding of the broader impact of each assigned Group’s and the Corporation’s activities on financial outcomes for the State and raise awareness of opportunities for access to additional external sources of funding.
Business Relationships · Build and develop a close relationship with the Budgeting and Reporting section and Financial Accounting and Reporting section to assist with providing value-added financial services to the assigned Groups.
· Provide advice to assigned Groups and business units on financial policy, relevant accounting treatment of transactions, and taxation implications
· Focus on continuous improvement in financial processes and procedures and highlight shadow finance activities with the aim of eliminating duplication, ensuring single source of truth and optimisation of finance processes.
· Share information within the Financial Services Business Unit in a timely manner to increase awareness of business initiatives to support budget processes.
· Contribute to the shared corporate financial direction of Financial Services
· Business Unit and advocate positive change in keeping with Process Improvement directions.
· Advocate for effective budget allocations and effective business investment in all major decision-making forums to support overall finance
· goals.
Ethics and Compliance Comply with relevant legislation, regulatory requirements, corporate policy, and ethical standards.
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 Mr Rees performed in the Manager role.
At this stage however, it is important to 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 Manger role as against the Principal role. To reduce the assessment to that would be to attribute to the term Suitable Alternative Employment too narrow 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 Mr Rees 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[107]
The word ‘similar’ takes on the ordinary meaning of ‘having likeness or resemblance, especially in a general way’.[108]
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’ would appear to mean 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 Mr Rees to be appointed into an identical role.
Whilst the parties placed reliance on the JDs to demonstrate the focus areas and key accountabilities of both the Manager and Principal roles and both were considered, my assessment extended to the duties Mr Rees performed in his previous position, which were not fully captured in JDs.
In my opinion, the accountabilities of the two roles are not precisely the same. This is understandable given the Principal role is newly established and appears to be an individual contributor position or that of a subject matter expert. However, when the accountabilities of both positions are considered, they are, in my view substantially similar.
In cross examination, Mr Rees was asked about the duties and responsibilities he undertook working for Water Corporation, which included the provision of financial services, such as providing strategic financial advice. Counsel took Mr Rees through numerous responsibilities and duties, which reflected those in the Principal role and clearly overlapped with those he had performed in the Manager role. Mr Rees confirmed that all were duties that he performed, and he confirmed that he did not require any extra training or skills development to undertake those duties.
It was 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. On this point, it was also understandable why Water Corporation did not consider an exclusion from the Lead Team (Group Finance Management Lead Team and the APDG Management 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, assumed limited supervisory responsibility of a team of three people and its supervisory responsibilities did not appear to be a key accountability of the role. The removal of supervisory accountability did not on any objective level render the Principal role substantially dissimilar or overall less favourable. Furthermore, while Mr Rees previously attended Lead Team meetings and arguably contributed in the same, membership or an invite to a particular meeting or group in this context, did not form part of his terms and conditions of employment, and the absence of such inclusion does not result in a finding that the Principal role was not substantially similar and/or less favourable.
Revisiting Mr Rees’ contention that his reporting structure had changed hence resulting in a reduction in status, it is true that before the Restructure, Mr Rees had reported to Mr Curtis who was performing the role of Acting Head of Group Finance. I am not persuaded that a reporting line constitutes a term and condition of employment in this current context or that a change in reporting line is sufficient, in the absence of other factors, to support a finding that this rendered the Principal role not substantially similar. It was, in my view, always open to Water Corporation, whilst Mr Rees occupied the Manager role, to change his reporting line.
Water Corporation noted the Applicant’s suggestion that the real motive behind making Mr Rees’ role redundant and thereafter placing him in the Principal role and asserting it was Suitable Alternative Employment, was done to avoid paying a redundancy entitlement. Water Corporation advanced it should not be criticised for giving effect to the terms of the Agreement in seeking to retain employees in ongoing employment that it considers is Suitable Alternative Employment, rather than dismissing them or offering Alternative Employment.
In brief, this Commission has been asked to determine whether the Principal role is Suitable Alternative Employment or Alternative Employment. Its jurisdiction does not extend to declaring that the consultation provisions of the Agreement were breached or succumbing to Mr Rees adjure that the redundancy of the Manager role and the redeployment into the Principal role are all but a ruse to avoid the provision of a severance or redundancy payment to him. Furthermore, the dispute is not one about the skills matching exercise undertaken by Ms Evans and the fairness of that process, notwithstanding the time spent in cross examination on that subject matter. Regarding the purported lack of transparency concerning the classification process, the evidence does not suggest that the process undertaken by Water Corporation rendered the classification of the Principal role wrong.
Conclusion
Considering the abovementioned reasons at paragraphs [87] to [127] 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 Mr Rees’ current terms and conditions. From the evidence given, there was no suggestion that Mr Rees is not capable of performing the Principal role or that he would be required to change his place of residence. The evidence, which was not challenged, was that Mr Rees 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 Teams’ 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 paragraphs [125] – [126] 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.
Finally, it should be noted that both Mr Rees and Water Corporation were granted permission to be represented under s 596(2) of the Act. Mr Rees, because he satisfied s 596(2)(b) of the Act (and arguably ss 596(2)(a) and (c)), and the Respondent, s 596(2)(a). As the matter involved the interpretation of an industrial instrument and the materials filed were voluminous, the ‘requisite’ complexity was evident, and, importantly, it was apparent that the matter could be dealt with more efficiently were permission granted.[109] Whilst Mr Rees presented as an astute professional, experienced in financial matters, it did not follow that he was able to represent himself effectively when it came to matters such as forensic cross examination or the presentation and application of relevant legal principles.
DEPUTY PRESIDENT
Appearances:
Mr Michael Loly on behalf of the Applicant;
Mr Nicholas Ellery on behalf of the Respondent.
Hearing details:
Thursday 12 May 2022 (video hearing)
[1] [2021] FWCA 2535; PR729361; AE511338.
[2] Statement of Agreed Facts [8] (SOAF).
[3] Ibid [2].
[4] Ibid [4].
[5] Ibid [8].
[6] Ibid.
[7] Ibid [9].
[8] Ibid.
[9] Ibid [11].
[10] Ibid [12].
[11] Ibid [13].
[12] Ibid [14].
[13] Ibid [15] – [16].
[14] Ibid [21].
[15] Witness Statement of Ms Deb Evans [18] (Evans Statement).
[16] Ibid.
[17] Ibid [19].
[18] Ibid [35].
[19] Ibid [36].
[20] Ibid [23].
[21] Ibid [24].
[22] Ibid [25].
[23] Ibid [50].
[24] Ibid [62].
[25] Ibid [65].
[26] Ibid [27].
[27] Ibid.
[28] Ibid [70].
[29] Ibid [79].
[30] Ibid [80].
[31] Witness Statement of Mr Vincent Rees [4] (Rees Statement).
[32] Ibid.
[33] Evans Statement (n 15) [82].
[34] Ibid [72].
[35] Ibid [77].
[36] Ibid [78].
[37] Ibid [75].
[38] Ibid [88].
[39] Ibid [89].
[40] Ibid [84].
[41] Ibid [85].
[42] Ibid [86].
[43] Ibid [90].
[44] Ibid [87].
[45] Ibid [30].
[46] Ibid [32].
[47] Witness Statement of Ms Rochelle Lonsdale, [18] (Lonsdale Statement).
[48] Ibid [21].
[49] Ibid [23].
[50] Ibid [38].
[51] Ibid.
[52] Ibid [56].
[53] Ibid [58].
[54] Ibid [59].
[55] Ibid [60].
[56] Ibid [61].
[57] Ibid [62].
[58] Ibid [50].
[59] Witness Statement of Ms Carole Borserini, [15] – [16] (Borserini Statement).
[60] Ibid [17] - [18], [44].
[61] Ibid [22].
[62] Ibid [23].
[63] Ibid [19].
[64] Ibid [20].
[65] Ibid [27].
[66] Ibid [28].
[67] Ibid [40].
[68] Ibid [40] – [41].
[69] Ibid [45].
[70] Ibid [46].
[71] Ibid [47] - [51].
[72] Ibid [52].
[73] Rees Statement (n 31) [11].
[74] Rees Submissions Annexure 5.
[75] Sinisa Krstic v Electricity Networks Corporation T/A Western Power[2019] FWC 7962, [64] (Krstic).
[76] Ryan v Insurance Australia Group Services Pty Ltd & Insurance Manufacturers of Australia Pty Ltd[2014] FWC 8268,
[83] (Ryan).
[77] Ibid [85].
[78] Krstic (n 75) [64].
[79] Oscar Group Services Pty Ltd v Lees[2012] FWA 3901 [18] (Oscar); Australian Chamber of Manufactures v Derole
Nominees Pty Ltd (1990) 140 IR 123.
[80] Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia (2006) 158 IR 428; [89].
[81] Oscar (n 79) [19].
[82] Spotless Services Australia Limited [2013] FWC 4484, [14].
[83] Ryan (n 76).
[84] Evans Statement (n 15) [66] - [67], Annexure DE-2; Witness Statement of Mr Geoff Archard, [48] - [50] (Archard Statement).
[85] Evans Statement (n 15) [73].
[86] Evans Statement [77].
[87] [2018] FCAFC 131 (Workpac).
[88] Ibid [197].
[89] Ibid [202].
[90] Ibid.
[91] [2017] FWCFB 3005 (Berri).
[92] [2014] FWCFB 7447 (Golden Cockerel).
[93] Ibid.
[94] Berri (n 92) [114] point 1; Ibid [41] point 8.
[95] Berri (n 92) [114] point 2.
[96] Maritime Union of Australia, The v FBIS International Protective Services(Aust) Pty Ltd[2014] FWCFB 6737, [29] (FBIS).
[97] DL Employment Pty Ltd v AMWU[2014] FWCFB 7946, [80].
[98] FBIS (n 97).
[99] Ibid [20] - [33].
[100] Krstic (n 75) [64].
[101] [2014] FWCA 8513; PR558300; AE411420.
[102] Applicant’s submissions Annexure VR-3.
[103] Archard Statement (n 84) Annexure GA-5.
[104] Applicant’s submissions Annexure VR-8.
[105] Respondent’s Form F1 dated 10 February 2021 Attachment R1.
[106] Archard Statement (n 84) Annexure GA-5.
[107] Macquarie Dictionary (online at 26 May 2022) ‘substantial’.
[108] Macquarie Dictionary (online at 26 May 2022) ‘similar’.
[109] Singh v Metro Trains Melbourne[2015] FWCFB 3502.
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