Weeks v Commissioner of Taxation
[2012] FMCA 502
•12 April 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WEEKS v COMMISSIONER OF TAXATION | [2012] FMCA 502 |
| INDUSTRIAL LAW – Termination of employment – failure to grant a redundancy claim – whether there was an unfair process – applicability of APS Values and Code of Conduct – whether a breach of APS Values amounted to a breach of an Enterprise Agreement – relevance of a business case – failure to demonstrate loss. |
| Fair Work Act 2009 (Cth) Public Service Act 1999 (Cth) |
| Weeks v Commissioner of Taxation & Anor [2012] FMCA 188 |
| Applicant: | CHERYL ROBYN WEEKS |
| Respondent: | COMMISSIONER OF TAXATION |
| File Number: | BRG 889 of 2010 |
| Judgment of: | Burnett FM |
| Hearing date: | 2 April 2012 |
| Date of Last Submission: | 2 April 2012 |
| Delivered at: | Brisbane |
| Delivered on: | 12 April 2012 |
REPRESENTATION
| The Applicant appeared on her own behalf |
| Counsel for the Respondent: | Mr Murdoch |
| Solicitors for the Respondent: | Australian Government Solicitor |
ORDERS
That the application filed 31 August 2010 be dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRG 889 of 2010
| CHERYL ROBYN WEEKS |
Applicant
And
| COMMISSIONER OF TAXATION |
Respondent
REASONS FOR JUDGMENT
(Revised from Transcript)
The applicant was formerly an employee of the respondent, the Australian Tax Office. Her employment was terminated following a negotiated redundancy. This application has its genesis in the circumstances leading up to the time of termination. The applicant’s application was initiated as a small claim pursuant to the small claims provisions of the Fair Work Act, as initially she claimed a sum well within the statutory limit. She claimed for “unpaid salary from 1 February 2010 to 31 March 2010,” in the sum of $20,000.
In the course of the exchange of material in preparation for trial, the respondent delivered to the applicant a copy of a ‘Business Case.’ This document caused the applicant considerable distress, and as a result, she applied to amend her application to advance a more conventional case against the respondent, seeking not only compensation but also for the imposition of penalties for alleged contraventions of the Fair Work Act. The offending material was contained in the business case and included four matters, which I will refer to as the “justification paragraphs 1 to 4”. They were as follows:
“(1) Cheryl, at times, will ignore her job obligations and undertake work that is more to her liking than expected of her position. An example is when she suddenly decided that she would no longer manage her two direct report Adelaide staff (her only staff) and take on other duties. Before this event occurred she had not taken any role in mentoring or developing those staff.
(2) Cheryl would have a level of difficulty in coping with the recent introduction of Siebel to her Interpretative Assistance work environment.
(3) Cheryl has worked in Excise for ten years and has sought jobs in other business lines without success. At least once, she has been overlooked (as a long-term EL2.1) in favour of person(s) being promoted from EL1 to the EL2.1 level.
(4) During mid 2009, an incident occurred between Cheryl and an Excise Compliance Officer at a Friday after work gathering of some staff at a hotel. This was followed by Cheryl attending work on the following Monday and making extremely loud accusations to the other staff member that could be heard by most of the staff on the floor. Both members took leave and both took further actions in relation to the matter. Cheryl has not been interested in a mediated outcome. Plus, the other officer to the event took stress leave and a number of other Excise Compliance officers (there is only one team in Brisbane site) were affected by the Monday morning incident. The situation that occurred has made it impossible for Cheryl to continue working with the Excise Compliance staff (this is part of her expected duties). Morale suddenly hit bottom for staff within Excise Compliance. That morale has improved but any reappearance of Cheryl will affect compliance staff generally and will, in particular, affect the wellbeing of both Cheryl and the other staff member who was directly involved in the incident.”
Following amendment of the application and statement of claim, various applications were made by the respondents seeking to have the various allegations in her statement of claim struck out. The first application succeeded and the applicant was directed to redraft her statement of claim. Having delivered an amended statement of claim, a second application was then brought to strike out all or parts of some of those amendments. That application was not successful; see generally Weeks v Commissioner of Taxation & Anor [2012] FMCA 188. However, it was apparent from the debate in the course of that application that the applicant’s principal concerns were about the business case. As was debated at that hearing, the applicant’s particular concerns and complaints about the business case concerned the justification paragraphs 1 to 4. Irrespective of the truth or otherwise of those matters, they did not bear upon her complaint. Justification paragraphs 1 to 4 were statements made in justification of and to enable the respondent to permit her redundancy to progress. She wanted that outcome. However, it appeared her complaint was not about the fact of being made redundant but rather the administration of her redundancy. In particular, as complained in her original complaint, she argued that she suffered a loss of salary between the dates alleged, that is, 1 February 2010 and 31 March 2010.
In summary, while she now complains about the matters given by way of justification for the voluntary redundancy, she does not complain about that outcome itself. She complains about the process leading to the implementation of the outcome.
It is important to state those matters at the outset because first, the applicant is aggrieved about the business case justification paragraphs 1 to 4 and she wished to pursue the truth or otherwise of those matters at trial but was not permitted to do so. She should understand why that course was adopted. Second, the applicant’s case sought compensation for a fixed period; that is, between February and March 2010. But there appears to have been little focus on the issue of causation or, if indeed a breach was established, whether there was any mitigation. Third, the applicant’s case failed to focus on the real issue, which is whether or not the respondent acted in breach of its Enterprise Agreement in the administration of her redundancy; a matter the applicant failed to focus on because she was distracted by her complaint concerning the justification paragraphs 1 to 4 issue.
Having addressed the background, the application fell into two parts. The first concerned the breach of the Enterprise Agreement and the second, the compensation consequences. As I indicated at the trial, if the breach of the agreement was established and in turn a contravention was established, a second hearing would be conducted for the purpose of dealing with penalties to be imposed.
Dealing first with the Enterprise Agreement. As I addressed in my earlier decision, I concluded that conceptually a breach by the respondent of its statutory APS Code of Conduct and ethical obligations could give rise to a breach of the Enterprise Agreement. That, of course, is if such could be demonstrated. If demonstrated, that in turn could give rise to a contravention of the Fair Work Act. However, for reasons which follow, I am not satisfied that any breach of the Enterprise Agreement has been demonstrated in this case.
At the outset, it is necessary to consider the applicable industrial framework. Clause 5 of the Enterprise Agreement picks up the Public Service Act, and in particular, s.10 and s.13 of that Act. Clause 5 deals with employment principles. It provides:
“5.1. The ATO is primarily an employment based organisation. The following principles underpin all provisions in this Agreement:
...
(h) behaving ethically and with integrity in accordance with the APS Values and Code of Conduct.”
The relevant APS Values and Code of Conduct can be found in s.10 and s.13 of the Public Service Act 1999. So far as this application is concerned, it appears that the following are relevant: s.10, APS values, Clause 1:
“The APS values are as follows:
...
(d) the APS has the highest ethical standards;
...
(i) the APS establishes workplace relations that value communication, consultation, co-operation and input from employees on matters that affect their workplace;
(j) the APS provides a fair, flexible, safe and rewarding workplace;
...
(o) the APS provides a fair system of review of decisions taken in respect of APS employees.”
The relevant parts of s.13 are as follows:
“The APS Code of Conduct
(1) An APS employee must behave honestly and with integrity in the course of APS employment.
(2) An APS employee must act with care and diligence in the course of APS employment.
(3) An APS employee, when acting in the course of APS employment, must treat everyone with respect and courtesy, and without harassment.
...
(11) An APS employee must at all times behave in a way that upholds the APS Values and the integrity and good reputation of the APS.”
Although the APS Code of Conduct and APS Values give rise to rights inter se between the applicant as an employee and the respondent as an employer, Clause 5 of the Enterprise Agreement, as it incorporates those Values and Code of Conduct, must be construed in that context. It is necessary to make that observation because the obligations expressed in the Values are directed to the organisation. They are not directed to the individuals within the organisation itself, i.e., it is the organisation which must have “the highest ethical standards” and/or establish workplace relations that value communication, consultation, cooperation, any input from employees on matters that affect their workplace and/or provides “a fair, flexible, safe and a rewarding workplace;” see APS Values Clause 1(d), (i) and (j).
However, the Code of Conduct is more employee-focused. Plainly, an organisation acts by the conduct of its individual members, but even that has limits within an organisation, obviously, as organisations seek to address aberrant behaviour by individuals through organisational processes and culture. Those matters are generally driven or at least acquiesced to by the organisation’s higher levels; they must be taken into consideration.
This claim, it will be noted, is not a general protections claim, so the respondent bears no onus as to these matters beyond that necessary to respond to the allegations made against it in respect of particular matters.
The significance of those matters is important in a case such as this where the applicant complains of a failure of ethics. Here, the applicant complains of a failure particularly by the Assistant Commissioner Wayne Barford and the organisation generally with respect to pursuing her redundancy claim. The principal complaint as identified in her outline is a denial of procedural fairness for not inviting her input on the business case for her redundancy. That was alleged to manifest by:
a)in part, a failure to comply with Clause 107.8 of the Enterprise Agreement;
b)a failure to afford natural justice with respect to justification paragraphs 1 to 4; and
c)a failure to pay her salary pending termination pursuant to Clause 40.1 of the Enterprise Agreement.
Although not perfectly plain, those events are said to be the contraventions giving rise to a breach of s.13 of the Public Service Act Code of Conduct. She does not particularise the clauses that she relies upon, although for the present purposes I am prepared to view the case for her at its highest. That is to say that her case is that the breaches by Mr Barford and/or some other officers of the ATO of s.13 gave rise to a breach.
I have earlier identified the various subclauses of s.13 which appear to apply, and beyond that make no further observation as those matters are not the subject of express submission. If a breach can be demonstrated then a breach of s.5 of the Enterprise Agreement can be shown and if so then, of course, in turn a contravention is established pursuant to s.50 of the Fair Work Act. However, for reasons that follow I am not satisfied that there was any breach of the Enterprise Agreement or of s.13 in this instance.
Turning now to the facts. As I have earlier noted, the applicant was an employee of the Australian Tax Office. Her employment commenced with the Australian Tax Office on 31 August 1999 and came to a conclusion by termination following acceptance of a voluntary redundancy on 31 March 2010. During the latter part of her employment she was a senior executive service level officer and lately employed as the Director of Litigation and Excise. She had commenced in that role in about 2006.
There were various difficulties experienced by her from at least 2006 which were reported in her evidence. Some of those matters are related in the justification paragraphs 1 to 4. However, beyond making that observation, it is, in my view, unnecessary to go further into those matters for the purpose of this application. For present purposes the relevant matters commenced in about 2008. At about that time, a Mr Barford was appointed to lead the excise compliance stream, which included the technical advice function.
He lived in Sydney and visited Brisbane from time to time. He was not a person to whom the applicant reported. She stated in her evidence and I assume this followed from that time – that she would have liked to have transferred to another area of the Tax Office as she had been in the excise area for several years and would have welcomed a change to a different area of tax. She spoke to Mr Barford about these matters on a number of occasions when he attended Brisbane but he was opposed to the proposal on the basis that he would lose funding for her position.
It appears at about this time that some difficulties arose between the applicant and some of the litigation team members in Adelaide which added to her unhappiness and that led her to the view that perhaps it was time to consider her retirement. In her evidence she stated that she had made retirement plans on the basis that for financial reasons she would continue to work until after her sixtieth birthday at the earliest. She had made salary sacrifice contributions to the AGST which she hoped would enable her to pay off the mortgage on her house after retirement and once free of the mortgage she had estimated that she would be able to live reasonably comfortably on her superannuation pension from PSS.
She noted that her financial position had worsened with the economic downturn which caused a significant drop in the value of her PSS entitlements and so she began to consider postponing retirement. That meant that she would need to consider working beyond her sixtieth birthday. However, she felt at this time that she had been sidelined to some extent by Mr Barford and that she was under some covert pressure to retire.
She complained that on 30 March 2009 an incident occurred which distressed her and, as she said, this led to the difficulty with her employment relationship underlying the current proceedings. Those events relate to the complaints addressed in paragraph 4 of the justification paragraphs. It is fair to say that by reason of the cumulative effect of those events and related matters she was tempted to retire. But as I have earlier noted she was concerned about her financial position.
She decided in that event to consider her options while she was on leave. She was granted paid leave from July 2009 to November 2009 inclusive and during that time had considered these matters. She says in her evidence she felt for a long time under pressure to resign, however, because of the recent events and her superannuation situation she felt it was not immediately appropriate at that time. She also noted her particular personal circumstances wherein her husband was to turn 74 in April 2011 and she had a daughter aged about 31 at that time who was financially dependent upon her.
During her leave she considered her work situation and on reflection concluded that in a practical sense she had become redundant to the respondent’s excise sections requirements and came to the conclusion that there was no useful role there for her. She has said that she sought an appropriate means of resolution in relation to that matter in accordance with the Enterprise Agreement, which provided in Clause 97.1 that:
“An EL2 employee whose services can no longer be effectively used in their current job because of changes in technology or work methods or changes in the nature, extent or organisation of the ATO will be given support in considering career alternatives or will be able to leave the ATO with dignity and respect for the contribution they have made in the past.”
She noted Part 7 of the Agreement provided a number of alternatives in relation to employees covered by that provision, which included the employee may be redeployed or retrained so that they could continue in gainful employment or with their consent the employee may be reduced to a lower classification with a period of income maintenance: or, finally, where redeployment or retraining was not feasible an EL2 employee may be formally notified in writing that they can no longer be gainfully employed in the ATO.
At about this time the applicant was also about to enjoy her fifty-ninth birthday which fell on 18 October 2009. In the course of her deliberations, she concluded that it was unlikely, given her age, that the employer would consider retraining her. She thought that redeployment would be a feasible option but recalled that Mr Barford had refused to consider it when it was raised with him previously. She stated that she would have considered reclassification to a lower level as it would have meant she would have been part of a team and have meaningful work to do and be able to accumulate retirement savings, but concluded, however, that the most desirable outcome for her would be to be made redundant.
She estimated that a voluntary redundancy payment would enable her to clear her mortgage debt and although she would receive a lesser amount of superannuation pension if she ceased work before her sixtieth birthday it still seemed to her a fair outcome for both parties. She thought, based on those matters, that the ATO would be pleased to finally dispense with her services, so it seemed to her to be a win-win situation.
She also reasoned that if her request for voluntary redundancy was refused the request would enable her to initiate a dialogue with her employer about what role she was to undertake when she returned to work on 1 December 2009. So it was with those matters in mind that she wrote to Mr O’Rourke, her manager, on 23 October 2009 formally requesting a voluntary redundancy on the basis that she was captured by the relevant provisions. In her email of 23 October 2009 to Mr O’Rourke, after the introductory salutations and pleasantries, she commenced to advance her case. She noted, having had time to consider matters:
“Naturally retirement would presently be an attractive option for me, if it were financially feasible. However, I recently received my 2009 PSS superannuation statement and learned that I have taken a hit in relation to transfer values (the amounts I transferred into PPS on joining the ATO in 1999) because of the economic downturn.
Consequently I have concluded that for financial reasons I must return to work at the end of my leave, which means I will be back on 1 December 2009.
I thought I should advise you immediately of this as it raises a number of practical management issues to be addressed prior to my return, including identifying appropriate work at the EL2 level, linking me up to a team, arranging for skilling in Siebel, finding me a permanent desk and computer, and so on.
However, I believe there is an alternative which would be in everyone’s interest. I consider that recent events and circumstances demonstrate that my EL2 services can no longer be effectively utilised. As you are aware I am geographically remote from the Excise IA, have no team in Brisbane and no direct relationship with the other excise officers in Terrica Place. Due to personnel issues, it is not viable for me to interact with Excise compliance team in Brisbane. The situation is largely due to the evolution of the Excise organisational structure as the ATO has responded to external and internal changes.
My considered assessment is that my circumstances fall within Clause 97 of the current EL2 Agency Agreement relating to employees whose service cannot be effectively utilised.
Would you therefore please treat this email as a request for a voluntary redundancy and refer the matter to the relevant HR area for consideration?
If a redundancy cannot be negotiated, I will of course report for duty on 1 December at Terrica Place.
I look forward to hearing from you in this regard.”
The response from Mr O’Rourke forwarded to her on 4 November was not pleasing to her. He responded:
“I have discussed and considered your request with Wayne [Barford] and we do not believe that there is justification for any type of redundancy payment.
We would like you to return to your EL2.1 position in the litigation and legal support area as well as taking a greater leadership responsibility in some additional areas that will ensure a full job at the EL2.1 level.
I am happy to discuss these with you.”
Not content with the rejection of her application she decided to press for an opportunity to be heard at a more senior level so that she might have some influence on the decision as to what her future role would be. She decided the best way to engage in that discussion would be to proceed formally under the agency agreement. She invoked Clause 107.8, which sets out the process for addressing any disagreement about matters covered by that agreement. That, as a first step, required her to notify the National Program Manager (NPM) in writing that she was in dispute with the respondent about the application of the agreement.
That obligation in turn then raised responsive duties upon the respondent to that advice to the NPM. Accordingly, on 9 November 2009 the applicant wrote to the NPM under a letter which was headed Notification of Dispute invoking Clause 107.8 and noting specifically:
“Specifically, the dispute relates to the decision of Wayne Barford and Michael O’Rourke in relation to my request for a voluntary redundancy pursuant to Clause 97 of the Agreement. That clause provides for voluntary redundancy where an EL2 employee’s services cannot be effectively utilised. The decision was notified to me by email on 4 November 2009, and a copy is attached.
I am concerned that due process was not followed in considering my application, and that the decision-makers failed to take into account a number of relevant considerations, of which, as my immediate managers, they were well aware.”
It is important to note that the justification paragraphs 1 to 4 which came into being long after this letter were not relevant to any of these matters. The applicant complains that she did not receive a reply from the NPM Excise section within the time provided for under the agreement, or which she thought was provided for under the agreement. Accordingly, she sent an email to her manager, Mr O’Rourke, on 18 November requesting that he ascertain the status of the matter. She wrote:
“You may not be aware that I have served by mail a notice of a dispute under the Agency Agreement in relation to my request for a voluntary redundancy. A copy is enclosed. I have not received an acknowledgment from the ATO, so I would be grateful if you would look into the status of it.”
In the circumstances, [remembering, of course, that she was due to return to work on 1 December] I consider it is premature to return to work in December, as it will be so close to Xmas and, given the lack of progress on the redundancy issue, it seems unlikely the dispute will be resolved by then.
I consider the better alternative is to remain on LWOP [leave without pay] up to and including 24 December 2009 and to start afresh in the new year.”
Mr O’Rourke responded the same day. He was not aware of the notice, and stated that he would follow it up with Mr Barford. He thought that had Mr Barford been aware, he would have been informed of the matter. As at 27 November, the applicant had still not received any communication from the respondent, so, accordingly, she posted a letter to the Commissioner containing a formal request under s.33 of the Public Service Act for a review. Her letter of that date was entitled Application under s.33 for Review of Action.
She identified the issue and concluded the paragraph in these terms:
“In the absence of any attempt by the relevant National Program Manager to resolve the dispute, and because the delay constitutes a breach of the Agency Agreement, I request that the Commissioner of Taxation now undertake a review in accordance with Regulation 5.27 of the Public Service Regulations 1999.”
Notwithstanding that letter, it seems that in the meantime, Mr O’Rourke had received notice of the complaint and responded that same day to the applicant. He noted as follows:
“This email is to confirm the message I left on your mobile telephone a short time ago.
Wayne has now advised me that Tim Dyce has now received your notice of dispute and will acknowledge receipt to you shortly. Your request for Leave without pay up to and including 24 December 2009 has been approved.”
I should note at this time that in an email sent by the applicant to Mr O’Rourke on 18 November and requested that leave. Aside from the introductory parts, it read as follows:
“You may not be aware that I have served by mail a notice of a dispute under the Agency Agreement in relation to my request for a voluntary redundancy. A copy is enclosed. I have not received an acknowledgement from the ATO, so I would be grateful if you would look into the status of it.
In the circumstances, I consider it premature to return to work in December, as it will be so close to Xmas and, given the lack of progress on the redundancy issue, it seems unlikely the dispute will be resolved by then.
I consider the better alternative is to remain on LWOP up to and including 24 December and to start afresh in the new year.”
The applicant responded to Mr O’Rourke’s email of 27 November, noting that as she had not heard anything, she had posted her request for a review under the Public Service Act and stated to him that she believed that the delay in responding to that matter had constituted a breach of the agency agreement. She plainly experienced a sense of frustration in relation to the delay and time it was taking for these matters to be formally engaged within the organisation. Ultimately, she received email correspondence from Ms Deborah Valente, who was the ATO Health and People Management person, on 15 December, and on 16 December before receiving a further email on 17 December which provided some better insight into what was happening. In her email of 17 December, Ms Valente stated:
“As per our telephone conversation today I offer the following information:
Your request for a review of action regarding a redundancy payment is actually not a reviewable action under the Public Service Act 1999. Schedule 1 of the Public Service Regulations discusses non reviewable actions, in particular “Action about the policy, strategy, nature scope, resources or direction of the APS or an agency.’ Offers of redundancy fall under this aspect as they are not an entitlement.
I can confirm that I spoke with Wayne Barford today who informed me that they are still considering your request for redundancy. They intend to have an answer for you by 24 December 2009.”
On 22 December 2009, the applicant received a phone call from Mr Barford. In that conversation Mr Barford indicated that he supported the proposal that was offered, that she be offered a voluntary redundancy, and in his affidavit he noted the exchange as follows. He said:
“I have reconsidered your request for a voluntary redundancy and discussed it with Tim Dyce, the delegate. I will support your request for a voluntary redundancy and make a submission to the delegate recommending that a voluntary redundancy be approved. Whilst I cannot confirm approval, it is likely that the submission will be approved by the delegate.”
He continued:
“I wish to have a without prejudice conversation with you to commence a Clause 97 process. A Clause 97 voluntary redundancy allows people to leave the ATO with dignity and respect for the contribution they’ve made in the past. This sort of redundancy is to be used in situations where the job is still required, and the person will be replaced. I need to advise you that it is considered that your services can no longer be effectively utilised. I need to provide you with an opportunity to comment. This can involve an employee representative.”
He says the applicant responded, “I agree, and I don’t need a representative.” Mr Barford continued:
“We need to briefly discuss whether there are any redeployment or retraining options. You may wish to simply agree that you are unable to be redeployed or retrained.”
He says the applicant responded, “I agree.” He then continued further:
“Following this meeting, a business case will be submitted to the delegate, Tim Dyce, to obtain approval to proceed and make a formal offer. The business case needs to address how the employee’s circumstances fit into the requirements of clause 97.1- what has changed in the ATO or Excise that has meant that the employee is no longer coping. Assuming that the business case is approved the next steps are:
We then need to notify the employee in writing that they can no longer be gainfully employed by the ATO, if redeploying/retraining is not feasible.
We need to provide the employee with information such as severance benefits, leave pay outs, taxation rules and superannuation figures.
We have a template that is sent to Payroll Services for this aspect and I can get this happening.
When the information has been provided to the employee, a formal offer of redundancy can be made. The employee has 2 weeks to consider the offer, however, it can proceed more quickly by agreement.
If the employee accepts the offer, the redundancy proceeds as if they were an excess employee under clause 99.”
He continued:
“You will be entitled to 2 weeks pay for every continuous year of public service - up to 48 weeks pay. How many years do you have in the public service?”
He said the applicant noted, “I have ten years service.” He continued:
“It is almost Christmas and little or nothing would progress until my return to work following the Christmas New Year break. When I get back from leave I will make the submission to the delegate. What do you want to do about your leave?”
He says the applicant responded, “I don’t want to come back into the office.” He said:
“Do you want to extend your leave without pay until the matter is resolved?”
He says that the applicant replied, “Yes.” He said:
“We’ll extend your leave until the end of January and see what happens then.”
He says the applicant responded, “Yes.” The conversation then ended with the exchange of pleasantries. I will address matters of credit in due course, but I have detailed that conversation at this point simply because the applicant, in her evidence, says that Mr Barford stated to her during the course of a telephone conversation:
“My services can no longer be utilised. He also said I was not able to be retrained or redeployed.”
While words to that effect may have been stated, the import of the applicant’s evidence is, I think, slightly different by nuance to that which is related by Mr Barford in his statement which, for reasons I will explain later, I prefer. But following that, Mr Barford commenced initiating the process for termination, as he directed. Unfortunately, Mr Barford was injured during the Christmas break, and it followed that his return to work was delayed while he recuperated from the injuries he sustained which appear to have been reasonably significant.
In the meantime, however, and perhaps because those matters were unknown to the applicant, she was becoming anxious about the delay in the prosecution of this matter. In any event, it was apparent that the matters were at hand, as on 11 January 2010 Ms Valente wrote to the applicant noting that she had confirmed that date as 11 January with Mr O’Rourke that:
“Your business line is considering a business case for your clause 97 request. Given this, and the fact that as previously explained the matter is of itself non reviewable, I now require a reply email from you stating that you are withdrawing your request for review of employment action.”
That is to say, Ms Valente was seeking to resolve the other matter which was the review under s.33. That seems to have elicited a response from the applicant generally expressing concern that nothing had come from – at least to her observation – the ATO about the redundancy process. She stated that she would not withdraw her application because of the lack of progress with the redundancy – which she then noted was imposing a financial burden upon her and her family. That matter of exchange continued between the parties largely until early March when she received a formal letter from Mr Barford addressing redundancy.
By way of letter dated 18 February, Mr Barford wrote:
“Recently I advised you that it is considered that your services can no longer be effectively utilised in the ATO, and this was discussed in a telephone conversation with you on 22 December 2009.
I am now satisfied that, under the provisions of Clause 97 of the ATO (Executive Level 2) Agreement 2009, you can no longer be gainfully employed in the ATO.
The next stage in the process will be the making of a formal offer of redundancy but in the interim, you will have a period of two weeks during which you will be provided with the following advice…”
and the matters that were stated in the conversation were restated. The formal offer itself was forwarded by Mr Barford under hand of letter dated 11 March 2010 when he noted:
“This letter is to confirm that your services cannot be effectively utilised by the ATO in your current position and that alternative employment for you within the ATO is not available. In accordance with the provisions under the ATO (Executive Level 2) Agreement 2009, Clause 97, I am formally offering you voluntary redundancy.”
The balance of the letter then dealt with the machinery provisions following that matter. In response to that letter the applicant wrote by letter of 23 March 2010 to express concerns about:
“…the constant delays involved in the processing of my voluntary redundancy.”
She detailed some history of the matter which is largely accurate. However, her letter concluded with a section entitled “Why The Matter Is Of Concern,” which I think is relevant to the application. She continued:
“As stated in my email to Mr O’Rourke on 23 October 2010, I would have chosen to resign if my financial circumstances permitted it. With only 10 years service, my accumulated superannuation is not large.
It has also been clear to me that a decision by me to retire would have been welcomed by my business line.
Due to the length of time that the redundancy process has taken, the value of the redundancy has been dissipated.
I have been on leave without pay since 1 December 2009. During that time I have had to finance my day-to-day living expenses by borrowing on my mortgage and making purchases with my credit card. I have had to borrow against my mortgage in order to make the fortnightly payments on the same mortgage.
I have borrowed $11,000 from the mortgage account. I have used up the $4,000 I had in my savings account and $5,000 from my (retired) husband’s savings. I have a credit card of more than $2,000. These expenses total $21,000 to date, so a considerable portion of the redundancy payment will be used in simply paying back the debts I have incurred while waiting for the ATO to progress the matter.
In addition, we have needed to delay house repairs and other outlays due to our lack of income.
Obviously this is causing me considerable concern.
I have great difficulty understanding why the process has, to date, has [sic] taken more than five months.”
She continued under the heading “The Outcome Sought”:
“As the delays which occurred were entirely due to inactivity by the ATO, it seems that the just and equitable outcome would be for the ATO to redress the situation. It could do this by taking steps to restore the value which the redundancy would have had if it had been efficiently processed.
If it is lawful to do so, the date of termination might be backdated, thus giving me access to the income I would have had from my super fund if I had been terminated earlier.
Alternatively, it would not be unreasonable for my leave while awaiting the processing of the redundancy, to be treated as paid leave.”
That letter perhaps provides the most significant insight that can be found in this case to the real issues which were being agitated in the mind of the applicant and which led to these proceedings. In any event, as the evidence demonstrates the redundancy progressed and a payout was forwarded as per the redundancy statement and assessed redundancy payout.
The other matter, however, that is, the complaint made under section 33 still remained outstanding. It can be seen by further correspondence, including emails of 24 May 2010 and a letter of complaint by the applicant of 1 June 2010, that those matters had not been resolved to the satisfaction of the applicant, notwithstanding the advice given to her by Ms Valente concerning that particular complaint.
It can be seen from the applicant’s evidence that generally her concerns related to the process. The respondent filed evidence from three officers addressing the matter of the delay and providing explanation for it. The evidence of Mr Barford, Ms Valente and Mr O’Rourke, in particular, addressed those matters. And whilst it is conceded that a number of weeks were lost by reason of Mr Barford’s illness, the evidence of the respondent is that the voluntary redundancy was otherwise administered in the ordinary course and that there was no unreasonable delay in its administration. I have no reason to disbelieve the evidence of either of those witnesses and I accept it on those matters.
Ms Valente also, in particular, dealt with issue of the formal dispute process. While that matter has not been resolved to the satisfaction of the applicant, again, there is nothing in the manner in which and the timeframe within which that process has been prosecuted to suggest there has been any unreasonable delay in relation to those matters; but I will speak a little more of that in a moment.
Broadly, the evidence by both the applicant and the respondent is not in dispute. There were, however, some departures between the applicant and the respondent on certain matters. I had earlier identified one concerning the nuanced views to be construed from the conversation between she and Mr Barford on 22 December.
Overall, I have preferred the evidence from the respondent’s witnesses. I have come to that view because of my assessment of the applicant. She is not entirely reliable. To some extent, I formed the view that her testimony was somewhat opportunistic and no doubt motivated by self interest in that regard. Let me illustrate three instances which demonstrate my concerns. First, there is the instance of the exchange with Mr Barford which was, as I have already indicated, in the unnuanced way which appears from Mr Barford’s detailed provision of evidence. Her failure to provide a more fulsome account was telling. It gave me concerns about her ability to be entirely objective in her recounting of facts.
Next is her evidence given in her oral testimony in response to the question as to whether she had already decided to exit via redundancy. While she acknowledged that she had thought about it, she noted that she thought it was unfair that she should be forced to exit her career when it seemed to her that the employer was not meeting its obligations to her. None of that assertion was ever supported by any of the earlier emails that were forwarded by her to the respondent.
While the applicant has taken issue with the matters identified in justification paragraphs 1 to 4, and states that she did not take issue until she became aware of those matters during the course of this litigation, the fact remains that, except for the event concerning her complaint about the event at the hotel, none of the other matters such as, for instance, the matters identified in paragraph 3, were ever raised by her in correspondence. That is to say, her disappointment in not being afforded another opportunity was never addressed by her in correspondence, although plainly a matter raised by her in her evidence as a basis for her personal disappointment in relation to these matters.
That is a matter which she now contends constituted the breach by the employer in respect of its failure to afford her procedural fairness. The reality is, as she stated in her correspondent, she was at an age where she simply wanted to retire and her domestic circumstances amply justified that conclusion. Likewise, her evidence that she would only have gone back if required was, in my view, somewhat disingenuous. While certainly she had indicated her willingness to return to work if required, that was a contractual requirement, she only was proposing to do so as an absolute last resort and if she could not negotiate a voluntary redundancy or some other satisfactory arrangement. So much was demonstrated by the fact that she was prepared to take leave without pay before return to work which was plainly, in her view, a very last resort as an option.
And, finally, other details in her letter of 1 June 2010 to the Commissioner for Taxation which, on a plain reading of it, suggest a clear change in language in terms of her revision of the history of the application and the manner in which her application was dealt with by the office. Having restated the facts as she saw them and maintaining her belief to an entitlement to be paid for the period during which she was on leave without pay while the redundancy was being processed, she never made any observations about the circumstances giving rise to her acceptance of the initial leave without pay. The reality is that she did not want to return to work and she did everything within her power to avoid that outcome including taking leave without pay.
Turning then to the arguments based upon the facts as they appear and as I have found them, the applicant now prosecutes her claim on the basis of three contraventions. The first is an alleged contravention of Clause 107.8 of the Agency Agreement. She says in her argument that she did not at any time on or after 9 November 2009 receive any communication from Deputy Commissioner Dice or anyone acting on his behalf in response to her notice of dispute under Clause 107.8 which was forwarded on 9 November. She says a conference envisaged by Step 1 was never convened and that failure constituted a breach of the agency agreement.
That complaint, in my view, was answered in two ways. First by a close examination of the facts following the Clause 107.8 Notice of Dispute. Clause 107.8 states, relevantly, that within seven days of receipt of that advice from the employee, the NPM shall arrange a conference which should take place as soon as practicable. The obligation is to arrange a conference, not to conduct a conference within seven days.
The evidence is that the NPM did not actually receive the application until 20 November 2009, which meant that his strict obligation arose by no later than close of business 27 November 2009. However, on that very same day, the applicant elected to take alternative action, that is, by seeking a s.33 review. The decision by the applicant to take that action plainly evinced an intention on her part to no longer press the industrial dispute under Clause 107.8 and was a waiver of it.
Given that the obligation to arrange a conference was still open to be fulfilled before that time, there could be no failure by the respondent to comply with his obligations under the provision. In any event, the breach, if there was any, in my view, merged into the latter redundancy which, at least by its terms, picked up the basis of complaint made by the applicant concerning this matter, remembering that the complaint by the applicant in respect of this matter was the decision by the relevant delegates to refuse her request for a voluntary redundancy.
Subsequently, a voluntary redundancy was agreed, such that it could be said that if there had been any breach, the mere fact of the later provision of a voluntary redundancy meant that the failure (if there was one) merged into that latter decision. It follows there could be no contravention of Clause 107.8, given the later decision.
The second contravention concerned the contravention of the APS Code of Conduct. The complaint was that the respondent failed to act with honesty and integrity and to treat the applicant with respect and courtesy. The failures were directed to the failures, in particular, in the approving and processing of the voluntary redundancy. The applicant contended that on 20 January 2010, Mr Barford prepared a case document entitled the ‘Business Case’ which purported to address the requirements of Clause 97. That was the business case approved by Mr Barry.
The business case, she contends, made serious allegations about her performance and conduct which had not been raised by her, and that, in essence, she was denied procedural fairness. She contended that the making of the serious allegations in the document without providing fairness to her was in breach of the APS Code of Conduct in s.13 of the Act. I have earlier addressed s.13 of the Act by identifying those provisions which arguably could apply in this instance. They require, for instance, the APS employee to behave with honesty and integrity in the course of employment, act with due care and diligence, treat with respect and courtesy and without harassment, or:
“…behave in a way that upholds the APS values and…integrity and good reputation of the APS.”
There is nothing in the evidence concerning Mr Barford’s preparation of the business case to indicate that in any respect there was any contravention by him in respect of any of those matters in his dealings. The applicant may be unhappy about the observations made in the business case but ultimately, the business case was a case prepared to support the outcome that she sought. There is nothing to suggest that the business case was not prepared bona fide, or that the business case on the part of the preparer of it was prepared without honesty or integrity. There is nothing to suggest that anything prepared was done without fair care or diligence, or without respect or courtesy to the applicant.
Indeed, only the contrary could be inferred, bearing in mind that for the business case to succeed, some justification had to be provided in order to permit a voluntary redundancy to progress. While the applicant might be unhappy about what she perceives to be a failure to provide input in response to the detail incorporated in the business case, there appears to have been no obligation upon the respondent to do so. Indeed, in the absence of the applicant seeking review of the decision arising from the business case, that is, to have that decision set aside, there would be no basis for judicial review of the decision.
In my view, the complaints on that basis also fail. I am also mindful that the complaint ought fail for the reasons advanced by the respondent in their submissions and that is, of course, that the applicant waived any requirement in respect of procedural fairness, if, indeed, there was any obligation, by the provision of the reasons for decision in relation to her role – to declare her role redundant pursuant to Clause 97. I note that she was informed all along the way and signed off at each opportunity which was afforded to her.
The third complaint alleging contravention relates to Clause 40.1 of the Enterprise Agreement which provides that:
“EL2 employees will be paid fortnightly according to the formula.”
The complaint is that she was not paid her salary between 25 December 2009 and 30 March 2010. However, the evidence clearly demonstrates not only acquiescence on her part in relation to those matters, but promotion on her part of that outcome with her patent anxiety to avoid a return to work at almost any cost, except as an absolute last resort. And it follows that having been offered the opportunity of a leave without pay basis not to return to work, the respondent had no obligation.
I should also note – although it is not entirely relevant to a determination of this point, but it does pick up a point I raised earlier concerning litigation – the applicant can demonstrate no loss in relation to this period. The applicant in questions addressed to her informed the court that she did not, or was not actively seeking employment during this period and would not have sought employment during this period. It follows that in the absence of a loss of opportunity, it is difficult to conceive how any failure by the respondent to pay her salary during this period when she accepted to be on leave without pay could now be said to render it liable to her for the salary which she says she might otherwise have been paid had she not been on leave without pay.
Plainly, if she had an alternative employment opportunity which was lost or deferred by reason of conduct on the part of the respondent, her position would be different, but that is not the case here. The evidence here is plainly and simply that she would not have been in other employment and so otherwise would have been at home expending money on her mortgage and on her groceries in the ordinary course. So those matters simply serve to reinforce the view that I am satisfied that there is no breach in respect of that matter.
Overall, I am not satisfied that the applicant has demonstrated any breach of the Enterprise Agreement. It follows that no contravention has been established and it follows, as it must, that the application is dismissed.
I certify that the preceding seventy-seven (77) paragraphs are a true copy of the reasons for judgment of Burnett FM
Date: 13 June 2012