Weeks v Commissioner of Taxation
[2012] FMCA 188
•24 February 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WEEKS v COMMISSIONER OF TAXATION & ANOR | [2012] FMCA 188 |
| INDUSTRIAL LAW – Application to strike out paragraphs in Statement of Claim – question of whether or not statutory obligations are incorporated in an enterprise agreement – approach to determining whether a matter if a terms of an enterprise agreement. |
| Fair Work Act 2009 Public Service Act 1999 |
| Amcor Limited v Construction, Forestry, Mining and Energy Union [2005] HCA 10 Australian Municipal, Administrative, Clerical and Services Union v Australian Taxation Office and another [2005] AIRC 700 Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Toyota Motor Corporation Australia Ltd [2006] AIRC 724 Shop, Distributive and Allied Employees Association re Shop, Distributive and Allied Employees Association v Big W Discount Department Stores [2002] AIRC 1376 |
| Applicant: | CHERYL ROBYN WEEKS |
| First Respondent: | COMMISSIONER OF TAXATION |
| Second Respondent: | COMMONWEALTH OF AUSTRALIA |
| File Number: | BRG 889 of 2010 |
| Judgment of: | Burnett FM |
| Hearing date: | 24 February 2012 |
| Date of Last Submission: | 24 February 2012 |
| Delivered at: | Brisbane |
| Delivered on: | 24 February 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 25 November 2011 be dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRG 889 of 2010
| CHERYL ROBYN WEEKS |
Applicant
And
| COMMISSIONER OF TAXATION |
First Respondent
| COMMONWEALTH OF AUSTRALIA |
Second Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
In this application, the respondent seeks orders that paragraphs 115 to 155 of the amended statement of claim be struck out, or that the statement be dismissed, and that paragraph 207 of the amended statement of claim be dismissed or struck out.
To understand the application it is necessary to have an appreciation of the pleading and some of the facts alleged by the applicant against the respondents. Broadly, the applicant was employed as an EL2 employee at the Australian Tax Office (ATO). Her employment was subject to an enterprise agreement, the ATO (Executive Level 2) Agreement 2009. The applicant is a lawyer and was employed by the tax office in various legal roles from about 1999, culminating in her employment at the EL2 level, overseeing excise matters within the office.
Towards the end of 2009 she appreciated, given her age and her understanding of the broader environment in which the ATO was going organisationally, that it was time to consider her future. Her concerns related to matters concerning IT, some personal difficulties that she had with some staff, a consideration of costs associated with her future training measured against the return on such an investment by the ATO, and a sense that she was being sidelined in the performance of her duties.
She had been at the ATO for 10 years and was entitled to various forms of leave. Given her age, she was also soon prospectively entitled to access her retirement benefits. However, she was well short of the maximum retirement age despite being close to minimum retirement. She took her accumulated holidays including long service and other leave at about that time knowing that, as far as the ATO was concerned, she was becoming – if not already – redundant to its needs.
With this in mind and cognisant of the terms of the enterprise agreement, she approached the relevant officer within the office to discuss redundancy. Ultimately, it appears that some agreement on the matter was reached after some conflict and representation to appropriate officers. During this period, delay was occasioned and she was required to continue within the ATO as an employee on a leave without pay basis. The leave without pay period appears to have extended over three months, at a cost she claims of about $36,000 in lost salary.
She commenced this application initially seeking to pursue that matter and her complaints in that regard as a small claim. However, she subsequently came to understand the basis of the officer’s proposal for redundancy and then sought to prosecute her case on a regular basis seeking a quantum well in excess of the small claims jurisdiction, and also claiming for penalties for contraventions of the Fair Work Act 2009 (FW Act).
She delivered a statement of claim in accordance with directions, but there were difficulties with it, and certain paragraphs were ultimately struck out. She subsequently delivered an amended statement of claim, and the respondent now seeks to have other paragraphs of that statement of claim struck out. These are the paragraphs referred to in the application.
In general, the paragraphs that the respondent seeks to have struck out address the “second occasion” relied upon by the applicant in support of her allegation made at paragraph 22 of the statement of claim, which provides that:
“The applicant claims that the respondents contravened the Fair Work laws in relation to her employment and that she thereby suffered financial losses and damage to her reputation and her health.”
The allegations are particularised by reference to the occasions, of which the second contention concerns this application.
The essence of the contravention complained of, being the second occasion, specifically alleged at paragraphs 115 to 155, addresses the circumstances of the business case considered in support of her application for a “voluntary redundancy.” The applicant initially accepted the outcome, however, she complains that the outcome was one which was reached in contravention of the enterprise agreement and accordingly should be subject to sanction by means of contravention proceedings.
She makes a separate complaint about the non-payment of salary. So, arguably, the challenged paragraphs afford her no direct relief but for the satisfaction of seeing her former employer potentially sanctioned for the alleged contraventions.
The actual facts underlying the alleged contraventions are very much in issue. It is not the role of the court today to deal with that contest; that is a matter for trial. However, on the issues raised by the respondent as the basis for the strikeout application it contends, in particular, that the alleged breaches of the applicant’s claimed rights to be treated in accordance with the Australian Public Service Values (APS Values) and Code of Conduct were not rights incorporated in the enterprise agreement. Accordingly, in its view, for the purposes of s.50 FW Act, a contravention of those APS Values and Code of Conduct cannot constitute a contravention of the terms of the enterprise agreement.
Section 172 of the FW Act deals with the meaning of enterprise agreements. There is no issue that in this case the ATO (Executive Level 2) Agreement 2009 is an enterprise agreement. There is also no question that the Public Service Act 1999 (PS Act) imposes rights, obligations and duties upon both the applicant and the respondents. Relevantly, s.10 of the PS Act provides for “APS Values” and s.13 provides for “the APS Code of Conduct.” An obligation is imposed upon the Public Service Commissioner and agency heads (of which the Tax Commissioner is one) to ensure that the APS Values and Code of Conduct are incorporated and upheld in the conduct of their operations. The issue here is whether the enterprise agreement incorporates them or whether they stand alone and are subject to independent enforcement. In other words, are they in fact part of the enterprise agreement?
The respondent says that they stand alone, the applicant says not. She contends that they form part of the enterprise agreement, and that they were incorporated by the provisions of clause 5 of the agreement, which provides employment principles in these terms:
“5.1. The ATO is primarily an employment based organisation. The following principles underpin all provisions in this Act:
...
(h) behaving ethically and with integrity in accordance with the APS Values and Code of Conduct.”
The thrust of the respondent’s argument is that the crucial and insurmountable flaw in the applicant’s case is that a breach of the APS Code of Conduct is not a breach of clause 5 of the agency agreement. Accordingly, even if the facts upon which she relies are true and even if there has been a contravention of the APS Code of Conduct on her pleaded case, there has been no breach of clause 5 of the agency agreement, and thus there can be no contravention on the pleaded case of s.50 of the FW Act.
The respondent contends that analysis of clause 5.1 demonstrates that it is clearly not a term that prescribes any obligation that is capable of being contravened. It says instead that it is a provision that sets out principles which underpin all provisions in the agreement. Additionally, the respondent contends that the failure of clause 5.1 to impose obligations is clearly demonstrated by each of the matters set out in clause 5.1(a) to (h). It is argued that those principles are not capable of creating and do not create any obligation capable of contravention and that they are instead subjective and aspirational.
The respondent contends that, at most, these values might be considered to aid the interpretation of the provisions within the agency agreement, but ultimately that the language of clause 5 is language which is intended to be aspirational, as opposed to evincing an intention to give rise to a binding agreement.
In support of the respondent’s argument, reference was made to a number of authorities. It was contended that those authorities support the proposition that if it had been intended by the persons who drafted the agreement that it would be breached in circumstances where the APS Values and Code of Conduct were breached, they would have employed more emphatic language to indicate as much.
Before considering in detail the authority submitted and addressing argument on the issue in question, it is first necessary to address the general approach that should be adopted in cases of this kind. These principles are summarised in the decision of the Australian Municipal, Administrative, Clerical and Services Union v Australian Taxation Office and another [2005] AIRC 700, where commencing at paragraph 55, the Full Bench of the Commission said:
“[55] ...the accepted approach to interpreting an industrial instrument was explained by Madgwick J in Kucks v CSR Ltd:
It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistency or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which may have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.
But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.”
The court continued at [56]:
“[56] This approach was approved by the Full Court of the Federal Court in Ansett Australia Ltd v Australian Licensed Aircraft Engineers’ Association, and was recently cited by two Judges of the High Court of Australia in Amcor v Construction, Forestry, Mining and Energy Union.
[57] The industrial context in which an agreement is negotiated is relevant to determining the mutual intention of the parties to the agreement. …”
Their Honours then proceeded to consider as a second general observation that the legislative context within which the agreement stands is also relevant. In that instance, an ATO agreement was under consideration. The Commission continued at paragraph [58]:
“[58] As Kirby J observed in Amcor Ltd v CFMEU:
Also set out in other reasons, or described there, are the provisions of the Act that constitute … the legislative background against which the Agreement was made and certified. It was a background that would have been in the minds of both parties (Amcor and its agent on the one side and the Union on the other) who negotiated the Agreement and hammered out its terms. The legislative background is therefore part of the common knowledge attributable to the parties to the Agreement. So far as it is relevant, it would ordinarily be assumed that, in agreeing as they did, the parties intended the Agreement to take its place within the industrial setting created by the Act.”
In his argument, the respondent’s counsel sought to emphasise that clause 5 was too vague and aspirational to evidence any intention between the parties to create any obligations that had a contractual character. He observed, for instance, that in the ATO case, the provision being considered there was clause 118 of that agreement. It provided:
“The ATO is committed to ensuring that all employees are aware of and comply with the standards of conduct as detailed in the APS Code of Conduct in the Public Service Act 1999, and that the ATO procedure ‘Managing Misconduct in the ATO’ is properly applied.”
He noted in paragraph 62 of the judgment that the court had observed of that provision:
“[62] It seems to us that in the context of this matter the expression “committed to ensuring” evinces an intention to create an obligation, enforceable as a clause of the ATO agreement, to properly apply the Misconduct Procedures. As the Deputy President pointed out in the decision subject to appeal, one of the meanings of the word “commit” is to “bind by pledge or assurance.” We also note that the word “ensuring” is a derivative of the word ‘ensure,’ which means, among other things, “to pledge one’s faith to a person for the execution of a promise.” Hence, adopting the ordinary meaning of the words in the expression “committed to ensuring” suggests a binding obligation. The context within which the ATO agreement was negotiated and the legislative context in which it sits also support that conclusion.”
The contention on behalf of the respondent was that the words in clause 5 in this instance are not nearly so emphatic as to evince that obligation to reach an agreement.
The respondent contended that the approach of the Commission in the ATO case was most instructive and assisted on the approach which ought be adopted here. That decision was subsequent to and informed by the Commission’s decision in Shop, Distributive and Allied Employees Association re Shop, Distributive and Allied Employees Association v Big W Discount Department Stores [2002] AIRC 1376 (the Big W case) where in discussing the approach to be adopted it was acknowledged that in a dispute “over the application of the agreement” it was determined that “that expression should not be narrowly construed…” for “…to do so would be contrary to the notion that certified agreements are intended to facilitate the harmonious working relationship of the parties during the operation of the agreement.”[1]
[1] Australian Municipal, Administrative, Clerical and Services Union v Australian Taxation Office and another [2005] AIRC 700 at [52]
However, in noting that approach, some care has to be taken to allow for the context of that decision. In the Big W case the agreement concerned whether or not the jurisdiction of the Commission was enlivened under the agreement. Consideration of the approach to the proper construction of the clause in the context of a jurisdictional issue requires some care in contrast to a case, such as this, concerning the application of a clause. As the Commission noted at [23]:
“[23] Although the referral of a dispute over the application of the agreement is narrower than the referral considered in Heyman v Darwins, what comprises a dispute over the application of the agreement should not be narrowly construed; to do so would be contrary to the notion that certified agreements are intended to facilitate the harmonious working relationship of the parties during the operation of the agreement.”
Accordingly, given those observations, the decision of the Commission in the Big W case should be read cautiously given the issue then under consideration. So much seems apparent from the observations of the Full Bench in the ATO case when considering as correct the broad effect provided for by the Full Bench in Big W.
However, other observations by the court in the ATO case gainsay the conclusion contended for by the respondent. The court considered the approach adopted by the Commissioner at first instance who by his reasoning concluded that the provision did not give rise to any contractual entitlement and was not a clause of the enterprise agreement. He had concluded that the meaning of the words “committed to ensuring” were not contractual because it was a “far weaker phrase” than a contract “term.” He also considered that it was not contractual because it was a unilateral obligation imposed by the structure of the sentence.
In addressing these concerns, the Full Bench continued:
“[64] As to his Honour’s first reason, the fact that the commitment in clause 118 is expressed by the ATO alone and not as a mutually agreed term is of little weight. The Misconduct Procedure does not impose any obligation on the ASU. Hence, as conceded by counsel for the ATO, one would not expect the clause to say that the ASU is committed to complying with a procedure that does not impose any obligation upon it. In support of his conclusion the Deputy President also advances the proposition that there is “some degree of vagueness” about a legal obligation to “properly apply” an existing obligatory procedure. With respect to him, we do not agree. We see no “degree of vagueness” about an obligation to properly comply with a misconduct procedure.
[65] The second reason given is that the ATO’s Misconduct Procedures are enforceable by other means and hence it was unnecessary for them to be given force by the ATO Agreement. We accept that this is so, but it does not follow that the availability of alternative remedies means the parties agreed that clause 118 would have no legal effect.”
In another context, the court appeared to be cognisant of the issue of linkage between the code and agreement, especially by reference to the context in which the agreement was negotiated and its legislative background. This issue of linkage was critical in the court’s approach in the decision of Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Toyota Motor Corporation Australia Limited [2006] AIRC 724, where at paragraph 59 the court noted when concluding in relation to the provision under consideration that in that instance a “commitment to provide employees with a workplace where they feel comfortable and treated with respect” was regarded as not giving rise to an obligation because it was:
“...not linked to a specific obligation, as is seen in the ATO and Big W cases.”
In this case, as in the ATO case, there is a clear linkage between the APS Values and Code of Conduct in the PS Act and the obligation arising under the enterprise agreement, as they are expressed to be the “principles that underpin all provisions in the agreement.” In my view, they form part of the agreement as by their expression there is plainly a commitment to their performance. Accordingly, a breach of their performance could constitute a contravention of the agreement, which could in turn constitute a contravention for the purposes of s.50.
Returning then to the allegations in question, the applicant contends that the business case was one prepared for the purposes of clause 97, the redundancy provision. Although not well expressed, it is tolerably clear from the amended statement of claim that the applicant alleges that the four factual issues identified in the business case in support of her redundancy were untrue. She claims that she was not afforded any right to be heard in respect of those allegations, allegations which are denied.
She has now achieved a redundancy but on terms which were less favourable than she would otherwise have thought acceptable. First, she complains that the redundancy she secured was achieved on terms which resulted in an inordinate delay for finalisation. Secondly, she says her redundancy has received less favourable tax treatment because of its form. She contends that this has come to pass because of the contraventions of the APS Code of Conduct by those further up the chain of command in breach of their ethical standards. Those particular values breached are APS Value 1(e), in their failing to prosecute the values of consultation and cooperative input from employees on matters that effect their workplace, APS Value 1(i), by not prosecuting a fair, flexible, safe, and rewarding workplace and APS Value 1(j). These breaches also allegedly contravene the APS Code of Conduct, insofar as they offend APS Values and integrity – APS Code of Conduct 1(xi).
These are matters which I consider ought to be tested at trial. The application for strikeout is dismissed.
I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of Burnett FM
Date: 11 April 2012
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