1
Fair Work Act 2009
s.604 - Appeal of decisions
Australian Municipal, Administrative, Clerical and Services Union
v
Australian Tax Office
(C2013/4354)
CPSU, the Community and Public Sector Union
v
Australian Tax Office
(C2013/694)
VICE PRESIDENT WATSON SYDNEY, 17 JULY 2013
DEPUTY PRESIDENT GOSTENCNIK
COMMISSIONER BLAIR
Appeal against decision of Vice President Lawler [2013] FWC 2470 - Standing to appeal -
person aggrieved - permission to appeal - interpretation of agreement - principles of
interpretation - whether agreement precludes actions during consultation phase - ATO
Enterprise Agreement 2011 - Fair Work Act 2009 - ss. 604, 607, 739.
Introduction
[1] This decision concerns applications for permission to appeal by the Australian
Municipal, Administrative, Clerical and Services Union (ASU) and the Community and
Public Sector Union (CPSU) against a decision of his Honour Vice President Lawler made on
23 April 2013. The original matter concerned a dispute between the ASU and the Australian
Tax Office (ATO). The CPSU has also sought permission to appeal against the original
decision pursuant to s.604 of the Fair Work Act 2009 (the Act).
[2] At the request of the ASU, the matter was listed for an expedited hearing on 18 June in
Melbourne, and directions were issued for the filing of submissions by all parties. At the
hearing, Mr P Rozen, of counsel, appeared for the ASU. Ms A Duffy, of counsel, appeared for
the CPSU, and Mr J Snaden, of counsel, appeared for the ATO.
[3] The matter arises from the proposed reduction of facility management staff at
Melbourne offices occupied by the ATO. Consequent upon the consolidation of Melbourne
offices, the ATO seeks to reduce the number of staff from eight to four. During the
consultation phase regarding these changes, and prior to the consideration of redeployment of
the affected employees to alternative positions, the ATO sought to implement a merit
[2013] FWCFB 4752
DECISION
AUSTR FairWork Commission
[2013] FWCFB 4752
2
selection process to determine which four staff members it wished to maintain in the new
roles. The dispute relates to whether this proposal is consistent with the applicable enterprise
agreement.
Background
[4] The original matter before Vice President Lawler arose from a dispute over the
interpretation of clauses 117, 118 and 119 of the ATO Enterprise Agreement 2011 (the
Agreement). The ASU notified a dispute with the Fair Work Commission pursuant to s.739 of
the Act, seeking to have the dispute dealt with by the Commission. The matter was originally
scheduled for conference before Deputy President Smith. Following a recommendation made
by the Deputy President, the parties continued their discussions but were unable to reach a
settlement. The matter was then dealt with by arbitration before Vice President Lawler in
accordance with the Agreement’s dispute settlement procedures.
[5] The Vice President set out the relevant background and the key communication in his
decision as follows:
“[2] In July 2012 five Australian Tax Office (ATO) offices in Melbourne were
consolidated into a single, newly fitted-out building at “Collins Square”, 747 Collins
Street. Prior to that consolidation there were eight APS 3 staff employed in the
Facilities Management Branch who were required to ensure that the Facilities
Management functions were performed in respect of those five separate sites.
Following the consolidation the ATO requires less of those staff to manage the single
“Collins Square” site. In particular, the ATO is determined that it requires only four
APS 3 positions in the Facilities Management Branch for the efficient and economical
working of its operations at the new “Collins Square” site. What is at issue in the
dispute is the process by which the ATO proposes to reduce the number of APS 3
Facilities Management employees from eight to four.
[3] On 27 July 2012 Assistant Commissioner Smillie wrote to the ASU in the
following terms:
“CONSULTATION PROCESS: MANAGING POSSIBLE EXCESS STAFF IN
THE MELBOURNE CENTRAL BUSINESS DISTRICT.
The purposes of this correspondence is to inform you of the planned actions to manage
the issue of possible excess APS 3 staff within the Melbourne CBD site located at 747
Collins Street.
As you may be aware there has been a process under way within the Melbourne CBD
to consolidate the following ATO occupied buildings into a single location at 747
Collins street:
...
One impact of this consolidation is that the current numbers of APS 3 staff is greater
than those required to manage a single modern building. There will be a lesser work
load as a result of the new premises as is evidenced in other CBD areas where the
ATO has consolidated lease holds such as the ACT.
[2013] FWCFB 4752
3
The following advice has been sent (sic) to the affected staff on Wednesday, 1 August
outlining the proposed process to address the situation of excess APS 3 staff.
I am writing to inform you that Property, Security and Environmental Services
(PS&ES) now has more APS 3 staff in the Melbourne CBD than are required
or affordable. This means that not all APS 3 staff will hold a position in the
Melbourne CBD in the medium to long term.
As you are aware this situation has arisen due to the recent moves from the
various Melbourne CBD sites, with the following ATO buildings have been
consolidated into a single CBD building located at 747 Collins St.
414 Latrobe St
390 Latrobe St
350 Queen St
World Trade Centre
Casselden Place
Due to this reduction in the number of ATO sites, we will need to reduce the
numbers of APS3 staff accordingly. We have sought advice and looked at the
various options to achieve this in the fairest way, and are proposing to run a
process where the affected CBD staff will be given an opportunity to apply for
the positions within the new Collins St building. The successful APS 3 staff will
be selected based on merit and the opportunity to apply for these positions will
only be open to the current APS 3 staff who occupy positions within the CBD.
To ensure that the process is open and transparent we will work with ATO
people to ensure an independent selection committee is appointed to run the
process. Any staff that are not successful through this process will be
supported by the ATO as per the ATO Enterprise Agreement 2011.
I will also be writing to the Unions to ensure that they have an opportunity to
provide feedback on the proposed process. My intention will be to begin this
process as soon as practical after I have received any feedback and will keep
you informed when we have timeframes for the process to commence so that
each of you has the same opportunity to prepare and apply for the available
positions. Please contact me on ext 66104 if you have any questions about this
process.
If you have any feedback I would appreciate you returning it to the Director of
Facilities Management, Andrew Osborne by COB 10th August 2012”
(underline emphasis added)
[4] By letter dated 2 August 2012 the ASU advised the ATO that it was in dispute over
the application of the Agreement in relation to the proposal. The ASU wrote:
“AC Smillie advised staff that he has sought advice, considered options and
proposes to run a process where the affected APS 3 staff will apply for the
[2013] FWCFB 4752
4
reduced number of their own jobs. The unsuccessful staff will be supported by
the ATO as per the ATO Enterprise Agreement 2011.
AC Smillie’s proposal, made with ‘advice’ is contrary to clause 118 of the
Agreement. The ATO is obliged to follow the measures in clause 118.5 and
following before it can consider commencing a process for selecting which
employees are excess as is now proposed.”
[5] The letter sought to activate the dispute resolution procedure in the Agreement.
The matter came before Deputy President Smith for conciliation on 3 October 2012. In
accordance with a recommendation by Smith DP there was a further meeting of the
parties on 7 November 2012 and there was an exchange of views in written
correspondence. A further conciliation conference was held on 9 January 2013. Smith
DP’s recommendation noted the “process raised in the letter of 27 July [2012] to the
Australian Services Union constitutes a proposal for discussion.””
[6] His Honour further summarised the preferred interpretations of clauses 117-119 of
both the ASU and the ATO:
“[7] The ASU’s essential submission is that the process outlined in the 27 July 2012
letter from the ATO is not permissible under clauses 117, 118 and 119 of the
Agreement. The ASU contends that clauses 118 and 119 constitute a ‘code’ which
must be observed by the ATO and followed in a sequential fashion. In particular, the
ASU contends that the obligations under clause 118 must be complied with before the
procedure in clause 119 is commenced. In that regard the ASU places a particular
emphasis on the sub-heading to clause 119.1 and the second paragraph of clause 119.1.
The ASU also places emphasis on the last portion of clause 118.5 together with the
overall structure of clause 118 in submitting that the ATO is obliged to discharge its
obligations under clause 118 before moving to clause 119 and the fact that variations
to the action required by clause 118.5 can only occur following consultation with the
employees and their representatives provides significant support for that contention.
[8] The ASU contends that clauses 117 to 119 do not permit the use of voluntary
redundancy except in the circumstances outlined in clause 119.4. The ASU also places
particular emphasis on clause 118.7 and argues that the “suitability” focus of clause
118.7(a) is inconsistent with the ATO conducting a merit based selection process to
determine which of the eight Facilities Management employees will retain their jobs.
[9] The ATO contends that on the proper construction of the Agreement clauses 118
and 119 are to be applied in a practical and business like fashion and that there is no
strict sequence as contended for by the ASU.
[10] The ATO also contends that the invitation to employees to submit expressions of
interest in receiving a voluntary redundancy is a step that is consistent with clause
118.3 of the Agreement. The ATO also contends that seeking expressions of interest
and proposing a merit based selection scheme of the sort set out in the 27 July letter is
consistent with clause 118.5(a) as the proper alternative to redeployment that is being
sought, reasonably, by the ATO.
[2013] FWCFB 4752
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[11] The ATO places particular reliance on item 4 of Step 2 and item 2 of Step 3 in
clause 119.4 as indicating that it is permitted to seek informal expressions of interest
in voluntary redundancy at any time.”
[7] Clauses 117, 118 and 119 of the Agreement are lengthy. They are set out in full in
Appendix 1 to this decision.
[8] When the matter came before his Honour for arbitration the parties posed three agreed
questions to the Commission. It was intended that providing answers to these questions would
determine the dispute. The Vice President considered the three questions, and found as
follows:
“[30] The questions posed for determination are answered as follows:
(a) Is a merit based selection process prior to, or as part of, clause 118 measures
permissible under the Agreement? Yes.
(b) Do clauses 118-119 need to be followed completely sequentially? Yes, albeit that
there is a degree of overlap between what is required by clause 118 and what is
required by Step 2 of clause 119.4. This does not mean that clause 118 and Step 2 of
clause 119.4 can be complied with concurrently, rather it means that when the ATO
has complied with its obligations under clause 118, it will be obliged to provide a
further month for consultation on the matters specified in Step 2 unless it is agreed that
the full period is not needed.
(c) Can the ATO seek expressions of interest in voluntary redundancy at this stage
from the eight affected APS3 facilities management staff? Yes.”
Standing of the CPSU to appeal
[9] The CPSU is covered by the Agreement but was not a party to the dispute before his
Honour. It seeks to appeal on similar grounds to those raised by the ASU, and on additional
grounds that the Vice President erred in failing to accord the CPSU an opportunity to be heard
on the matters for determination.
[10] We are prepared to accept that the CPSU is a party aggrieved by the decision in that it
and its members are covered by the agreement and that it contests the interpretation of the
agreement arising from the proceedings. We will deal with its grounds of appeal relating to
the interpretation of the agreement in conjunction with the ASU appeal. The additional
grounds will be dealt with separately.
The nature of the appeals
[11] It was accepted that the questions posed by the parties involve the interpretation of the
Agreement. The ASU and CEPU contend that as these questions do not involve the exercise
of a discretion, the principles applicable to discretionary decisions do not apply. The ATO
contends that since the exercise of arbitration powers arises from s.739 of the Act, and this
provides that the Commission may arbitrate a dispute, the decision subject to appeal is a
discretionary one.
[2013] FWCFB 4752
6
[12] The nature of a discretionary decision was described by Gleeson CJ, Gaudron and
Hayne JJ in Coal & Allied v AIRC1 as follows:
“[19] “Discretion” is a notion that “signifies a number of different legal concepts” . In
general terms, it refers to a decision-making process in which “no one [consideration]
and no combination of [considerations] is necessarily determinative of the result” .
Rather, the decision-maker is allowed some latitude as to the choice of the decision to
be made. The latitude may be considerable as, for example, where the relevant
considerations are confined only by the subject matter and object of the legislation
which confers the discretion . On the other hand, it may be quite narrow where, for
example, the decision-maker is required to make a particular decision if he or she
forms a particular opinion or value judgment.”
(footnotes omitted)
[13] In our view the nature of the decision subject to the appeal depends on a consideration
of the determinations the Commission was required to make. In this case his Honour was
answering questions posed by the parties that involved interpreting the Agreement. There is
no discretion involved in such a task. It follows therefore that, if permission to appeal is
granted, the appeal bench must determine whether the interpretation adopted by his Honour
and the answers he provided to the questions are correct.2
Grounds of appeal
[14] The ASU seeks to appeal the findings of Vice President Lawler on several grounds.
First, it says that his Honour erred in the construction of the Agreement:
At paragraph [15] of his decision in his construction of clause 119 of the
Agreement as applying when an ‘excess employee situation exists’;
At paragraph [24] in construing the expression ‘these procedures’ in item 2 of step
3 of clause 119 of the Agreement as referring to both clauses 118 and 119;
[15] The ASU also contends that the approach taken by Vice President Lawler to the
principles of construction at paragraph [22] in adopting what he described as a ‘practical
approach to the construction of the agreement’ was incorrect. It also appeals findings made by
the Vice President, as it says the following findings were made without evidentiary basis:
That it was ‘most unlikely that the ATO could prevent that excess employee
situation through the measures specified in clause 118.3(a) or (b);
That it was ‘reasonably open to the ATO to conclude that it was not practicable to
prevent the ‘excess employee situation’ [through the measures specified in clause
118.3(a) or (b)]”; and
That the eight employees ‘do not have technical taxation skills’.
[16] The ASU ultimately appeals the conclusions of the Vice President in relation to the
three questions posed by the parties and set out in paragraph [30] of his Honour’s decision.
The ASU submits that the correct answers are ‘no’ to the first and third questions, and ‘yes’ to
the second.
[2013] FWCFB 4752
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[17] The CPSU’s application provides three grounds for appeal. It says the Vice President
erred in failing to accord the CPSU, which is an organisation covered by the Agreement, the
opportunity to make submissions and lead evidence on the questions posed for determination.
[18] The CPSU also submits that the Vice President erred in finding that a merit based
selection process was permissible prior to or as part of the measures in clause 118 of the
Agreement, in that:
It is inconsistent with the finding at paragraph [30](b) that clauses 118 and 119
need to be followed completely and sequentially;
He failed to take into account the purpose and effect of clause 118 namely that for
all intents and purposes it is a redeployment clause;
He failed to take into account the terms of clause 119.4 Steps 2(d) and 6(a).
[19] The third ground for appeal is that the CPSU says the Vice President erred in that he
has misconstrued the meaning of clause 118.5 in his findings at paragraphs [15], [16] and [23]
because:
It is inconsistent with the finding at paragraph [30](b) that clauses 118 and 119
need to be followed completely and sequentially;
He failed to take into account the purpose and effect of clause 118 namely that for
all intents and purposes it is a redeployment clause;
He failed to take into account the terms of clause 119.10 - 119.13 when construing
clause 118.5.
[20] Both the ASU and the CPSU seek to have the decision of Vice President Lawler
overturned and for the Commission to make a further decision in relation to the matter
pursuant to s.607(3)(b) of the Act.
[21] We note that s.739(5) precludes the Commission making a determination of a dispute
that is inconsistent with the Agreement, and this dispute essentially relates to the proper
interpretation of the Agreement. The nature of the appeal and the grounds of appeal require us
to consider whether his Honour was correct in providing the answers he gave to the questions
posed by the parties. We will consider the questions in turn after dealing with some
preliminary issues.
Permission to Appeal
[22] As the Agreement is an important one, applying to a large number of employees and
an important part of government, and as the questions requiring determination potentially
affect future restructuring processes at the ATO, we consider that it is in the public interest to
grant permission to appeal.
[2013] FWCFB 4752
8
Principles of Interpretation
[23] The parties are not in dispute as to the principles to be applied in interpreting the
Agreement. These have been stated in various cases. The leading High Court case is Amcor
Ltd v Construction, Forestry, Mining and Energy Union; Minister for Employment and
Workplace Relations v Construction, Forestry, Mining and Energy Union3 (Amcor). In that
case, Gummow, Hayne and Heydon JJ stated:
“30. Clause 55.1.1 must be read in context. It is necessary, therefore, to have regard not
only to the text of cl 55.1.1, but also to a number of other matters: first, the other
provisions made by cl 55; secondly, the text and operation of the Agreement both as a
whole and by reference to other particular provisions made by it; and, thirdly, the
legislative background against which the Agreement was made and in which it was to
operate.”
[24] In that case Kirby J said:
“94. However, certified agreements such as this commonly lack the precise drafting of
legislation. As appears from a scrutiny of the provisions of the Agreement, it bears the
common hallmarks of colloquial language and a measure of imprecision. Doubtless
this is a result of the background of the drafters, the circumstances and possibly the
urging of the preparation, the process of negotiation and the omission to hammer out
every detail - including possibly because such an endeavour would endanger the
accord necessary to consensus and certification by the Commission.
96. The nature of the document, the manner of its expression, the context in which it
operated and the industrial purpose it served combine to suggest that the construction
to be given to cl 55.1.1 should not be a strict one but one that contributes to a sensible
industrial outcome such as should be attributed to the parties who negotiated and
executed the Agreement. Approaching the interpretation of the clause in that way
accords with the proper way, adopted by this Court, of interpreting industrial
instruments and especially certified agreements. I agree with the following passage in
the reasons of Madgwick J in Kucks v CSR Ltd, where his Honour observed:
‘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 a 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 inconsistencies 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 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.’” (references omitted)
[25] In the same case Callinan J stated that there was substance in the abovementioned
observations of Madgwick J in Kucks v CSR Limited4 (Kucks). He then said:
[2013] FWCFB 4752
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“131. An industrial agreement has a number of purposes, to settle disputes, to anticipate
and make provision for the resolution of future disputes, to ensure fair and just
treatment of both employer and employees, and generally to promote harmony in the
workplace. It is with the third of these that cl 55 of the Agreement is particularly
concerned. It is important to keep in mind therefore the desirability of a construction, if
it is reasonably available, that will operate fairly towards both parties. …”
[26] In Kucks, following the passage quoted above, Madgwick J went on to say:
“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.”
[27] A leading case in relation to the interpretation of commercial agreements is Codelfa
Construction Pty Ltd v State Rail Authority of NSW.5 The dicta of Mason J, as he then was,
(and with whom Stephen, Aickin and Wilson JJ agreed) has frequently been adopted and
applied in matters concerning the interpretation of enterprise agreements. In Codelfa Mason J
said (at 352):
“The true rule is that evidence of surrounding circumstances is admissible to assist in
the interpretation of the contract if the language is ambiguous or susceptible of more
than one meaning. But it is not admissible to contradict the language of the contract
when it has a plain meaning. Generally speaking facts existing when the contract was
made will not be receivable as part of the surrounding circumstances as an aid to
construction, unless they were known to both parties, although, as we have seen, if the
facts are notorious knowledge of them will be presumed.
It is here that a difficulty arises with respect to the evidence of prior negotiations.
Obviously the prior negotiations will tend to establish objective background facts
which were known to both parties and the subject matter of the contract. To the extent
to which they have this tendency they are admissible. But in so far as they consist of
statements and actions of the parties which are reflective of their actual intentions and
expectations they are not receivable. The point is that such statements and actions
reveal the terms of the contract which the parties intended or hoped to make. They are
superseded by, and merged in, the contract itself. The object of the parol evidence rule
is to exclude them, the prior oral agreement of the parties being inadmissible in aid of
construction, though admissible in an action for rectification.
Consequently when the issue is which of two or more possible meanings is to be given
to a contractual provision we look, not to the actual intentions, aspirations or
expectations of the parties before or at the time of the contract, except in so far as they
are expressed in the contract, but to the objective framework of facts within which the
contract came into existence, and to the parties' presumed intention in this setting. We
do not take into account the actual intentions of the parties and for the very good
reason that an investigation of those matters would not only be time consuming but it
[2013] FWCFB 4752
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would also be unrewarding as it would tend to give too much weight to these factors at
the expense of the actual language of the written contract.”
[28] With these principles in mind we now consider the specific questions posed.
Is a merit based selection process prior to, or as part of, clause 118 measures permissible
under the Agreement?
[29] The terms of the Agreement under consideration are lengthy and somewhat complex.
Clause 117 deals mainly with application and interpretation issues. As its heading implies,
Clause 118 is directed to preventing excess employee situations. It requires, amongst other
things, that consultation occur over planned restructures, mitigating measures be fully
investigated and redeployment of displaced employees occur as far as practicable. There is no
express mention of voluntary redundancies in clause 118. Clause 119 is headed Redundancy
Provisions. Its application only arises if earlier efforts have not avoided an excess employee
situation. It provides for a six step process to be followed prior to implementing redundancies.
Those steps include the options of voluntary redundancy and redeployment.
[30] In the appeal the ASU and the ATO essentially repeated their submissions on the
interpretation of the agreement that had been advanced before his Honour and the CEPU
supported the ASU’s submissions. The central ASU contention is that the provisions are a
code and the ATO is required to exhaust entirely the options under clause 118 before it
applies clause 119 by offering voluntary redundancies. It views the provisions as a step by
step series of obligations, the integrity of which depends on sequential application of the
agreed processes. It submits that the ATO cannot implement a voluntary or merit based
selection process in the course of following the process in clause 118. The ASU contends that
the processes in clause 119 may be circumvented by the actions of ATO under clause 118.
[31] The ATO submits that there is nothing in the Agreement that precludes its intended
process from occurring during the course of consultation and as a prelude to the process of
redeployment. It envisages that other aspects of the Agreement will apply depending on the
result of the selection process. That may involve redeployment under clause 118. It may or
may not be necessary to implement the process under clause 119. The ATO submits that the
ASU interpretation is too rigid and that the various processes contemplated by the clauses
overlap and are capable of flexible application. It submits that practical problems flow from
the ASU interpretation in that some employees may be redeployed who would be the best
candidates to fill the remaining roles and if the ASU interpretation is adopted the process
could preclude that result.
[32] The learned Vice President favoured the arguments of the ATO. In our view he was
correct in doing so. There is no evidence of any extrinsic material relating to the making of
the agreement that might explain the intention of the parties. The provisions obviously need to
be read as a whole and be given their ordinary and natural meaning in the context in which
they occur. They are quite prescriptive. They are also very detailed and deal with concepts
such as redeployment and consultation in more than one clause. Despite the level of detail, the
clauses do not clearly delineate the particular processes covered by them. They do not
expressly or impliedly preclude either seeking interest for voluntary redundancies or
undertaking a merit based selection process prior to redeployment.
[2013] FWCFB 4752
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[33] The ATO obviously wishes to retain the best employees in the four remaining roles. It
does not want them redeployed. If it cannot identify the employees it wishes to deploy in the
new roles before the redeployment process, then there is a risk of them not being available for
the roles by the time the roles are filled. It is unlikely that the parties would have agreed to
such a situation. In our view clear language would have been used if the parties intended to
prevent the ATO taking the type of steps it proposes. In the absence of such clear words we
are unable to conclude that the ATO is precluded from undertaking those steps. Furthermore,
clause 118 is aimed at “preventing excess employee situations”. The proposals of the ATO are
consistent with achieving that aim.
[34] For these reasons we are of the view that his Honour was correct in answering ‘Yes’ to
the first question.
Do clauses 118-119 need to be followed completely sequentially?
[35] This question incorporates other notions which are really at the heart of the dispute.
The Vice President answered this question “Yes”, with an explanation. Both parties contend
that this is the correct answer. The real dispute is what is meant by the answer. The ASU and
CPSU contend that the consequences of answering in the affirmative are that the ATO cannot
undertake the processes of voluntary redundancy and merit selection before exhausting clause
118. The ATO contends otherwise. As the real issue is covered by the other questions we will
not deal with this question further.
Can the ATO seek expressions of interest in voluntary redundancy at this stage from the
eight affected APS3 facilities management staff?
[36] This question essentially involves the same considerations as the first question. The
ASU contends that there is a sharp delineation between clause 118 and 119 and that the
processes of voluntary redundancy and merit based selection must not precede seeking to
prevent an excess employee situation pursuant to clause 118.
[37] The ATO contends that a failure to mention voluntary redundancy in clause 118 does
not mean that such a process cannot be considered and applied during the consultation and
redeployment process in clause 118. It submits that such measures are consistent with the
notions of preventing an excess employee situation. The CPSU does not contest this
interpretation
[38] His Honour found that the actions taken by the ATO were consistent with the
discharge of obligations under clause 118. For the reasons given above regarding the
construction of the relevant provisions we are the view that his conclusion was correct.
Additional CPSU grounds of appeal
[39] The CPSU submits that the Vice President erred in failing to accord the CPSU an
opportunity to be heard on the matters for determination. We see no basis for this ground.
Enterprise agreements are required to contain a term that requires or allows an independent
party to settle disputes about matters arising under the agreement.6 If the parties have agreed
for the Commission to arbitrate a dispute it may do so.7 The Commission can only deal with a
dispute on application by a party to the dispute.8
[2013] FWCFB 4752
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[40] The Commission’s obligation under the Act and the Agreement is only to take the
steps the parties empower it to do on application by a party to the dispute. Any outcome of an
arbitration cannot bind another person who is not party to the dispute in question. The
Commission is under no obligation to notify potentially affected parties prior to exercising
these powers. Not only is there no basis for suggesting that there is such an obligation, the
practicalities of such a step would be prohibitive. Every employee of the ATO and every other
party to the Agreement could be affected by an interpretation of terms such as the redundancy
provisions.
Conclusions
[41] We have concluded above that the CPSU appeal is competent. We grant permission to
the ASU and CPSU to appeal because the appeals concern the interpretation of important
provisions of the ATO Agreement.
[42] As we do not consider that the answers provided by his Honour to the questions posed
by the ASU and ATO are incorrect, or that the other grounds of appeal have substance, we
dismiss the appeals.
VICE PRESIDENT WATSON
Appearances:
Mr P Rozen, of counsel, for the Australian Municipal, Administrative, Clerical and Services
Union
Ms A Duffy, of counsel, for the CPSU, the Community and Public Sector Union
Mr J Snaden, of counsel, for the Australian Tax Office.
Hearing details:
2013.
Melbourne.
June
18.
Printed by authority of the Commonwealth Government Printer
Price code C, PR539001
1 (2003) 203 CLR 194
2 Pawel v AIRC (1999) 94 FCR 231.
COMMISSION AUSTRALIA THE SEAL OF FA
[2013] FWCFB 4752
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3 [2005] HCA 10; (2005) 222 CLR 241.
4 (1996) 66 IR 182
5 (1982) 149 CLR 337
6 s186(6).
7 S739(4).
8 S739(6)
APPENDIX 1 - EXTRACTS FROM ENTERPRISE AGREEMENT
“117. Excess employees
117.1 This clause only applies to ongoing employees who are no longer on probation.
When is an employee excess?
117.2 An employee becomes excess for either of the following reasons:
a) the duties of the employee are transferred to a different capital city or to an
office which requires a move of a similar scale, involving a necessary change
of residence, and
i) the employee is unwilling to perform duties at the new office; and the
Commissioner is unable to provide ongoing work at the first office; and
ii) the Commissioner agrees redundancy is an economically viable
alternative to relocation.
b) the Commissioner determines that the employee is a member of a given
class that has more members than is necessary for the efficient and economical
working of the ATO in a particular location.
118. Preventing excess employee situations
Consultation with employees and their representatives
118.1 The ATO will consult with employees and their representatives where the
provisions of this clause need to be exercised.
a) Consultation and communication processes established under clauses 2 and
3 of this Agreement will be used to consult employees and their representatives
about workforce adjustment issues;
b) The briefings of employees and their representatives, under sub-clause 3.3
of this Agreement, will be used to explain the overall funding and likely
staffing situation of the ATO. It is envisaged these meetings will be held when
data is available from the Budget and the additional estimates process;
c) Employees and their representatives will be consulted in relation to possible
national corporate measures which could be taken under this clause to prevent
excess employee situations.
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Preventing excess employee situations
118.2 This clause only applies to ongoing employees who are no longer on probation.
118.3 The ATO will, as far as practicable prevent excess employee situations through:
a) an employee retraining/redeployment approach so that employees prepared
to acquire new capabilities within an appropriate time can reasonably expect to
be employed by the ATO, and/or
b) the measures set out in clause 118.5 to 118.7.
118.4 Where the provisions in 118.3 are not successful in preventing excess employee
situations, the ATO will take actions consistent with any APS wide redeployment
principles.
Measures for preventing excess employee situations
118.5 To prevent excess employee situations, the ATO will:
a) where appropriate, seek alternatives to redeploying employees, such as
moving work, or
b) reassign the employees to other duties in their sub plan within their current
site; or
c) if action taken under a) and b) above does not prevent the excess employee
situation then the ATO will attempt to reassign employees to other sub plans
within the site (refer to sub-clauses 118.7 and 118.8), or
d) where the above actions do not prevent the excess employee situation then
the ATO will attempt to reassign the employees to each employees current sub
plan within the region.
The order of action taken by the ATO under this sub-clause may be varied
following consultation with the employees and their representatives.
118.6 Where a sub plan has undertaken the measures in clause 118.5 and still cannot
prevent an excess employee situation the sub plans will participate in corporate
workforce adjustment activities.
Information in relation to these activities will be available to employees and
their representatives.
118.7 The ATO will assess employees, identified as being in a situation where they are
likely to be excess, for suitability for any identified ongoing job opportunity in the
ATO prior to it being filled in another way. In this context, suitability of an employee
will be based on:
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a) suitability for the work in areas where they could be redeployed, not on their
relative suitability for work in the current work area; and
b) the employee’s ability to perform satisfactorily within a maximum of three
months.
Where there are insufficient volunteers, the ATO may identify and redeploy an
employee from the group of potentially excess employees.
Factors to be considered in redeployments under this clause
118.8 The following factors will be taken into account in redeploying employees:
a) Employees working in ATO sites outside the greater metropolitan area of
capital cities (e.g. Geelong, Newcastle Townsville, Wollongong and Albury)
will be given first consideration for additional job opportunities that arise in
those sites as the size of the offices means there are different opportunities to
those in metropolitan regions;
b) Within the greater metropolitan area of capital cities, on occasions it may be
more practicable and reasonable to redeploy an employee between BSLs in
their current site, than to re-assign the employee to a job in a different site in
their current BSL. To the extent practicable, employee preferences and
‘hardship’ factors will be taken into consideration in redeployment decisions;
c) Employees may express interest in redeployment to another region, but the
first priority will be to find jobs for employees within their current region. The
ATO is not obliged to redeploy employees between regions and such
redeployments do not have priority over other vacancy filling methods unless
determined by the Commissioner;
d) Where a site is closing, employees may express a preference for a site for
their redeployment. The ATO will take this preference into account in
corporate workforce adjustment activities.
118.9 An employee who is redeployed to another office in the same city will be
eligible for the relocation provisions under clause 112.
118.10 If both the ATO and the employee agree on redeployment to another region,
the move may be considered to be in the interests of the ATO.
119. Redundancy provisions
Application
Where measures under clause 118 do not resolve the situation
119.1 This clause only applies to ongoing employees who are no longer on probation.
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If, despite relevant steps having been taken under clause 118, an excess
employee situation is likely to arise, the six steps set out in this clause will be
taken.
119.2 Where 15 or more employees are considered to be excess, steps 3 to 6 below
will apply as well as any relevant provisions provided for by relevant legislation.
119.3 Where less than 15 employees are considered to be excess the following steps
will apply.
119.4 The six steps are:
Step 1
Affected employees and where they choose, their representatives, will be
informed and will be provided with the following information:
a) the reasons why employees are likely to become excess; and
b) the time when, or the period over which, it is likely to occur.
When advising affected employees of the situation, the ATO will specifically
ask the affected employee to identify which representative they wish the ATO
to advise of the situation.
Step 2
1. Employees and, where they choose, their representatives will have one
month for consultation with ATO management about:
a) measures that have been, or could be, taken to remove or reduce the
likelihood of excess employees;
b) redeployment prospects for the employee(s) concerned;
c) the appropriateness of using voluntary redundancy; and
d) the method of identifying an employee as excess, having regard to
the efficient and economical working of the ATO and the relative
efficiency of employees.
2. If the invitation to be consulted is declined or it is agreed that the full period
is not needed, follow on action may be taken before the end of the one month
period.
3. If the Commissioner agrees, the period will be extended beyond one month.
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4. Apart from employees who express interest in voluntary redundancy, no
employee will be notified that they are excess within one month of the
consultation period commencing.
Step 3
1. If redeployment or other measures are not feasible or only partially remove
the problem, the Commissioner will identify the employees who are considered
to be excess.
2. Nothing in these procedures will prevent excess employees being identified
by seeking informal expressions of interest in voluntary redundancy.
Employees who lodge an informal expression of interest in Voluntary
Redundancy will be provided with, or given access to, information in relation
to their likely entitlements. This could take the form of access to ‘selfhelp’
methods of estimating final leave/severance payments and superannuation
benefits.
3. Where the ATO determines that it is effective and economical to do so, the
ATO will facilitate the use of swaps to maximise the extent to which
redundancies are voluntary.
4. Employees must be notified in writing that they are excess employees.
Step 4
1. Employees who are identified as being excess will be provided with the
following information:
a) estimates of severance benefits, pay in lieu of notice and pay in lieu of any
unused annual, purchased or long service leave credits;
b) the estimated amount of taxation the ATO will deduct from any payments;
c) access to superannuation information;
(i) For employees who are members of the CSS or PSS (either defined
benefit or accumulation plan) the ATO is authorised by the employee to
obtain details of accumulated superannuation contributions and the
options available to those employees in relation to superannuation. The
ATO will provide this information to the employee;
(ii) Employees who are not members of either the CSS or PSS funds are
responsible for obtaining details about their options in relation to
superannuation from their superannuation fund. The ATO will, where
possible, assist the employee to get this information by providing
relevant information in writing to the employee; and
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d) the retention provisions which apply if the employee declines an offer of
voluntary redundancy, including information about how the amortised salary
would be calculated if they nominate the Alternate Retention Period as
determined by Step 5 (4).
2. Once the employee has been provided with the information as set out in a),
b) and c) (i) and d) above, and for an employee covered by c) (ii) they have had
reasonable time to get the information, they will be made a formal offer of
voluntary redundancy. An employee will have up to two weeks to accept or
decline such an offer. Where the employee declines the offer, they will be
required to, at the same time, nominate which retention period provisions they
wish to apply to them (ie. the Retention Period as determined by Step 5 (3) or
the Alternate Retention Period as determined by Step 5 (4).
3. Employees who accept the formal offer of voluntary redundancy will be
given notice of termination and will be paid a voluntary redundancy severance
benefit. With the agreement of the employee, follow on action may commence
inside the two week period.
4. If the employee does not respond to the ATO within the two week period
provided in subclause 2 above, they will be taken to have declined the offer.
5. If the employee does not nominate a retention period within the two week
period provide in sub-clause 2 above, the retention period under Step 5 (3) will
apply to them.
6. The ATO will not make a further offer of a voluntary redundancy to the
employee at later steps in the process.
Step 5
1. Employees who decline the offer of voluntary redundancy will begin a
formal retention period, to apply from that date.
2. Where the ATO determines that it is effective and economical to do so, the
ATO will facilitate the use of swaps to maximise the extent to which
redundancies are voluntary.
3. Retention period - An excess employee who declines the offer of voluntary
redundancy will be entitled to the following period of retention:
a) 13 months where the employee has 20 years or more service or is
over 45 years of age; or
b) 7 months for all other employees,
reduced by the relevant NES redundancy pay period that would apply to the
employee at the end of 7 or 13 months retention period.
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4. Alternate Retention Period - Where an employee elects to enter into the
retention period provisions under this sub clause, the employee’s retention
period determined in 3 above will be:
a) 13 months where the employee has 20 years or more service or is
over 45 years of age; or
b) 7 months for all other employees.
5. Payment of salary during retention period
a) Unless (b) below applies an employee will be paid at their ordinary
rate of pay during their retention period.
b) (i) Where an employee elects to enter into the Alternate Retention
Period provisions their total pay throughout the retention period will be
reduced by an amount equivalent to the employee’s redundancy pay
entitlement under the NES, with such redundancy pay period
entitlement calculated as at the expiration of the retention period.
(ii) For the purposes of (b)(i), the reduction of the employee’s ordinary
pay will be amortised over the duration of the retention period.
6. If during the Alternate Retention Period the employee ceases to be excess
(other than by termination of employment for the reason of being excess)
amortisation will cease and the amount deducted as part of the amortisation
provisions will be paid to the employee.
Step 6
Employees who cannot be placed in a suitable job within three months of
declining an offer of voluntary redundancy:
a) will be advised that, because sufficient work is expected to remain available,
it is intended to retain their services for the whole of their retention period,
including the period since the offer of voluntary redundancy was rejected. In
other than exceptional circumstances, it is expected that this will normally be
the case but it may be necessary for affected employees to move to a different
type of work, for which they are suitable, during this period; or
b) where the Commissioner is satisfied at any time in the remaining retention
period that there is insufficient productive work available for the employee
during the remainder of the retention period and that there is no reasonable
redeployment prospects in the APS, the Commissioner may:
i. Give written notice of the involuntary termination of the employee’s
employment under s.29 of the PS Act; or
[2013] FWCFB 4752
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ii. by agreement with the employee, give written notice of involuntary
termination of their employment; or
c) will be given 4 weeks’ written notice of the intention to reduce their
classification so that they can be redeployed to suitable employment, in which
case income maintenance will apply instead of an involuntary redundancy
benefit;
d) may at any time, be given written notice of the involuntary termination of
the employee’s employment under s.29 of the PS Act.
Support for excess employees
119.5 Employees who are identified as being excess, or offered a voluntary
redundancy, will be reimbursed for the costs of the following support where they
choose to use it:
a) career, lifestyle and/or financial planning by a qualified advisor; and/or
b) assistance with preparation of applications for job interviews.
The maximum total amount of reimbursement under a) and b) is $2,200.
119.6 During any notice or retention periods referred to in this clause:
a) the ATO will provide assistance to the employees to try to find opportunities
to redeploy the employee to another agency. This includes actions consistent
with any APS wide redeployment principles; and,
b) excess employees will be given reasonable time to attend employment
interviews, including reasonable travel and incidental expenses where these are
not met by the prospective employer.
119.7 Where an excess employee has to move their household to a new locality as a
result of a movement at level or reduction in classification, they will be entitled to
reasonable travel and relocation expenses as if being promoted.
Payment if reduced in classification
119.8 If an employee is reduced in classification, the employee will maintain the base
salary they had immediately prior to the reduction for either 7 or 13 months, less the
period of employment since the offer of voluntary redundancy was rejected.
Notice period
119.9 The following notice periods will apply where employment is terminated:
a) if over 45 years of age, with at least 5 years continuous service: 5 weeks’
notice;
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b) other employees: 4 weeks’ notice.
Voluntary redundancy benefit
119.10 An employee who elects for retrenchment with a redundancy benefit and
whose employment is terminated by the Commissioner under s.29 of the Public
Service Act 1999 on the grounds that he/she is excess to the requirements of the ATO,
is entitled to payment of a redundancy benefit of an amount equal to two weeks’ salary
for each completed year of continuous service, plus a pro-rata payment for completed
months of service since the last completed year of service, subject to any minimum
amount the employee is entitled to under the NES.
Attachment C sets out certain conditions relating to service for redundancy
benefit purposes.
119.11 The minimum sum payable will be an amount equal to 4 weeks’ salary and the
maximum payable will be equal to 48 weeks’ salary.
119.12 The redundancy benefit will be calculated on a pro rata basis for part time
hours during the period of service if the employee has less than 24 years full time
service.
119.13 This benefit will be in addition to any payment in lieu of the notice period and
accrued annual leave, long service leave and purchased leave credits.
Involuntary redundancy benefits
119.14 Where employment is terminated involuntarily, employees will be paid a sum
calculated as follows:
a) for employees with 20 or more years of service or over 45 years of age:- a
lump sum equal to 13 months salary reduced by the amount of salary paid since
the date the offer of voluntary redundancy was rejected; or
b) for others:- a lump sum equal to 7 months salary reduced by the amount of
salary paid since the date the offer of voluntary redundancy was rejected.
119.15 Such employees will receive payment in lieu of accrued Annual Leave and
Purchased Leave calculated as if the date of termination of their employment is 13
months or 7 months (as the case may be) later than the date the offer of voluntary
redundancy was rejected.
119.16 If the total amount payable is less than the total amount (including pay in lieu
of leave) that would have been payable had the employee accepted the offer of
voluntary redundancy (reduced by any salary received since the date the offer was
rejected), the employee will be aid an additional amount to bring the total benefit to
that amount.
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Salary for calculating benefits
119.17 For calculating redundancy benefits, an employee’s salary will include:
a) HDA, if received on the date notice is given and has been payable for a
continuous period of at least 12 months at that date;
Where the higher duties of an employee who has received HDA for a
continuous period of 12 months is ceased due to the workforce adjustment
process necessitating the redundancy, and the employee would otherwise have
continued to receive higher duties until the date notice was given, the higher
duties will be taken to have continued to the date notice was given for the
purpose of this clause.
b) an average of shift penalties over the 12 months prior to notice being given,
provided shift work has been rostered in at least 26 weeks; and
c) any other regular allowance in the nature of salary received on the date
notice is given.”
(underline emphasis added)
