Appeal by Australian Municipal, Administrative, Clerical and Services Union; Appeal by CPSU, the Community and Public Sector Union [2013] FWCFB 4752 (17 July 2013)

(#P131_14575) Pawel v AIRC [1999] FCA 1660; (1999) 94 FCR 231.

(#P182_18941) [2005] HCA 10; (2005) 222 CLR 241.

(#P195_21911) [1996] IRCA 166; (1996) 66 IR 182

(#P204_23187) (1982) 149 CLR 337

(#P243_32057) s186(6).

(#P244_32151) S739(4).

(#P245_32248) S739(6)

Printed by authority of the Commonwealth Government Printer

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.

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:

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.

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.

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

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.

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

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;

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.

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)