Australian Services Union and Sydney Water Corporation (No 2) [2005] NSWIRComm 211

LEGISLATION CITED: Industrial Relations Act 1996

Australian Services Union and Sydney Water Corporation [2005] NSWIRComm 156 CASES CITED: Commissioner of Police and Police Association of New South Wales [2005] NSWIRComm 132

NOTIFIER Mr A Slevin of counsel Solicitor: Mr P Pasfield Slater & Gordon LEGAL REPRESENTATIVES:

RESPONDENT Mr S Benson of counsel Solicitor: Mr J Murphy Sparke Helmore Lawyers

• 10 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

NOTIFICATION UNDER SECTION 130 BY AUSTRALIAN SERVICES UNION OF NSW OF A DISPUTE WITH SYDNEY WATER CORPORATION (No 2)

INTERLOCUTORY DECISION [2005] NSWIRComm 211 1 In Australian Services Union and Sydney Water Corporation [2005] NSWIRComm 156, a decision given on 17 May 2005, the Commission dealt with an application by the Australian Services Union (NSW & ACT Services Branch) ("ASU") for interim relief pursuant to ss 136 and 137 of the Industrial Relations Act 1996. The order sought was that: The Respondent, Sydney Water Corporation, not dismiss Ronald Arthur Austin or Tony Bagala until the hearing and determination of matter number IRC 962 of 2005. 2 The background to the application was explained at [2]-[7] of the decision. Essentially, the application arose out of industrial dispute involving the ASU and Sydney Water Corporation in respect of the latter's injury management and medical retirement policy and its application to employees who had suffered injury at work and in respect of whom Sydney Water had been unable to find suitable duties. Sydney Water had indicated an intention to terminate the employment of Mr Bagala and Mr Austin because, after an number of years of trying, had been unable to find the two employees duties they were able to perform given injuries they had suffered at work. 3 The ASU sought to forestall the termination of the two employees pending the hearing and determination of the wider industrial dispute, namely, objections the ASU had to Sydney Water's injury management and medical retirement policy and its application. 4 The effect of the decision and orders made on 17 May 2005 was that the employment of Mr Bagala and Mr Austin should not be terminated until the Commission had the opportunity of considering the answers it had sought to a number of questions directed to Sydney Water. These questions were set out at [76] of the decision as follows: (1) What is the system, if any, for searching out, and following up, on suitable duties for injured employees, having regard to the restrictions on the work they are able to perform, within: (a) Sydney Water's Water Service Division; (b) Sydney Water Corporation; (c) Other employers? (2) What is the system, if any, for determining what range of duties an injured employee may be able to perform with reasonable and appropriate re-training, what re-training does Sydney Water provide and on what basis is it determined that an injured employee is a candidate for re-training? (3) Does Sydney Water give precedence to the employment of employees over the engagement or continued engagement of contract workers in circumstances where the employees are unable to perform pre-injury duties but who are able to undertake full time or part time work in an area of Sydney Water's operations covered by contractors? If not, why not? (4) What arrangements are in place to review on a regular basis return to work programs in consultation with relevant unions? (5) What formal role does an injured worker's representative have in determining whether suitable duties are available and what practical arrangements are in place to ensure the representative is provided with an opportunity to be consulted about the question of suitable duties? Does the representative have access to a list of suitable duties that may be available and a description of the work involved?

5 Subsequent to the decision being handed down, Sydney Water lodged an objection to the Commission as presently constituted exercising arbitration powers. The objection was made pursuant to s 173 of the Act and Sydney Water requested that a different member of the Commission exercise arbitration powers. At about the same time as the objection was lodged Sydney Water filed an application for leave to appeal and to appeal the decision of 17 May 2005. No stay was sought in respect of the orders made on that day. 6 The matter of the objection was listed for directions on 31 May and heard on 7 June 2005. Sydney Water's position was that whilst the Commission had conducted conciliation and had issued a certificate of attempted conciliation on 20 April 2005, the certificate was only in relation to the issue of the termination of Messrs Bagala and Austin, that the arbitration proceedings thus far were only in respect of the issue of the terminations and that the Commission had not commenced to arbitrate in respect of the wider industrial dispute, namely, Sydney Water's injury management and medical retirement policy and its application. Sydney Water's obvious concern is that if the Commission were to proceed to deal with the questions raised at [76] it would be intruding into the wider industrial dispute and arbitrating on issues in respect of which Sydney Water considers the Commission has exercised conciliation powers but in respect of which Sydney Water objects to the exercise of arbitration powers by the Commission as presently constituted. 7 The reason the Commission sought answers to the questions in [76] was to determine whether there was a serious issue to be arbitrated. That is to say, in determining whether interim relief should be granted in respect of the proposed termination of Mr Bagala and Mr Austin, the Commission was considering one of the relevant tests for granting such relief. As the Commission noted in its decision, the answers to the questions would assist in determining whether Sydney Water's system for searching out suitable duties for Mr Bagala and Mr Austin was adequate and, therefore, whether the terminations would be harsh, unjust or unreasonable. If it was adequate and had been followed by Sydney Water, it could not be said the terminations would be harsh, unjust or unreasonable. At [79] the Commission stated: 79 Clearly, adequate relief is available to Mr Austin and Mr Bagala if they were able to make out a case for reinstatement and such a consideration counts in favour of refusing interim relief. However, whilst I acknowledge the principle the Commission will not lightly interfere with an employer's right to dismiss an employee without first coming to the view that such dismissal would be harsh, unjust or unreasonable, in the present case there are a number of issues I have identified that need to be resolved before being able to come to that view. If, for example, after considering the further information I have sought, I was to come to the view that the system within Sydney Water for searching out suitable duties was inadequate and that inadequate system operated in respect of Mr Austin and Mr Bagala, it might lead to a conclusion that termination of employment would be harsh, unjust or unreasonable. On the other hand, the further consideration may lead to the conclusion that the respondent took all reasonable steps to find alternative work for the two employees and medical retirement was the only reasonable option for the employer. 8 The difficulty that arises is that in seeking to determine on a prima facie basis, whether the termination of Mr Bagala and Mr Austin would be harsh, unjust or unreasonable because the system used for finding suitable duties was inadequate, this necessarily leads into an inquiry about the adequacy or otherwise of Sydney Water's injury management and medical retirement policies and practices. 9 That Sydney Water's injury management policies and practices have come under scrutiny is not surprising given the manner in which both parties conducted their respective cases. On the one hand the ASU contended that the decision of Sydney Water to terminate the two employees was made under flawed policies and procedures and, on the other hand, Sydney Water went to some lengths to show that the policies and practices followed in respect of Mr Bagala and Mr Austin were sound. 10 The question that arises here for determination, however, is whether, in issuing a certificate of attempted conciliation, it was the Commission's intention, considered objectively, that the whole of the dispute had moved to the arbitration phase or that the Commission was merely intending to deal with the question of interim relief by arbitration, leaving the wider issue of Sydney Water's injury management and medical retirement policies and practices still the subject of conciliation and in respect of which Sydney Water was entitled to take an objection under s 173 before it became the subject of arbitration. 11 The initial notification of an industrial dispute by the ASU on 24 February 2005 referred to the Union's view that Sydney Water was intending to terminate Mr Bagala and Mr Austin because the respondent had been unable to provide the two employees with suitable duties and that Sydney Water had failed to respond to a request for an urgent meeting to discuss the subject matter of the notification. The dispute came before the Commission in Compulsory Conference the following day when it became apparent that the underlying dispute was about Sydney Water's injury management and medical retirement policy. The Commission's Recommendation of 25 February recommended, inter alia, that Sydney Water consider any change to its policy as put to it by the ASU regarding the role of the ASU in representing its members who may become subject to the terms of that policy. 12 The next development was described at [5] of the decision of 17 May 2005: 5 The matter returned to the Commission on 11 April at the request of Sydney Water. It was concerned at the prospect of a stop work meeting "in support of injured workers" called by the ASU for the following day. That issue was sorted out in the course of the conference but it was evident that the ASU's underlying source of concern, Sydney Water's injury management policy, had not been resolved. Accordingly, the Commission issued further recommendations, which included the following: 1. The parties shall meet as soon as reasonably practicable for the purpose of Sydney Water Corporation considering the ASU's proposals to amend Sydney Water Corporation's Injury Management - Return to Work Programme; that, in the course of those discussions, Sydney Water Corporation will indicate either those elements of the union's proposals it is able to accept or, alternatively, those elements in the amended proposals it finds unacceptable and the reasons in writing why those proposals are unacceptable.

3. Sydney Water Corporation, in particular, Mr Ferrier, will take on the responsibility of fast-tracking any decision in relation to the future of Mr Ron Austin and Mr Don Snape as to whether or not there will be a role for them within Sydney Water Corporation, or, alternatively, whether or not they are to be medically retired and once that decision is made the employees and the union will be advised accordingly.

4. The parties will report back to the Commission on the progress of their discussions at 2pm on Wednesday, 20 April next.

13 By 11 April no party could have been under any misapprehension that the dispute the Commission was attempting to deal with involved not only the immediate issue of the employment future for Mr Bagala and Mr Austin but also the substantive issue of the policies and practices adopted by Sydney Water that directed the way that Corporation approached injury management and medical retirement. 14 In the proceedings on 20 April Ms Fawcett for the ASU explained that some progress had been made in discussions between the parties and she proposed a way forward involving further negotiations between the parties but that in light of Sydney Water's stated intention to terminate the employment of Mr Bagala and Mr Austin that the Commission, in order to facilitate further negotiations, recommend that the terminations not proceed. 15 Mr Fitzgerald for Sydney Water made it perfectly clear a decision had been taken to terminate the two employees and Sydney Water would not accept any recommendation by the Commission that was inconsistent with that decision. Once Sydney Water's position became apparent, Mr Lynch for the ASU submitted: For the record, we seek a certificate of failed (sic) conciliation in this matter. The union is of the view arbitration is the course on issuing that certificate. We ask, under section 137 of the Act that the two members identified as part of the substantive nature of this dispute, Mr Bagala and Mr Austin, that the Commission grant orders they not be terminated in line with the employer's statement until such time as the substantive matter of arbitration is resolved (my emphasis). 16 It is apparent from that submission that Mr Lynch was seeking a certificate of attempted conciliation in respect of all of the issues in dispute. Moreover, the application filed by the ASU on 27 April 2005 sought an order that: The Respondent, Sydney Water Corporation, not dismiss Ronald Arthur Austin or Tony Bagala until the hearing and determination of matter number IRC 962 of 2005. 17 That is to say, an order was sought that Mr Bagala and Mr Austin not be dismissed until the substantive issue, Sydney Water's injury management and medical retirement policies and practices, was dealt with by arbitration.

18 This interpretation is supported by the ground (1) relied upon by the ASU for its application: Pursuant to s 136 and s 137 of the Industrial Relations Act 1996, the threatened terminations are a fundamental element to the wider industrial dispute between Sydney Water and the ASU. This dispute concerning the application of Sydney Water's Injury Management Policy has been subject to various proceedings of the Commission since 1997, all of which have failed to resolve the dispute. Accordingly, we are seeking a final determination of this matter (my emphasis). 19 There was no suggestion by any of the parties in the course of the proceedings, nor the Commission, that the question of Sydney Water's injury management and medical retirement policies and practices would remain to be dealt with by conciliation whilst the employment future of Mr Bagala and Mr Austin would be the subject of arbitration; the two issues are inextricably linked. 20 Firstly, there is an industrial dispute. Whilst the initial dispute involved a concern on the part of the ASU that Sydney Water was about to terminate the employment of two employees in respect of whom suitable duties could not be found, it became apparent that the real dispute that needed to be resolved related to Sydney Water's injury management and medical retirement policies and practices; the ASU regards those policies and practices as flawed and inadequate. 21 Secondly, the ASU has sought an order that Sydney Water not dismiss Mr Bagala and Mr Austin until the dispute has been determined by arbitration. The approach the Commission has taken, based on how the parties have framed their respective cases, is to ask itself whether the dismissal of the two employees would be harsh, unreasonable or unjust. The answer to that question lies in whether or not Sydney Water's injury management and medical retirement scheme as it has been applied to the two employees is, prima facie, inadequate. In other words, the scheme that Sydney Water operates has led it to a decision that it has no suitable role for the two employees, given their disabilities, and it intends to terminate their employment. Would such terminations be harsh, unreasonable or unjust? It is impossible to answer that question without having a better understanding of the scheme, hence the questions in [76] of the 17 May 2005 decision. 22 To approach it another way, as I did in the earlier decision, is there a serious issue to be arbitrated in respect of the adequacy of Sydney Water's injury management and medical retirement regime? If not, it probably cannot be said the dismissal of Mr Bagala and Mr Austin would be unfair. If so, the opposite conclusion might be arrived at and an order providing interim relief from any threat of dismissal might be appropriate until the dispute is heard and determined. 23 There is some inconsistency in the respondent's position in submitting that the only matter that is open to be arbitrated is the question of the dismissal of the two employees and not any issue related to its injury management and medical retirement scheme. In defending the application the respondent relied on an extensive amount of material to show that under the scheme Mr Bagala and Mr Austin had been treated fairly. Yet the respondent now contends that the Commission really cannot make any judgment about that scheme and its adequacy as it applied to the two employees because, it submits, it is a matter that remains the subject of conciliation. 24 In any event, in seeking the additional information described in [76] of the earlier decision the Commission is not setting out to arbitrate on the changes the ASU proposes to Sydney Water's injury management and medical retirement policies and practices. Those changes are set out in a letter from Ms Fawcett of the ASU to Mr David Evans, managing director of the respondent, dated 4 March 2005. Undoubtedly, if and when this dispute proceeds to further hearing it will involve a consideration of the changes being sought by the ASU. That is a different question to whether the termination of the employment of Mr Bagala and Mr Austin would be harsh, unreasonable or unjust because of inadequacies or shortcomings in the respondent's existing injury management and medical retirement scheme, although if it is found the scheme is inadequate that will necessarily invite the question of how that inadequacy might be remedied. 25 It follows from all of the foregoing that I do not consider it is open to the respondent to rely on s 173 of the Act. It is too late for the respondent to take an objection under s 173: see the extensive discussion regarding s 173 in Commissioner of Police and Police Association of New South Wales [2005] NSWIRComm 132 particularly at [17]-[30]. Accordingly, I do not propose to disqualify myself from continuing to exercise arbitration powers in relation to this industrial dispute. 26 I noted earlier that the respondent has filed an application for leave to appeal and appeal from my previous decision. In the circumstances, given the respondent has not sought a stay of the orders I made on 17 May 2005, I consider the appropriate course is to await the outcome of the appeal before taking any further steps to resolve this dispute either by arbitration or further conciliation pursuant to s 135(9) of the Act. 27 Once the outcome of the appeal is known my associate will contact the parties for the purpose of calling the matter on for directions if that be the appropriate course.

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