In approximately September 2020, Transport for NSW ("TfNSW") initiated a process which it called the "Corporate Functions Review" ("CFR"). The objective of the CFR was to consolidate a number of corporate functions currently being performed separately by Sydney Trains, NSW Trains and TfNSW. The CFR anticipates the creation of a structure within TfNSW which incorporates or integrates those functions. A further process follows which allows for the placement of staff, including from Sydney Trains and NSW Trains, into that structure.
Relevantly for present purposes, and in broad overview, TfNSW proposed that employees of Sydney Trains and NSW Trains whose functions would be assumed by TfNSW would be offered employment in the Transport Service of New South Wales ("Transport Service"), as constituted by s 68B of the Transport Administration Act 1988 (NSW). Their employment would be covered by the terms of the Transport for New South Wales and Sydney Metro Salaries and Conditions of Employment Award 2019 ("Award"). An employee who elected not to take up the offer would remain employed by Sydney Trains or NSW Trains, as the case may be, albeit subject to finding an alternative role or possibly being managed as an excess employee.
Separate to the CFR, in May 2021 Sydney Trains announced a "reform" of its Property and Commercial Services ("PCS") function, which would see that function also being integrated within TfNSW. The approach taken by TfNSW in implementing the PCS changes is largely consistent with the CFR process.
Sydney Trains and NSW Trains are NSW Government Agencies and statutory corporations, constituted under ss 36 and 37 of the Transport Administration Act, respectively. They are each empowered to employ their own staff: ss 64A and 64D of the Transport Administration Act. They are, however, "national system employers" within the meaning of s 14 of the Fair Work Act 2009 (Cth). Their employees are covered by the Sydney Trains Enterprise Agreement 2018 and the NSW Trains Enterprise Agreement 2018, respectively, both of which were made and approved under the Fair Work Act.
Each of the Rail, Tram and Bus Union of New South Wales, The Association of Professional Engineers, Scientists and Managers, Australia (NSW Branch) and the Australian Services Union of NSW (collectively, "Unions") have members employed by either Sydney Trains or NSW Trains who are potentially impacted by either the CFR or the PCS changes ("Affected Employees").
The CFR was the subject of correspondence and consultation between TfNSW, Sydney Trains and NSW Trains on the one hand, and the Affected Employees and the Unions on the other, from November 2020. The PCS reforms were also the subject of consultation between the parties from May 2021.
The Unions' position was that Affected Employees who accepted employment with the Transport Service were entitled to retain their current terms and conditions of employment. The Unions raised concerns that Affected Employees who accepted the offer of employment would lose a number of benefits which they currently enjoy, including in particular:
1. enhanced redeployment and redundancy entitlements contained in a deed between Sydney Trains, NSW Trains, the Unions and others dated 3 May 2018;
2. free travel (Opal) passes, pursuant to cl 31 of the Sydney Trains Enterprise Agreement 2018 and cl 30 of the NSW Trains Enterprise Agreement 2018, which included the ability to receive free travel for life depending on length of service; and
3. a union picnic day, pursuant to cl 30 of the Sydney Trains Enterprise Agreement 2018 and cl 29 of the NSW Trains Enterprise Agreement 2018.
Although some concessions were made by the Transport Secretary during the course of consultation, the Unions' concerns were not alleviated.
As at 16 July 2021, in connection with the CFR, TfNSW had issued 275 offers of employment to employees of Sydney Trains or NSW Trains, of which 98 had been accepted. Some steps have been taken by TfNSW to recruit for and fill positions in the structure that remain vacant.
TfNSW issued offers of employment relating to the PCS changes on 16 June 2021, which were open for acceptance until 23 June 2021. There is some uncertainty in the evidence as to the number of offers made and the those that were accepted. Renee Nixon, the Senior Manager Workforce Relations in the People and Culture Division of TfNSW, stated that 16 offers were made to employees who would fall under the Award, of which two were accepted. Adrian Catt, a Senior Organiser employed by APESMA, stated that 24 offers had been made, of which four had been accepted. The difference is not material for present purposes. TfNSW has commenced the process of advertising for people to fill the vacant roles.
Each of the Unions has separately notified the Industrial Registrar of a dispute pursuant to s 130 of the Industrial Relations Act 1996 (NSW). The gravamen of each dispute is that the terms of employment offered to the Affected Employees by TfNSW are not the same as those which they currently enjoy, and that the Affected Employees are entitled to, or should be held to be entitled to, maintain their existing terms.
On 15 July 2021 the Unions filed an application seeking interim dispute orders purportedly pursuant to ss 136(1)(c) and 137(1)(c) of the Industrial Relations Act ("Application") in these terms:
"1. TfNSW shall extend the time for employees who have been offered employment as part of the Corporate Functions Review and the Property and Commercial Services restructure to accept those offers until further order of the Commission.
2. TfNSW will refrain from making any further offers of employment as part of the Corporate Functions Review and the Property and Commercial Services restructure until further order of the Commission.
3. TfNSW will refrain from talking [sic - taking] further steps to recruit for positions in the [sic] Property and Commercial Services."
The Application includes the following "grounds, reasons and particulars":
"1. The Applicants seek interim orders…concerning:
a. The roles of 307 employees currently employed by Sydney Trains and NSW Trains in corporate functions areas and 24 employees in the Property and Commercial Services Group are being transferred to TfNSW. To give effect to the transfer TfNSW has made offers of employment to Sydney Trains and NSW Trains employees and proposes to make offers to others in the near future.
b. The offers of employment by TfNSW are on the basis that the employees accept that the terms and conditions of employment will be those contained in the Transport for New South Wales and Sydney Metro Salaries and Conditions Award 2019 (the Award).
c. The terms and conditions of the Award differ from the terms and conditions currently applying to the employees.
d. This will result in the employees, should they accept the offers, losing key conditions of employment they currently enjoy as Sydney Trains and NSW Trains employees. Key conditions include a Deed which provides far more generous arrangements for redeployment and redundancy than those provided by TfNSW, travel pass arrangements which include free travel and the potential to gain a lifetime travel pass after reaching the required years of service, and an approved picnic day.
e. The unions dispute that the Award should govern the employment of the employees following the transfer.
f. The unions claim that the terms and conditions of employment on which the employees become employed on being transferred, including terms and conditions as to remuneration, allowances and duration of employment should be the same as those applying immediately before the transfer.
2. TfNSW has issued letters of offer to 230 employees currently employed by Sydney Trains and NSW Trains. Those letters of offer require the employees to accept offers on the basis that the Award will apply to them. The time for responding to some of those offers has expired and for others is 13 July 2021. The 13 July 2021 deadlines have been extended in accordance with the recommendation of the Commission made on 13 July 2021.
…
5. The grounds upon which the application for interim orders is made are:
a. The unions contend that by failing to observe the terms and conditions prior to the transfer TtNSW is acting contrary to the approach taken in sections 66 and 67 of the Transport Administration Act 1988 which provides that transferred employees will have their existing terms and conditions observed following a transfer.
b. If the transfer occurs on the terms proposed in the offers of employment, then there will be a substantial diminution in the employees' terms and conditions of employment in circumstances where they will be performing the same job and the only change will be the designation of TfNSW as their employer.
c. The preservation of the terms of conditions is fair and reasonable.
d. The interim orders will preserve the position of the employees while the Commission resolves the dispute."
[2]
Legal principles
When exercising its functions, the Commission is obliged by s 146(2) of the Industrial Relations Act to have regard to the objects set out in s 3 of the Act. Relevantly for present purposes, those objects include the provision of a framework for the conduct of industrial relations that is fair and just (s 3(a)) and providing for the resolution of industrial disputes in a prompt and fair manner and with a minimum of legal technicality (s 3(g)).
The Unions submitted that the orders sought in the Application will preserve the status quo pending the resolution of the underlying disputes by the Commission. The power of the Commission to make such orders was recognised by Sams DP in Barrier Industrial Council dispute with Broken Hill Chamber of Commerce and Others re Breach of Award and The Construction, Forestry, Mining and Energy Union (New South Wales Branch) dispute with Broken Hill Chamber of Commerce and Others re alleged breach of Award [2002] NSWIRComm 232 at [20]-[23], upheld on appeal in Broken Hill Chamber of Commerce and CFMEU (NSW Branch) [2002] NSWIRComm 244.
The proposed interim orders would operate in a manner analogous to an interlocutory injunction, effectively precluding TfNSW (and, by extension, Sydney Trains and NSW Trains) from progressing with the CFR or the PCS restructure. The approach to apply when determining whether to grant such relief was articulated in Australian Broadcasting Commission v O'Neill (2006) 227 CLR 57; [2006] HCA 46 at [19] and [65], in passages which have been cited with approval by the Commission in several decisions: see for example Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales on behalf of Pearcey, Barnett and Woelfl v Department of Attorney General and Justice - Corrective Services NSW [2012] NSWIRComm 33 at [32]-[34].
Put simply, in the present proceedings there are two questions to be answered in deciding whether to grant the interlocutory relief sought by the Unions. First, whether the Unions have shown that there is a serious question to be tried as to their entitlement to relief. That is, whether there is a sufficient likelihood of success by the Unions in the substantive proceedings to justify the preservation of the status quo pending the final hearing. Second, whether the inconvenience or injury which the Affected Employees would be likely to suffer if the Application were refused outweighs or is outweighed by the inconvenience or injury which TfNSW would suffer if the relief were granted. That is, whether the balance of convenience favours the granting of an injunction.
The Unions drew my attention to Sydney Water Corporation and Australian Services Union (New South Wales and Australian Capital Territory Branch) [2005] NSWIRComm 305 in support of the submission that "the traditional elements informing an interim order (serious question to be tried, and balance of convenience) were of assistance but ought not slavishly be followed in the context of the arbitration of an industrial dispute". [1] I have had these submissions in mind in determining the Application.
[3]
Determination
I have determined not to grant the interim orders sought in the Application. My reasons are set out below.
As already stated, at the heart of the Unions' case is the assertion that if the Affected Employees take up employment with the Transport Service, they are entitled to, or at least should continue to, enjoy the terms and conditions that they currently enjoy. The grounds set out in pars 5(a)-(c) of the Application, reproduced at [12] above, are all directed towards that proposition.
Whether the Affected Employees have an extant entitlement to the maintenance of the existing terms and conditions of their employment, or ought to have one conferred on them by the Commission, will be fundamental to the Unions' success in the primary proceedings. To that extent, there might prima facie be said to be a serious question to be tried in the matter. However, that is not determinative of the Application.
Although TfNSW is a statutory corporation and a NSW Government agency constituted by s 3C of the Transport Administration Act, by s 3E(4) it cannot employ any staff. The employees in whose interests the proposed interim orders are sought, and others whose position might consequentially be impacted (about which see [26]-[28] below), are employed by national system employers. The effect of the proposed interim orders, if made, is that the Commission would be purporting to mandate the preservation of structures existing within two national system employers and, by necessary extension, the maintenance of particular employment relationships between those employers and their employees. By virtue of s 26 of the Fair Work Act, this would appear beyond the Commission's jurisdiction.
TfNSW drew my attention to Tristar Steering and Suspension Limited v Industrial Relations Commission of New South Wales [2007] FCAFC 50. It is not necessary to traverse the details of that case. Suffice it to say, in separate judgments the members of the Full Court held that by virtue of s 16 of the Workplace Relations Act 1996 (Cth), the predecessor to s 26 of the Fair Work Act, the Industrial Relations Act was rendered invalid to the extent that it would otherwise apply in relation to constitutional corporations which are employers or any of their employees. I note in particular, without reproducing them, the observations of Kiefel J at [10] and [16] and Buchanan J at [45]-[48]. Justice Gyles succinctly summarised the position as follows:
"22. Whilst the NSW Act may not be wholly invalid, it can have no effect upon constitutional corporations concerning their relations with actual or potential employees. Indeed, the NSW Act cannot be concerned with the regulation of constitutional corporations at all. …"
The Unions peremptorily dismissed the significance of Tristar. Mr Slevin of Counsel, who appeared for the Unions, submitted at the hearing: [2]
"The third issue that I wanted to respond to was this question of whether the interim orders will somehow offend s 26 of the Fair Work Act I simply don't understand the point Tristar is simply not on point here. Tristar was an attempt to investigate the conduct of a national system employer we're not asking for any investigation to occur as to the conduct of Sydney Rail or NSW Rail nor do we ask for any orders to be made that have any application to those two entities. The orders speak for themselves they're about conduct by Transport for NSW."
With respect, these submissions focus too much on the form of the orders and pay insufficient regard to their effect. As stated above, while the interim orders sought are directed to TfNSW, it is not an employer. The employees who may be impacted by the orders are employees of national system employers, whose operations in turn will be affected by the orders. There is a significant question as to the jurisdiction of the Commission to make such orders.
Indeed, the question might arise as to the jurisdiction of the Commission to grant final relief in the proceedings. However, this was not a matter advanced at the hearing of the Application. It is neither necessary nor appropriate that I seek to make a determination on that issue at this time.
Even were it to be assumed that jurisdiction exists to make the interim orders, there are two considerations which I regard as weighing the balance of convenience in favour of TfNSW.
First, the CFR and PCS restructure has broader implications than the case presented by the Unions appears to acknowledge or contemplate. On the hearing of the Application the Unions read an affidavit of Amanda Perkins, an Organiser employed by the Australian Services Union. In that affidavit, Ms Perkins deposed:
"91. I understand there to be a total of 377 employees affected by the CFR, 307 of those have been identified as direct matches and 206 have already received offers from TfNSW. The 71 remaining may be offered roles at TfNSW."
This evidence is to be contrasted with that of Ms Nixon, who stated that there are a total of 2,563 employees captured in the scope of the CFR. Ms Nixon described the process by which employees will be placed in corporate functions in TfNSW as follows:
"54. The CFR Placement Process includes a number of steps for the placement of employees into roles. Firstly, employees are considered for roles that are the same as their current grade and are the same or substantially the same as their current role. If there are fewer or an equal number of employees to roles, the employees can be 'direct matched' to the role. However, if there are more employees than roles the employees will go into a 'many to few' process where they will be ranked based on merit and offered the roles in that order. This will result in those employees who were not successful in the 'many to few' process being unplaced. Where roles are not filled following the direct match and many to few processes, in most cases the role will move to the 'functional search' stage where all employees from within the function (across the 3 entities) can apply for unfilled roles. Unplaced permanent employees will be prioritised for assessment in the 'functional search' followed by permanent employees. Finally, if there remain unfilled role the roles will be advertised internally and externally with Transport cluster employees getting priority consideration."
Ms Nixon stated that the proposed interim orders would have the effect of jeopardising recruitment activities that are under way. Further, the delays they would inevitably cause to the staffing of the corporate functions might create confusion and concern for employees as to whether they will be able to apply for roles in the new structure or whether, having done so, they were successful.
Having regard to the balance of convenience, the possibility of the proposed interim orders having a consequential and potentially deleterious effect on employees not contemplated by these proceedings argues against them being made. Further, there is the strong possibility that the orders would do more than maintain the status quo, but would rather result in things that have been done having to be undone. In this context I am mindful of whether the orders might prejudice those employees who have already accepted or declined the offers from TfNSW.
Second, during the hearing of the Application I had the following exchange with Mr Baroni of Counsel, who appeared for TfNSW:
"COMMISSIONER: You've got Mr Slevin submitting on the one hand you've got a bunch of employees who don't know what they're being offered, or don't know what they're signing up to They could accept the offers to preserve their ongoing employment status, but by doing that be taken to have waived any claim that they have to these additional benefits, and you're saying 'Well don't worry about it because if it's coming their way, it's coming their way' but in the context where you or your client may be making a submission at the final hearing, well they accepted the offer, it's too late, it's gone.
…
BARONI: Thank you Commissioner can I answer your question this way. My understanding of Mr Zang's position is this. Firstly and this is a position that I'm putting to you now as a clear concession that is that if the Commission determines that these employees have an entitlement to these benefits which they say they have then those employees who have already accepted positions will not be discriminated against. That is at final hearing the Commission determines that there is an entitlement then all employees irrespective of whether they've accepted offers before or after or whatever the case maybe will obtain those benefits. That's the first issue.
The second issue is that the interim orders as I've said before won't make any difference to ultimately what the Commission determines in relation to an entitlement. The employees can accept the offers that are on foot and be comforted in the fact that ultimately presumably this will go to a final hearing that if the Commission determines that they are entitled to those benefits they'll get them. If they don't want to accept the offer they have other entitlements which they're entitled to under a Federally registered enterprise agreement redundancy and the like. So that's the best way I can answer that question but it still gets back to in my submission that there is nothing inconsistent about what Mr Zang had put to the Commission and it couldn't be something that's put on, on a without prejudice basis to the unions who are prejudiced to my client. That would be unfair to interpret it simply that way.
So ..(not transcribable, link break).. is that if you accept the job now or have already accepted the job then you'll get the benefits that flow from whatever the decision the Commission makes if it's a positive one. If it's a negative one then you don't lose anything I mean you've made your choice and you live with it. Hopefully that's answered the question the longish question that the Commission opposed to me and if it hasn't I'll attempt to answer it further Commissioner.
COMMISSIONER: I think you have. But let me add a wrinkle to the fabric.
Obviously if this Commission finds that the employees have an entitlement an extant entitlement to retain the three benefits going across to their new employment within Transport for NSW, that's one thing. And as you say that's an entitlement that one would find that be difficult to say would be denied to those who have already--
BARONI: Yes.
COMMISSIONER: --accepted offers that did not expressly make that clear. What if the Commission came at it from a different angle and said that and I'm not in any way telegraphing a punch I'm just asking a question. What if the Commission were to say well it's not an entitlement but at the same time it would not be fair and reasonable that they lose those benefits and so to resolve the dispute I'm going to make an award conferring those three benefits on the relevant employees would that change the position that you just put?
BARONI: I don't think so because ultimately that is something the Commission could do and it doesn't need my client's permission to make and award we might object to it.
COMMISSIONER: It's a different it's - but there might be a different question in terms of when the - from when - the date from which the award could operate.
BARONI: No I understand that but I think the point I'm making Commissioner is that either way - let me go back a step. If ultimately what this dispute is about now I understand it to - this is what's being I think being put because if it's not being put then you simply can't make the orders. But if the proposition is being put that I have an entitlement to these conditions which I will lose if I accept the job that's being offered then the Commission can determine that issue it can determine it in a number of ways. It can make orders, it can make an aware it can make whatever it wants to do relevant to the powers that it has under the award making powers or under s 136, it doesn't really matter how you do it.
There might be issues about when the award operates from, who it should apply to, there may be some growling (as said) provisions. I guess that the Commission may think about Mr Slevin's clients may put it that way. But it doesn't change the fact that our position will be if you say they're entitled to it then they're entitled to it and no employee will be discriminated.
Now on that basis alone we say there just simply can be no basis to make the interim orders. …"
The position taken by TfNSW ensures that an Affected Employee who accepts an offer from TfNSW is not to be regarding as having relinquished the right to claim any entitlements that the Commission might later determine apply or should apply to their employment. I accept that this leaves some risk that an Affected Employee may be held not to have the entitlements for which the Unions contend, which is a matter they may have to weigh up in the balance in deciding whether to take up employment with the Transport Service. Even allowing for that, the concessions made by TfNSW at the hearing further shift the balance of convenience in its favour.
[4]
Order
As I am not persuaded that the interim orders ought to be made, the only appropriate order is that the Application be dismissed. I so order.
Damian Sloan
Commissioner
[5]
Endnotes
Outline of Submissions on behalf of the ASU, RTBU and APESMA NSW at par 10
Tcpt, p 17(18-25)
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Decision last updated: 29 July 2021