CPSU, The Community and Public Sector Union v Commonwealth of Australia[2007] FCA 1861 - FCA 2007 case summary — Zoe

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CPSU, The Community and Public Sector Union v Commonwealth of Australia[2007] FCA 1861

[2007] FCA 1861

Federal Court of Australia|2007-12-04|Before: Cowdroy J

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Source facts

Court

Federal Court of Australia

Decision date

2007-12-04

Before

Cowdroy J

Source

Original judgment source is linked above.

Judgment (61 paragraphs)

[1]

REASONS FOR JUDGMENT 1 The first applicant, the Community and Public Sector Union ('the CPSU') seeks a declaration that the respondent, the Commonwealth, breached s 792(1) of the Workplace Relations Act 1996 (Cth) ('the Act') by subjecting its employers to a disadvantage in their employment for a reason prohibited under s 793(1)(a) of the Act and for additional declarations and orders arising out of other alleged unlawful conduct by the Commonwealth. 2 The second applicant ('Mr McCarron') claims similar declarations and orders and additionally claims that the conduct complained of constitutes a breach of an agreement made between himself and the Commonwealth relating to his employment. 3 The claim arises from the refusal of the Commonwealth to permit Mr McCarron to take accrued flex leave to enable him to attend an event which was held on 30 November 2006 known as the National Day of Community Protest ('NDCP'). The CPSU is an affiliate of the Australia Council of Trade Unions ('the ACTU'). The NDCP was held as part of the campaign organised by the ACTU against the recent amendments to the Act: see Workplace Relations Amendment (Work Choices) Act 2005 (Cth) ('Work Choices').

[2]

FACTS 4 At all material times Mr McCarron was and remains an employee of the Commonwealth Department of Employment and Workplace Relations ('the Department'). His employment is governed by an Australian Workplace Agreement ('AWA') made between himself and the Commonwealth. Shortly after joining the Department on 1 November 2001 Mr McCarron became a member of the CPSU and has remained a member of that union. 5 The Workplace Authority, formerly known as the Office of Employment Advocate ('OEA'), an organisation within the Department, is constituted by a number of business units. One such business unit is Agreement Services, previously known as Australian Workplace Agreements Operations. The functions of Agreement Services include the provision of advice and assistance to employers and employees. Agreement Services is also responsible for the management and lodgement of AWAs, project work and prior to 27 March 2006, the review of AWAs under the Act. 6 Mr McCarron is engaged in such business unit and as an Agreements Specialist dealing with AWAs he is required to coach and mentor staff. Approximately 82 employees are engaged in that section, 50 of whom work in the Sydney office. Ten employees are engaged in a similar role to that of Mr McCarron.

[35]

25 Mr Casson communicated his opinion to Ms Skarratt and considered that the email of 18 October 2006 was justified on the basis of operational requirements. 26 Mr Casson confirmed that in respect of the 2005 NDCP nothing came to his attention which caused a significant problem with people taking, or being absent from work without authorisation. With regard to the June protest, Mr Casson considered that the total ban was necessary to ensure a minimal staffing level availability for operational purposes, given that there was a special event which was 'targeted at employees to encourage them to attend community protests'. He considered that such circumstance, just like events such as the Melbourne Cup, could have a significant effect upon staffing levels. He considered that it was an 'unquantified and unquantifiable impact on the business' and it was prudent to impose the ban. He was not, however, able to indicate whether there was any untoward impact upon attendance during the June protest. Mr Casson considered that it was 'entirely sustainable to have a policy in place in advance of a significant event, that may have an impact on staffing of the agency, and for certainty, and for fairness and equity purposes'. Mr Casson believed that the NDCP would have a significant effect on business and considered that it was fair and equitable that if more leave applications were received than could be accommodated, it would be unfair to grant leave to some persons and not to others. Mr Casson chose not to overturn the ban. 27 Mr Forbes testified that there had never been any occasion when the OEA had insufficient staff to maintain services, and apart from union days of protest, blanket bans on leave had not, to his knowledge, been applied. Other than the 2005 NDCP, the June protest and the NDCP, a total ban had never been imposed in the OEA. From his consideration, there was no justification for the ban on leave to guarantee access to the OEA's services. He explained that in his unit, work is not required to be done on any particular day, or between any particular hours, but can be completed at any time as long as business targets were met. In consequence an employee had a high degree of flexibility to decide when to work their required hours. 28 Mr Forbes confirmed that he did not expect any unauthorised absences on the NDCP, that none occurred and that Mr McCarron's application for leave was the only application received for the NDCP. 29 Mr Steven's evidence confirmed that of Mr Forbes. Mr Stevens said the he had not held any discussion with Mr McIlwain in November 2005 relating to the question of whether in his business unit a total ban was necessary for operational requirements in respect of the 2005 NDCP nor whether there might have been an increase in the workload on the 2005 NDCP. He had no reason to believe that there would be an increase of workload on that day and there was no such increase experienced on that day. No enquiries were made of him by either Mr McIlwain or Ms Skarratt prior to the 2005 NDCP. After the 2005 NDCP, no enquiry was made of Mr Stevens by Mr McIlwain or by Ms Skarratt to ascertain if there had in fact been any increase in workload on that day. Nor was any inquiry made by either of them concerning any unauthorised leave having been taken on that day. 30 With regard to the June 2006 protest, no enquiry was made of Mr Stevens by Mr McIlwain nor of Ms Skarratt concerning the likelihood of unauthorised absence in that week. The prohibition on leave was not imposed until the Wednesday of that week. There was no apparent increase in work during the June protest, and the number of public enquiries was marginally less that week compared to the previous week. 31 Ms Skarratt maintained that operational considerations were the reason for the imposition of the ban. She did not know of any specific number of staff required to provide the appropriate level of service in any unit. She agreed that she could have spoken to the managers to ascertain whether there was a potential problem in ensuring adequate staff for the NDCP, but chose not to do so. She reiterated that her primary concern was the prospect of a significant increase in leave applications. She discussed the potential for unauthorised absences with Mr McIlwain and considered that it was 'his call', rather than discussing such issue with senior managers. She acknowledged that the prospect that unauthorised absence would occur was a possibility but she could not 'pretend to know' what the level of unauthorised absence would be. Ms Skarratt acknowledged that Mr Stevens was probably in the best position to determine whether operational requirements would be compromised by attendance at the NDCP. 32 Mr McIlwain considered that it was inappropriate for a public servant to disagree with the legislation they are charged to administer and believed that Mr Stevens, because of the force of his comments concerning Work Choices, might deliberately attempt to compromise the OEA's operations. Mr McIlwain was extensively cross examined concerning his reasons for imposing the ban but maintained his consideration that fairness, and the need to provide services justified the imposition of the ban.

[39]

SUBMISSIONS OF THE OEA 40 The OEA submits that the CPSU and Mr McCarron have not discharged the onus of proving that the reason for the imposition of the ban was not genuine and that the evidence does not establish that Mr McCarron's position was altered to his prejudice within the meaning of s 792(1)(c) of the Act. The OEA submits that no employee had the entitlement to take leave on a specified day since the grant of leave remained within the discretion of the OEA. None of Mr McCarron's accrued leave was lost by virtue of the ban, and accordingly there was no prejudice to him. 41 The OEA submits that even with the ban in place, Mr McCarron was not obliged to attend work until 11.00 am and that there was ample time for him to participate in the NDCP prior to that time if he wished. The OEA submits in answer to the submission of the CPSU and Mr McCarron that 'leave applications in respect of 30 November 2006 were assessed against a higher standard than on any other day…', that no higher standard prevailed. Rather, the OEA applied an appropriate response to a non-standard circumstance and applied a criteria which recognised the needs of its clients because of the extraordinary event. That event was the fact that the 2005 NDCP was conducted on a national basis, that there was a significant promotion for attendance and that there was reason to anticipate an increased demand for services by telephone enquiries by employers and employees concerning their rights. 42 With respect to the submission of the CPSU and Mr McCarron that the announcement of the leave ban constituted a threat of prohibited conduct within the meaning of s 793(2) of the Act, the OEA submits that as the ban on leave was not prohibited, its announcement could not have been a threat. Further, the OEA submits that the announcement of the leave ban did not constitute a threat as it did not menace or warn of an intention to inflict harm. The OEA relies upon the observations of Finkelstein J in Community and Public Sector Union v Telstra Corporation Ltd (2000) 99 IR 238. 43 The OEA submits that leave was approved for Mr McCarron after orders of the Full Court in CPSU, The Commonwealth and Public Sector Union v Commonwealth of Australia [2006] FCAFC 176. It is submitted that because Mr McCarron attended the NDCP, his position was not altered to his prejudice. 44 As to alleged breaches of the AWA, it is submitted that Clause 30 of the AWA does not provide an absolute entitlement of flex leave for an employee. Clause 30(a) stipulated that flex leave was 'subject to operational requirements'. Clause 3 of the Policy required 'operational requirements and needs of individuals' to be taken into account when an employee and the manager were settling working arrangements, work patterns and flex-leave arrangements. Clause 1 of the Policy required managers and supervisors to have regard to the operational requirements of the area, the impact of granting the leave on clients and other members of the workgroup and the personal needs of the employee

[44]

See also Branson J in Commonwealth Bank of Australia v Finance Sector Union of Australia (2007) 157 FCR 329 where her Honour considered the scope of the meaning of a prejudicial alteration of an employee's position within the meaning of s 298K(1)(c) of the unamended Act. 48 The ban operated to prevent employees of the OEA attending the NDCP. Although Mr McCarron did not have the legal right to be granted flex leave on any particular day he was entitled to have his application for leave on the NDCP assessed the same way as any other day. The ban removed from Mr McCarron the possibility that he would be entitled to take flex leave on a day which would, but for the ban, have been available to him. It was important to him to attend the NDCP to express his support for the Your Rights at Work campaign. 49 In addition the Court accepts the submission of the CPSU and Mr McCarron that the test for the granting of leave was higher on the days of the 2005 NDCP, the June protest and the NDCP. Mr McIllwain gave evidence that he considered he was imposing a higher test on the days of protest in balancing the need to assess individual leave applications and the operational requirements of business units in the OEA. Further Mr McIllwain acknowledged that it was his intention not to merely minimise the risk of not meeting operational requirements on the days of the protests but to eliminate such risk. On days other than the 2005 NDCP, the June protest and the NDCP, the OEA adopted a lower test for assessing risk of not meeting operational requirements. The imposition of a higher test of eliminating risk rather than minimising it constitutes a prejudicial alteration to the rights of employees. 50 The Court is satisfied that the conduct of imposing the ban did alter the position of Mr McCarron to his prejudice as provided by s 792(1)(c). The effect of the ban upon Mr McCarron was real and substantial and not merely hypothetical: see Community and Public Sector Union 107 FCR 93. A further question remains, namely was such ban imposed for a prohibited reason within the meaning of s 793 of the Act?

[45]

Was the ban imposed for a prohibited reason? 51 To satisfy section 793(1) of the Act conduct prescribed in s 792 must be carried out, inter alia, because the employee is a member of an industrial association. Mr McCarron was a member of the CPSU and the NDCP was carried out under the auspices of the ACTU with the full support of the CPSU. Ms Skarratt and Mr McIlwain were aware that employees in the OEA were union members and that the NDCP was organised by the ACTU. 52 The standard of proof required to determine whether the reason for conduct was prohibited under s 793 is to be considered in accordance with the principle derived from the judgment of Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336 at 362: see The Employment Advocate v National Union of Workers (2000) 100 FCR 454 at 464 where Einfeld J said I think that in dealing with these types of civil offences some standard of proof above mere satisfaction on the probabilities is appropriate. The Court is in any event bound by s 140(2) of the Evidence Act 1995 (Cth) to take into account the nature of the cause of action, the nature of the subject matter of the proceeding and the gravity of the matters alleged in determining whether it is reasonably satisfied that the matter has been proved. 53 The ban affected all employees in the OEA, whether members of the CPSU or otherwise. However this circumstance does not lead to the conclusion that it was therefore not imposed for a 'prohibited reason'. In McIlwain v Ramsey Food Packaging Pty Ltd (2006) 154 IR 111 at 355 Greenwood J said: Dismissal of employees for a prohibited reason within a group of employees some of whom may be dismissed for a non-prohibited reason does not remove the individual or bilateral character of the prejudicial conduct on the part of the employer as against that employee. It would be an odd thing if the statutory quality of contravening conduct in respect of some employees could be dissolved amongst a group and remedial entitlements otherwise available to the affected individuals thereby lost. The question is whether the conduct, from the standpoint of the individual, notwithstanding others, represents conduct carried out for a prohibited purpose.

[54]

64 Despite the opinions of Messrs Rushton and Stevens, Mr McIlwain and Ms Skarratt believed that there might be excessive applications for leave for employees to attend NDCP. Further, Mr McIlwain was of the view that certain managers, some of whom did not support Work Choices would automatically grant such leave if requested to do so. Mr McIlwain was aware that Mr Stevens had expressed his disagreement with Work Choices, and was concerned that Mr Stevens might not have proper regard for the operational requirements of the OEA in the provision of services to clients in granting leave applications. Mr McIlwain said that he feared that Mr Stevens might give 'more weight to the personal needs of employees than to the needs of OEA clients'. That is, there might have been 'indiscriminate leave approvals' given in Agreement Services. Mr McIlwain had similar concerns with respect to Mr Forbes, following views expressed by him concerning Work Choices. 65 By October 2006 the OEA had already had the experience of the 2005 NDCP and of the June protest. There is no evidence that the OEA was burdened with a disproportionate number of leave applications or that leave had been granted excessively on either of those occasions. In respect of the June protest, Mr McIlwain, in consultation with Ms Skarratt, determined that the same ban on leave should apply as that which had applied for the 2005 NDCP. However in doing so, no inquiry was made to ascertain whether there had been any increase in workload in any unit of the organisation during the 2005 NDCP. 66 Mr McIllwain was not prepared to assume that the experience of the 2005 NDCP would provide a useful guide. He said the ban was imposed on Wednesday 28 June because events were planned across Australia on that morning and the ban was extended for the remaining days of that week. Before imposing the ban for the NDCP Mr McIlwain did not make enquiries to ascertain the volume of applications for leave for the first two days of the June protest nor enquire whether there had been any increase in leave applications during the remainder of the week. 67 Also of concern to Mr McIlwain and Ms Skarratt was the possibility of unauthorised absences, and each rely upon this factor as constituting a motivation to make the decision to prohibit leave. Mr McIlwain testified however that unauthorised absences, whilst they 'arose from time to time' were not a widespread problem. 68 There is no evidence that promotional material for the NDCP was seeking to encourage employees to take unauthorised leave to attend, and the advertisements included a reminder of the need to apply for leave. No inquiries were made by Mr McIlwain of the possibility of unauthorised absences and it was not a factor which loomed large in the minds of other senior officers in the OEA such as Mr Rushton. 69 A further reason advanced by Mr McIlwain for imposing the general prohibition on leave was the need for fairness between offices and units within the OEA. Mr McIlwain testified that 'every area of the organisation makes a contribution to providing services to our clients', and he wished to ensure that the blanket ban applied to all employees equally. He considered it prudent to impose the ban because of the possibility of an increase in workload which ordinary staffing levels might not be able to accommodate. 70 Had investigations been made into the events surrounding the 2005 NDCP and the June protest, it would have been determined that there were no significant increases in applications for leave on either of those occasions. Although the lack of applications might have resulted from the implementation of the ban in respect of the 2005 NDCP, no such inference could be drawn in respect of the June protest. Even after two days of the protest there was no significant increase in absenteeism adverse to the operations of the OEA. That event may have been considered of even greater detriment to the potential provision of services by the OEA because of its week long duration. Further, before imposing the ban for the June protest Mr McIlwain had made no inquiry to ascertain whether there had been any increase in workload for the 2005 NDCP. Similarly before imposing the ban on the NDCP, he had not made any inquiry to ascertain whether there was any increase demand on either the first or second days of the June protest. 71 As with other days of potential absenteeism, such as sporting events, an assessment could have been made of the levels of staffing required to maintain normal service provision within the OEA. In this instance however no such assessment was made. Nor does it appear that there was any real assessment of the effect of unauthorised absences. 72 Mr McIlwain advanced another reason for imposing the ban, namely backlog of 20,000 AWAs awaiting processing. However, such concern cannot be sustained in view of Mr Steven's evidence that there was no urgency in achieving the requisite targets. 73 Mr McIlwain's concern of higher demand on the NDCP is also unsustainable in view of the fact that he made no inquiry of the local mangers as to whether there was the likelihood of such impact resulting from the 2006 NDCP. Similarly, Mr McIlwain's fear of unauthorised absences cannot be sustained in view of the absence of any such history in respect of the previous protests. 74 In view of the above findings the Court is satisfied that the motivation of the OEA, albeit arising from the concern to provide adequate staffing, was not founded upon a genuine assessment of operational requirements and that the ban was accordingly unjustified. 75 Despite such findings, there is no evidence from which the Court can infer that the immediate purpose of the OEA in imposing the ban was directed to any of the matters referred to in s 793(1) of the Act. The evidence establishes that the NDCP was not purely a union event but was aimed at the wider community, including union and non union employees. It was not industrial action but was a community campaign to express opposition to controversial amendments to industrial relations legislation. Even if an inference could be drawn that the ban on leave was imposed for the reason that senior management in the OEA were concerned to prevent OEA staff protesting the very legislation they were employed to administer, a breach of s 792 is not established because such reason is not one of the reasons enunciated in s 793(1) of the Act. The fact that arguably proper and genuine assessments of operational requirements were not carried out does not detract from the Court's finding that the immediate purpose of the ban was to ensure provision of sufficient staffing levels in order to ensure adequate service provision in the OEA on the NDCP. 76 The Court determines that the OEA has discharged its onus to show that the ban was not imposed for a prohibited reason within in the meaning of s 793(1) of the Act. As such it follows that there has been no breach of s 792(1) of the Act.

[56]

Breach of AWA 78 Clause 28 of the AWA between Mr McCarron and the OEA specifies ordinary hours of work and the hours of work that employees are to record on their flex sheets for days on which they are absent from work for various reasons such as public holidays. It specifies one or four week settlement periods and permits employees and their managers to make agreements for different settlement periods and patterns of hours. Clause 28 does not provide for flex leave and the Court is unable to find that the actions of the OEA in refusing leave on 30 November 2006 could constitute a breach of clause 28 of the AWA. 79 Mr McCarron was entitled to have his leave applications properly considered by the OEA pursuant to the terms of his AWA. Pursuant to clause 30 of the AWA the approval of flex leave is subject to operational requirements. However the existence of operational requirements must be demonstrated and must be genuine and reasonable. The decision of the Full Court in Tasmanian Development and Resources v Martin (2000) 97 IR 66 at [26] provides support for a finding that there must be a factual basis for a conclusion that there were operational requirements which necessitated the ban on leave. The reasons advanced for operational requirements as referred to above amount to no more than, at the highest, an apprehension of staff shortages on the NDCP. Such fear was not based upon any enquiries of past experiences, nor any genuine assessment of the real staffing needs on the NDCP. Had enquiries of the relevant managers been made, the decision to impose the ban would at least have had a foundation. Such enquiries however would have revealed that a total ban, based on the experience of the two prior occasions, would not be necessary. Accordingly, the reasons advanced in support of the decision do not constitute a sufficient basis for imposing the ban on leave. It follows that by imposing such ban the OEA breached clause 30 of Mr McCarron's AWA with the OEA. 80 The CPSU and Mr McCarron also claimed that clause 33 of the AWA between Mr McCarron and the OEA was breached. The text of clause 33 is couched as a statement of the role of the relevant manager in ensuring that flex-leave arrangements provided by clause 30 are made available to employees. The OEA made no submissions on this issue, and in view of the Court's finding that clause 30 has been breached, it is not necessary to determine whether clause 33 creates a contractual right, and if so, whether it has been breached. 81 Although no submissions were made in relation to the issue of the applicability of the doctrine of implied terms in respect of Mr McCarron's AWA, there is no apparent reason why such doctrine should not apply to imply a term that the operational reasons referred to in clause 30 of the AWA be 'genuine operation reasons' determined after proper inquiry. The doctrine which applies only where it is necessary to give efficacy to an agreement, was considered by the Judicial Committee of the Privy Council in BP Refinery (Westernport) Pty Limited v President, Councillors and Ratepayers of the Shire of Hasting (1977) 180 CLR 266. Had the parties applied their minds to the question of whether a proper assessment would be made to determine whether a total ban on leave was necessary or that only genuine reasons could justify a ban, the result would have been so obvious that it 'goes without saying' (see BP Refinery 180 CLR 283). Whilst the doctrine of implied terms is not applicable to an industrial award (see Byrne v Australian Airlines Limited (1995) 185 CLR 410), the terms under which Mr McCarron was employed was an agreement, and not an award. It is not necessary to decide this issue in view of the finding that there were no operational reasons which justified the ban on the NDCP thereby resulting in a breach of clause 30. If it were necessary in order to give efficacy to the AWA to imply a term requiring the provision that 'operational requirements' means 'genuine operational requirements', the Court would imply such a term, and would find that such implied term was breached.