AAPT LIMITED BENDIGO CONTACT CENTRE CERTIFIED AGREEMENT

Alleged dispute concerning clauses 10 and 20 of the agreement.

[1] By application dated 3 April 2008, the Community and Public Sector Union (CPSU) sought a dispute settlement procedure as provided for by the AAPT Limited Bendigo Contact Centre Certified Agreement (the Agreement). The matters in dispute relate principally to the proper operation of clause 20.6 of the Agreement dealing with alternative employment. Depending upon a finding in relation to that matter, other clauses of the Agreement may come into play.

[2] Several conciliation conferences were held but complete agreement was not reached although the parties were able to agree on a number of matters which did not have to be argued in arbitration

[3] The matter came on for hearing on 19 September 2008 and Ms K Von Barnveld appeared for the CPSU, Mr R Marasco appeared for Excelior.

[4] As mentioned earlier, as a result of conciliation, a number of facts and issues were agreed by the parties to this matter. This, agreed facts document, is attached.

[5] In short however, the background may be described as follows: on 27 May 2007, Excelior took over the AAPT contact call centre operations in Bendigo. As provided by the Workplace Relations Act 1996 (the Act), Excelior was bound by the terms and conditions of the Agreement.

[6] During August 2007, 22 sales positions at the Bendigo call centre were made redundant. All employees were transferred into customer service roles and no offers of redundancy were made. The employees maintained their base ordinary rate of pay and classification under the AAPT Agreement, however, the incentive payments, shift patterns, and shift penalty payments differed between the sales and service roles. The incentive payments do not form part of the Agreement.

[7] The 22 employees were advised of the transfer on 13 August 2007 and training began shortly after that. Of those 22 employees, three now argue that the positions offered to them do not constitute alternative employment and as such it is submitted that they are redundant in accordance with the Agreement.

Where AAPT is able to identify and offer an alternative position to an employee in lieu of termination of employment for reason of redundancy, the employee is not entitled to severance pay provided that the alternative position is reasonably comparable in terms of pay and classification. The alternative position may be at the same work location or based at a different work location, provided that the employee will not forfeit the entitlement to severance if it is unreasonable for the employee (in his or her circumstances) to permanently transfer to a different work location.

[9] The issue for determination is whether the three employees transferred from sales to a customer service role, with no offer of redundancy, were provided with alternative employment that was reasonably comparable in pay and classification to their original positions. In the alternative, the Commission is being asked to make a finding that as the employees are required to undertake employment carrying a lower rate than that received in their sales roles their original wage should be maintained.

An employee who may be directed to do work carrying a lower rate than his/her ordinary level shall suffer no reduction in pay in consequence thereof.

[11] The CPSU accepts that the sales and service roles have the same classifications under the Agreement; however, the CPSU argues that the customer service positions are not comparable to the sales roles in pay. The CPSU contends that the reduction in incentive payments and the loss of shift loadings have affected the employees' take home wage. The CPSU submits that the Commission should take into account the incentive and shift loading payments, rather than; 'just their base pay rate.' [Transcript PN72] It seeks to include the Commission structure as a part of their pay.

[12] Excelior contends that the Commission should not take into consideration, in determining whether the employees were transferred into acceptable alternative employment, either the incentive payments or the shift penalties as neither are guaranteed to the employees. [1]

[13] It is further argued by Excelior that the incentives do not form part of the contract of employment or the Agreement, and that the employees were required to sign a declaration which stipulated that the incentive payments were 'not a guarantee of any specific level of remuneration.' [2]

[14] It was further contended that the employees no longer received shift penalties for the simple fact that they were no longer required to work antisocial hours, for which these shift penalties were intended to compensate.

[15] Witness evidence was provided by the three affected employees; Peter Scott Kennedy, Jacqueline Marie Robertson, and Jessica Cassidy.

[16] The evidence sought to demonstrate the differences between the sales and service roles. In the sales role, employees receive inbound sales queries from both pre-existing and new customers. The customer service role, on the other hand, requires the employees to answer general calls ranging from billing enquiries to customer complaints.

[17] Further evidence was provided by the witnesses concerning the receiving of incentive payments in the sales position. The employees received incentive payments through the 'On-Track Incentive Sales Incentive Plan' (OTI), a copy of which was provided by the CPSU. [3] To qualify for a payment, the employees were required to meet all call quality and conversion rate targets.

[18] The customer service role also includes an incentive plan, known as the 'Short Term Incentive Scheme' (STI). A copy of this plan was also provided by the CPSU. [4] This is an annual payment that is based on the performance of the business and the individual performance of the employee.

[19] Each witness gave evidence that since their transfer into the customer service role they had received a substantial reduction in pay.

[20] The following table is what each employee estimated that they would lose in income resulting from the transfer.

Estimate of loss of income [5].

[21] The most significant aspect of this case is said to be the loss of earnings associated with the alteration to the bonus system under which these employees operated. Those earning almost exclusively related to a change in the bonus system occasioned by the change in the nature of work from an inbound sales area to an inbound enquiries function. The loss of a shift loading, whilst important, does not seem to be the focus of the controversy. These are ordinary earnings but, by themselves in the context of this matter, do not seem to be at a level which would lead to a successful challenge that these positions were not acceptable alternative employment.

[22] A Full Bench of the Commission stated in Australian Chamber of Manufacturers v Derole Nominees Pty Ltd:

"What constitutes 'acceptable alternative employment' is a matter to be determined, as we have said, on an objective basis. Alternative employment accepted by the employee (and its corollary, alternative employment acceptable to the employee) cannot be an appropriate application of the words because that meaning would give an employee an unreasonable and uncontrollable opportunity to reject the new employment in order to receive redundancy pay; the exemption provision would be without practical effect.

Yet, the use of the qualification 'acceptable' is a clear indication that it is not any employment which complies but that which meets the relevant standard. In our opinion there are obvious elements of such a standard including the work being of like nature; the location being not unreasonably distant; the pay arrangements complying with award requirements. There will probably be others." [6]

[23] The employer bears the onus of establishing that the alternative employment obtained in a particular case was acceptable. The determination of that issue may involve a consideration of such matters as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and travelling time. [7] These factors impact upon the objective assessment as to whether or not there has been acceptable alternative employment.

[24] CPSU directed my attention to Von Bibra Robina Autovillage Pty Ltd [8] in which Richards SDP dealt with an application by the Von Bibra Robina Autovillage to vary or set aside an obligation to pay redundancy to Mr Timothy Van Riet in accordance with the Vehicle Industry - Repair, Services and Retail Award 2002. It was necessary for the Commission to determine whether the employer had obtained acceptable alternative employment for Mr Van Riet after making his original position redundant.

[25] SDP Richards found that the alternative position offered the same remuneration as the original, however, some conditions of employment differed, including the removal of usage of a motor vehicle, alteration of the commission structure, and a change in the target sales market.

[26] Considering these facts his Honour found the transfer from a wholesale sales position to a retail sales position was critical in determining whether or not the new position constituted acceptable alternative work. His Honour concluded that due to the 'insufficient connection with the employee's demonstrated skill set and experience [9] it was not acceptable alternative employment. Whilst His Honour referred to the commission structure it did not seem decisive in his finding. This is unlike this case where the commission structure is the central element of the controversy.

[27] It appears to me that a number of factors fall in favour of the new positions being considered as acceptable alternative employment. They are:

• The duties have similar work value. This is demonstrated by the fact that there has been no need to alter the classification of these employees under the Agreement, and

[28] The Commission structure is the kernel of the issue as there is a significant loss of income.

[29] It is argued by Excelior that the sales incentive plan did not form part of the Agreement and further, a provision of the plan stated:

"The Company reserves the right to change any aspects of the Sales Incentive Plan, at its discretion, at any time. Where it is practical to do so, the company will provide reasonable notice of any changes to the Sales Incentive Plan. The components of the Sales Incentive Plan do not form part of any employment contract and the Sales Incentive Plan does not guarantee a level of income."

[30] CPSU argue that the level of earnings from the Commission was significant and consistent and should be treated as a part of income.

[31] There is no doubt that the alteration to the commission plan from OTI to STI does constitute a significant amount of income which is lost in the transfer to the new employer and new job. However, the nature of the plan and the income derived from it was not guaranteed.

[32] Further, the terms of the plan make it plain that it does not create any entitlement to payment nor any level of payment. In terms of the operation of the Agreement it can not be linked with pay and classification. It would be inappropriate to extend the meaning of pay under the agreement to something unknown to the Agreement.

[33] It is apparent from a reading of the authorities that entitlements, broadly described, form the relevant comparators for an objective assessment in relation to what may or may not be acceptable alternative employment.

[34] Against the background of the terms of the commission plan I find that Excelior has provided alternative employment to the persons concerned and that clause 20.2 of the Agreement has been properly applied.

[35] It follows that the operation of clause 10.2 does not arise for consideration.

K Von Barnveld for the CPSU, the Community and Public Sector Union.

s.170LW - pre-reform Act - Application for settlement of disputes (certified agreement)

1. Excelior Pty Ltd ("Excelior") offers outsourcing business solutions to the Contact Centre industry.

2. Excelior took over AAPT contact centre operations in Bendigo on 27th May 2007.

3. The transmission of business rules in the Workplace Relations Act 1996 mean Excelior remained bound by the AAPT Limited Bendigo Contact Centre Certified Agreement ("the AAPT Agreement") until 27 May 2008.

4. The AAPT Agreement was certified pursuant to s.170LK of the pre-reform Workplace Relations Act. The CPSU is also a party to the EBA.

5. In August 2007, Excelior made 22 positions in Sales in Bendigo redundant.

6. Excelior transferred the 22 employees that occupied those positions into Customer Service roles.

7. All employees who were transitioned into a Customer Service role in AAPT (including the 4 employees currently being represented by the CPSU) maintained their base ordinary rate of pay.

8. There were changes in Incentive Payments and Shift Patterns (and therefore Shift penalty payments).

9. The sales and Customer Service roles have identical classifications under the AAPT Agreement (clause 22.1).

10. The employees concerned were advised of the changes on August 13th 2007.

11. Following notification of the changes, employees were trained in two groups. The first group started on 15th August 2007 and finished on 28 August 2007. The second group started on 29 August 2007 and finished on 11 September 2007. Schedules were changed for training to 9 am - 5 pm Monday to Friday. After the completion of training, employees were put into service on a rotating schedule.

12. In mid-October 2007, all remaining Sales positions (26) were made redundant.

13. Excelior could not accommodate all 26 employees in Customer Service so voluntary redundancies were offered to these employees. Approximately 13 employees accepted a redundancy at this stage. The remainder stayed and moved into either Customer Service or technical helpdesk roles.

14. Voluntary redundancies were not offered to employees who had already been moved into Customer Service roles due to the changes in August 2007.

15. All employees who are employed to undertake AAPT work are eligible to receive a performance incentive. There are different incentives for Sales and Service functions. (Please attach copies of the two Incentive schemes.)

16. There is no provision for an incentive payment in the AAPT Agreement.

17. A grievance in relation to a breach of the AAPT CA was lodged by the following employees: Pete Kennedy, Ross Dohnt, Jessica Cassidy and Jacqui Robertson. The CPSU is representing these employees in relation to this matter.

[5] These are estimates derived from seeking to reconcile the evidence and the submissions of Ms Von Barnveld at PN463-438

[7] Re: Clothing and Allied Trade Unions of Australia v Hot Tuna Pty Ltd 1988 [27 IR 226], pp.230-1

[8] PR977090, 16 May 2007 at para 28

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