s.739 - Dispute resolution

Alleged dispute about any matters arising under the enterprise agreement - consultation requirements - application for interim orders.

[1] The National Tertiary Education Industry Union (NTEU) has made an application for the Fair Work Commission to deal with a dispute arising under the Deakin University Enterprise Agreement 2017 [1] (Agreement) . The dispute relates to the consultation requirements in clause 58 of the Agreement as they apply to change occurring at Deakin University (University).

[2] The NTEU has sought interim orders from the Commission in relation to the dispute. The form of the interim orders is:

Until such time as the dispute notified on 27 May 2020 has been resolved between the parties or there has been a further order of the Commission, the Respondent must not:

(a) Continue to consult with its employees regarding matters raised by the Redundancy Decision;

(b) Progress the implementation of any change proposal that is the subject of the dispute;

(c) Such other orders as the Commission deems appropriate. The University oppose the granting of the interim order.

[3] The NTEU and University agree on the relevant principles applicable to such an order - they are that there is a serious issue to be tried (or question to be answered) and that the balance of convenience supports the granting of the interim order.

[4] I would add that, of course, it must be that the matter is within the jurisdiction of the Commission to determine.

[5] On Tuesday, 30 June 2020 I issued my Decision and Order in this matter. I indicated then that I would issue reasons for decision in due course. These are my reasons.

[6] Much of the background is not in contention and is set out in the witness statements of Mr Bryan Gillis, Workplace Relations Manager for the University and Mr Kean Selway, Chief Operating Officer for the University. In short the following events have occurred.

The University Council met and considered the "Budget and Sustainability Program (BSP) measures to manage the COVID-19 pandemic. The elements of the BSP are, in summary:

• significantly cut expenditure on planned capital works over the coming 5 years;

• pause non-staff related discretionary spending;

• minimise spending not directly related to teaching and research;

• pause all new recruitment not critical to the University; and

The Vice Chancellor requested the University Executive members to prepare proposals on how to reduce employment costs (the Major Workplace Change (MWC) Proposals) guided by 'universal principals'.

The Vice Chancellor sent an email to all staff regarding the impact of COVID-19 and outlined the steps that the University was going to have to make:

We have already made changes to reduce expenditure such as stopping new project investments, minimising new appointments and cutting non-essential spending. These have helped, but we are going to have to make more significant changes to navigate the next 12-18 months successfully.

We will be very substantially reducing or delaying our capital and project investments. These reductions will impact on several significant investments we have been planning, and I know this will be disappointing for many.

We will also continue to minimise all non-essential expenditure wherever possible and focus on those activities that speak the most strongly to our core activities - education and employability, and ideas and innovation.

Although we will be doing so with a heavy heart, it will be impossible to avoid redundancies given that employment costs are more than half of our total expenditure. These decisions will be shaped so that we ensure focus on our core activities of Education, Research and Innovation.

A special University Council meeting was held. A reported outcome of that meeting was that:

Council noted that 55% of the University's total revenue goes towards staff salaries. Inevitably the Budget Sustainability Program involves the potential displacement of staff. Council discussed the need for the University to ensure that staff facing redundancy receive strong support not only in terms of their financial entitlements but also their mental health and general wellbeing.

15 MWC proposals were provided to the Vice Chancellor covering 4 faculties and 11 professional areas of the University.

The Vice Chancellor held a Town Hall meeting with staff of the University via Zoom. The speaking notes of the Vice Chancellor indicate that he said that:

As a University we spend 55% of our total revenue on our staff, and whilst we want to minimise staff impacts, it is not possible to adjust to where we need to be for the next few years without looking at our employment costs as well as curtailing expenditure, as I have already described.

Over the past weeks we have been looking at the options available to us to manage these challenges. As I committed to you in my earlier email, we have continued to examine all options available to us, including cost avoidance and containment, in addition to considering staffing reductions, with the overriding principle that any decisions will be made on the basis of what is best for Deakin as a whole.

We are taking a staged approach regarding the changes that we will need to make. We recognise that there is still considerable uncertainty in what will happen in the coming 12-24 months and Phase II must take account of both that uncertainty and our new Strategy...

I had planned to present to you today the outline of the Phase I changes that we were proposing, but, in light of yesterday's information, it is now our view that we cannot proceed with this without carefully considering the National Framework and the implications for Deakin.

The Vice Chancellor sent an email to staff that covered most of that said at the Town Hall meeting the day before. That email said, in part:

There are two phases to the actions that I believe we need to implement. Phase I is based on the immediate actions we need to take to manage the issues we currently face, and Phase II looks to more medium‐term changes. Phase II will focus on how we shape the University in the context of both a changed external environment and a new University Strategic Plan.

A further Special University Council meeting was held.

The Vice Chancellor again held a Town Hall meeting with staff via Zoom. In that meeting he said:

You know that, over the past month or so, we have been looking at the options available to us to manage these challenges. This includes cost avoidance and containment, staff reductions and, most recently the Australian Universities Job Protection Framework I talked to you about at the last briefing.

...Today I am presenting to you the 2020 components or Phase 1 of our approach.

The proposals that I have now received from the Executive and approved for putting to you, our staff, anticipate a possible reduction of around 400 positions - not FTE. Of these about 100 are vacancies that are currently unfilled, leaving around 300 positions that the consultation process will consider...

We prepared...proposals for major workplace change across all faculties and portfolios and now intend commencing consultation with you later this week and into next week.

The release of these documents to you will commence consultation in accordance with clause 58 of the Deakin University Enterprise Agreement 2017.

[7] The process of consultation subject to the dispute before me commenced on 9 June 2020. To date no proposals have been implemented.

[8] Clause 58 of the Agreement governs the consultation requirements. It states, in part, as follows:

58.1 Management of major workplace change is enhanced by genuine consultation between the University, the NTEU and staff members affected by the change prior to the University implementing major workplace change.

58.2 Major workplace change means changes in organisation, structure or technology that are likely to have significant effects on staff members.

58.3 Significant effects include, but are not limited to:

(a) terminating the employment of staff members as a result of redundancy;

(b) major changes in the composition of the University's workforce;

(c) major reduction in the size of the University's workforce;

(d) eliminating job opportunities, promotion opportunities or job tenure;

(e) major changes to average hours of work required to be performed by professional staff members outside the span of hours set out in clause 43 of this Agreement;

(f) transferring staff members to another work location which is more than 15kms from a staff member's existing work location;

(g) restructuring jobs in situations involving more than two staff members within the same organisational unit; or

(h) proposals to outsource key services or contract out key services currently provided by staff members.

58.4 For the avoidance of doubt, major workplace change does not include:

(a) the creation of or appointment to a new senior position within the University or change of reporting lines, unless the change results in significant effects on staff members within the meaning of clause 58.3; and

(b) termination of employment of a single staff member.

58.5 Where the University has developed a formal proposal to introduce major workplace change, the University will consult affected staff members and the NTEU prior to finalising a decision to proceed with the major workplace change...

[9] The NTEU submits that the issues on which it is in dispute with the University are:

(a) Whether the University made a definite decision to proceed with redundancies prior to consultation with the NTEU and employees (as evidenced by the Vice Chancellor's statement).

(b) Whether the University has made an institution-wide decision about organisational change and redundancies (as evidenced by the Vice Chancellor's statement), and if so, whether it is required by the terms of the EBA to consult with the NTEU and employees about that institution-wide decision.

(c) Whether proceeding to consult about numerous piecemeal change proposals defeats the capacity to meaningfully consult about the institution-wide decision.

(d) Whether proceeding to consult about numerous piecemeal change proposals is exacerbation of the dispute.

(e) Whether informing individual staff that their positions have been slated for redundancy in change proposals which had not, at that time, been promulgated, is exacerbation of the dispute.

[10] The NTEU submits that the email of 20 April 2020 and actions of the University from the Vice Chancellor to all staff up to 25 May 2020 is evidence of a proposal to introduce major change by the University that will have a significant effect on employees such that the requirement to consult was triggered at the University-wide level.

[11] The NTEU submits that the proposal considered by the University Council on 7 May 2020 was a formal proposal to introduce workplace change within the meaning of clause 58.5 of the Agreement.

[12] The NTEU says that the 15 change proposals[2] put out by the University for the purpose of consulting with staff in the separate faculty and professional areas each contain the same background, objectives and reasons for the change. It says that feedback on the proposals is required to be sent to a centralised email address and not to management in the faculty or professional area to which the proposal relates. In this respect the NTEU says that the proposals are "cookie cutter" proposals.

[13] The NTEU submits that the email to staff on 20 April 2020 and the subsequent consideration by the University Council on 7 May 2020 demonstrate that the University had, by that time, developed formal proposals for change.

[14] The NTEU says that the offer of the University to the NTEU to suggest alternative approaches to the proposals does not meet the consultation obligations of the University.

[15] The NTEU submits that the balance of convenience lies with granting the interim relief sought. It submits that to leave the matter to a full hearing of its application would enable the University to continue with consultation at the faculty or professional group whilst the decision to reduce the workforce by 400 is "not open to question". The effect would be that consultation on University-wide changes would not occur but piecemeal consultation could continue on implementation of previously agreed changes would continue. This, the NTEU submits, would undermine the purpose of consultation.

[16] The University submits that, where the relief in interim orders are such as those sought by the NTEU, it is not enough that there is an arguable case but that there must be a strong prima facie case such that the interim orders should be granted. In this case it says that the NTEU has not demonstrated that it has a strong prima facie case. It therefore says that the NTEU fails on its first limb.

[17] Further, the University submits that the interim orders sought by the NTEU are inconsistent with the terms of the Agreement such that they could not form final orders. The University submits that the Agreement limits the operation of the status quo to a period ending 5 days after the procedures in clause 59.3 of the dispute settling procedure have been completed.

[18] The University submits that the requirement to consult under clause 58 of the Agreement is only enlivened when there is a formal proposal for change. The University submits that the only formal proposals for change are the 15 individual and detailed MWC faculty/professional proposals currently subject to consultation. It says that it is engaged in consultation with staff at the level of each MWC. The University submits that it is apparent from these various proposals that there is not a single formal proposal for major change at the University such that consultation should be required at any level than that currently being undertaken.

[19] The University says that, in addition to the required consultation it is undertaking at the level of the MWC proposals, it has sought any input from the NTEU. It submits that its invitation to the NTEU has not resulted in the identification by the NTEU of the matters they would wish to discuss.

[20] The University says that the deliberations at the University Council and Executive cannot be characterised as formal proposals for workplace change such that consultation at the University-wide level is required under the Agreement.

[21] The University relies on the decision in National Tertiary Education Industry Union v La Trobe University[3] in support of its proposition that the statements by the Vice Chancellor were "merely forecasting, and not a concrete proposal which would enable consultation in accordance with clause 58 of the Agreement."

[22] The issue in dispute between the University and the NTEU goes to the level at which consultation on the change proposed by the University is required by the consultation obligations in the Agreement. The resolution of that dispute rests on a determination of whether there was a formal proposal for change developed at the University-wide level or if the 15 individual WMC proposals are each individual and separate proposals for change and therefore subject to consultation at the faculty/professional level.

[23] There is no doubt that consideration of the need to implement change that effected both appointments to vacancies and that would encompass the need to reduce existing staff was underway as early as 20 April 2020. The email of the Vice Chancellor to staff is testament to this.

[24] There can be no doubt that at this stage there was no formal proposal. It would appear, on its face, that the University was aware that it would need to reduce staff to meet the constraints caused by COVID-19 but had not yet formalised details. Forewarning of staff cannot be equated to a formal proposal. A formal proposal suggests some level of consideration (such as through the Council) and decision to present that proposal beyond the point of consideration. By the same reasoning however, the lack of a minuted decision of the Council or Executive to take some course of action is not evidence of the lack of a formal proposal.

[25] I accept that that between 7 May 2020 and 25 May 2020 the University did develop a formal proposal to reduce staffing by about 400 through both a freeze on appointments and through the reduction of 300 staffed positions. I consider it arguable that this decision was made at a University-wide level either through the accumulation of the faculty/professional WMC proposals or by a decision at the University-wide level then delegated to and articulated through the faculty/professional WMC proposals.

[26] That the University did not produce a single proposal that it has used for consultation does not, on its face, mean that there was not a formal decision by the University to introduce major change that would result in redundancies.

[27] It is arguable that, given the similarities between each of the 15 proposals, there is a formal proposal at the University-wide level to restrict appointments and reduce staff numbers. That all of the proposals arose from a request to the University Executive from the Vice-Chancellor is strongly indicative of a co-ordinated and centralised process amenable to consultation at the University-wide level.

[28] On the basis of the information before me I am therefore satisfied that it is arguable that the redundancies (and freeze on appointments) is a University-wide formal proposal that is open to the consultation requirements at the University level pursuant to clause 58 of the Agreement.

[29] I agree with the NTEU that, should it not be successful at the final hearing of the application the University will have lost no more than time - it will be entitled to pick up the process from that point it was at when the decision for interim relief was granted. Should the NTEU be successful at final relief, the University will have to recommence the consultation process at the University-wide level.

[30] Should the interim relief not be granted and the NTEU is successful at the final hearing of its application it may well be too late for the final relief it seeks to have any meaning - by that time the University may well have completed its consultation at the faculty/professional level, employees informed of their future and there may well be little for the NTEU to be able to influence in terms of the options open to the University in confronting the challenges facing it.

[31] This strongly supports a finding that the balance of convenience rests with granting the interim orders as sought by the NTEU. It will be highly prejudiced should they not be granted.

[32] On consideration of the issue I am satisfied that the balance of convenience favours the grant of the application and the issue of interim orders.

[33] I do not consider it necessary that the interim relief sought be the same as the final relief. The interim relief is a step taken to ensure that the position of the parties is not prejudiced whilst final relief is determined. I do note the arguments of the University that the interim relief grants a "status quo" not otherwise available under the Agreement.

[34] The dispute settling procedure in the Agreement provides, in part, as follows:

59.3 The parties to the dispute will endeavour to resolve the matter within 10 working days. Any resolution will be in the form of a written agreement between the parties to the dispute.

59.4 The Executive Director, Human Resources, will notify the Deakin University NTEU Branch President of the dispute should the NTEU not be involved in the processes under clauses 59.2 or 59.3.

59.5 Until five working days after the procedures described in clause 59.3 have been exhausted:

(b) no industrial action will be taken by any party to the dispute;

(c) the parties to the dispute will not change the work, staffing or the organisation of the work if this is the subject of dispute, nor take any action likely to exacerbate the dispute; and

(d) the subject matter of the dispute will not be taken to the Fair Work Commission.

59.6 If the dispute remains unresolved following the steps set out in clauses 59.2 to 59.4, the matter may be referred to the Fair Work Commission...

[35] I do not consider that the interim order sought is contrary to the dispute settling procedure. Whilst clause 59.5 of the Agreement provides a period within which things will not change (clause 59.5(c)) it is not apparent that a pause on the course of conduct of the University is otherwise contrary to the Agreement. If it was the case that the University was correct other parties to the Agreement would have no recourse to have matters put on hold pending conduct of arbitration in circumstances where the University intended to proceed in relation to a matter in dispute.

[36] In any event I would note that the proposed order does not seek an unlimited halt to the processes of the University but only until such time as the dispute proper is resolved.

[37] For these reasons I decided to grant the application of the NTEU.

[38] The application will be listed for mention and directions at 2.00pm Tuesday, 7 July 2020. The conciliation conference scheduled for the time and date stated above will immediately follow.

[39] I note and accept the submissions of the University that this matter should be heard expeditiously. The parties are therefore directed to confer with a view to developing consent directions prior to the date of the mention.

L. Gale for the National Tertiary Education Industry Union.

[2] See exhibit Deakin 1, attachment BG-1.

[3] [2014] FWC 5806.

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