PSA v Dept. Industry & Investment

PSA v Dept. Industry & Investment - [2010] NSWIRComm 1026 - NSWIRComm 2010 case summary — Zoe

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1 The Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales (the applicant) filed a dispute under section 130 of the Industrial Relations Act 1996 on 1 April 2010. The respondent to this dispute was the Department of Industry & Investment. 2 The dispute was expressed in the following terms The PSA is applying to cease the pending announcement of voluntary redundancies to the workforce of the Department of Industry & Investment. No further action should be undertaken until there has been full and proper consultation with the PSA regarding the proposed workplace structural reforms. The current general offer to seek expressions of interest for voluntary redundancies is contrary to the NSW government's "Managing Excess Employees Policy". The policy requires change management plans, criteria of what defines excess employees and definition of change in the workplace. None of these issues have been addressed by the Government. 3 The dispute centres around the requirement by the State Government for the respondent to reduce its workforce by approximately 90 employees by offering voluntary redundancies through a general expression of interest communiqué directed to its workforce. The respondent has set the last day of work for those chosen to be around 24 June 2010. 4 The dispute came before Bishop C who held a number of conciliations prior to raising a Certificate of Attempted Conciliation on 16 April 2010. 5 The applicant then pressed a section 173 and the matter was re allocated to the Commission as presently constituted. 6 On 19 April 2010 the applicant by correspondence to the Commission set out their proposed award entitled Crown Employees (Department of Industry and Investment-Redundancy Consultation) Award. (the redundancy award) 7 A mention of the matter was held on 23 April 2010 when Directions for the filing and swerving of evidentiary material was provided to the parties and dates of 1 and 2 June 2010 were set. 8 The matter was relisted on 13 May 2010 when a threshold issue was raised by the respondent and the matter was set down for hearing of this issue on 19 May 2010. 9 On 13 May 2010 the Commission was advised that approximately 302 employees had responded to the expression of interest and that the respondent had identified 103 for tentative approval. 10 On the same day the applicant advised by correspondence that they would be seeking the following interim order to preserve the status quo: "That the Department of Industry and Investment not proceed with offering voluntary redundancies to its employees, pending the arbitration and determination of these proceedings." 11 On 19 May 2010 the Commission heard argument with respect to the applicant's claim for an Interim Order and the respondent's claim that the application for an award was contrary to a Memorandum of Understanding (MOU) signed by the NSW Government and the applicant covering the period from 1 July 2008 and 30 June 2011 and the industrial award covering the employees that being Crown Employees( Public Sector Salaries-2008) Award (the award).

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Case for the Applicant. 12 In its submissions the applicant stated that the Commission had the power to make orders preserving the status quo pending the arbitration of an industrial dispute. The status quo in this matter being where no employee is made redundant. 13 In determining whether interim orders should be made, the applicant went to Castlemaine Tooheys Ltd v South Australia for guidance in considering whether there is a serious question to be tried, whether the applicant will suffer irreparable injury and whether the balance of convenience favours granting an injunction. The criteria identified in the above case should not be applied strictly or inflexibly. The Commission has a broad discretion to fashion appropriate relief by reference to the merits of the industrial dispute itself. 14 By making a general call for expressions of interest in voluntary redundancy without identifying its proposed structure the respondent has denied the applicant the opportunity to properly consult with its members, asses the impact of the redundancies on the services and functions of the respondent and workload of its members and ensure that redundancies are minimised.. If offers of redundancy are made, acceptance by employees will be immediate. 15 The balance of convenience favours the making of interim orders restraining the respondent from offering voluntary redundancies pending the hearing and determination of the proceedings listed for hearing on 1-2 June 2010. The orders sought would have the effect of restraining the offers of voluntary redundancy for a period of two weeks at most. 16 With respect to the no extra claims objection, the applicant stated that clause 8(iii) of the award also refers and incorporates the no extra claims commitment in clause 8 of the MOU. Clause 8(iii) of the award does not purport to expand upon the operation of clause 8 of the MOU. 17 It was the submission of the applicant that the redundancy award application made is not precluded by either clause 8 of the MOU or clause 8 (iii) of the award. The applicant submitted that the redundancy award application made by the applicant which is the subject of the dispute proceedings is not a claim that fulfils the description of "no extra wage claims, claims for improved conditions of employment or demands made in respect of the employees covered under the award" for the purposes of clause 8 of the MOU. It seeks no more than the respondent consult with the applicant. Secondly clause 8 of the MOU should be interpreted by reference to the matters that were in contemplation of the parties at the time the agreement was made and will not be interpreted as preventing a party advancing claims with respect to matters not contemplated at the time of the signing of the MOU. 18 The applicant stated that in approaching the construction of a no extra claims clause whilst a strict approach is to be adopted to the construction one must be alert so as not to ignore the actual words used in the provision or to ignore the actual words used in the provision or to ignore an attempt by the parties to limit the terms of the commitment. Appeals to the widest conceivable literal meaning of the words used in a no extra claims provision are liable to mislead and result in a construction of the provision at odds with the industrial context and intention of the agreement as a whole. 19 What is being sought by the applicant is not an increase in wages nor a claim for improved conditions of employment or demands made in respect of the employees covered. The application does not seek to revisit matters contained in the awards that apply to the employees during the life of the MOU. All that is sought is a requirement for consultation between the respondent and the applicant in the context of proposed redundancies. 20 In any event the application made is not precluded by the no extra claims provision since there can be no suggestion that its subject matter was in contemplation at the time the MOU was signed. The MOU was signed in settlement of a claim advanced by the applicant for increases in the salaries payable to employees covered by particular industrial awards. Nothing in the MOU suggested that the parties had in contemplation the consultation arrangements applying with respect to redundancies in the public sector at all in making the MOU. 21 The applicant rejected the respondent's submission that the subject matter of the application was contemplated by clause 5.1 of the MOU. That clause deals with compulsory redundancy as a last resort and the retrenchment payment payable. That clause and the MOU generally did not deal with issues relating to consultation in the event of the introduction of restructures within Departments or agencies. What the applicant is seeking to do was not contemplated in making the MOU. Case for the Respondent.

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22 It was the respondent's submission that the subject matter of the proposed award is precluded by the "no extra claims" clauses in both the award and the redundancy award. A perusal of the proposed redundancy award reveals that the substantive subject matter sought to be regulated relates to consultation requirements to apply in circumstances where the respondent proposes to declare any of its employees excess or to offer voluntary redundancy to any of its employees. 23 A consideration of the MOU clearly shows that the "no extra claims" undertaking is couched in extremely broad terms and precludes any "proceedings, claims or demands" concerning (amongst other things) conditions of employment in respect of employees covered by the agreement. 24 When considered in the light of the MOU, the "no extra claims" commitment in the award clearly extends to any claim for improved conditions of employment or demands made in respect of the employees covered under the award. 25 The undertaking was given in the context of concessions of salary increase over a three year period. 26 The consent award was made a few weeks after the MOU was signed and reflected the outcome of the MOU as was intended by the parties. 27 The proposed redundancy award requires that the respondent consults with the applicant and its employees. It was the view of the respondent that the claim clearly relates to the conditions of employment for the employees covered by the award and are clearly demands made in respect of such employees. 28 It was the submission of the respondent that the proposed new redundancy award deals with matters that were not previously the subject of specific award regulation applicable to the respondent and which were not contemplated by the parties at the time of the execution of the MOU. This would only be material if the "no extra claims" commitment was couched in such prescriptive terms (i.e. that it was limited to "no extra claims" for award provisions then in existence). That is not the language adopted in the MOU or the award. 29 Also the view of the applicant that the proposed award deals with subject matter that was not contemplated by the parties at the time of the execution of the MOU is contradicted by the fact that clause 5.1 of the MOU expressly deals with issues concerning excess employees. Consideration.

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and 49 When considered in the light of the MOUs, the "no extra claims" commitments are said to prevent two types of claims or actions. First, the parties committed to precluding "claims for improved conditions of employment or demands made in respect of the employees covered by the Union and employed under the Awards". Secondly, the "no extra claims" provisions of MOUs provide "that no proceedings, claims or demands concerning wages or conditions of employment in respect of those employees will be instituted before the Commission or any other arbitral tribunal". (The provisions are very similar in each case with some minor but immaterial differences such as in the NSWNA's MOU which states that "no proceedings, claims or demands concerning wages or conditions of employment in respect of those employees will be instituted before the Commission or any other arbitral tribunal except as provided in the Leave Reserved Clause below".) 37 The applicant's redundancy award entitled Crown Employees (Department of Industry and Investment-Redundancy Consultation) Award states the following under 3. Excess employees -Consultation (a) Where it is proposed by the State Government and/or the Department to declare employees excess or call for employees to take up offers of voluntary redundancies, the Department shall immediately engage in discussions with effected employees and the PSA. Such discussions shall cover all relevant matters, including: (i) the reasons for proposing to declare employees excess or to offer voluntary redundancies; (ii) measures to avoid or minimise the need to declare employees excess or offer voluntary redundancies; (iii) available measures to mitigate any adverse effects of employees being declared excess or the proposed redundancies; (iv) the availability of reasonable alternative employment within the Department. (b) For the purpose of such discussions, the Department shall as soon as practicable supply the affected employees and the PSA with all relevant information about the proposed redundancies; including but not limited to: (i) the reasons for proposing to declare employees excess or to offer voluntary redundancies; (ii) the number and categories of employees likely to be affected; (iii) the method of identifying an employee as excess, having regard to the efficient and economical working of the department, and the relative efficiency of employees; (iv) the future of any services or functions affected including, where such services or functions are to be retained, how they are to be effectively managed on reduced staff; and under Clause 6 Area, Incidence and Classification (a) This award shall apply to the State of New South Wales, The Director of Public Employment, The Department of Industry and Investment, and employees of the Government Service of New South Wales employed in the Department of Industry and Investment. (b) This award shall take effect on and from 12 April 2010 and shall remain in effect thereafter for a period of three years. 38 The MOU and the "no extra claims " clause disallows any party to either document from seeking increase in rates of pay or improvements in conditions of employment.

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Judgment (43 paragraphs)

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