s.709 application for Commission to conduct dispute resolution process (Division 5)

UNIVERSITY OF NEW SOUTH WALES (GENERAL STAFF) ENTERPRISE AGREEMENT 2006

Appeal - dispute arising under workplace agreement - appeal in relation to dispute resolution process - construction of certified agreement - whether Commission may waive or vary severance payments - Workplace Relations Act 1996, ss.111,120,709,711 and 712.

[1] This is an appeal by the CPSU, the Community and Public Sector Union (CPSU) against a decision made by Commissioner Thatcher on 17 August 2007. In the latter half of 2006 the University of New South Wales (the University) carried out a restructure of part of its organisation. A number of employees in the Information Services Unit within the University library occupied positions which were abolished in the restructure. Although they were offered positions in the new structure, the employees nevertheless claimed that they were not dealt with in the manner required by the provisions of the relevant workplace agreement, the University of New South Wales (General Staff) Enterprise Agreement 2006 (the Agreement). The CPSU lodged an application in relation to four of the employees on 19 January 2007. The application was made under s.709 of the Workplace Relations Act 1996 (the Act). It was common ground that s.709 in conjunction with the relevant terms of the Agreement enabled the Commission to conduct a dispute resolution process in this case.

[2] The dispute resolution process was conducted by Commissioner Thatcher. It was submitted on behalf of the four employees that, because their old positions had been abolished, they were redundant and were entitled to be retrenched pursuant to the Agreement. Under the Agreement redundant employees receive a severance payment and other benefits. The University's primary position was that it was entitled to appoint the employees to classifications in the new structure and that the employees were not entitled to be retrenched. The University submitted that if, contrary to its primary submission, the employees were entitled to be retrenched, it wished to make application to the Commission for exemption from the obligation to make severance payments to the employees (and to afford them the other benefits to which retrenched employees were entitled under the Agreement) because acceptable alternative employment had been obtained for the employees in the new structure.

[3] After hearing the parties' cases the Commissioner determined that while the employees were entitled to be retrenched, they should not be entitled to retrenchment benefits because suitable alternative employment had been obtained for them. The CPSU has appealed against that part of the Commissioner's determination in which he found that the employees were not entitled to retrenchment benefits.

[4] At the commencement of the appeal hearing we drew the parties' attention to s.712 of the Act. Section 712(1) obliges the Commission to conduct a dispute resolution process in private. Section 712(2) requires the Commission not to disclose or use any information or document given to the Commission in the course of conducting the dispute resolution process. It is common ground that in these proceedings the Commission is not conducting a dispute resolution process. Therefore s.712(1) does not apply. Each of the parties, out of an abundance of caution and at the Commission's suggestion, agreed to waive their rights under s.712(2) pursuant to s.712(2)(b) for the purposes of the appeal.

[5] Part 13 of the Act deals with dispute resolution. Division 5 of Part 13 deals with the Commission's function of conducting a dispute resolution process under a workplace agreement. Section 709, which is in Division 5, permits an application to be made to the Commission to conduct a dispute resolution process where a workplace agreement allows it and if all necessary steps have been taken. The Commission's powers in dealing with such an application are set out in s.711, which reads:

(1) In conducting the dispute resolution process under this Division, the Commission has, subject to subsection (2), the functions and powers:

(a) given to it under the workplace agreement; or

(2) The Commission does not have the power to make orders.

(3) The Commission must, as far as is practicable, act:

(b) in a way that avoids unnecessary technicalities and legal forms; and

(c) if the parties have agreed, either in the workplace agreement or otherwise, that an aspect of the process is to be conducted in a particular way - in accordance with that agreement.

(4) Subdivision B of Division 4 of Part 3 of this Act does not apply in relation to the conduct of the dispute resolution process by the Commission under this Division."

[6] As is apparent s.711(1) provides that the Commission has the functions and powers given to it under the workplace agreement in question or otherwise agreed by the parties. Section 711(2) provides that the Commission does not have the power to make orders. Reference should also be made to s.353 which deals with dispute resolution provisions in workplace agreements. Section 353(1) reads:

"353 Workplace agreement to include dispute settlement procedures

(1) A workplace agreement must include procedures for settling disputes (dispute settlement procedures) about matters arising under the agreement between:

(b) the employees whose employment will be subject to the agreement."

[7] The Agreement is dated 18 August 2006. Clause 9 is entitled Dispute Settling Procedures and sets out the agreed procedure for dealing with disputes regarding the "interpretation, application or operation of any provision of" the Agreement. It is apparent that cl.9 is responsive to the statutory requirement in cl.353 which we set out earlier. Relevantly, subject to a requirement for attempts to be made to settle such a dispute at the workplace, cl.9 provides that the parties may submit a dispute to the Commission for resolution, if necessary by arbitration. Clause 9(c) contains this provision:

"… Subject to the legislative rights of any party to the dispute to appeal a decision of the AIRC, the parties to the dispute will implement any arbitrated decision of the AIRC in resolution of the dispute."

[8] The provisions with which the substantive dispute is concerned are in cl.24 and in particular cll.24.3 Major Workplace Change, 24.4 Implementation of Redundancies and 24.5 Redeployment and Retrenchment. For the purposes of the appeal it is only necessary to set out cl.24.5:

(a) Where the University declares a position redundant following the process set out above, the employee holding that position will be advised in writing by the Director Human Resources that he/she must elect to seek redeployment within a period of 10 weeks from the date of election. Where the University and the employee cannot identify an agreed suitable alternative position within the 10 week redeployment period, the employee will be retrenched.

(b) At any time during the 10 week redeployment period, the employee may elect to terminate the redeployment process and be retrenched.

(c) Redeployment placement will be on the basis of a trial period. If the redeployment trial is unsuccessful, the employee will be retrenched in accordance with subclause 24.5(f).

(d) Where an employee does not elect redeployment in accordance with clause 24.5(a) above, he or she will be given written notice of not less than 10 weeks of the date of retrenchment, or at the election of the employee, 10 weeks payment in lieu of notice, provided that the University may place the employee on paid leave (not being annual leave or long service leave) during the notice period.

(e) An employee who elects to work part or all of the 10 week notice period (including through a redeployment process) will only receive on retrenchment payment for the balance of the 10 weeks not worked.

(f) An employee who is retrenched will be entitled to:

(i) a severance payment based on 3 weeks salary for every completed

(ii) payment for accrued annual leave in accordance with clause

(iii) payment on a pro-rata basis for leave loading; and

(iv) payment for any long service leave in accordance with clause

(g) Where the University declares a position redundant but obtains acceptable alternative employment for the employee, it may apply to the AIRC to have the severance payment or retrenchment benefit varied or waived."

[9] While these provisions give an employee a right to elect to be retrenched in certain circumstances, they also give the University a right to apply to the Commission to have the applicable severance payment or retrenchment benefit varied or waived, provided it has obtained acceptable alternative employment for the employee concerned.

[10] The Commissioner identified three questions to be decided:

(a) were the four employees entitled to elect to be retrenched and receive the severance payments and other benefits set out in the Agreement;

(b) if so, could the University nevertheless make an application to have the severance payments and other benefits waived or varied; and

(d) if the University could make such an application, should the Commission waive or vary the severance payments and other benefits.

[11] The Commissioner determined the first question in favour of the employees, finding that the employees were redundant and were entitled to be retrenched and, subject to the resolution of the other two matters in dispute, were entitled to the severance payments and other benefits in cl.24.5. In relation to the second issue, however, the Commissioner decided that the University was entitled to make an application under cl.24.5(g) to vary or waive its obligations to make severance payments and to afford the employees other benefits under cll.24.5(d) and (f). Finally he decided, pursuant to cl.24.5(g), to relieve the University of its severance obligations under cll.24.5(d) and (f). The CPSU has appealed against that part of the Commissioner's decision which purports to waive the University's obligations under cl.24.5(d) and (f).

[12] At the outset it is convenient to mention an issue concerning the competence of this appeal. The CPSU purports to bring the appeal pursuant to ss.120(1)(a) and (f) of the Act. Those provisions read:

"120 Appeals to Full Bench relating to matters arising other than under the Registration and Accountability of Organisations Schedule

(1) Subject to this Act, an appeal lies to a Full Bench, with the leave of the Full Bench, against:

(a) an award or order made by a member of the Commission; and

(f) a decision of a member of the Commission that the member has jurisdiction, or a refusal or failure of a member of the Commission to exercise jurisdiction, in a matter arising under this Act."

[13] It was made clear during the hearing of the appeal that the CPSU no longer sought to challenge the Commissioner's decision on the basis that it was an order. It is therefore unnecessary to consider whether an appeal might be available pursuant to s.120(1)(a). In light of the express prohibition in s.711(2) on the making of orders, however, it is difficult to see how an appeal could ever be brought under s.120(1)(a) in relation to anything done in a dispute resolution process conducted under Division 5 of Part 13. That issue aside, it is still necessary to consider whether an appeal might be brought pursuant to s.120(1)(f). We deal with that issue now.

[14] It was submitted on the University's behalf that no appeal is available pursuant to s.120 from an arbitration under Division 5 of Part 13. The submission was based on the nature of the alternative dispute resolution scheme in Part 13 and in particular on the terms of s.711(1). It will be recalled that s.711 provides that in conducting a dispute resolution process under Division 5 the Commission only has the functions and powers given to it under the workplace agreement or otherwise agreed by the parties. It was contended that as a consequence in the absence of agreement as to an appeal no appeal is available.

[15] The first thing to note is that s.120 on its face applies generally to proceedings in the Commission. Its application is, however, limited by the opening words of s.120(1): "Subject to this Act…" The High Court considered the use of those words in s.111(1) of the Industrial Relations Act 1988 in Re Australian Bank Employees' Union Ex parte Citicorp Australia Limited. [1] The Court said:

"That subjection serves to indicate that the powers conferred by s.111(1) may not be exercised contrary to any prohibition, limitation or qualification found in the Act." [2]

[16] The context in which the expression is used in s.120 is not relevantly different. The question is therefore whether there is any prohibition, limitation or restriction in Part 13, Division 5 of Part 13 in particular, or elsewhere in the Act which operates to exclude a determination made in a dispute resolution process conducted by the Commission from the operation of s.120. We can find no such prohibition, limitation or restriction. Furthermore there are indications to the contrary. First, s.120 is found in Division 5 of Part 3 of the Act. Section 711(4) provides that Subdivision B of Division 4 of Part 3 of the Act does not apply to the conduct of a dispute resolution process under Division 5 of Part 13. By contrast, there is no provision excluding the application of Division 5 of Part 3 of the Act. Secondly, there are a number of provisions in the Act which expressly modify or limit appeal rights. [3] In light of these provisions the absence of any express exclusion in relation to Division 5 is significant. For these reasons we reject the submission that s.120 has no application to the conduct of a dispute resolution process under Division 5 of Part 13. Accordingly, subject to the requirement for leave, s.120(1)(f) can provide the foundation for an appeal.

[17] We add for completeness that the terms of the Agreement are consistent with this conclusion. We have referred already to the terms of cl.9 Dispute Settling Procedures of the Agreement. By cl.9(c) the parties have agreed to accept the outcome of arbitration subject to any "legislative rights" to appeal. The effect of the provision is that the parties have the rights of appeal provided for under the Act, no more and no less.

[18] As will be seen the grounds of appeal raise novel issues concerning the power and jurisdiction of the Commission under Division 5 of Part 13. The subject matter is of such importance that in the public interest leave ought be granted to appeal. We grant leave.

[19] The grounds of appeal, as modified in the hearing, number only three. The first ground is that the Commissioner erred in finding he had jurisdiction to determine an application by the University under cl.24.5(g) to vary or waive the University's obligations under cl.24.5. The second ground is that the Commissioner erred in finding that the Agreement conferred jurisdiction to determine an application pursuant to clause 24.5(g) as a supporting power to the power conferred in Division 5 of Part 13 of the Act. The third ground is that the Commissioner erred in finding that the parties could by Agreement confer jurisdiction on the Commission beyond that conferred by the Act. We shall deal with the three grounds together.

[20] The primary contention advanced by the CPSU was that a dispute as to whether the Commission has power to vary the University's obligations pursuant to cl.24.5(g) is a dispute about the Commission's jurisdiction and not a dispute over the interpretation, application or operation of the Agreement. To give support to this contention the CPSU argued that the Commission has no power to vary the terms of the Agreement by arbitration under Division 8 of Part 8 of the Act and therefore the parties could not confer that power on the Commission under Division 5. [4] It submitted that the Commission cannot be given jurisdiction under Division 5 of Part 13 to exercise a power or to perform a function which it cannot exercise or perform under the Act. The clause was said to have been put in the Agreement through inadvertence, since a similar provision had been included in previous agreements.

[21] With respect to these arguments, there is no reason why parties cannot submit to the Commission, in an alternative dispute resolution process, a question of interpretation of the terms of an agreement, even where the question of interpretation relates to the powers the Commission may exercise. It is of course necessary to ascertain what matters have been submitted to the Commission by the parties, either in the relevant instrument or by separate agreement. In this case the terms of cl.9 of the Agreement specify that the Commission may arbitrate in relation to an unresolved dispute over the interpretation, application or operation of the Agreement. There were three issues before the Commissioner: whether the four positions were redundant, whether application could be made to the Commission to waive or vary the entitlements otherwise applicable to retrenched employees and whether the entitlement should be waived or varied. All three issues come within the general description of interpretation, application or operation of the Agreement. And simply because the Commission has no power to vary an agreement by arbitration under Part 8 of the Act, it does not follow that cl.24.5(g) is ineffective to confer a power of arbitration on the Commission when it is conducting a dispute resolution process. Clause 24.5(g) sits comfortably with s.711(1) which is predicated on the parties' capacity to confer functions and powers on the Commission by agreement.

[22] The CPSU asked us to accept that cl.24.5(g) has been maintained in the Agreement through inadvertence and should not be regarded as conferring a power on the Commission for the purpose of s.711(1). We cannot accept that submission. The words of the provision are unambiguous and there is no evidence of either a common understanding (or misunderstanding) which might lead us to interpret them so as to limit the operation of the provision in some relevant way.

[23] It can be seen from clause 24.5 that where the University makes a declaration that a particular position is redundant there is scope for the employee in that position and the University to agree on redeployment into a suitable alternative position and that, in the absence of such agreement, the employee may elect to be retrenched pursuant to cl.24.5(b) or (d). Ordinarily, on retrenchment the employee will be entitled to a severance payment under cl.24.5(f). Pursuant to cl.24.5(g), however, where the University declares a position redundant it may apply to the Commission to have a severance payment or retrenchment benefit varied or waived if it obtains acceptable alternative employment for the employee concerned.

[24] The import of the CPSU's argument is that cl.24.5 can have no operation because the Commission can only perform the functions conferred on it by the Act and the Act does not permit the Commission to accept an application of the sort referred to in clause 24.5(g).

[25] A court called upon to construe a commercial agreement will strive to give operation to a term rather than leave it with no operation at all. [5]The same approach should be taken to the interpretation of workplace agreements. This does not mean that a meaning should be ascribed to a provision when, viewed objectively, it is impossible to ascertain the parties' intention. Rather the Commission may more readily adopt an interpretation which gives a provision substantive operation than one which does not.

[26] The existence of cl.24.5(g) demonstrates that the parties intended that in the circumstances set out an employer could ask the Commission to vary or waive the severance payment otherwise due to an employee whose position had been declared redundant. The questions likely to arise would be whether in the circumstances the alternative employment was acceptable and whether the severance payment prescribed by cl.24.5(f) should be waived completely or simply reduced. In our view cl.24.5(g), in conjunction with cl.9, should be construed as conferring power on the Commission to resolve such disputes. The term "application" in clause 24.5(g) should be construed as including an application pursuant to the dispute resolution process in clause 9 or a part of a dispute resolution process being conducted pursuant to that clause. It is possible that s.24.5(g), independently of cl.9, provides an adequate basis for the Commission to conduct a dispute resolution procedure pursuant to Division 5 of Part 13, but it is unnecessary to pursue that question.

[27] In the circumstances it is not necessary for us to deal with a number of other issues advanced by the University in response to the CPSU's appeal. For the foregoing reasons we dismiss the appeal and confirm the Commissioner's decision.

D Mendelssohn with X Thomson for the CPSU, the Community and Public Sector Union.

S Britt of counsel with N Gower and C Clarke for the University of New South Wales.

[1] [1989] HCA 41; (1989) 167 CLR 513.

[3] See for example ss.651(10) and 685(3) of the Act.

[4] Division 8 of Part 8 deals with the variation of workplace agreements.

[5] See for example, Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd [1968] HCA 8; (1968) 118 CLR 429 at 436-7 per Barwick CJ.

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