Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia

s.170LW pre-reform Act - application for settlement of dispute

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia

Appeal - determination pursuant to dispute resolution provision in agreement - obligation to provide union with opportunity to consult in relation to proposed retrenchments - Industrial Relations Act 1998 s.134H - Workplace Relations Act 1996 ss.62, 111 & 120(1)(a), item 28 of Schedule 7.

[1] There are two appeals before the Commission against a determination made by Commissioner Smith on 13 December 2006. [1] Leave is required for both appeals. The first appeal is by Telstra Corporation Limited (Telstra) and seeks to quash the determination. The second appeal is by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and seeks to vary the Commissioner's determination.

[2] The determination was purportedly made in the exercise of powers conferred on the Commission by the dispute resolution provision in a certified agreement made in 1993 under the provisions of the Industrial Relations Act 1988. Section 134H of that Act provided:

"Section 134H Procedures for Preventing and Settling Disputes

134H Procedures in an agreement for preventing and settling further disputes between employers and employees covered by the agreement may, if the Commission approves, empower the Commission to do either or both of the following:

(a) to settle disputes over the application of the agreement;

(b) to appoint a board of reference as described in section 131 for the purpose of settling such disputes."

[3] It can be seen that s.134H permitted the parties to an agreement, subject to the Commission's approval, to empower the Commission to settle disputes over the application of an agreement. The agreement before the Commission in this case, subsequently amended and renamed, is known as the Telstra Redundancy Agreement 2002 (the Agreement). [2] Clause 17 deals with disputes over the application of the Agreement. It provides that a dispute over the application of the Agreement can be referred to the Commission for "conciliation/determination."

[4] This case is concerned with redundancy. The factual background will require some elaboration later, but for the time being an outline is sufficient. Telstra decided to reorganise a function known as Customer Access Network Provisioning (CAN Provisioning) within a division called Service Delivery East. Service Delivery East is a geographical division responsible for the Telstra network in Queensland and New South Wales. The CAN Provisioning function relates to the installation and maintenance of the network. It includes the receipt of customer requests and the creation of tickets of work which constitute a job instruction for communication technicians. In substance the reorganisation involved the abolition of a work classification known as 'designer'. Within Service Delivery East 92 designer jobs were lost and 27 of the 32 work locations in Queensland and New South Wales were closed.

[5] Clause 7 of the Agreement deals with redundancy arising from the closure of a site function. So far as relevant it provides:

7.1 In this clause "site function" is a body of work which is readily identified and treated by Telstra as a substantial, distinct and discreet activity within a single and discrete geographical location.

7.2 Where Telstra has decided to close a site function and retrench all employees at that site function, it will provide the employees and the appropriate office of the union entitled to represent the employees at least 8 weeks notification of the site function being closed. Notification will be in Form A (Attachment I to this Agreement).

7.3 Concurrent with the notification under clause 7.2 being given, Telstra will give the union entitled to represent the employees:

(a) information about the proposed retrenchments and the reasons for them; and

(i) measures to avert the proposed redundancies; and

(ii) measures to mitigate the adverse effects of the proposed retrenchments.

7.4 Any consultation around these issues will conclude 2 weeks after the information under clause 7.3 has been given.

7.5 During the first 2 weeks after notification under clause 7.2 is given, an employee must decide whether to:

(a) participate in the Telstra Jobs Program under clause 8, such participation to commence no earlier than 6 weeks prior to the proposed date of retrenchment; or

(b) not participate in the Telstra Jobs Program and be retrenched at the date of the closure of the site function (or earlier by agreement between Telstra and the employee), and will be paid upon retrenchment:

* a $4500 gross payment to allow the employee to conduct their own job search program; and

* An election not to be placed in the Telstra Jobs program under this clause must be in writing Form C (Attachment to the Agreement)."

[6] It is common ground that the reorganisation of CAN Provisioning attracted the requirements of cl.7. Some time after the reorganisation was announced the CEPU notified a dispute to the Commission under the dispute settlement provision in the Agreement (cl.17). It alleged that Telstra had not complied with its obligation under cl.7.3 to afford the CEPU an opportunity to consult in relation to the situation. The proceedings were concerned with four employees only - two of the six designers based in Toormina, on the outskirts of Coffs Harbour, one of three designers in Albury and the sole designer in Leeton. Each of the designers was made redundant and their employment was terminated in accordance with the Agreement. The CEPU sought orders for the reinstatement of the four designers.

[7] The Commissioner found that Telstra had not fulfilled its consultation obligations pursuant to cl.7.3. He determined that Telstra should reinstate two of the four designers. Of the remaining two designers, he determined that in one case Telstra should either reinstate the designer if certain conditions were fulfilled or in the alternative appoint him to a suitable vacancy if one arose. The Commissioner decided not to grant any remedy in relation to the fourth designer.

[8] In its appeal Telstra submitted that the Commissioner made fundamental errors and that we should quash his determination. In its appeal the CEPU submitted that the Commissioner's determination did not go far enough. Preliminary issues arise in both appeals.

[9] For completeness we set out the relevant part of cl.17 of the Agreement which contains the dispute settlement procedure:

17.1. If any matter arising as to the application of this Agreement is in dispute it will be dealt with as follows:

(a) Discussion between the employee/employees affected and their one-up manager.

(b) If the matter is not resolved, the Appeal Process under clause 16 of this Agreement (where applicable).

(c) If the matter is still not resolved, discussion between the employee/employees and their two-up manager and, upon the request of the employee/employees, their union representative.

(d) If the matter is still not resolved, discussion between the relevant General Manager - Human Resources of the Business Unit (or nominated representative), the employee/employees affected and, upon request of the employee/employees, a senior national representative of the relevant union.

(e) If the matter is still not resolved, referral, by the General Manager Human Resources of the Business Unit (or nominated representative), the employee/employees affected or a senior national representative of the relevant union, to the Australian Industrial Relations Commission in accordance with clause 17.2. Any dispute not within the scope of clause 17.2 can not be referred to the Australian Industrial Relations Commission.

(f) Telstra's Group Workplace Relations and a senior national representative of the relevant union may agree to waive any step in this process to aid dispute resolution. However, the parties acknowledge the importance of the steps in this dispute resolution process to facilitate speedy and effective resolution of disputes arising as to the application of this Agreement.

17.2. A dispute referred to the Australian Industrial Relations Commission will be referred for:

(a) in the case of a dispute over the application of any of the following clauses, conciliation/determination:

Site Function Closures - Clauses 7.3, 7.4 and 7.5

[10] With reference to cl.17.1(e), it is common ground that the dispute in this case, if there was a dispute, fell within cl.17.2.

[11] The first preliminary issue is whether the Commissioner had jurisdiction to deal with the matter before him. The second is whether the Commissioner's determination is appealable in any event.

[12] The first issue arises in the following way. At the time the Commissioner came to deal with the matter the four employees in question had been retrenched and had ceased to be Telstra employees. For that reason Telstra submitted that there was no dispute to which cl.17 of the Agreement could apply at the relevant time. It can be seen that the main contention underlying this submission is that the Commission's power under s.134H provisions is limited to disputes between employers and persons who are in employment. If that contention is correct termination of employment would bring proceedings under such provisions to an end.

[13] The same issue arose recently in the case of ING Administration Pty Ltd v Jajoo. [3] While in that case the dispute resolution procedure had been approved pursuant to the terms of s.170LW of the Workplace Relations Act 1996 (pre-reform), the position under s134H is not relevantly different. The Full Bench decided by majority that a dispute which had been raised by an employee pursuant to a dispute resolution provision in a certified agreement did not cease to be such a dispute by reason of the termination of the employee's employment before the dispute had been finally dealt with by the Commission. In these proceedings neither party sought to persuade us that ING Administration was wrongly decided, although Telstra put a formal submission to that effect. In the circumstances it is appropriate that we follow the decision in ING Administration which is a relevant and recent Full Bench authority. We should add that there is nothing in cl.17 of the Agreement to indicate that the parties intended that in circumstances such as the present the operation of the clause ought be contingent on the employees concerned remaining in employment.

[14] The second preliminary issue concerns the status of the Commissioner's determination. The question which arises is whether a determination of that nature is amenable to appeal. Telstra submitted that an appeal lies pursuant to s.120(1)(a) of the Workplace Relations Act 1996 because the Commissioner's determination was an order for the purposes of that section. Telstra also submitted that an appeal lies pursuant to s.120(1)(f) on the basis that the Commission's decision constitutes a failure to exercise jurisdiction. We turn to the question of whether the Commissioner's determination constitutes an order.

[15] It is first necessary to consider whether the Commissioner had power to make an order. While the Agreement was certified in 1993 it was varied by agreement in 2002 pursuant to s.113 of the Workplace Relations Act 1996 (pre-reform). The variation involved the deletion of all of the original clauses and the inclusion of new ones. Schedule 7 of the Workplace Relations Act 1996 provides for the continuation, for a period of three years, of old IR agreements. [4] Old IR agreements are defined as agreements certified or approved under legislation operative prior to 1996.[5] The preservation of old IR agreements carries the implication that the Commission has the powers in relation to such agreements which it had under the legislative provisions which gave those agreements life, at least for a period of three years. This was the basis upon which the CEPU sought Commissioner Smith's assistance under the dispute resolution provision. It is also the basis for Telstra's submission that the Commissioner's determination was an order for the purposes of s.120(1)(a). At all relevant times prior to the commencement of the Workplace Relations Act 1996 the Commission had power to make an order pursuant to its general powers.[6] It is true that with effect from 27 March 2006 the Commission's general powers under s.111 of the Workplace Relations Act 1996 have not included the power to make an order. There is no indication, however, that the legislature intended that the Commission should be deprived of the power to make an order in relation to old IR agreements during the period provided for in item 28 of Schedule 7. Nor does s.62 of the Workplace Relations Act 1996 suggest such a limitation in the Commission's function. For these reasons we have concluded that the Commissioner had power to make an order. Further, on the basis of prevailing authority, we have no doubt that the Commissioner's determination is an order and is amenable to appeal pursuant to s.120(1)(a).[7]

[16] We are satisfied that an appeal may be brought against the Commissioner's decision pursuant to s.120(1)(a). It is unnecessary to consider whether an appeal may also be brought pursuant to s.120(1)(f).

[17] Telstra's appeal is based on 3 contentions. The first contention is that s.134H was not attracted because there was no dispute about the application of the Agreement. The second contention is that Telstra had complied with its consultation obligations pursuant to cl.7.3 of the Agreement. Thirdly, and in the alternative, it is contended that even if the Commission was acting within the powers conferred by s.134H and cl.17 of the Agreement, there was no jurisdiction to order reinstatement.

[18] The first contention - that there was no dispute about the application of the Agreement - is not sustained. The CEPU alleged that Telstra had failed to consult it in accordance with the requirements of cl.7.3. Telstra denied the allegation. There were issues as to the nature of the obligation under cl.7.3 and, if Telstra had not complied with the obligation, what should be done about it. There was clearly a dispute about the application of the Agreement. While this dispute could have been determined by a court in the context of an application for a penalty for breach or non-observance, cl.17 confers a power of private arbitration on the Commission in relation to such disputes.

[19] The other two contentions, that the Commissioner was wrong in concluding that Telstra had failed to comply with cl.7.3 and that the Commission did not have the power to order reinstatement, are issues of substance. We turn first to the Commissioner's finding that Telstra had not carried out its obligations pursuant to cl.7.3.

[20] Provision for consultation was not a feature of awards and agreements, at least in this Commission, until the Full Bench decision in the Termination, Change and Redundancy Case in 1984. [8] In the same year the High Court gave consideration to the jurisdiction of the Industrial Relations Commission of Victoria to deal with a claim that employers be required to consult with unions in relation to the effects on employment of the introduction of technological change.[9] Telstra's obligation under cl.7.3 is to:

"give the union…an opportunity to consult with Telstra on:

(i) measures to avert the proposed redundancies; and

(ii) measures to mitigate the adverse effects of the retrenchments."

[21] At the outset it is useful to give some consideration to the meaning of the term "consult." In this case the Commissioner referred to the obligation to provide an opportunity to consult in these terms:

"There does not seem to be much between the parties in relation to the underlying principles about consultation; namely, that it must be genuine with an opportunity to influence the decision maker but not be a frustrating barrier." [10]

[22] The New Shorter Oxford English Dictionary gives as the primary meaning of the verb "consult": "deliberate, take counsel, confer (with someone; about, upon a matter)". The Macquarie Concise Dictionary defines "consult" as "to seek counsel from, ask advice of". While dictionary definitions can shed some light on the term, it must be seen in context. The context of cl.7.3(b) is an obligation to provide an opportunity to consult about measures to avert proposed redundancies and to mitigate the adverse effects of proposed retrenchments. It is clear from cl.7.2 that it is only once decisions to close a site and to retrench employees have been made that an obligation arises under cl.7.3(b). Nevertheless Telstra must give the unions an opportunity to persuade it that the relevant decisions should be modified or revoked. In some cases it may not be so much a question of reviewing a decision but of preparedness to consider actions which might assist employees to better manage the effects of the termination on themselves and their families or to find alternative employment. Such issues do not appear to arise in the present case which, as will be shown, was more concerned with attempts by the union to persuade Telstra to redeploy certain employees who were facing retrenchment.

[23] There is no obligation, however, to do other than provide an opportunity to consult. A refusal to modify or revoke a decision of itself could not be regarded as establishing that the obligation had not been discharged. If, on the other hand, it is clear that while agreeing to meet the union Telstra never contemplated a review of the relevant decision or decisions, it must follow that no opportunity to consult was in fact provided.

[24] There are other parts of the Agreement which shed light on the nature of the obligation to consult. Clause 2 of the Agreement is entitled "Agreed Principles" and reads:

2.1 The parties agree that the following principles reflect their shared objectives in entering this Agreement;

(a) where redundancies occur, processes for separation are fair, and based on

(b) whilst recognising that long term job security cannot be guaranteed,

providing access to job opportunities for redundant employees both within Telstra and in the industry is generally the objective;

(c) Telstra retains the discretion in the selection of employees for redundancy and retrenchment."

[25] The "shared objectives" set out in cl.2.1(a) and (b) are important. The first objective emphasises the importance of fairness and respect for the individual. The second objective, relevantly, involves giving redundant employees access to job opportunities within Telstra. It is this second objective which has a particular significance in considering the requirements of cl.7.3(b). The obligation on Telstra to consult on measures to avert the proposed retrenchments must extend to consideration of job opportunities elsewhere in Telstra. This implies that an opportunity to consult with a particular business unit or division may not be adequate. It is very likely that if a business unit or division proposes to make employees redundant there are no job opportunities for the displaced employees in that particular part of the business. The obligation to provide an opportunity to consult is placed on Telstra as a whole, not upon the part of the business in which the need for retrenchments arises.

[26] Telstra employs around 22,000 people. The corporation is divided into a number of business units. The largest of the business units is Telstra Operations which employs over half of Telstra's Australian workforce. The largest part of Telstra Operations is Telstra Services. Telstra Services is divided into 5 main divisions: Service Delivery East, Service Delivery South/West, Delivery Management, Commercial Management and Network Services. As previously mentioned Service Delivery East is the division which installs and maintains the network for Queensland and New South Wales. The Managing Director of the division is Mr Alan Olden.

[27] On 15 July 2006 Telstra commenced a review of the structure of CAN Provisioning within Service Delivery East. At that time the function was performed through 32 centres in three separate geographical areas: Sydney, country New South Wales and Queensland. There were 222 employees of whom 92 performed the designer function. This function involved going to the site to check the tickets of work prepared by another employee known as a briefer. The designer ensured that the suggested solution was accurate, but did not carry out the required work. Once the ticket had been checked by the designer the communications technician was authorised to carry out the work. The review recommended that the briefer provide the ticket of work directly to the technician, thus eliminating the designer role. Because the majority of staff at many of the CAN Provisioning centres were designers, the review also recommended that the number of centres be reduced from 32 to 5.

[28] The results of the review were adopted by Mr Olden on or around 18 August 2006. The decision to implement the outcome was announced to relevant staff on 22 August 2006 by Mr Brown, at the time Manager, National CAN Provisioning, Service Delivery East. There were separate presentations given to staff on that day - one for the 39 designers affected in Queensland, one for the 5 designers in Sydney and one for the 48 designers in country New South Wales. The presentations included a comprehensive explanation of the planned changes, the reasons for the site closures and the effect on staff. Staff were told they would receive a redundancy information package soon thereafter explaining what would happen and their entitlements. The presentation to the country New South Wales designers was given by Ms Taylor, Manager, NSW CAN Provisioning, by telephone hook-up and the Telstra intranet.

[29] Also on 22 August, Ms Ahern, Manager Human Relations, Service Delivery East and Delivery Management, spoke to Mr Colin Cooper, National Secretary of the CEPU, by telephone. She told him of the planned changes, and the impact they would have on CEPU members and the number of redundancies. She also offered to provide more details through Mr Brown. On 24 August redundancy information packs were provided to the employees. On the same day Telstra provided to the CEPU and the employees the Form As required by cl.7.2 of the Agreement.

[30] On 25 August Mr Brown met Mr. Cooper and other CEPU officers at the CEPU's offices at Parramatta. Mr Brown explained the review and went through the presentation which had been made to staff on 22 August. It appears to be common ground that Mr Brown indicated that as a result of the changes the 48 designers in country New South Wales would be retrenched. According to Mr Brown's evidence he did not raise or suggest any steps that might be taken to mitigate the effect of the redundancies and apparently none were raised by the CEPU. There is no suggestion that the meeting had any wider focus than the provision by Mr Brown of the information about the planned organisational and personnel changes to CAN Provisioning.

[31] On the same day, 25 August 2006, Mr Chalker, a New South Wales Branch official of the CEPU, rang Mr Brown and informed him that another division of Telstra, Delivery Management, was recruiting staff externally in Coffs Harbour. The CAN Provisioning and Delivery Management centres in Coffs Harbour were located in the same building. Mr Chalker asked that some of the designers to be retrenched in Coffs Harbour be redeployed to Delivery Management instead of recruiting new employees. Mr Brown said he would look into the matter and get back to Mr Chalker in the next week.

[32] On 29 August Ms Wagner, a Senior Human Resources Advisor in Service Delivery East, as a result of Mr. Chalker's discussion with Mr. Brown, spoke to a Mr Neilsen, a Senior Human Resources Advisor for the Delivery Management division. He indicated to Ms Wagner that it had been decided at the end of June 2006 that seven CFW5 roles and two CFW7 roles were required at the Coffs Harbour Data Centre. The roles were advertised internally and externally in early July with a closing date for applications of 21 July. A number of candidates were interviewed on 4 August 2006 and verbal offers of employment were made to persons employed by contractors to the Data Management division on or about 23 August 2006. According to her evidence he indicated to Ms Wagner that the nine roles had been filled. In her evidence to the Commission Ms Wagner indicated in addition that the CAN Provisioning designers would have required approximately four days of retraining to carry out the roles in Delivery Management, there were differences in the pay and conditions and the CAN Provisioning roles were not commensurate with the roles required by Delivery Management.

[33] On 30 August 2006 there was a telephone conference between Ms Ahern, Ms Wagner, Mr Brown and Mr Cooper. According to Ms Ahern's evidence, the purpose of the meeting was to tell Mr Cooper what Telstra was doing. It is common ground that Mr Cooper rang Ms Ahern just prior to the telephone hook-up and told her of Mr Chalker's concern that Delivery Management was recruiting in Coffs Harbour while CAN provisioning staff were being made redundant. Mr Cooper raised that issue at the meeting and asked that Delivery Management stop the recruitment process at the Coffs Harbour Data Centre and redeploy the six CAN Provisioning designers in Coffs Habour to those jobs. Ms Ahern responded that she was not the decision-maker. She undertook to investigate how far the recruitment process had gone and to see if anything could be done to mitigate the redundancies.

[34] During the meeting Mr Cooper raised several other issues including options for redeployment, the operation of the Telstra Jobs Program and the issue of salary maintenance.

[35] Following this meeting there was an internal Telstra meeting at 3.30pm on the same day. Ms Ahern and Ms Wagner were there. It will be recalled that Ms Ahern was the Manager Human Relations for Service Delivery East and Delivery Management. Ms Wagner's responsibility was confined to Service Delivery East. Also present were a number of Delivery Management personnel - Mr Hatton, the Managing Director, Mr Neilsen, Mr Stevens, Public Policy and Communications Adviser and a Mr Winton. The meeting discussed in detail whether it was possible to cease external recruitment for the Delivery Management roles in Coffs Harbour, whether the work to be performed was equivalent to that performed by the redundant designers in CAN Provisioning and whether there were other suitable vacancies in Delivery Management. The meeting adjourned inconclusively and resumed the following morning. According to Ms Ahern, Mr Hatton indicated that the Delivery Management recruitment process could not be stopped as offers had been made seven days earlier. He said that "since offers had been made and the successful candidates had secured the roles … he felt that Telstra was bound to stand by that decision." [11] He indicated in addition that the successful candidates had been performing the roles for contractors and would not require retraining. For these reasons it was not possible to redeploy the redundant designers to those roles. The decision was not based on the possibility that the designers may have been entitled to salary maintenance. [12] Mr Hatton said he would look for other roles for the six designers. We should indicate that there is no conclusive evidence that all of the offers had been accepted by that date.

[36] On 1 September 2006 Ms Ahern telephoned Mr Cooper to advise him that there had been discussions with Mr Hatton and Mr Olden and that it had been decided to continue with the closure of the site. She indicated that there would be no attempt to redeploy the six redundant designers in Coffs Harbour to the Distribution Management roles and also outlined some other options which had been considered. [13] Ms Ahern told Mr Cooper that Telstra was ethically and legally bound by its verbal offers of employment.[14] She testified that the purpose of the discussions with Mr Cooper on 1 September 2006 was to outline what business decisions had been made, some of the detail and what was planned. [15]

[37] Mr Cooper's version of the conversation was that Ms Ahern had told him that the Distribution Management roles would mainly involve data entry work, that it was work at a lower level and those who were to be made redundant would incur a reduction in salary if they took the positions. In any event, the successful applicants had been notified and Telstra was going to proceed to employ them. [16] Mr Cooper, among other things, asked some questions about the Telstra Jobs Program provided for in cl.8 of the Agreement.

[38] Clause 7.5 of the Agreement, which is set out earlier, provides that in the two weeks following the notification of a site closure an employee must elect whether to participate in the Telstra Jobs Program or to accept retrenchment. The Program includes internal and external job searches on behalf of redundant employees over a five week period prior to retrenchment, with a further option of 20 weeks external job search after retrenchment. On or before 6 September 2006, each of the employees elected not to be placed in the Telstra Jobs Program and accepted retrenchment as provided for by cl.8 of the Agreement.

[39] Pursuant to cl.7.4 of the Agreement, consultation was required to conclude within two weeks of notification of the proposed retrenchments. Accordingly the consultation should have concluded by 7 September 2006. In early September the CEPU indicated to Telstra that in its view the Form A information that Telstra had provided did not comply with the Agreement and the forms should be withdrawn. On 19 September Telstra indicated by letter that although there were some errors in the forms they were administrative only and the forms would not be withdrawn. At the same time Telstra said it would extend the consultation period to 29 September 2006. The CEPU did not really take up this offer. It submitted to us, however, that the two week limit on the consultation period was mandatory and could not be altered by agreement, a proposition with which Ms Wagner agreed in cross-examination.

[40] On 4 October 2006 Mr Chalker requested a meeting with Mr Brown. Mr Brown told him that he needed a letter from Mr Chalker stating the reason for the meeting and what he wanted to discuss, and proposed a meeting for 6 October. On 6 October Mr Brown and Ms Wagner met with Messrs Chalker, Cooper, Dodd and Dwyer. The CEPU representatives indicated that in their view the meeting was a consultation under the third stage of the dispute resolution process in the Agreement. Telstra's view was that the meeting was not for that purpose but it was prepared to discuss any issues the CEPU wanted to discuss. Mr Brown advised the CEPU representatives of actions taken by Telstra to mitigate some of the redundancies of the 92 affected employees. It is unnecessary to traverse the other developments leading up to the Commissioner's determination.

Did Telstra give the CEPU the opportunity required by cl.7.3?

[41] There are few disagreements as to what was said at the relevant meetings but there are differences of emphasis. Telstra sought to persuade the Commission that it had consulted openly and comprehensively and that it had discharged its obligation. The CEPU maintained that Telstra had not been prepared to change any decisions, had failed to give an opportunity to consult in the manner intended and as a consequence some employees who could have been redeployed were retrenched.

[42] There is a deal of support for the CEPU's position in the evidence. Ms Wagner testified that she became aware of the CAN Provisioning review in mid-July and that she became aware that redundancies were likely after a workshop which took place on 25 to 27 July 2006 as part of the review process. On 18 August 2006 she was told of the outcome of the review and it was confirmed at that time that the designers would be redundant. [17] The closure of the CAN Provisioning site in Coffs Harbour was announced on 22 August 2006. Other events were unfolding at roughly the same time in Distribution Management. The vacancies in Coffs Harbour were advertised internally and externally in early July 2006. Applications closed on 21 July 2006.[18] On 4 August 2006 applicants were interviewed.[19] On 23 August 2006, the day after the closure of the CAN Provisioning site in Coffs Harbour was announced, Distribution Management made verbal offers of employment to a number of external candidates.[20]

[43] This sequence of events is relevant. Two arms of the business were simultaneously planning staffing changes - in one case to engage new staff and in the other to retrench staff - apparently without anyone considering the potential to avoid retrenchments that this situation presented.

[44] The opportunity to consult required by cl.7.3 must be provided within two weeks of notification in accordance with Form A. The Form A notifications were given on 24 August 2006. Accordingly it is only the events that took place between that date and 7 September which are relevant. At the meeting at the CEPU offices on 25 August attended by Mr Brown it is clear that the primary purpose of the meeting was to provide information on the review and the changes in organisation and personnel which were being implemented. Although no doubt issues such as redeployment could have been raised by the CEPU, the focus of the meeting was CAN Provisioning and it is not suggested that Mr Brown was authorised to speak on a Telstra-wide basis.

[45] Another part of the evidence which bears on whether Telstra had discharged its obligation concerns the telephone meeting with the CEPU on 30 August 2006. By the time of that meeting Ms Wagner had already been briefed about the situation in Coffs Harbour by Mr Neilsen of Distribution Management. Although Ms Wagner gave evidence that she reported her conversation with Mr Neilsen to Mr Brown and Ms Ahern, she did not say when that report was made. Ms Ahern, on the other hand, testified that she was unaware of the position until Mr Cooper raised it with her shortly before the meeting commenced. [21] Mr Brown's evidence does not appear to deal with the point although he had been alerted to the position in Coffs Harbour by Mr Chalker on 25 August, some five days before. Ms Wagner did not disclose to the CEPU that she had already been briefed on the Coffs Harbour situation.[22] She told the Commissioner that she was at the meeting to listen and it was not her role to provide Mr Cooper with any information about any mitigating actions that had been taken.[23] The meeting concluded on the understanding that Mr Brown and Ms Ahern did not know what was happening in Coffs Harbour but Ms Ahern would find out.

[46] At the very least there was a lack of frankness in the discussions on 30 August. Had it been known that Mr Neilsen had already briefed Ms Wagner the opportunity to consult would have been more effective on that day. It is also significant that before the meeting with the CEPU on 30 August 2006 Ms Ahern had not taken any steps to see what jobs might be available for the redundant designers in parts of Telstra other than CAN Provisioning. [24] This is surprising given that her role as Manager Human Resources was to be performed in relation to both Service Delivery East, of which CAN Provisioning is only a part, and Distribution Management.

[47] The Commissioner found that Telstra had conveyed all of the relevant information to the CEPU. He also found that proper efforts were made by Telstra. He concluded, however, that Telstra had not complied with cl.7.3 of the Agreement because its business structures isolated the CEPU from the decision-maker and made it impossible for there to be effective consultation. The conclusion was based on the Commissioner's finding that Telstra regards its separate business lines as the employer and therefore, it has no capacity to take a corporate approach to the placement of employees from redundant positions in any vacancy within Telstra as the employer under the Agreement. He found in effect that the Telstra personnel involved had done what they could but that the organisation was so structured that the opportunity to consult was limited. His decision includes this passage:

"[69] I have reached the conclusion that because of the organisational structure of Telstra where there is no authority reposed in any officer to implement the Agreement, then clause 7.3 of the Agreement has not been given proper effect. To properly apply the Agreement there needs to be someone with the authority to implement steps within Telstra, not just business lines, to ensure that the terms of clause 7.3 can be given meaningful effect. It cannot be that an obligation of the employer can be negated by the administrative structure chosen for either financial or other business reasons.

"[70] Consultation has not occurred in relation to clause 7.3 because there is no relevant decision maker that can influence or effectively implement action on behalf of Telstra in accordance with its obligations under the Agreement."

[48] We agree with the Commissioner that Telstra failed to discharge its obligation under cl.7.3. Our reasons are similar to the ones he gave but they are not the same. As we indicated earlier, the requirement to give the CEPU an opportunity to consult must be seen in the context of the Agreement as a whole. It is clear that at the meetings on 25 and 30 August 2006, and during the subsequent discussions with the CEPU officers, Telstra focused on providing information about the results of the review of CAN Provisioning and the effect on the designers. Mr Brown's management responsibility was for CAN Provisioning as was Ms Wagner's. While Ms Ahern had a responsibility in relation to Distribution Management as well, it was clear that she had not taken any steps, nor shared any information in relation to that Division. Her investigation of redeployment opportunities for the designers, at least until 30 August, was confined to CAN Provisioning. Although Ms Wagner was briefed on the Coffs Harbour vacancies, she remained mute during the discussions on that topic. In reality the consultation was with CAN Provisioning. As we indicated earlier in these reasons, if one part of Telstra proposes to make employees redundant it is highly likely that there are no job opportunities for the displaced employees in that particular part of the company. The obligation to provide an opportunity to consult is placed on Telstra as a whole, not upon the part of the business in which the need for retrenchments arises.

[49] It is true that the Telstra representatives carefully investigated the Coffs Harbour situation following the meeting on 30 August, but we do not think that alters the position greatly. The shared objectives to which the parties committed themselves in the Agreement emphasise the importance of fairness, respect for the individual and giving redundant employees access to job opportunities within Telstra. Clause 1.1(b) of the Agreement might also be relevant. It reads:

(b)In negotiating this agreement, the parties have sought to achieve a process within which job security can be maintained for as many Telstra employees as possible."

[50] Had Telstra afforded the CEPU a proper opportunity to consult with it on measures to avert the proposed redundancies the consultation would not have been so narrowly focused. Having said that, we do not adopt the Commissioner's finding that Telstra's organisation structure was at fault. It is sufficient to indicate that on the evidence in the case the CEPU was not afforded an opportunity of the kind required by cl.7.3. Telstra's organisation structure is a matter for it.

[51] We turn now to the question of remedy. The Commissioner decided that Telstra should provide a remedy to three of the designers. In the cases of two who had been employed at Coffs Harbour, Mr Burgess and Mr Comisari, he determined that Telstra should reinstate them in employment in the Coffs Harbour region. The third employee, Mr Hammer, had applied unsuccessfully for two positions. The Commissioner determined that if either of the positions had been filled by external applicants and the position in question was within his skill and competence Mr Hammer should be reinstated. In the alternative, if the two positions were filled by other Telstra employees, but the positions were within Mr Hammer's skill and competence, Telstra should examine all vacancies within the next three months and offer him any vacant position within his skill and competence.

[52] Although we have found that Telstra did not discharge its consultation obligations under the Agreement, it does not automatically follow that the employees are entitled to the remedy sought by the CEPU. Pursuant to s.134H of the Industrial Relations Act 1988, the Commission was arbitrating a dispute over the application of the Agreement. Such a proceeding is to be distinguished from an application for a remedy in relation to termination of employment and from a proceeding in a court in which the remedy of reinstatement is one of a number of specified remedies that might be ordered. Leaving aside any issues concerning the powers exercised by the Commission in proceedings under s.134H, was there justification for the remedies the Commissioner decided upon in this case?

[53] There are two significant matters to which the Commissioner did not refer in his reasons for decision. The first is that all three employees elected not to take advantage of the Telstra Jobs Program but to be retrenched. This had occurred by 6 September 2006. There was no argument that the redundancies were not genuine ones and the entitlements of retrenched employees were comprehensively dealt with in the Agreement. The only area for exploration, therefore, was whether alternative employment was available, either elsewhere in Telstra or externally. The Agreement gives employees the option of joining the Telstra Jobs Program, a program designed to secure alternative employment for redundant employees, or to accept a cash payment in lieu. The employees in this case elected to take the cash payment.

[54] The second significant matter is that when, on 19 September 2006, Telstra offered to consult for a further 10 days, the CEPU did not take up the offer. Consultation under the Agreement is limited to a period of 14 days from notification. On that basis the period of consultation provided for under the Agreement concluded on 7 September 2006. Telstra's offer of further consultation was made some 12 days later. Accordingly the offer could not constitute the provision of an opportunity to consult for the purposes of the Agreement. But in practical terms the offer provided an opportunity to explore other redeployment opportunities for the employees in question.

[55] The Commissioner's failure to take these matters into account indicates that the exercise of discretion miscarried. For these reasons the Commissioner's determination must be quashed. It therefore falls upon us to determine the dispute by exercising the discretion ourselves.

[56] While we have found that Telstra did not discharge its obligation to provide the CEPU with an opportunity to consult, it does not follow that Telstra should be compelled, directly or indirectly, to reinstate the employees. The employees elected to be retrenched rather than to pursue other redeployment opportunities and Telstra's offer of further consultation on measures to avoid the terminations was not availed of. While the elections to accept retrenchment were made several days before Telstra offered to reopen consultations, it could not be assumed for that reason only that further consultation would be incapable of bearing fruit for the redundant employees. For these reasons the remedies granted by the Commissioner, being reinstatement in two cases and conditional reinstatement in the third, were inappropriate in the circumstances. We add for completeness that these proceedings are obviously not applications for a remedy based on the allegation that the terminations were harsh, unjust or unreasonable. We say nothing about the considerations which might apply if that had been the case.

[57] We have considered the possibility that if the Coffs Harbour situation had been handled differently at least some of the designers might have been redeployed to the vacancies in Distribution Management. While Telstra did advance reasons why the redundant employees would not have been suitable for the vacancies, some of the reasons are less than convincing. A requirement for four days of retraining should not be an obstacle to an employer of Telstra's resources. Any reductions in remuneration, if consented to, would not be an obstacle either. The objection that Telstra was obliged to honour offers of employment could not be disregarded, but whether binding arrangements had been made at the relevant time in relation all of the vacancies was never fully explored. The objectives of the Agreement suggest that Telstra should have attempted to minimise the need for redundancies on a whole-of-organisation basis. We doubt whether that was done. In the final analysis, however, the Agreement does not oblige Telstra to do more than provide an opportunity to consult. Had it discharged that obligation, it would still have been within Telstra's discretion to decide, based on suitability and any other relevant criterion, whether to redeploy some or all of the designers to the Coffs Harbour vacancies. Under the Agreement Telstra retains the discretion to make such decisions.

[58] Because we have decided that the remedies granted were inappropriate it is unnecessary to deal with Telstra's submission that the Commission did not have power under the dispute resolution provision to do other than determine whether Telstra had complied with its obligation under cl.7.3.

[59] We turn now to the CEPU's appeal. That appeal concerns a procedure known as "job swaps". Within Telstra the term "job swaps" has a particular meaning. It refers to a situation in which redundant employees are redeployed to positions rendered vacant by employees who volunteer for retrenchment. Prior to the amendments to the Agreement in 2002, when retrenchments were proposed employees other than those to be retrenched could volunteer for a redundancy package. Subject to some conditions, Telstra would be obliged to substitute such volunteers for the employees designated for retrenchment. There were two issues before the Commissioner in relation to job swaps. Firstly, the CEPU contended that even after the 2002 amendments to the Agreement, job swaps were permissible. In this connection the CEPU submitted that although Telstra might no longer be under an obligation to accept job swaps, it was still obliged to consult with the union in relation to the potential for job swaps to be used to avert the proposed retrenchments in CAN Provisioning. The second issue was whether by refusing to consult with the CEPU on the use of job swaps Telstra failed to discharge its obligation under cl.7.3(b) of the Agreement. These issues were raised particularly in the case of Mr Hammer and a Mr Griffiths.

[60] The Commissioner found that although the notion of universal voluntary redundancy or job swaps had been part of the Agreement prior to 2002, the variations that year had removed the concept. The Commissioner also accepted evidence indicating that Telstra had adopted a policy against job swaps. The policy was based on the need to retain staff and to minimise disruption across the company arising from retrenchments. The Commissioner found that Telstra was entitled to reject the notion of job swaps in its discussions with the CEPU. It may be that the Commissioner was referring to compulsory job swaps, whereas the CEPU was not. But in the final analysis it does not seem to us to matter. Though there might be room for argument about the fairness and utility of job swaps, it has not been shown that Telstra's approach ran counter to its obligations under the Agreement. To the contrary, the removal of the universal voluntary redundancy provisions from the Agreement in 2002 might be said to support Telstra's right to reject job swaps.

[61] For these reasons we decline to grant the CEPU leave to appeal.

[62] In the circumstances we shall grant Telstra leave to appeal and uphold the appeal. Pursuant to s.120(7)(a) of the Workplace Relations Act 1996 we quash the Commissioner's determination of 13 December 2006.

[63] We have decided that Telstra did not discharge its obligation to provide the CEPU with an opportunity to consult as required by cl.7.3(b) of the Agreement within the two week period prescribed in cl.7.4. While on the evidence and submissions before us we see no basis for any other remedy, it is nevertheless appropriate that we make a determination in relation to the dispute about the application of cl.7.3(b). We make such a determination pursuant to the dispute resolution provision in the Agreement.

[64] We determine that in relation to the CAN Provisioning retrenchments of September 2006, the subject of these proceedings, Telstra failed to afford the CEPU an opportunity to consult with Telstra on measures to avert the proposed redundancies and measures to mitigate the adverse effects of the proposed retrenchments, contrary to the requirements of cll.7.3 and 7.4 of the Agreement.

[65] In the circumstances it is desirable that there be further discussions between the parties in light of our decision. Pursuant to s.120(7)(c) we direct Senior Deputy President Lacy to convene a conference of the parties on a suitable date.

J West QC and S Wood of counsel with C Gardner for Telstra Corporation Limited.

R Reitano of counsel with P Pasfield for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.

[4] Item 28 of Schedule 7, Workplace Relations Act 1996.

[6] Workplace Relations Act 1996 (pre-reform) ss.111(1)(b) and s,111(2) and Industrial Relations Act 1996

ss. 111(1)(b) and 111(2).

[7] PR971351, Woolworths Limited T/A Safeway v Miller, 1 May 2006 at para 8 and the authorities referred to

[8] (1984) 8 IR 34, see also the Supplementary Decision in (1984) 9 IR 115.

[9] Federated Clerks Union of Australia v Victorian Employers' Federation [1984] HCA 53; (1984) 154 CLR 472.

[12] Exhibit 25 at para 20 and Transcript at PN1337, 17 October 2006.

[13] Exhibit 25 at para 22 and Annexures JA-3 and JA-4.

[14] Ibid. see also Transcript at PN 1337, 17 October 2006.

[15] Transcript at PN1370, 17 October 2006.

[17] Transcript at PN1533 - 5, 17 October 2006.

[21] Transcript at PN1303 -1307, 17 October 2006.

[22] Transcript at PN1494 -1498, 17 October 2006.

[23] Transcript at PN1503 - 6, 17 October 2006.

[24] Transcript at PN 1307 -1314, 17 October 2006.

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