DISPUTE REGARDING THE EMPLOYERS REDEPLOYMENT OF UNION MEMBERS

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2012 WAIRC 00438

DELIVERED : Tuesday, 17 July 2012

FILE NO. : CR 1 OF 2012

Applicant

AND

The Minister for Health in his incorporated capacity under s.7 of the Hospitals and Health Services Act 1927 (WA) as the Hospitals formerly comprised in the Metropolitan Health Service Board.

Respondent

Catchwords : Industrial law (WA) – Positions abolished – Whether calculation of severance pay entitlement for existing employees is an industrial matter – Requires current employment relationship - Application of Western Australian Government/LHMU Redeployment, Retraining and Redundancy Certified Agreement 2004 – Imposes time limit on process through which suitable alternative employment may be identified – Declaration and order issued

Legislation : Industrial Relations Act 1979 s 29(1)(l); s 44(9); s 27(1)(l); s 26 s 27(1)(s)

Result : Order and Declaration issued

Representation:

Case(s) referred to in reasons:

Kounis Metal Industries Pty Limited v Transport Workers Union of Australia, Industrial Union of Workers, Western Australian Branch (1993) 73 WAIG 14;

Coles Myer Ltd v Koppin and Ors (1993) 73 WAIG 1754

Quality Bakers Australia Limited v Australian Liquor, Hospitality and Miscellaneous Workers Union, Western Australian Branch & Other (2004) 84 WAIG 2579

Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355

Case(s) also cited:

Reasons for Decision

1          The employees the subject of the present dispute, Ms Padberg, Ms Tisdale, Ms D’Rozario, Ms Stanciu and Ms Carroll, have been long-standing employees at the Sir Charles Gardiner Hospital.  All of them are engaged in the position of Menu Assistants in the hospital’s catering department. Some of them have had very many years of service. As a result of a decision taken by the hospital in June 2011, changes to the catering department have been implemented such that most of the Menu Assistant positions have been abolished.  A new position of Food Services Supervisor has been created and aspects of the operations of the catering service have been re-structured.

2          Because of this, and as required by the applicable industrial instruments, the hospital and the employees, as represented by the Union, have been conferring about alternative employment options for the Menu Assistants.  Of a total of some 10 positions, five employees have accepted other offers of employment.  The five employees the subject of these proceedings, have not.  As a consequence of an interim order of the Commission made on 6 January 2012, these employees have been maintained in their Menu Assistant positions, on a supernumerary basis.

3          In accordance with the process described by the Western Australian Government/LHMU Redeployment, Retraining and Redundancy Certified Agreement 2004 a determination has been made by the Public Sector Commissioner of Western Australia, that the alternative employment offered by the hospital to the employees in question is ‘suitable alternative employment’ for the purposes of the Agreement.  The Union disputes this.  The Union in these proceedings seeks:

(a)           a declaration that the employment offered by the hospital is not suitable alternative employment for the purposes of the Agreement;

(b)           an order that the five employees concerned be paid severance pay; and

(c)           any other orders that the Commission considers appropriate.

4          The substantive applications have been largely heard by the Commission.  These reasons for decision deal with two subsidiary issues that have arisen during the course of the substantive proceedings.  The first relates to an application under s 29(1)(l) of the Act to amend the s 44(9) referral to raise an issue concerning the proper interpretation of clause 9 Agreement.  The issue relates to the calculation of severance pay entitlements for Ms D’Rozario.  Whilst Ms D’Rozario was one of the employees included in the s 44(9) referral as being in dispute with the Minister regarding her redundancy and redeployment, this has now been resolved by agreement between the parties.  However, the question of the calculation of entitlements, specifically the manner in which shift allowances are to be calculated, remains controversial.  It is common ground that Ms D’Rozario has resigned from her employment and has received payment of severance under the Agreement.

5          The Union submits that the issue now raised not only has application to Ms D’Rozario, but also to the proposed redeployment of Ms Carroll and Ms Tisdale.  This is because both of these employees have also taken a period of long service leave and whether that period of leave should be taken into account in calculating shift allowance entitlements.  In response to issues raised by the Commission as to whether there remain any live industrial matters, and in Ms D’Rozario’s case, whether the issue raised was a matter of enforcement, the Union contended that the relevance of the issue to remaining employees subject of the s 44(9) referral under the Act, provided the Commission with jurisdiction.

6          For the Minister, it was submitted, in relying upon decisions of the Industrial Appeal Court in Kounis Metal Industries Pty Limited v Transport Workers Union of Australia, Industrial Union of Workers, Western Australian Branch (1993) 73 WAIG 14 and Coles Myer Ltd v Koppin and Ors (1993) 73 WAIG 1754, that as Ms D’Rozario was no longer an employee at Sir Charles Gairdner Hospital, and no claim was made for the employment relationship to be restored, there no longer existed any live industrial matter for the Commission to enquire into and deal with.

7          After a short adjournment the Commission informed the parties that the application to amend the referral would be granted in part, but be limited to consideration of the proper method of calculation of entitlements to income maintenance and severance (if any), for the existing employees the subject of the s 44(9) referral.  These are my reasons for so concluding which I can shortly state.

8          It is clear that the Commission has power to amend any proceedings on such terms as it considers fit, under s 27(1)(l) of the Act.  It is also trite that in proceedings such as these, the Commission does not have jurisdiction or power to enforce the terms of an award or industrial agreement.  That does not preclude, however, the Commission from engaging in what has been described as “arbitral interpretation”, involving the interpretation of an award or industrial agreement, for the purposes of enquiring into and dealing with the industrial matter before it.

9          The issues in dispute between the parties to the present proceedings relate to the redeployment of, now, four employees employed as Menu Assistants at Sir Charles Gairdner Hospital. Questions have arisen as to the suitability of alternative employment that has been offered by the Minister, for the purposes of cl 8 of the Agreement. The Commission has heard a significant amount of evidence, and taken submissions on these issues to date.  Regardless of whether the primary relief claimed by the Union, that being a declaration that the offers of alternative employment made by the Minister to the affected employees is not suitable alternative employment for the purposes of the Agreement, or not as the case may be, will involve the issue raised by the Union.

10       That is, insofar as Ms Carroll and Ms Tisdale are concerned, as existing employees, whether the Union is ultimately successful on their behalf, the fact that they have taken a period of long service leave will be a relevant consideration for the Minister, in calculating either their income maintenance or their severance pay, whichever arises under the Agreement.  That is still a live issue to be determined in these proceedings.  Given the nature and history of the present dispute, it is in the interests of the parties concerned, having regard to s 26 of the Act, that all relevant issues in dispute be determined by the Commission, subject of course to those matters being within the Commission’s jurisdiction and power.

11       Insofar as Ms D’Rozario is concerned, I am not satisfied that a determination of this issue in relation to her circumstances would be within jurisdiction and power.  That is because she has now resigned from her employment and is no longer an employee. In my view, in relation to her particular circumstances, the Commission would have no jurisdiction or power to make any determination about her entitlements as there is no live industrial matter on foot.  Firstly there is no claim that the former employment relationship between her and the Minister be restored.  Secondly and in any event, what the Union effectively seeks in relation to Ms D’Rozario, amounts to an after the event declaration about an entitlement under the Agreement, which is ultimately an enforcement issue or alternatively, a matter of bare interpretation.

12       For the foregoing reasons, the Commission requested the Union to draft an appropriate short amendment to the referral, reflecting the restricted amendment granted.

13       The second issue to be dealt with concerns the circumstances applying to Ms Stanciu.  As a result of earlier proceedings before the Commission in the substantive matter concluding on 29 March 2012, an issue arose as to Ms Stanciu’s medical fitness to undertake the suitable alternative employment then offered to her by the Minister.  Ms Stanciu had been offered the alternative position of a Menu Assistant in the C Block location of the Sir Charles Gairdner Hospital.  For medical reasons, in relation to which Ms Stanciu obtained a medical report from her general practitioner Dr Di Camillo, it was concluded that Ms Stanciu was permanently unfit for such a position as it would aggravate her medical condition.  Following the proceedings on 29 March 2012, Ms Stanciu’s circumstances were referred to the Minister’s medical advisor for assessment.  As a result, Ms Stanciu was offered a further alternative position, which the employer considered to be further suitable alternative employment.

14       The employer’s medical assessment found that Ms Stanciu was not medically fit to perform the original duties of the position initially offered to her as suitable alternative employment.  This opinion was expressed on advice from Dr Lee, an occupational physician.  This advice was dated 17 April 2012.  Subsequently, on 20 April 2012, Ms Stanciu was offered the further alternative position noted above.  The Minister contends this is suitable alternative employment under cl 8(1) of the Agreement.  Through the Union, Ms Stanciu has disputed this and does not consider that this is suitable alternative employment, and opposes her transfer.

15       The Union now contends, that in accordance with cls 8(2)(b) and (10) of the Agreement, Ms Stanciu is entitled to leave the services of the employer and receive a severance payment.  This is prior to any further consideration by the Public Sector Commissioner, as to whether, in its view, the further alternative position is suitable alternative employment for the purposes of the Agreement.

16       Given that the Minister contests the Union’s view as to Ms Stanciu’s present entitlement, the parties agree that this matter be determined as a discrete issue in the proceedings.  If the Union’s contention is upheld, then Ms Stanciu would be entitled to severance payments in accordance with the terms of the Agreement.  If not, the determination of the Public Sector Commissioner will be received and considered.  If the Public Sector Commissioner, in accordance with the terms of the Agreement, concludes that the further offer is suitable alternative employment for Ms Stanciu, the Union foreshadowed recalling Ms Stanciu to give further evidence on the resumption of the proceedings.  Since these submissions were made, the Public Sector Commissioner has determined that the further offer to Ms Stanciu should be regarded as suitable alternative employment for the purposes of the Agreement.

17       To facilitate the determination of this issue at this stage, the Commission will divide the proceedings under s 27(1)(s) of the Act.  This discrete issue will become application CRA 1 of 2012. The remainder of the issues for determination will be application CRB 1 of 2012.

Terms of Agreement

18      The relevant provisions of the Agreement for present purposes are as follows:

8. REDEPLOYMENT AND RETRAINING

Suitable Alternative Employment

…

(2) a) The suitability of alternative employment or training shall be determined by the Public Sector Management Division of the Department of Premier and Cabinet after consultation with the employer, employee and Union concerned in accordance with subclause (1) of this clause and having regard for the particular circumstances of each employee.

   Any dispute between the parties over whether a position falls within the definition of suitable alternative employment as prescribed by subclause (1) of this Clause, subject to subclause 8 (2) (c) may be -referred to the Commission by any party to the dispute.

  b) Where suitable alternative employment is unable to be identified for an employee, the employee may elect within three months from the date the position becomes redundant to transfer to a position outside that defined as suitable or leave the services of the employer.

An employee who elects:

i) to leave the service of an employer shall be paid the severance and other payments prescribed by Clause 10 - Selective Voluntary Severance or Early Retirement of this Agreement; or

ii) to transfer to a position under the terms of this clause shall be entitled to the provisions of Clause 9 - Income Maintenance of this agreement .

…

10. SELECTIVE VOLUNTARY SEVERANCE OR EARLY RETIREMENT

Selective voluntary severance or early retirement

(1) a) Each employee identified as being surplus to the employer's requirements and who:

i) is dismissed without notice on grounds related to redundancy of the kind described in Clause 8 (2) (c) ; or

ii) cannot be found suitable alternative employment and who elects to resign; shall be entitled to the benefits of this clause.

Contentions of parties

19       The Union submitted that on its proper construction, consistent with the ordinary and natural meaning of the language of the clause, there is no ambiguity.  It was submitted that the purpose of the clause is to place a time limit on the period from which an employee’s position is declared redundant, for a suitable alternative position to be identified.  If within the three month time limit specified in the clause, a suitable alternative position has not been identified, then the employee should be entitled to the option of leaving the employer and taking a severance payment.  The Union contended that the evident purpose from the terms of the clause is to not leave an employee “in limbo” where there may be endless offers of alternative employment, thereby denying an employee an opportunity to leave the employer and take the benefits under the Agreement.

20       In this case, it is common ground that Ms Stanciu’s position was, as with the other Menu Assistant positions, declared redundant on 9 January 2012.  Whilst an interim order was made by Mayman C on 5 January 2012, the effect of the interim order was not to stay the declaration of redundancy of the positions rather a stay on the redeployment of the employees was imposed.  This meant, as noted above, that the affected employees were declared supernumerary, and given alternative meaningful work.

21       The Union also contended, that the fact of the suitability of the alternative employment presently being in dispute, and being the subject of proceedings before the Commission, should not deny Ms Stanciu the benefit of the operation of this clause. In the present circumstances, after her position was declared redundant on 9 January 2012, the Union, on behalf of Ms Stanciu, by letter of 23 March 2012 to the Minister, said that should the alternative employment initially offered to her not be suitable, then Ms Stanciu intended to elect to leave the services of the employer and take a severance payment.  Given that it was found by 23 April 2012 that the alternative employment offered to Ms Stanciu was not suitable, then within the three month period specified in cl 8(2)(b)(i) of the Agreement, Ms Stanciu has made her election.

22       For the Minister, it was submitted that even though the first offer of alternative employment was held not to be suitable by reason of Ms Stanciu’s medical fitness, that does not preclude the Minister from making further offers of alternative employment to her in an endeavour to find a position which is suitable.  Furthermore, the current revised alternative employment offer, is but one of a range of positions that have been offered to Ms Stanciu and her colleagues previously, from July 2011.  The contention of the Minister was that until the Commission determines whether the current offer of alternative employment is suitable, then Ms Stanciu should not be entitled to resign and receive a severance payment.

Consideration

23       In relation to the principles to apply in the interpretation of industrial instruments, in Quality Bakers Australia Limited v Australian Liquor, Hospitality and Miscellaneous Workers Union, Western Australian Branch & Other (2004) 84 WAIG 2579 I observed:

“It is settled law in this jurisdiction, that awards should be interpreted consistent with relevant principles having application to the construction of any other written instrument: Perth Electric Tramways Employees’ Industrial Union of Workers v The Commissioner of Railways (1927) 7 WAIG 155; FMWU v Wormald International (Australia) Pty Ltd (1990) 70 WAIG 1287. That is, the meaning of the relevant provision in the Award needs to be read in its ordinary and natural sense within the context of the Award as a whole: Norwest Beef Industries Ltd v WA Branch, Australasian Meat Industry Employee's Union (1984) 64 WAIG 2124. Additionally, given that many if not most awards are drafted by those not always skilled in the art of legal drafting, a generous approach to interpretation ought be adopted: Hospital Salaried Officers Association v Minister for Health (1981) 61 WAIG 616; Robe River Iron Associates v Amalgamated Metal Workers and Shipwrights Union of Western Australia and Others (1987) 67 WAIG 1097.”

24       Additionally, the High Court has reaffirmed the purposive approach to interpretation in Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355.  Applying these principles, in my view, the construction of the Union is to be preferred.  I have reached that view for the following reasons.

25       From the language used in cl 8(2)(b), the draftsperson has clearly intended to specify a time limit on the process through which suitable alternative employment may be identified for an employee whose position has been declared redundant. The evident purpose of the time limitation, in this case three months, is to ensure that the process does not continue in endless cycles of offer and rejection.

26       The terms of the Agreement contemplate that the parties turned their minds to what would be a reasonable period of time from the date of an employee’s position being declared redundant, to pursue suitable alternatives. The clear intention of cl 8(2)(b), from its plain and ordinary meaning, is to enable an employee to make a decision about their future within the three month time limit, to either transfer to an external position or to leave the employer, where suitable alternate employment has not been identified within this period.  In the latter case, the terms of cl 8(2)(b)(i) make it clear that upon exercising that election, as long as it is within the three month time limit, in this case from 9 January 2012, the employee is entitled to be paid the severance and other payments prescribed by cl 10 of the Agreement.  The overall purpose of the subclause, having regard to the terms of cls 7, 8, and 10 of the Agreement when read as a whole, is to provide a degree of certainty within which the redeployment, retraining and severance process will take place. Whilst the purpose of the framework is to place an emphasis on finding alternate employment for an employee, it is not intended that disputes about these matters continue endlessly, and thus leave employees uncertain about their future, which conceivably could be the case on the Minister’s interpretation of the Agreement.

27       If the focus is only on the first part of cl 8(2)(b), that being the finding of suitable alternate employment, then it is not difficult to envisage many circumstances where the employee would be denied the benefit of the remainder of the subclause.  This is so because time may pass well beyond the point at which the employee’s position is declared redundant.

28       Accordingly, a declaration will be made that Ms Stanciu should be entitled, in accordance with cls 8(b)(ii) and 10 of the Agreement, to elect to leave the services of the employer, and be paid the severance and other payments as prescribed.