T13451
TASMANIAN INDUSTRIAL COMMISSIONIndustrial Relations Act 1984
and Minister Administering the State Service Act 2000
[2] The matter was listed for hearing at the Commonwealth Law Courts, 39-41 Davey Street, Hobart, Tasmania on 9 June 2009 (Conciliation Conference), 12 June 2009 (Report Back and Directions) and 16 June 2009. [3] Mr M Johnston with Ms L Saunders appeared for and on behalf of the Union; Mr P Baker, Ms J Fitton and Mr N McCulloch appeared for and on behalf of the Minister. [4] The Union alleged the Minister had breached the award by failing to consult with the Union prior to giving notice to retire from the agreement. Further, that the Minister is likely to breach the agreement by failing to honour the nexus pay increment calculated on 31 May 2009 when it falls due in July. [5] The agreement had effect from 1 July 2005 for a period of three years. In accordance with Clause 55(7) of the Act the agreement remained on foot beyond the operational term which expired at 30 June 2008. In the agreement, at Clause 8 - Salary Nexus Arrangements, it specifies that on 31 May each year a nexus calculation would be made to determine the ongoing salary increments. The recalculated salaries would be payable from the first full pay period after 1 July of the same year during the life of the agreement. [6] The agreement affects approximately 130 employees. [7] On 27 May 2009 the Minister lodged a Notice of Intention to Retire from Industrial Agreement (notice to retire) with the Office of Registrar at the Tasmanian Industrial Commission under Clause 55(9) of the Act to retire from the agreement. [8] Mr Johnston, for the Union, alleged the Minister failed to consult with the affected employees or their representatives prior to the lodgement of a notice to retire from the agreement. He alleged a breach of Part XI(1) of the award, which relates to an obligation on an Agency to consult with its employees and their representatives with respect to changes as outlined, but not restricted to, paragraph 1(b) of the Part. He also argued that the examples in the paragraph were not exhaustive and the issues could not be restricted to those denoted in the paragraph. [9] Mr Johnston said the agreement makes reference to the General Conditions of Employment Award which was the processor of the current award, where Part XI resides, and as such has application in this matter. [10] This was not disputed. [11] Indeed, Mr Johnston alleged that far from being open to discussion the Department of Justice gave out false information to the employees regarding its intent. He said he heard by chance of a meeting on 28 May 2009, where the Deputy Secretary of the Department of Justice, Mr Michael Stevens, was about to address some of the legal practitioners. He managed to attend the meeting during which Mr Stevens communicated the intention of the Minister to retire from the agreement. Until that point in time the Union had not been made aware of the Minister’s intentions. [12] Mr Johnston said that after the meeting he discovered that the Union had received a notification from the Minister, that same morning while he was at the meeting, which indicated an intention to withdraw from the agreement. [13] Mr Johnston said this was misleading since the notice to retire from the agreement had already been lodged with the Tasmanian Industrial Commission (the Commission) the previous day. In answer to a question by Mr Johnston regarding the limited number of employees present, Mr Stevens allegedly said that there were no plans to inform the rest of the legal practitioners. [14] This statement was not challenged by Mr Baker, the Minister’s representative. [15] Similarly on the same day the Manager, Legal Aid Commission of Tasmania, wrote to the employees of that section informing them of the intention of the Minister to retire from the agreement. Exhibit A1 presents the email communication dated 28 May 2009, from Mr N Reaburn: “I have just been advised that the Public Sector Management Office is at the Tasmanian Industrial Commission lodging the notice, and that the CPSU has been advised.” [16] Mr Johnston addressed an email (Exhibit A1) sent by the Secretary of the Department of Premier and Cabinet, Mr Rhys Edwards, to “legal practitioners” on 28 May 2009, it was not specified which legal practitioners were included in the circulation. Mr Johnston cited two paragraphs. In the first paragraph it concluded: “… to date no application has been received from the Union seeking to negotiate a new agreement with the Government.” [17] In the fourth paragraph: “It is therefore the Government’s intention to lodge a notice with the Tasmanian Industrial Commission under s.55(8) (sic) …” [18] Mr Johnston argued that Mr Edwards had inferred that as a result of the Union not having yet initiated a re-negotiation of the agreement, the Minister made the decision to withdraw from it. [19] Mr Baker argued that there was no breach of award, in that Part XI of the award refers to matters such as structural change and not the re-negotiation of the agreement. He cited Clause 1 - Consultation and Change, subclause (b) of that Part: “Major change in working arrangements and practices that are likely to have significant impact on employees …” [20] Mr Baker argued that the Minister’s actions were in accord with Clause 55(9) of the Act: “At any time after the expiry of an industrial agreement, a party to the agreement may file in the office of the Registrar, a notice in the prescribed form signifying his intention to retire from the agreement at the expiration of the period of 30 days from the filing of the notice and that party shall, on the expiration of that period, cease to be a party to the agreement.” [21] Mr Baker conceded that “… the process of consultation could have been handled a little better than what it did – or what it has done.” (Transcript p.6, L.2) However, he said that the Minister determined a need for urgent action to be taken. [22] Mr Johnston sought an Order from the Commission under s.31(1) of the Act, in that the Commission has the power to order: “… that anything should be required to be done, or any action should be required to be taken, for the purpose of preventing or settling the industrial dispute in respect of which the hearing was convened ...” [23] The Order sought by Mr Johnston was for the Minister to withdraw his notice to retire from the agreement and to allow two weeks of consultation between the Minister’s representatives, the employees and the Union. [24] Mr Baker said that the Minister was prepared to commence negotiations immediately and that Mr Johnston was aware of that. [25] Mr Johnston also alleged a potential breach of the agreement with respect to the Minister’s intent not to honour a wage increase which he said was due in the first full pay period after 1 July 2009 by virtue of the nexus arrangement within the agreement. [26] Mr Baker argued that no liability existed to pay the outcome of the recent nexus calculations because the agreement would have expired by 1 July 2009. [27] Mr Johnston asserted he and Mr Lynch had discussions with representatives of the Public Service Management Office (the PSMO) late in 2008 regarding the agreement. He said they had made the PSMO aware that should the agreement still be on foot at 31 May 2009 then there would be a liability to pay the nexus increase in July. He accepted he had no documentary evidence of the meeting. [28] Mr Johnston also asserted that the PSMO had suggested, around the same time, that there was “no hurry” for the Union to lodge their log of claims because they, the PSMO, did not have the personnel to process the claims. [29] Mr Baker rejected this assertion. [30] Mr Johnston claimed that the Minister’s failure to consult with the Union prior to withdrawing from the agreement was an attempt to coerce the Union to consent to any amendments the Minister wanted to introduce into the award. [31] Mr Baker said that the Minister was not aware that there had been any consideration of a replacement to the agreement by the Union. He argued that during the development of the agreement the Union had insisted that it be for a three-year term as opposed to the five years as sought by the Minister, hence the employees could not have an expectation of another nexus increase in pay. He said in May this year the Union had circulated a document to legal practitioners which signalled a pay increase in line with the Government’s recent wage policy. [32] This was not challenged. [33] Mr Baker rejected any inference by Mr Johnston that the Minister’s representatives had wilfully misled employees regarding withdrawal from the agreement. He said that withdrawal from the agreement would not impact on either the working arrangements or practices of the legal practitioners within the Agencies. [34] Mr Johnston argued that he had come to the conclusion that there was a liability to pay the nexus payment in July this year by his reading of Clause 8 of the agreement: “Thereafter, for the term of this Agreement, salaries will increase, unless otherwise specified, in accordance with a salary nexus arrangement …” [35] Further: “On 31 May in each year of operation of this Agreement the average salary paid to the equivalent legal practitioners … will be determined from published salaries: ...” [36] And: “Salaries will be increased by that percentage, unless otherwise specified, with effect from the first full pay period after 1 July in each year.” [37] Ms J Fitton, also representing the Minister, argued that the 31 May was merely a calculation point and attracted no liability to pay the nexus outside of the agreement. She said that Clause 5 of the agreement specified the extent of the agreement from 1 July 2005 to 1 July 2008 and offered nothing beyond that date. She said that regardless of the current economic situation there had never been an intention or contemplation to pay the nexus arrangement beyond 1 July 2008. [38] Ms Fitton could not say if the other party was aware of the Minister’s intention to re-negotiate the agreement prior to lodging the notice to retire on 27 May 2009. [39] Ms Fitton gave the examples of the “Post Year 10” teachers’ and the “health practitioners” agreements where, after the expiry of those agreements, they continued to operate but without the nexus component. [40] Ms Fitton argued that Clause 8 of the agreement was the only clause which was reliant on an operative date and as such the rest of the agreement could remain on foot unhindered. [41] Mr Johnston said that in recent months newly appointed legal practitioners had been directed to the current agreement as the basis of their employment conditions. [42] Ms Fitton argued that as the agreement is currently on foot, it is appropriate that the new employees are directed to it.
[43] Mr Johnston sought an Order from the Commission for the Minister to withdraw the notice to retire from the agreement and to allow two weeks of negotiation around a new agreement. He cited clause 31(1) of the Act which states: “… that anything should be required to be done, or that any action should be required to be taken, for the purpose of preventing or settling the industrial dispute in respect of which the hearing was convened, that Commissioner may, by order in writing, direct that that thing is to be done or that action is to be taken.” [44] The Commission did not accede to Mr Johnston’s request for two reasons. [45] The first that the Minister, indeed either party, under Clause 55(9) of the Act is entitled to file a notice to retire from an agreement at any time after that agreement has expired. This is not an uncommon occurrence. As such, the Commission has no facility to prevent the parties from exercising that right. [46] Secondly, the Minister offered to commence negotiations around a new agreement immediately which, in my view, facilitates the “two weeks” stay sought by the applicant. [47] I accept that in not making the Order requested by the applicant, the agreement will expire before the 1 July 2009. [48] I turn to the alleged breach of Part XI(1) of the award. [49] Subclause (a) of Clause 1 - Consultation and Change at Part XI, directs the following: “Where an Agency proposes major changes in the work arrangements and practices that are likely to have significant effects on employees the Agency is to notify the employees who may be affected by the proposed changes and the relevant union/s prior to the implementation of any changes” [50] And at subclause (b) the type of changes are elaborated upon: “Major changes in work arrangements and practices that are likely to have significant impact on employees include those matters that may be directly linked to public sector restructuring processes including amalgamations and the implementation of new technologies, systems and workplace practices that improve productivity and efficiency and the quality and quantity of organisational outcomes.” [51] Mr Johnston argued that Part XI(1)(b) was not an exhaustive list and that retirement from an agreement was correctly covered by this paragraph, therefore failure to consult breached the award. [52] In my view the whole of Part XI(1) is specific to the introduction and management of significant changes to the everyday process of going about their work which were to be imposed on individual employees. [53] From submissions presented by Mr Baker and Ms Fitton it is the Minister’s intent that the most significant change to the agreement he is seeking is to cease adhering to the nexus pay arrangement. This action, we were told, comes about as a result of a projected budget shortfall, which may affect the totality of the State Service. Whatever the reason, in my view wage negotiations are part and parcel of ongoing industrial life and not “Major changes in work arrangements and practices …” [54] Clause 55(9) of the Act affords a 30-day notice period before retirement from an agreement is concluded, one must assume to facilitate re-negotiation. Further, the Act is silent on the need for the retiring party to give any notice of their intent, prior to lodging the notice to retire. [55] In the instant matter it is clear the Minister sought to withdraw from the agreement before 1 July. There was no evidence educed to support Ms Fitton’s assertion that it was never the intent of the Minister to pay the nexus arrangement beyond 1 July 2008. The agreement had been expired for almost 11 months. It is not uncommon for agreements to continue for years after the nominal expiry date. Mr Baker conceded that the communication process was lacking. [56] I reject the inference made by senior members of the State Service and Mr Baker that retirement from the agreement was as a consequence of the Union not initiating a re-negotiation process for the agreement. Unrefuted evidence shows that the Union had raised this very matter with PSMO late in 2008. PSMO declined to progress the matter at that time. [57] There is nothing in the Act to prevent either party unilaterally retiring from an expired agreement at any time. The Minister, needlessly in my view, waited until the last moment to retire from this agreement, reasons for which were not disclosed. There is certainly evidence of inaccurate communication from senior public servants to the employees and the Union. Whether this was deliberate or by accident is open to conjecture. [58] The Minister’s failure to communicate his intent to retire from the agreement to the employees and the Union in an open and timely manner, in my view, is disingenuous to those parties; particularly when the expectation from all parties was that the agreement would be re-negotiated at some point in time. However, there is no evidence that the Minister intends to introduce major or significant change to the operation of the workplace without consultation and as such has not breached the award, and I so find. [59] Mr Johnston argued that once the nexus pay increase had been calculated on the 31 May 2009, the Agency was liable to pay this increase on 1 July regardless of whether the agreement was on foot or not. He said that in late 2008, he and Mr T Lynch approached the officers of the PSMO and reminded them of the expectation that the nexus arrangements would be honoured in July 2009. [60] I have no doubt that Mr Johnston and Mr Lynch did approach the PSMO regarding the nexus payments. However, what they expressed was their interpretation of the application of the nexus. I do not concur with their interpretation. [61] Ms Fitton argued that 31 May was only a calculation point, an activity that had been undertaken and attracted no liability to pay beyond the life of the agreement. She said that there could be no expectation that a nexus payment would be made beyond the operational date of the agreement. I accept Ms Fitton’s argument that 31 May is only a calculation date for the quantum of the nexus payment. [62] Clause 5 of the agreement limits the operation of the agreement to three years from 1 July 2005. Albeit Clause 55(7) of the Act prescribes that the agreement continues until one or both parties retire from it. [63] Clause 8 of the agreement details how and when the nexus payment is to be calculated. The last paragraph of the clause states: “Salaries will be increased by that percentage, unless otherwise specified, with effect from the first full pay period after 1 July each year.” [64] The Minister legitimately applied to retire from the agreement on 27 May 2009, which in my view introduces an alternative specification as expressed in Clause 8 as above. The agreement remains in force for 30 days beyond that date before the Minister is no longer a party to it. On Friday 26 June the agreement will no longer have force. [65] The Minister is obliged to pay that quantum in July of each year while the agreement is on foot. The agreement will expire on 26 June 2009. The agreement will no longer be on foot when the payment is due therefore there is no liability for the Minister to pay the nexus in July 2009. There will be no agreement to enforce. The Minister cannot breach that which no longer exists. It follows that the Minister is not likely to breach the agreement, and I so find. [66] The application is dismissed, I so order.
James P McAlpine
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