FEDERAL COURT OF AUSTRALIA
CPSU, The Community and Public Sector Union v Commonwealth of Australia[2007] FCA 1861
Workplace Relations Act 1996 (Cth) ss 792, 793, 809
Workplace Relations Amendment (Work Choices) Act 2005 (Cth)
BP Refinery (Westernport) Pty Limited v President, Councillors and Ratepayers of the Shire of Hasting (1977) 180 CLR 266 considered
Briginshaw v Briginshaw (1938) 60 CLR 336 applied
Byrne v Australian Airlines Limited (1995) 185 CLR 410 cited
Commonwealth Bank of Australia v Finance Sector Union of Australia (2007) 157 FCR 329 cited
Community and Public Sector Union v Telstra Corporation Ltd (2000) 99 IR 238 cited
Community and Public Sector Union v Telstra Corporation Ltd (2001) 107 FCR 93 considered
CPSU, The Commonwealth and Public Sector Union v Commonwealth of Australia [2006] FCAFC 176 referred to
Greater Dandenong City Council v Australian Municipal, Administrative Clerical and Services Union (2001) 112 FCR 232 considered
Maritime Union of Australia v Geraldton Port Authority (1999) 93 FCR 34 considered
McIlwain v Ramsey Food Packaging Pty Ltd (2006) 154 IR 111 considered
Patrick Stevedores Operations No 2 Pty Limited v Maritime Union of Australia (1998) 195 CLR 1 considered
Squires v Flight Stewards Association of Australia (1982) 2 IR 155 considered
Tasmanian Development and Resources v Martin (2000) 97 IR 66 considered
The Employment Advocate v National Union of Workers (2000) 100 FCR 454 considered
Tillmanns Butcheries Pty Limited v Australasian Meat Industry Employee’s Union (1979) 42 FLR 331
Wribass Pty Limited v Swallow (1979) 38 FLR 92 cited
CPSU, THE COMMUNITY AND PUBLIC SECTOR UNION AND GREGORY MCCARRON v COMMONWEALTH OF AUSTRALIA
NSD 2262 OF 2006
COWDROY J
4 DECEMBER 2007
SYDNEY
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IN THE FEDERAL COURT OF AUSTRALIA |
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NEW SOUTH WALES DISTRICT REGISTRY |
NSD 2262 OF 2006 |
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BETWEEN: |
CPSU, THE COMMUNITY AND PUBLIC SECTOR UNION First Applicant
GREGORY MCCARRON Second Applicant
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AND: |
COMMONWEALTH OF AUSTRALIA Respondent
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COWDROY J |
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DATE OF ORDER: |
4 DECEMBER 2007 |
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WHERE MADE: |
SYDNEY |
THE COURT DECLARES THAT:
1. The Respondent breached Clause 30 of the Australian Workplace Agreement between the Second Applicant and the Respondent by imposing the ban on leave on 30 November 2006.
THE COURT ORDERS THAT:
2. The proceedings be adjourned to a date to be fixed for presentation of submissions in respect of orders, and/ or penalty arising from the Court’s findings.
3. Costs be reserved.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
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IN THE FEDERAL COURT OF AUSTRALIA |
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NEW SOUTH WALES DISTRICT REGISTRY |
NSD 2262 OF 2006 |
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BETWEEN: |
CPSU, THE COMMUNITY AND PUBLIC SECTOR UNION First Applicant
GREGORY MCCARRON Second Applicant
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AND: |
COMMONWEALTH OF AUSTRALIA Respondent
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JUDGE: |
COWDROY J |
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DATE: |
4 DECEMBER 2007 |
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PLACE: |
SYDNEY |
REASONS FOR JUDGMENT
1 The first applicant, the Community and Public Sector Union (‘the CPSU’) seeks a declaration that the respondent, the Commonwealth, breached s 792(1) of the Workplace Relations Act 1996 (Cth) (‘the Act’) by subjecting its employers to a disadvantage in their employment for a reason prohibited under s 793(1)(a) of the Act and for additional declarations and orders arising out of other alleged unlawful conduct by the Commonwealth.
2 The second applicant (‘Mr McCarron’) claims similar declarations and orders and additionally claims that the conduct complained of constitutes a breach of an agreement made between himself and the Commonwealth relating to his employment.
3 The claim arises from the refusal of the Commonwealth to permit Mr McCarron to take accrued flex leave to enable him to attend an event which was held on 30 November 2006 known as the National Day of Community Protest (‘NDCP’). The CPSU is an affiliate of the Australia Council of Trade Unions (‘the ACTU’). The NDCP was held as part of the campaign organised by the ACTU against the recent amendments to the Act: see Workplace Relations Amendment (Work Choices) Act 2005 (Cth) (‘Work Choices’).
FACTS
4 At all material times Mr McCarron was and remains an employee of the Commonwealth Department of Employment and Workplace Relations (‘the Department’). His employment is governed by an Australian Workplace Agreement (‘AWA’) made between himself and the Commonwealth. Shortly after joining the Department on 1 November 2001 Mr McCarron became a member of the CPSU and has remained a member of that union.
5 The Workplace Authority, formerly known as the Office of Employment Advocate (‘OEA’), an organisation within the Department, is constituted by a number of business units. One such business unit is Agreement Services, previously known as Australian Workplace Agreements Operations. The functions of Agreement Services include the provision of advice and assistance to employers and employees. Agreement Services is also responsible for the management and lodgement of AWAs, project work and prior to 27 March 2006, the review of AWAs under the Act.
6 Mr McCarron is engaged in such business unit and as an Agreements Specialist dealing with AWAs he is required to coach and mentor staff. Approximately 82 employees are engaged in that section, 50 of whom work in the Sydney office. Ten employees are engaged in a similar role to that of Mr McCarron.
Application for leave
7 On 16 March 2005 the Executive of the ACTU passed a resolution to oppose the changes in the industrial relations system and organise the campaign known as ‘Your Rights at Work’. As part of such campaign it arranged the NDCP. The ACTU considered that maximising attendance at the NDCP was essential to the success of the campaign which included a day of protest in November 2005 (‘the 2005 NDCP’) and a week of protest from 25 June – 1 July 2006 (‘the June protest’). In October 2006 the CPSU distributed a bulletin to all its members encouraging attendance at the NDCP and commenced to register details of its members who would be attending. A further bulletin was published on 1 November 2006 the relevant portions of which provided as follows:
Make a difference on November 30
01 November 2006
Australia’s largest-ever national rally for decent workplace rights is approaching fast. Now is the time to book your leave for Thursday morning November 30… and get organised.
Why you need to attend: The Government’s harsh new industrial laws are being been [sic] used to slash pay and conditions, and sack people unfairly. November 30 is a historic opportunity for workers, unions, families and communities to campaign together for a fairer system. With a federal election looming, the time is right to send a strong message to all politicians about respecting our rights at work.
What are we rallying for? November 30 is not just about opposing the Government’s unfair workplace laws, it’s also about putting forward a positive vision for a fairer system based on:
· a democratic say in how your wages and conditions are determined
· an obligation to bargain in good faith
· a genuine safety net
· real freedom of association
· an independent umpire – the Industrial Relations Commission – to help resolve workplace disputes
Is this event ‘industrial action’? No. Attending the Day of Action is not ‘industrial action’ – which means you should apply for a flexi, RDO or recreation leave etc.
Do I need to arrange leave now? Yes. To avoid disappointment make your leave application now.
What are my rights in relation to requesting leave? In approving leave requests, managers have no real right to ask what you plan do with your time off. It’s worth noting that a number of Departments who tried to unfairly deny similar leave requests last November are now facing legal proceedings. If you feel your leave request is being unfairly denied, contact the CPSU immediately on 1300 137 636.
8 Mr McCarron wished to attend the NDCP and for that purpose he intended to use a day of accrued leave under his flex-time arrangements with the OEA. However on 18 October 2006 he received an advice by email from Ms Ann Skarratt, Corporate Director of the OEA, advising that the OEA must be able to provide a full range of services to its clients on 30 November 2006 and that for this reason, leave, including flex leave, would not be approved for staff to participate in the NDCP. The email further advised that any staff absences without leave, would be treated as unauthorised absences. It relevantly stated:
The OEA’s position is that on that day, 30 November – just like every other working day – the OEA must be able to operate normally and provide the full range of services to its clients. For this reason, leave (including flex leave) will not be approved for staff to participate in the “National Day of Community Protest”. Employees will be expected to start work at the time they normally do.
If an OEA employee applies for sick leave to cover 30 November, their manager can request that they provide a medical certificate. Likewise, where there is an application for carer’s leave, the employee’s supervisor may request a written declaration from the employee.
Of course, any leave previously approved, that runs over 30 November, will stand.
If staff absent themselves from the workplace without approved leave, this will be an unauthorised absence and salary will be deducted for the duration of the unauthorised absence
Managers and supervisors will record details of any employees on unauthorised absence, and notify the details to Human Resources, which will arrange for salary deductions to be made.
9 In response the CPSU wrote to Mr Peter McIlwain, the Employment Advocate, threatening to take legal action if the OEA did not withdraw the ban on leave the NDCP. Mr McIlwain responded stating relevantly as follows:
My decision to restrict access to leave on 30 November 2006 is motivated solely by the need to ensure that the OEA continues to operate in a normal fashion on that day.
The purpose of the event on 30 November is irrelevant. The decision would be the same, whatever the purpose of the event, where the event was conducted in all States and Territories, on a weekday, during business hours.
I do not consider that the reasonable and lawful direction that I have authorised amounts to a breach of the freedom of association (FOA) provisions of the Workplace Relations Act 1996. The direction was given so that the operational requirements of the Office could continue to be fulfilled. The OEA has obligations to its clients, set out in its Service Charter, which require the presence of staff in all its offices.
10 On 19 October 2006 Mr McCarron sought clarification from the OEA by writing to Ms Sue McIntosh, his supervisor, as follows:
Hi Sue,
I fail to see the difference between using my flexible working conditions to go shopping for a couple of hours, having a very long lunch, or going to listen to some speakers for a couple hours.
I also fail to understand how you can expect me to start at my normal 7.20 on any particular day, where my local arrangements allow me to start as late as 11am should work or personal circumstances dictate.
I am wondering if you could clarify this for me please.
11 In the absence of a response Mr McCarron sent another request on 31 October 2006. As no response had been received to either email by 6 November 2006 Mr McCarron wrote to Mr Brian Forbes Senior Manager in Agreement Services stating that he would like to apply to use some of his accrued flex-leave to attend the NDCP. Mr Forbes responded on 10 November 2006 stating that in view of the directive from Ms Skarratt on 18 October 2006 he was unable to approve such request.
12 The CPSU and Mr McCarron challenge the Commonwealth’s right to impose such ban, and commenced these proceedings on 15 November 2006.
Terms of Mr McCarron’s employment
13 Part 3 of the AWA pursuant to which Mr McCarron was employed by the OEA refers to working hours and pattern of work under the heading ‘Achieving balance through flexibility’. Clause 28 of the AWA relates to flextime and provides the formula relating to the hours worked for the calculation of flextime entitlements. Clause 30 relevantly provides:
Unless otherwise specified in Part 8, Business Unit Specific Arrangements, or Part 9, Employee Specific Conditions, the following arrangements will apply:
a) The approval of flex leave is subject to operation requirements;
b) You may carry over a maximum flex credit of 40 hours at the end of a settlement period. Where flex credit exceeds 40 hours at the end of a settlement period, you will:
(i) bank the excess credits and use these at a later date independently of, or in conjunction with, recreation leave, with the necessary records to be maintained locally; or
(ii) cash out the excess credits at ordinary time rates at the end of the settlement period;
14 The AWA makes provision for differing kinds of leave which included annual leave, personal leave, maternity leave and other types of leave. Clauses 75 and 76 relate to ‘Other Leave’ and provides:
75. Other leave provides flexibility to managers and employees. It can be made available with or without pay for a variety of purposes in accordance with the OEA Leave Policy.
76. Where other leave is refused your manager will advise you in writing of the reason for the decision. Other leave without pay greater than 29 calendar days does not count as service for any purpose.
Flexible working arrangements policy
15 At 30 November 2006 the Commonwealth had a Flexible Working Arrangements Policy (‘the Policy’) which subject to conditions entitled its employees whose engagement was subject to an AWA to flexible working arrangements. Mr McCarron wished to use his flex time for the purpose of attending the NDCP on 30 November 2006.
16 The relevant provisions for present purposes are contained in the first three paragraphs of the Policy which provide:
1. Introduction
The OEA’s Australian workplace agreements (AWAs) provide a range of flexible working arrangements. This guide, to be read in conjunction with the AWAs, contains additional information about these arrangements.
2. Principles
Flexible working arrangements are intended to achieve working patterns which support a balance between employees’ work and personal lives, improve productivity and minimise the need for employees to work beyond their normal hours.
3. Considerations
Working arrangements, work patterns and flextime arrangements should be settled between employees and managers at the earliest opportunity and reviewed as necessary. The following matters should be considered when working arrangements, work patterns and flextime arrangements are being settled:
· hours of work should take into account both operational requirements and the needs of individuals.
· managers and employees should balance working patterns so that they accord with the needs of clients, other members of the unit and the personal needs of employees.
· managers and employees have joint responsibility for ensuring that accurate attendance records are maintained, leave requests submits, and absences from work approved, in accordance with their AWA and this policy.
17 Applications for leave in the OEA were primarily determined by the relevant Team Leader assessing the current and anticipated work flows for the proposed period of leave. Leave applications might be refused where the granting of leave would jeopardise the achievement of the business unit’s performance targets. If it appeared that these targets would not be reached if a particular leave request is approved, a Team Leader would speak to their Operational Manager to ascertain whether it was possible to deploy staff from another work area. Operational Managers unable to resolve the issue between granting leave and meeting targets would report to the next level of management, namely their Team Manager, Mr Brian Forbes. Mr Forbes reported to Mr Michael Stevens, Deputy Employment Advocate and Manager of Agreement Services.
18 On previous occasions Mr McCarron had applied for and been granted leave on the same day as the application or on the following day and he had never experienced an occasion when a determination had been made more than six weeks in advance that leave on a particular day would not be approved because of operational requirements.
19 Mr McCarron recalled only one other prior occasion when an ‘all staff email’ had been sent by Ms Skarratt namely on 7 November 2005 which advised that leave to be absent from work would not be available in respect of the 2005 NDCP. That event was organised for the same purpose as that planned for 30 November 2006.
The 2005 NDCP and other previous union protests.
20 To understand the events leading up to 30 November 2006 it is instructive to consider the events surrounding earlier days of union action organised by the ACTU, namely the 2005 NDCP and the June 2006 protest. In respect of the 2005 NDCP a ban on leave was imposed after an exchange of emails between Mr McIlwain, Mr Rushton, Senior Legal Manager, Mr Stevens and Ms Skarratt.
21 With regard to the 2005 NDCP, both Mr McIlwain and Ms Skarratt claimed that they were concerned that a significant number of staff might apply to take leave on that day. They considered that any increase in the normal levels of absences on that day would impact adversely upon the OEA’s ability to provide the requisite services of that agency. It was for that reason that Ms Skarratt, after consultations with Mr McIlwain, then sent a draft email imposing a ban on leave on the 2005 NDCP to the office managers in the OEA for their consideration. Thereafter Ms Skarratt sent a revised email on 7 November 2005 to all employees of the OEA advising that leave would not be granted on the 2005 NDCP.
22 In anticipation of the June 2006 protest, Ms Skarratt issued an email on 27 June 2006 relevantly stating as follows:
DEWR has issued APS Advice 11 of 2006 on the Community Week of Protest – 25 June to 1 July 2006.
As always, the OEA will put its clients – employees and employers – first. For this operational reason, leave (including flex leave) will not be approved from now onwards for staff to participate in the Community Week of Protest during working hours. Staff will be expected to start work at the time they normally do.
23 During 2006 Mr Geoffrey Charles Casson, Deputy Employment Advocate Client Services within the OEA was acting as Employment Advocate during the absence of Mr McIlwain. Ms Skarratt acted in Mr Casson’s substantive position during his acting appointment. Mr Casson states that prior to receiving Ms Skarratt’s email of 18 October 2006 he had discussed with Ms Skarratt the position relating to flex-leave for the NDCP. He decided that there was benefit in the OEA maintaining an approach consistent with that which had been taken during the 2005 NDCP and restated during the June protest. He said
The paramount consideration was the need for the OEA to ensure that it had sufficient operational staff to provide an appropriate level of services to the OEA’s clients.
24 He also states:
Having regard to the advertised scale of the event, I anticipated that it was likely that a significant number of staff would apply for leave. I decided that the potential scale of the event meant that it might be disruptive to the OEA’s operations if all staff who applied for leave on 30 November 2006 were granted that leave. I also decided that this matter should be dealt with on a clear and equitable basis for all OEA staff.
25 Mr Casson communicated his opinion to Ms Skarratt and considered that the email of 18 October 2006 was justified on the basis of operational requirements.
26 Mr Casson confirmed that in respect of the 2005 NDCP nothing came to his attention which caused a significant problem with people taking, or being absent from work without authorisation. With regard to the June protest, Mr Casson considered that the total ban was necessary to ensure a minimal staffing level availability for operational purposes, given that there was a special event which was ‘targeted at employees to encourage them to attend community protests’. He considered that such circumstance, just like events such as the Melbourne Cup, could have a significant effect upon staffing levels. He considered that it was an ‘unquantified and unquantifiable impact on the business’ and it was prudent to impose the ban. He was not, however, able to indicate whether there was any untoward impact upon attendance during the June protest. Mr Casson considered that it was ‘entirely sustainable to have a policy in place in advance of a significant event, that may have an impact on staffing of the agency, and for certainty, and for fairness and equity purposes’. Mr Casson believed that the NDCP would have a significant effect on business and considered that it was fair and equitable that if more leave applications were received than could be accommodated, it would be unfair to grant leave to some persons and not to others. Mr Casson chose not to overturn the ban.
27 Mr Forbes testified that there had never been any occasion when the OEA had insufficient staff to maintain services, and apart from union days of protest, blanket bans on leave had not, to his knowledge, been applied. Other than the 2005 NDCP, the June protest and the NDCP, a total ban had never been imposed in the OEA. From his consideration, there was no justification for the ban on leave to guarantee access to the OEA’s services. He explained that in his unit, work is not required to be done on any particular day, or between any particular hours, but can be completed at any time as long as business targets were met. In consequence an employee had a high degree of flexibility to decide when to work their required hours.
28 Mr Forbes confirmed that he did not expect any unauthorised absences on the NDCP, that none occurred and that Mr McCarron’s application for leave was the only application received for the NDCP.
29 Mr Steven’s evidence confirmed that of Mr Forbes. Mr Stevens said the he had not held any discussion with Mr McIlwain in November 2005 relating to the question of whether in his business unit a total ban was necessary for operational requirements in respect of the 2005 NDCP nor whether there might have been an increase in the workload on the 2005 NDCP. He had no reason to believe that there would be an increase of workload on that day and there was no such increase experienced on that day. No enquiries were made of him by either Mr McIlwain or Ms Skarratt prior to the 2005 NDCP. After the 2005 NDCP, no enquiry was made of Mr Stevens by Mr McIlwain or by Ms Skarratt to ascertain if there had in fact been any increase in workload on that day. Nor was any inquiry made by either of them concerning any unauthorised leave having been taken on that day.
30 With regard to the June 2006 protest, no enquiry was made of Mr Stevens by Mr McIlwain nor of Ms Skarratt concerning the likelihood of unauthorised absence in that week. The prohibition on leave was not imposed until the Wednesday of that week. There was no apparent increase in work during the June protest, and the number of public enquiries was marginally less that week compared to the previous week.
31 Ms Skarratt maintained that operational considerations were the reason for the imposition of the ban. She did not know of any specific number of staff required to provide the appropriate level of service in any unit. She agreed that she could have spoken to the managers to ascertain whether there was a potential problem in ensuring adequate staff for the NDCP, but chose not to do so. She reiterated that her primary concern was the prospect of a significant increase in leave applications. She discussed the potential for unauthorised absences with Mr McIlwain and considered that it was ‘his call’, rather than discussing such issue with senior managers. She acknowledged that the prospect that unauthorised absence would occur was a possibility but she could not ‘pretend to know’ what the level of unauthorised absence would be. Ms Skarratt acknowledged that Mr Stevens was probably in the best position to determine whether operational requirements would be compromised by attendance at the NDCP.
32 Mr McIlwain considered that it was inappropriate for a public servant to disagree with the legislation they are charged to administer and believed that Mr Stevens, because of the force of his comments concerning Work Choices, might deliberately attempt to compromise the OEA’s operations. Mr McIlwain was extensively cross examined concerning his reasons for imposing the ban but maintained his consideration that fairness, and the need to provide services justified the imposition of the ban.
CPSU involvement
33 The CPSU was directly involved with challenges to the implementation of Work Choices which would have impacted upon the rights of its members. On 20 March 2005 the CPSU had passed a resolution expressing ‘grave concern’ about Work Choices and resolved to oppose its introduction. The resolution referred to the need for cooperation ‘across the trade union movement, the support of the community and a detailed strategic focus’.
34 On 31 March 2005 the CPSU resolved to co-ordinate its approach to the opposition to the legislation with the ACTU and Trade Labour Council’s rallies and activities. On 31 May 2006 the Governing Council of the CPSU adopted a resolution supporting the NDCP and in October 2006 all CPSU staff were provided with information concerning the NDCP. The newsletters were also circulated to CPSU members informing them of the CPSU’s opposition to the legislation and of the need to support the NDCP.
APPLICANTS’ SUBMISSIONS
35 The CPSU and Mr McCarron submit that if conduct of the OEA constitutes a breach of s 792(1)(c) of the Act which relevantly states:
(1) An employer must not, for a prohibited reason, or for reasons that include a prohibited reason…
(c) alter the position of an employee to the employee's prejudice;
36 Section 793(1) of the Act provides that if the conduct referred to s 792(1) of the Act is carried out for one of the reasons referred to in that subsection, it constitutes a ‘prohibited reason’. Mr McCarron submits that the OEA’s conduct in applying the prohibition on flex- leave on the NDCP altered his position to his detriment. By so doing he lost an advantage which he would otherwise have had and such loss is sufficient to constitute ‘prejudice’.
37 Additionally the CPSU and Mr McCarron claim that such breach of s 792(1) of the Act was carried out for a reason prohibited under s 793(1)(a) of the Act or otherwise constituted a threat of such breach pursuant to s 793(2) of the Act.
38 The CPSU and Mr McCarron also claim that the ban on leave on the NDCP, by preventing managers from assessing individual leave applications, constituted a breach of Clause 33 of Mr McCarron’s AWA with the OEA. Clause 33 of the AWA relevantly provides as follows:
Managers are responsible for ensuring that employees do not continue to build excessive flex credits with no opportunity to access flex leave.
39 It is submitted that the ban on leave on the NDCP removed the ability of managers to undertake such task.
SUBMISSIONS OF THE OEA
40 The OEA submits that the CPSU and Mr McCarron have not discharged the onus of proving that the reason for the imposition of the ban was not genuine and that the evidence does not establish that Mr McCarron’s position was altered to his prejudice within the meaning of s 792(1)(c) of the Act. The OEA submits that no employee had the entitlement to take leave on a specified day since the grant of leave remained within the discretion of the OEA. None of Mr McCarron’s accrued leave was lost by virtue of the ban, and accordingly there was no prejudice to him.
41 The OEA submits that even with the ban in place, Mr McCarron was not obliged to attend work until 11.00 am and that there was ample time for him to participate in the NDCP prior to that time if he wished. The OEA submits in answer to the submission of the CPSU and Mr McCarron that ‘leave applications in respect of 30 November 2006 were assessed against a higher standard than on any other day…’, that no higher standard prevailed. Rather, the OEA applied an appropriate response to a non-standard circumstance and applied a criteria which recognised the needs of its clients because of the extraordinary event. That event was the fact that the 2005 NDCP was conducted on a national basis, that there was a significant promotion for attendance and that there was reason to anticipate an increased demand for services by telephone enquiries by employers and employees concerning their rights.
42 With respect to the submission of the CPSU and Mr McCarron that the announcement of the leave ban constituted a threat of prohibited conduct within the meaning of s 793(2) of the Act, the OEA submits that as the ban on leave was not prohibited, its announcement could not have been a threat. Further, the OEA submits that the announcement of the leave ban did not constitute a threat as it did not menace or warn of an intention to inflict harm. The OEA relies upon the observations of Finkelstein J in Community and Public Sector Union v Telstra Corporation Ltd (2000) 99 IR 238.
43 The OEA submits that leave was approved for Mr McCarron after orders of the Full Court in CPSU, The Commonwealth and Public Sector Union v Commonwealth of Australia [2006] FCAFC 176. It is submitted that because Mr McCarron attended the NDCP, his position was not altered to his prejudice.
44 As to alleged breaches of the AWA, it is submitted that Clause 30 of the AWA does not provide an absolute entitlement of flex leave for an employee. Clause 30(a) stipulated that flex leave was ‘subject to operational requirements’. Clause 3 of the Policy required ‘operational requirements and needs of individuals’ to be taken into account when an employee and the manager were settling working arrangements, work patterns and flex-leave arrangements. Clause 1 of the Policy required managers and supervisors to
have regard to the operational requirements of the area, the impact of granting the leave on clients and other members of the workgroup and the personal needs of the employee
when approving the use of annual leave. The OEA submits that it had regard to its operational requirements when determining to refuse further flex leave and annual leave for participation in the rally.
FINDINGS
Prejudicial alteration of position
45 The Full Court in Community and Public Sector Union v Telstra Corporation Ltd (2001) 107 FCR 93 considered the equivalent of s 792(1)(b) in the previous legislation and stated at page 100:
It is sufficient for present purposes to say that if the prejudicial alteration is real and substantial, rather than merely possible or hypothetical, it will answer the description in s 298K(1)(c).
46 Ellicott J in Squires v Flight Stewards Association of Australia (1982) 2 IR 155 at 183 said of the words prohibiting an employer from injuring an employee in his employment as referred to in s 188 of the Conciliation and Arbitration Act 1904 (Cth):
The words “injure in his employment” are in the context of s. 5 words of wide import. I do not regard them as referring only to financial injury or injury involving the deprivation of rights which the employee has under a contract of service. They are, in my view, applicable to any circumstances where an employee in the course of his employment is treated substantially differently to the manner in which he or she is ordinarily treated and where that treatment can be seen to be injurious or prejudicial.
47 The High Court in Patrick Stevedores Operations No 2 Pty Limited v Maritime Union of Australia (1998) 195 CLR 1 at 18, referring to s 298K(1)(c) of the Act being the predecessor to the current s 792(1)(c), said:
par (c) is a broad additional category which covers not only legal injury but any adverse affection of, or deterioration in, the advantages enjoyed by the employee before the conduct in question.
See also Branson J in Commonwealth Bank of Australia v Finance Sector Union of Australia (2007) 157 FCR 329 where her Honour considered the scope of the meaning of a prejudicial alteration of an employee’s position within the meaning of s 298K(1)(c) of the unamended Act.
48 The ban operated to prevent employees of the OEA attending the NDCP. Although Mr McCarron did not have the legal right to be granted flex leave on any particular day he was entitled to have his application for leave on the NDCP assessed the same way as any other day. The ban removed from Mr McCarron the possibility that he would be entitled to take flex leave on a day which would, but for the ban, have been available to him. It was important to him to attend the NDCP to express his support for the Your Rights at Work campaign.
49 In addition the Court accepts the submission of the CPSU and Mr McCarron that the test for the granting of leave was higher on the days of the 2005 NDCP, the June protest and the NDCP. Mr McIllwain gave evidence that he considered he was imposing a higher test on the days of protest in balancing the need to assess individual leave applications and the operational requirements of business units in the OEA. Further Mr McIllwain acknowledged that it was his intention not to merely minimise the risk of not meeting operational requirements on the days of the protests but to eliminate such risk. On days other than the 2005 NDCP, the June protest and the NDCP, the OEA adopted a lower test for assessing risk of not meeting operational requirements. The imposition of a higher test of eliminating risk rather than minimising it constitutes a prejudicial alteration to the rights of employees.
50 The Court is satisfied that the conduct of imposing the ban did alter the position of Mr McCarron to his prejudice as provided by s 792(1)(c). The effect of the ban upon Mr McCarron was real and substantial and not merely hypothetical: see Community and Public Sector Union 107 FCR 93. A further question remains, namely was such ban imposed for a prohibited reason within the meaning of s 793 of the Act?
Was the ban imposed for a prohibited reason?
51 To satisfy section 793(1) of the Act conduct prescribed in s 792 must be carried out, inter alia, because the employee is a member of an industrial association. Mr McCarron was a member of the CPSU and the NDCP was carried out under the auspices of the ACTU with the full support of the CPSU. Ms Skarratt and Mr McIlwain were aware that employees in the OEA were union members and that the NDCP was organised by the ACTU.
52 The standard of proof required to determine whether the reason for conduct was prohibited under s 793 is to be considered in accordance with the principle derived from the judgment of Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336 at 362: see The Employment Advocate v National Union of Workers (2000) 100 FCR 454 at 464 where Einfeld J said
I think that in dealing with these types of civil offences some standard of proof above mere satisfaction on the probabilities is appropriate. The Court is in any event bound by s 140(2) of the Evidence Act 1995 (Cth) to take into account the nature of the cause of action, the nature of the subject matter of the proceeding and the gravity of the matters alleged in determining whether it is reasonably satisfied that the matter has been proved.
53 The ban affected all employees in the OEA, whether members of the CPSU or otherwise. However this circumstance does not lead to the conclusion that it was therefore not imposed for a ‘prohibited reason’. In McIlwain v Ramsey Food Packaging Pty Ltd (2006) 154 IR 111 at 355 Greenwood J said:
Dismissal of employees for a prohibited reason within a group of employees some of whom may be dismissed for a non-prohibited reason does not remove the individual or bilateral character of the prejudicial conduct on the part of the employer as against that employee. It would be an odd thing if the statutory quality of contravening conduct in respect of some employees could be dissolved amongst a group and remedial entitlements otherwise available to the affected individuals thereby lost. The question is whether the conduct, from the standpoint of the individual, notwithstanding others, represents conduct carried out for a prohibited purpose.
54 The motivation for the ban is also a relevant consideration. In Greater Dandenong City Council v Australian Municipal, Administrative Clerical and Services Union (2001) 112 FCR 232 the Full Court considered the interpretation of s 298K of the unamended Act (the equivalent of s 793 of the current Act). At [164] Merkel J observed that s 298K was not concerned
with the cause of the prejudicial conduct. Rather, it is concerned with the employer’s reason or reasons for engaging in that conduct. [emphasis in the original]
55 The Court is required to determine whether there is a causal connection between the conduct of the OEA which altered Mr McCarron’s position to his prejudice, and the status of Mr McCarron as a union member under s 793(1) of the Act: see Maritime Union of Australia v Geraldton Port Authority (1999) 93 FCR 34 at [294]-[296] per Nicholson J. An analysis of the authorities establishes that the Courts have interpreted s 793(1) of the Act as requiring the dominant or immediate purpose of the conduct to be considered and not the ultimate purpose in determining the motivation for the prohibited conduct. Such approach has been applied in statutory interpretation of other statutes: see for example Wribass Pty Limited v Swallow (1979) 38 FLR 92 at 104-106 and Tillmanns Butcheries Pty Limited v Australasian Meat Industry Employee’s Union (1979) 42 FLR 331 at 349 which involved the interpretation of s 45D of the Trade Practices Act 1974 (Cth).
56 Due to the Court’s finding above that the imposition of the ban on leave did constitute an alteration of Mr McCarron’s position to his prejudice, s 809 of the Act is enlivened to reverse the onus of proof and the OEA must establish that the conduct was carried out for reasons which do not include a reason prohibited pursuant to s 793 of the Act.
Operational Reasons
57 The OEA claims that contrary to the ban being imposed for a prohibited reason, namely the union membership of Mr McCarron, the ban was imposed for operational reasons. The OEA provides several reasons to support such claim.
58 Mr McIlwain believed that it was possible for the workload in the OEA to increase on the NDCP generated in part by queries that might be raised by persons who were seeking information on the impact of the NDCP in the workplace. He believed that there would be an increase in demand in key client areas, and that ‘all hands on deck’ were required whether or not particular employees had direct public contact. However, before imposing the ban on leave on the NDCP he made no enquiries after the 2005 NDCP to establish whether any increase in workload in any area had actually occurred. He said he would have made the decision to impose the ban regardless of operational requirements on the 2005 NDCP. He said that he had decided that ‘the circumstances compounding here were unlike those on any other day’.
59 Mr Casson understood that the ban was necessary
to ensure a minimal staffing level availability for operational purposes, given that there was a special event that was – targeted at employees to encourage them to attend the community protests.
60 Ms Skarratt understood that the ban was necessary, ‘the primary factor which is the significant increase in leave applications’.
61 No contemporaneous document relating to such concern on either the 2005 NDCP or the NDCP has been provided to the Court. Mr McIlwain said that there was a need to maintain the services of every available employee on the day. However, evidence has been adduced which establishes that on any one day approximately 20% of staff in Agreement Services would be absent from work through authorised leave, illness and for other reasons. The records for 30 November 2006 show that 11% of staff of Agreement Services had been granted leave prior to the implementation of the ban.
62 On 31 October 2005 Mr Rushton informed Mr McIlwain by email of the need to justify the proposed ban and stated relevantly:
I would have thought there was some APS wide prohibition on granting of leave to attend such a rally. If there is not we would need to justify a blanket ban on leave as proposed. The leave policy and the flextime provision in the AWA both refer to such leave being approved and that it is subject to operational requirements.
If the APS generally does not require a blanket then it would seem hard for the OEA to justify same. However it may be considered that in light of the rally that allowing staff who would normally be working leave would be operationally problematic, and to pick and choose who got leave inappropriately discriminatory.
63 On 1 November 2005 Mr Stevens sent the following email to Mr McIlwain:
Thanks for opportunity to comment Peter.
Reasons I feel leave should be allowed in most cases:
· There are no operational reasons I can think of to deny leave applications. Leave will be taken at some state and therefore there is no adverse affect to OEA. The only areas I can think of could be phone, counter enquiries
· This is not industrial action
· People are not representing the OEA – it is personal
· This does not appear to be a showstopper issue – why risk alienating people when big changes are underway?
As long as there are no adverse operational consequences, people do not identify with the OEA and there is no APS wide directive to the contrary, I can’t see what the harm is, as it is a fairly isolated event. If we treat as low key, there is unlikely to be an issue. If it is escalated, it will almost certainly become a focus point for adversarial action.
64 Despite the opinions of Messrs Rushton and Stevens, Mr McIlwain and Ms Skarratt believed that there might be excessive applications for leave for employees to attend NDCP. Further, Mr McIlwain was of the view that certain managers, some of whom did not support Work Choices would automatically grant such leave if requested to do so. Mr McIlwain was aware that Mr Stevens had expressed his disagreement with Work Choices, and was concerned that Mr Stevens might not have proper regard for the operational requirements of the OEA in the provision of services to clients in granting leave applications. Mr McIlwain said that he feared that Mr Stevens might give ‘more weight to the personal needs of employees than to the needs of OEA clients’. That is, there might have been ‘indiscriminate leave approvals’ given in Agreement Services. Mr McIlwain had similar concerns with respect to Mr Forbes, following views expressed by him concerning Work Choices.
65 By October 2006 the OEA had already had the experience of the 2005 NDCP and of the June protest. There is no evidence that the OEA was burdened with a disproportionate number of leave applications or that leave had been granted excessively on either of those occasions. In respect of the June protest, Mr McIlwain, in consultation with Ms Skarratt, determined that the same ban on leave should apply as that which had applied for the 2005 NDCP. However in doing so, no inquiry was made to ascertain whether there had been any increase in workload in any unit of the organisation during the 2005 NDCP.
66 Mr McIllwain was not prepared to assume that the experience of the 2005 NDCP would provide a useful guide. He said the ban was imposed on Wednesday 28 June because events were planned across Australia on that morning and the ban was extended for the remaining days of that week. Before imposing the ban for the NDCP Mr McIlwain did not make enquiries to ascertain the volume of applications for leave for the first two days of the June protest nor enquire whether there had been any increase in leave applications during the remainder of the week.
67 Also of concern to Mr McIlwain and Ms Skarratt was the possibility of unauthorised absences, and each rely upon this factor as constituting a motivation to make the decision to prohibit leave. Mr McIlwain testified however that unauthorised absences, whilst they ‘arose from time to time’ were not a widespread problem.
68 There is no evidence that promotional material for the NDCP was seeking to encourage employees to take unauthorised leave to attend, and the advertisements included a reminder of the need to apply for leave. No inquiries were made by Mr McIlwain of the possibility of unauthorised absences and it was not a factor which loomed large in the minds of other senior officers in the OEA such as Mr Rushton.
69 A further reason advanced by Mr McIlwain for imposing the general prohibition on leave was the need for fairness between offices and units within the OEA. Mr McIlwain testified that ‘every area of the organisation makes a contribution to providing services to our clients’, and he wished to ensure that the blanket ban applied to all employees equally. He considered it prudent to impose the ban because of the possibility of an increase in workload which ordinary staffing levels might not be able to accommodate.
70 Had investigations been made into the events surrounding the 2005 NDCP and the June protest, it would have been determined that there were no significant increases in applications for leave on either of those occasions. Although the lack of applications might have resulted from the implementation of the ban in respect of the 2005 NDCP, no such inference could be drawn in respect of the June protest. Even after two days of the protest there was no significant increase in absenteeism adverse to the operations of the OEA. That event may have been considered of even greater detriment to the potential provision of services by the OEA because of its week long duration. Further, before imposing the ban for the June protest Mr McIlwain had made no inquiry to ascertain whether there had been any increase in workload for the 2005 NDCP. Similarly before imposing the ban on the NDCP, he had not made any inquiry to ascertain whether there was any increase demand on either the first or second days of the June protest.
71 As with other days of potential absenteeism, such as sporting events, an assessment could have been made of the levels of staffing required to maintain normal service provision within the OEA. In this instance however no such assessment was made. Nor does it appear that there was any real assessment of the effect of unauthorised absences.
72 Mr McIlwain advanced another reason for imposing the ban, namely backlog of 20,000 AWAs awaiting processing. However, such concern cannot be sustained in view of Mr Steven’s evidence that there was no urgency in achieving the requisite targets.
73 Mr McIlwain’s concern of higher demand on the NDCP is also unsustainable in view of the fact that he made no inquiry of the local mangers as to whether there was the likelihood of such impact resulting from the 2006 NDCP. Similarly, Mr McIlwain’s fear of unauthorised absences cannot be sustained in view of the absence of any such history in respect of the previous protests.
74 In view of the above findings the Court is satisfied that the motivation of the OEA, albeit arising from the concern to provide adequate staffing, was not founded upon a genuine assessment of operational requirements and that the ban was accordingly unjustified.
75 Despite such findings, there is no evidence from which the Court can infer that the immediate purpose of the OEA in imposing the ban was directed to any of the matters referred to in s 793(1) of the Act. The evidence establishes that the NDCP was not purely a union event but was aimed at the wider community, including union and non union employees. It was not industrial action but was a community campaign to express opposition to controversial amendments to industrial relations legislation. Even if an inference could be drawn that the ban on leave was imposed for the reason that senior management in the OEA were concerned to prevent OEA staff protesting the very legislation they were employed to administer, a breach of s 792 is not established because such reason is not one of the reasons enunciated in s 793(1) of the Act. The fact that arguably proper and genuine assessments of operational requirements were not carried out does not detract from the Court’s finding that the immediate purpose of the ban was to ensure provision of sufficient staffing levels in order to ensure adequate service provision in the OEA on the NDCP.
76 The Court determines that the OEA has discharged its onus to show that the ban was not imposed for a prohibited reason within in the meaning of s 793(1) of the Act. As such it follows that there has been no breach of s 792(1) of the Act.
Threat to do an act
77 Although the Court has found that there was an alteration of Mr McCarron’s position to his prejudice, this in itself does not constitute a breach of the Act. The onus of the OEA to show that such alteration of position was not for a prohibited reason has been discharged and there is no need for the Court to determine whether there was a threat to do an act in contravention of s 792(1) of the Act.
Breach of AWA
78 Clause 28 of the AWA between Mr McCarron and the OEA specifies ordinary hours of work and the hours of work that employees are to record on their flex sheets for days on which they are absent from work for various reasons such as public holidays. It specifies one or four week settlement periods and permits employees and their managers to make agreements for different settlement periods and patterns of hours. Clause 28 does not provide for flex leave and the Court is unable to find that the actions of the OEA in refusing leave on 30 November 2006 could constitute a breach of clause 28 of the AWA.
79 Mr McCarron was entitled to have his leave applications properly considered by the OEA pursuant to the terms of his AWA. Pursuant to clause 30 of the AWA the approval of flex leave is subject to operational requirements. However the existence of operational requirements must be demonstrated and must be genuine and reasonable. The decision of the Full Court in Tasmanian Development and Resources v Martin (2000) 97 IR 66 at [26] provides support for a finding that there must be a factual basis for a conclusion that there were operational requirements which necessitated the ban on leave. The reasons advanced for operational requirements as referred to above amount to no more than, at the highest, an apprehension of staff shortages on the NDCP. Such fear was not based upon any enquiries of past experiences, nor any genuine assessment of the real staffing needs on the NDCP. Had enquiries of the relevant managers been made, the decision to impose the ban would at least have had a foundation. Such enquiries however would have revealed that a total ban, based on the experience of the two prior occasions, would not be necessary. Accordingly, the reasons advanced in support of the decision do not constitute a sufficient basis for imposing the ban on leave. It follows that by imposing such ban the OEA breached clause 30 of Mr McCarron’s AWA with the OEA.
80 The CPSU and Mr McCarron also claimed that clause 33 of the AWA between Mr McCarron and the OEA was breached. The text of clause 33 is couched as a statement of the role of the relevant manager in ensuring that flex-leave arrangements provided by clause 30 are made available to employees. The OEA made no submissions on this issue, and in view of the Court’s finding that clause 30 has been breached, it is not necessary to determine whether clause 33 creates a contractual right, and if so, whether it has been breached.
81 Although no submissions were made in relation to the issue of the applicability of the doctrine of implied terms in respect of Mr McCarron’s AWA, there is no apparent reason why such doctrine should not apply to imply a term that the operational reasons referred to in clause 30 of the AWA be ‘genuine operation reasons’ determined after proper inquiry. The doctrine which applies only where it is necessary to give efficacy to an agreement, was considered by the Judicial Committee of the Privy Council in BP Refinery (Westernport) Pty Limited v President, Councillors and Ratepayers of the Shire of Hasting (1977) 180 CLR 266. Had the parties applied their minds to the question of whether a proper assessment would be made to determine whether a total ban on leave was necessary or that only genuine reasons could justify a ban, the result would have been so obvious that it ‘goes without saying’ (see BP Refinery 180 CLR 283). Whilst the doctrine of implied terms is not applicable to an industrial award (see Byrne v Australian Airlines Limited (1995) 185 CLR 410), the terms under which Mr McCarron was employed was an agreement, and not an award. It is not necessary to decide this issue in view of the finding that there were no operational reasons which justified the ban on the NDCP thereby resulting in a breach of clause 30. If it were necessary in order to give efficacy to the AWA to imply a term requiring the provision that ‘operational requirements’ means ‘genuine operational requirements’, the Court would imply such a term, and would find that such implied term was breached.
CONCLUSION
82 The Court has held that the provisions of s 792 of the Act were not breached by the OEA. However, the OEA did breach Mr McCarron’s AWA, and as such he is entitled to obtain the declaratory relief sought in respect of such breach. The Court will stand the proceedings over to a date to be fixed to allow the parties to consider the future course of the proceedings.
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I certify that the preceding eighty-two (82) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy. |
Associate:
Dated: 4 December 2007
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Counsel for the Applicant: |
C. Howell |
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Solicitor for the Applicant: |
Slater & Gordon |
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Counsel for the Respondent: |
P.M Kite SC, R. Crow |
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Solicitor for the Respondent: |
Australian Government Solicitor |
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Date of Hearing: |
29 May -1 June and 21, 22 August 2007 |
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Date of Judgment: |
4 December 2007 |
