FEDERAL COURT OF AUSTRALIA
Australian Education Union v State of Victoria (Department of Education and Early Childhood Development) [2015] FCA 1196
SUMMARY
6 nOVEMBER 2015
MELBOURNE
SUMMARY
1 In accordance with the practice of the Federal Court in some cases of public interest, importance or complexity, the following summary has been prepared to accompany the publication of the Court’s reasons for judgment. This summary is intended to assist in understanding the outcome of this proceeding and is not a complete statement of the conclusions reached by the Court. The only authoritative statement of the Court's reasons is that contained in the published reasons for judgment which will be available on the internet at http://www.fedcourt.gov.au/ together with this summary.
2 Section 323(1) of the Fair Work Act 2009 (FW Act) requires an employer to pay its employee amounts payable to the employee for the performance of work, in full and in money, except where the making of a deduction from salary is permitted by s 324(1). Section 324(1) permits an employer to make deductions in specified circumstances. One of those circumstances is where a deduction has been authorised by the employee in accordance with an enterprise agreement. Another circumstance is where the deduction is authorised by a State law. Section 325(1) prohibits an employer from requiring its employee to spend amounts payable to the employee in any particular way where the requirement is “unreasonable in the circumstances”. Section 326(1) invalidates a term of an enterprise agreement or a contract of employment which has the effect of permitting the employer to make a deduction, where the deduction is for the benefit of the employer and is “unreasonable in the circumstances”.
3 Between 1 July 2009 and 29 November 2013 (the claim period), fortnightly deductions of between $4 and $17 were made by the State of Victoria (Department of Education and Early Childhood Development) (DEECD), from the salaries of those teachers and principals employed in Victorian government schools (teachers) who participated in a scheme in which DEECD provided a laptop computer and associated services to the teacher. Prior to March 2012 the scheme was known as the “Notebooks for Teachers and Principals Program” and subsequently as the “eduSTAR.NTP Program” (NTPP). The principal purpose of the NTPP was to provide teachers with a laptop computer for use as a work tool. Subject to some restrictions, teachers were permitted to use the laptop for personal purposes. Most teachers (about nine of every ten) participated in the NTPP and, in the claim period, over $20 million was deducted by DEECD from the salaries of participating teachers as “contributions” to the cost of the laptop computer.
4 The Australian Education Union has challenged the lawfulness of those deductions and, on behalf of participating teachers, sought orders that the amounts deducted be paid to those teachers. Although not a class action, the proceeding concerns the lawfulness of deductions made in relation to many tens of thousands of teachers. By the agreement of the parties, some of the mechanisms familiar to class action proceedings have been utilised. It was agreed that that part of the claim of unlawful deductions relating to a sample group of teachers, as well as a set of common questions, be determined by an initial trial, with all other issues raised by the proceeding deferred to a further trial.
5 The reasons published with this summary deal with the claims of a sample of 11 teachers (Group 11 teachers) and, in so far as it has been possible, my reasons provide the answers to the common questions. The claims made in relation to the Group 11 teachers is determined by those answers. The parties intend that the answers to the common questions will enable the resolution of the claims made relating to all affected teachers, without further trial. The common questions are set out at [17] of my reasons and the answers collected at [380].
6 In relation to the Group 11 teachers, I have found that the NTPP deductions made from their salaries were not deductions permitted by s 324(1) of the FW Act and that the failure of DEECD to have paid those teachers in full, was, in each case, a contravention of s 323(1) of the FW Act.
7 I have not accepted DEECD’s contention that the deductions were authorised by teachers in accordance with relevant enterprise agreements (Agreements) and thus permitted by s 324(1)(b). That issue largely turned upon whether the arrangements under which the NTPP deductions were made, can properly be characterised as “salary packaging arrangements” within the meaning of the Agreements. In broad terms, because the NTPP laptops were not provided to teachers as remuneration for their services, I have concluded that the NTPP arrangements were not “salary packaging arrangements” and therefore not made in accordance with the Agreements.
8 I have also not accepted DEECD’s contention that the deductions were authorised by or under a law of the State and thus permitted by s 324(1)(d). The State law relied upon by DEECD was a Ministerial Order made on 19 December 2012 (Ministerial Order). The effectiveness of the Ministerial Order was challenged on a number of basis, only two of which I have accepted. In so far as the Ministerial Order sought to provide retrospective authorisations for deductions made in the period 1 July 2009 to 18 December 2012, I have determined that, as s 324(1)(d) does not apply in relation to authorisations retrospectively given by a State law, those authorisations were ineffective. I have also determined that the Ministerial Order was inoperative in relation to any deduction made pursuant to a term of a teacher’s contract that was rendered of no effect by s 326(1).
9 In determining whether s 326(1) of the FW Act had that effect upon the deductions made from the salaries of the Group 11 teachers, it was necessary to answer two questions raised by s 326(1). The first was whether the terms that permitted the deductions to be made were, in each case, terms of teachers’ contracts of employment. I have determined that they were. Secondly, it was necessary to determine whether the deductions were “unreasonable in the circumstances”. I have determined that the deductions were “unreasonable in the circumstances”. Broadly speaking, I came to that view because I considered that the contributions made by the Group 11 teachers to the cost of the laptop computers provided to them were (with some exceptions) made in the absence of a genuine choice made by the teacher to participate in the NTPP; because the contribution to the cost was set at an excessive rate; because the deductions made were not principally for the benefit of the teachers concerned; and because the value of the benefits actually received by the teachers (the personal use made of the laptops) did not provide a countervailing justification.
10 Other complex questions, in which various submissions made by the AEU are rejected, are also dealt with by my reasons, but it is not necessary to refer to them here. There are some unresolved questions including the orders that are now to be made in relation to the Group 11 teachers and the further disposition of the claims yet to be determined. I will provide the parties with an opportunity to consider my reasons and to consult. I will list the proceeding for directions at 9.30 am on 25 November 2015, so that the further steps that now need to be taken may be addressed.
