| [2016] FWC 2653 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.789FC—Application for an order to stop bullying
s.739—Dispute resolution
Stephen Millman; David Baker
v
Essential Energy; Gary Humphreys
(AB2015/666; AB2015/667)
Construction, Forestry, Mining and Energy Union
v
Essential Energy
(C2015/6184)
SENIOR DEPUTY PRESIDENT HAMBERGER |
SYDNEY, 23 MAY 2016 |
Applications for FWC orders to stop bullying – application for arbitration of dispute under the Essential Energy Far West (Electricity) Enterprise Agreement 2013 and Essential Energy Far West Electricity Enterprise Agreement 2011.
[1] On 23 September 2015, the Construction, Forestry, Mining and Energy Union (CFMEU) applied to the Fair Work Commission (the Commission) to deal with a dispute in accordance with the dispute settlement procedures in the Essential Energy Far West Electricity Enterprise Agreement 2011 1 (the 2011 agreement) and the Essential Energy (Electricity) Agreement 20132 (the 2013 agreement). I will refer to this as the dispute matter.
[2] The dispute concerns two employees, David Baker (covered by the 2011 agreement) and Stephen Millman (covered by the 2013 agreement). In late 2014, both men were advised that their substantive positions were no longer required and that they were now redeployees. The CFMEU contends that they have been left without meaningful roles or meaningful work (or in Mr Baker’s case, sufficient meaningful work). In these circumstances, the CFMEU argued their employer (Essential Energy) was obliged to pay them redundancy pay.
[3] Also on 23 September 2015, Mr Baker and Mr Millman applied, pursuant to s.789FC of the Fair Work Act 2009 (the FW Act), for orders to stop bullying. I will refer to these as the AB matters. The person alleged to have bullied them was Gary Humphreys (the acting Chief Executive Officer of Essential Energy).
[4] The AB matters and the dispute matter have been dealt with together. Attempts to resolve them by conciliation were unsuccessful and the applications have been referred for arbitration.
[5] Hearings were conducted on 30 and 31 March 2016, in Sydney. The CFMEU, Mr Baker and Mr Millman were represented by Adam Walkaden. Essential Energy was represented by Alice DeBoos, of K&L Gates. Evidence was given by:
[6] Essential Energy’s operations in and around Broken Hill and the surrounding areas are known as the ‘Far West’. The remainder of Essential Energy’s operations are known as the ‘East’. The Far West operations comprise of both electricity operations and water operations. There are approximately 170 employees in the Far West. This is made up of 95 employees in electricity operations and 75 employees in water operations. 3
[7] Essential Energy has adopted a practice not to accept an expression of interest for voluntary redundancy where the employee would be entitled to a redundancy payment in excess of 52 weeks. This decision was made by the Executive of Essential Energy. 4
[8] The only exception to this has been when Essential Energy offered a 13-week incentive program for a particular group of employees in the East. 5
[9] As the General Manager, Network Services, Mr Jenner is responsible for recommending whether or not Essential Energy will accept an expression of interest for voluntary redundancy. Given the Executive’s decision not to accept an expression of interest for voluntary redundancy where the entitlement is to a payment in excess of 52 weeks, he has not recommended Essential Energy accept any expressions of interest where this is the case. 6
[10] In his evidence, Mr Jenner gave the following reasons for Essential Energy’s decision not to accept an expression of interest for voluntary redundancy where the employee would be entitled to a redundancy payment in excess of 52 weeks.
a) Essential Energy wants to maintain discretion over the acceptance or rejection of voluntary redundancies;
b) Essential Energy has cash flow constraints which make it difficult to pay redundancy entitlements in excess of 52 weeks; and
c) Paying voluntary redundancy payments only up to 52 weeks is consistent with other areas of the business, particularly those employees under the Essential Energy Enterprise Agreement 2013. 7
[11] Mr Millman commenced employment with Broken Hill City Council on 5 April 1988. At the time, the Council operated the electricity network in the Far West region of New South Wales. He has remained working on the electricity network in the Far West and is now employed by Essential Energy. He started work as a labourer and then became a linesman. After working as a Supervisor Leading Hand, he was appointed as a Safety Environmental Auditor (SEA) in March 2010. He is classified as a Technical Officer, pay point 35 under the 2013 agreement and is paid $2,026.34 per week (inclusive of the Electrical Safety Rules Allowance, but exclusive of superannuation). He is employed to work a 36 hour week. 8
[12] As an SEA, Mr Millman was required to work for both Essential Energy and Essential Water in the Far West. In this role he was required to audit plant, equipment and infrastructure to ensure compliance with work health and safety requirements. Initially, about 25% of his time was spent out in the field. 9
[13] In 2013, the field-based auditing function was removed from Mr Millman’s position. He was then restricted to the office and only completed compliance audits and performed what he described as an evaluation role. This mainly involved evaluating the safety and environmental compliance of contractors. As a result of this change, his workload was reduced and he was not fully occupied. His workload continued to decline and he completed his last compliance audit in April 2014. By October 2014, he had about one day of productive work for the entire month. He worked with a high degree of autonomy and most of his contact with his manager was by phone or email. 10
[14] On 19 December 2013, Mr Millman received an email from a member of the HR Services Team advising him that he was deemed a redeployee because his role was either:
[15] In January 2014, Mr Millman received a further email advising him that a recruitment process was underway to fill positions in the new operational structure. He was told that while this process was underway he would continue in his current role, but that as a redeployee, he would immediately have access to all new vacant positions and would be eligible to apply for those roles before other employees. He was reminded that redeployees who did not wish to be redeployed could request to be considered for voluntary redundancy. 12
[16] On 17 June 2014, Mr Millman submitted an expression of interest for voluntary redundancy. He was forwarded an email from the Regional HR Manager for the Far West which indicated that he would be entitled to a redundancy payment, based on his 26.25 years of service, of 78.75 weeks (calculated at three weeks per year of service). 13
[17] In early to mid-July 2014, Mr Millman received a phone call from an HR officer who told him that his application for voluntary redundancy had been rejected. 14 He subsequently lodged a grievance.15
[18] On 28 July 2014, Mr Millman submitted a second expression of interest for voluntary redundancy. 16 On 15 October 2014, he received a letter from David Nardi, General Manager, Health Safety and Environment, confirming that from 28 November 2014, his role would no longer be required. He was told:
‘From this date you will report to a Redeployment Case Manager until a suitable alternative position, which may include relocation by agreement, has been identified.
As a redeployee, you will remain on Essential Energy’s redeployment register and are entitled to priority consideration for job opportunities.
Essential Energy’s Salary Maintenance provisions (CEC1026) will apply in relation to your redeployment. You need to demonstrate your commitment in seeking alternative employment, both internally and externally (including redeployment opportunities).
Essential Energy is committed to providing support and assistance to employees whose substantive position is no longer required. Support may include providing access to the following types of assistance and services:
Essential Energy will work in partnership with you in exploring possible solutions to assist you to transition into other acceptable employment. This may include opportunities such as secondments, work experience, or other work deemed to be suitable.
Alternatively, if you do not wish to be redeployed and would like to pursue employment outside of Essential Energy you may request to be considered for a voluntary redundancy. If you wish to explore this option please complete the attached Expression of Interest Form and forward to…
…
You will be contacted by a Redeployment Case Manager to discuss and put in place an appropriate redeployment plan that will help you make informed decisions for the future.’ 17
[19] According to Mr Millman, he had not been given any work to complete from 28 November 2014 until the date of his witness statement (26 February 2016):
‘I have gone to work and literally have had nothing to do.’ 18
[20] Mr Millman said that he had participated in a telephone conversation with his Redeployment Case Manager about every week or so. There had been a number of different Redeployment Case Managers. The calls were always brief and no more than five minutes. He was also required to complete and submit a Redeployment Progress Report each month, which took him about five minutes each month. 19
[21] Mr Millman was told by HR representatives on 13 January 2015 that his application for voluntary redundancy was ‘on hold’. He subsequently had a meeting with Mr Jenner and Mr Smith on 3 February 2015. The meeting was also attended by Mr Baker, Mr Braes and Kym Files, who is a Trainer/Assessor. 20 At that meeting, he was told by Mr Jenner that Essential Energy was not accepting any applications for voluntary redundancies requiring pay-outs over 52 weeks. Mr Jenner said that Essential Energy had no obligation to retrench them, even though their roles might have been made redundant.21 Mr Millman was told that Essential Energy would try and find him a job in Broken Hill.22
[22] Mr Millman was absent from work from 22 July to 5 October 2015 due to a shoulder injury.
[23] On 13 October 2015, Mr Millman received a letter from Mr Nardi, which, amongst other things, said:
‘… there is currently a meaningful work placement available to you. You will continue on this work placement until otherwise notified and based on business needs.
To assist you in securing a new role, Essential Energy may provide the option of an intensive career transition support program during this period…’ 23
[24] According to Mr Millman, he did not participate in a meaningful work placement from 28 November 2014 to 13 October 2015.
‘I literally had nothing to do. …it was not until 23 November 2015 that I was first offered a work placement.’ 24
[25] On 16 November 2015, Mr Millman had a phone conversation with his Redeployment Case Manager who offered him a work placement working with contractors to ensure their Safe Work Method Statements and environmental information they submitted were correct. He accepted the work placement, which commenced on 23 November 2015.
[26] Mr Millman was not given any work to do prior to commencing annual leave on 14 December 2015. 25 On 6 January 2016, his manager sent him three emails. Mr Millman tried to call his manager to discuss the emails on 7 January 2016 and left a message for him to return his call. The manager failed to do so. Mr Millman had had no contact with his manager or any other members of the team from 6 January 2016 to the date he made his statement.26
[27] Mr Millman said he had had no requests to perform any of the tasks outlined as part of his work placement. He filled in his time reading books, watching TV and movies, and so on. 27
[28] Mr Millman said during his oral evidence that he had had eight hours’ work since 15 February 2016. 28 He agreed that he was now being given ‘some work’.29
[29] Mr Millman said that, since his position had been abolished, there had been no suitable position with Essential Energy or Essential Water in the Far West. 30 During his cross-examination he said:
‘I’ve made heaps of enquiries, but there’s not a lot of positions in Broken Hill.’ 31
[30] Mr Millman said he had had no response in respect of the jobs he had applied for. 32 He said he had not looked for jobs outside Broken Hill.33
[31] He said that he was upset and angry at the way he had been treated by Essential Energy, and that the situation had caused him significant stress. 34
[32] Mr Millman is 51 years old. Both he and his wife have lived their whole life in Broken Hill. 35
[33] During his cross-examination, Mr Millman agreed that he had submitted an expression of interest in voluntary redundancy on 17 June 2014 (that is, some time before his position had been abolished). He said that he had done so because he was no longer happy with Essential Energy and he was keen to leave. He said he had no plan as to what he would do if his expression of interest had been accepted – he just ‘wanted out’. 36
[34] On being asked whether he would be happy to stay at Essential Energy if it was able to provide him with a meaningful job, he said that he would not. 37
‘I’m just not happy being there anymore. I continually go home to my wife and family frustrated.
…why is that? --- Because I haven’t had any meaningful work.
But if they gave you meaningful work? --- No. I no longer wish to be employed by the company.’ 38
[35] Mr Millman said he had never met Mr Humphreys. 39 He had said to Mr Jenner that he thought he was being victimised and discriminated against because ‘other people were getting redundancies and we couldn’t’. However he agreed that he now understood that Essential Energy appeared to have a policy of not accepting applications for voluntary redundancy where the redundancy payment would be more than 52 weeks.40
[36] Mr Baker commenced employment with Broken Hill City Council on 30 January 1985. He has remained working on the network in the Far West since then and is now employed by Essential Energy. 41
[37] Mr Baker started work as a Labourer/Powderman and worked his way up, until he became the Regional Safety Coordinator (RSC) for the Far West on about 2 July 2006. 42 This position was later retitled Regional Safety Specialist (RSS).43
[38] Mr Baker is employed under the 2011 agreement. He is classified as a Manager and Specialist, level 8, pay point 44 under that agreement. Excluding superannuation he is currently paid $2,795.49 per week. He is paid to work a 40 hour week. 44
[39] About 20% of Mr Baker’s time was spent working for Essential Water. He was a member of Essential Energy’s Regional Management Team for the Far West. 45
[40] On and from 5 May 2014, Mr Baker ceased performing duties for Essential Energy as RSS in the Far West. The duties of that position appear to have been redistributed to other regions. However, he was asked to perform the RSS duties for the Southern Region on a temporary basis. He also continued to perform the same duties as he had previously performed for Essential Water. 46
[41] On 27 November 2014, Mr Baker received a letter from the General Manager Network Operations, Peter Bereicua, in which he was advised that his substantive position was a role which was no longer within the operating structure. As a result, from 12 December 2014 he would be transferred to redeployment. From that date, he would continue to be based at Broken Hill and would report to a Redeployment Case Manager until a suitable alternative position was identified, which might include relocation by agreement. The letter included the following:
‘Alternatively, if you do not wish to be redeployed and would like to pursue employment outside of Essential Energy you may express interest in redundancy.
If you wish to explore this option, please complete the attached Expression of Interest Form and forward to …’ 47
[42] On 9 December 2014, Mr Baker completed and submitted an expression of interest for redundancy form. 48
[43] On 12 December 2014, Mr Baker ceased working as a RSS in the Southern Region. He also ceased performing duties for Essential Water. 49
[44] From 12 December 2014 until 22 December 2014, Mr Baker was not given a single task to complete. 50
[45] From 22 December 2014 to 13 March 2015, Mr Baker commenced a work placement as a Safety Specialist with Essential Water. This work placement was repeatedly extended until 27 November 2015. 51
[46] The duties that Mr Baker performed in this work placement were essentially the same tasks that he had performed for Essential Water in his previous role. This involved an average of around five hours of work per week. 52
[47] On 26 November 2015, Mr Baker was advised by his Redeployment Case Manager that he would be commencing a work placement, with 80% of his time spent completing work scheduling projects and 20% of his time dedicated to Essential Water projects. He was told that this work placement would commence on 4 January 2016 and conclude on 25 March 2016. 53
[48] To perform the duties involved in the work placement, Mr Baker would have needed to undertake some training, as he had not worked as a work scheduler before. However, as at the date of making his witness statement (26 February 2016), no arrangements had been made for him to attend that training. Nor had he been given the necessary IT access to use the software relevant to the tasks involved in the work placement. Apart from the Essential Water duties, he had not been asked to perform any of the work notionally involved in the work placement. 54
[49] On 11 February 2016, Mr Baker was advised that he would be undertaking a work placement with Essential Water as an OHSE Advisor from 28 March 2016 to 17 June 2016. 55
[50] Mr Baker indicated that during the periods where he had had no work to perform, he had filled in his time by reading books, watching TV and movies, completing some external courses for his own development and other miscellaneous activities. 56
[51] The only formal response that Mr Baker received concerning his application for voluntary redundancy was a telephone conversation on 18 December 2014, in which he was advised that his application was on hold. 57 He was at the meeting with Mr Jenner on 3 February 2015 where both he and Mr Millman were told that Essential Energy was not accepting any voluntary redundancies over 52 weeks.58 If he were to be made redundant, he would be eligible to receive 93 weeks’ redundancy pay.59
[52] Mr Baker said that to leave him idle and then misrepresent that he had a ‘meaningful job’ or that he would be successfully redeployed left him stressed, upset and angry with Essential Energy. 60
[53] Mr Baker is 54 years old. He has lived in Broken Hill his entire life.
[54] Mr Baker said that if his application for voluntary redundancy was accepted his plan was to look for work within the Far Western area (for example with a mining or construction company). 61
[55] Mr Baker said that since becoming a redeployee, there have been no internal vacancies at his salary level in the Far Western area. 62
[56] Mr Baker said that he had never spoken to Mr Humphreys about his role and that he had only ever met him briefly. 63
[57] During his cross-examination, Mr Baker agreed with the proposition that he felt harassed because he felt that he was being forced out of the organisation without his entitlements. 64 He clarified that by ‘entitlements’ he meant voluntary redundancy and its accompanying pay-out. On being asked whether he considered voluntary redundancy an entitlement, he responded:
‘If they are trying to get rid of 1600 people I do, yes. Because they made it quite clear that if you put in for an expression of interest to leave and you haven’t got a meaningful position, you might have a title but having a meaningful position after so long, they’ve given out the 52 weeks to Eastern side but obviously under 52 weeks to Far West. But over 52 weeks, anyone in that situation is just-it’s just put on hold and there is no end in sight.’ 65
[58] Mr Baker indicated that he would be happy if Essential Energy was able to offer him a meaningful job. 66
[59] Mr Jenner agreed with a statement made by Mr Braes that:
‘For over two years, Essential Energy has been discussing the impact that a significant number of challenges will have on jobs. One of the most significant challenges has been the determination of the Australian Energy Regulator (AER), which significantly reduced Essential Energy’s revenue and required significant reductions to their operating costs.
These challenges have led to a significant number of redundancies across the organisation.’ 67
[60] Mr Jenner also agreed that a document attached to Mr Braes’ statement was part of a broadcast that Essential Energy had issued. 68
[61] The document included the following, in a section marked ‘commentary’:
‘The Australian Energy Regulator (AER) cut Essential Energy’s (EE) revenue by 25% and operating costs by 30%, backdated to 1 July 2014.
The AER did not allow a period of transition nor an allowance for redundancy payments.
The capital program has also been reduced by 44% compared to the last regulatory period.
As a result, from 1 July 2015 EE has 1,395 unfunded positions costing $17.4M per month.
EE workforce will be reduced in two phases:
- Phase 1 – 700 positions – September 2015 for October/November implementation
- Phase 2 – 695 positions – post legal appeals against the AER’s final determination
These reductions are across all categories of employees, including a 20% reduction in Senior Management.
365 voluntary redundancies have been received since 1 July 2015. This has contributed substantially to reducing the number of surplus unfunded positions.
There remains 234 surplus unfunded positions and redeployees, with the locations for these listed in the table below.
The 234 surplus unfunded positions comprises 152 redeployees and 82 positions that will be subject to a Merit Based Selection process
Surplus unfunded positions at Broken Hill are subject to further consultation.’
[62] The table indicated that 20 of the 234 ‘surplus unfunded positions’ were in Broken Hill. This was many more than any other location, with the exception of Port Macquarie (where Essential Energy’s head office is located), which had 39 ‘surplus unfunded positions’. 69
[63] Mr Jenner agreed that the 20 ‘surplus unfunded positions’ in Broken Hill comprised approximately 11 per cent of the positions in Broken Hill. 70
[64] Mr Jenner’s evidence was that Essential Energy had genuinely tried in the past 15 months or so to find meaningful work for both Mr Millman and Mr Baker. He conceded however, that, at least in relation to Mr Millman, Essential Energy’s efforts had been unsuccessful. 71 However, he maintained that there may well be prospects that Essential Energy could find Mr Millman and Mr Baker more work in the future, especially given the uncertainties in the regulatory environment. He appeared to accept that the 20 ‘surplus’ positions in Broken Hill only related to Phase 1 (which would not be affected by Essential Energy’s appeal against the AER determination), but said:
‘…I guess the point is that, for argument’s sake, depending on where we end up with the regulatory outcome, if our revenue now increases and the amount of work we’re expected to perform increases significantly, you know, there is the opportunity that some of those unfunded positions may now be required’. 72
[65] Mr Jenner also suggested that while the total number of jobs might decline ‘…depending on what programs are funded by the AER, you know, there may well be prospects of Mr Millman and Mr Baker finding future work…’. 73
[66] Mr Jenner agreed that he could not predict where the AER determination might end up and that the circumstances relating to Mr Millman were likely to continue for the foreseeable future. 74 He said that Essential Energy was willing to let the circumstances pertaining to Mr Millman to roll on while it looked for meaningful work for him to perform.75
[67] Mr Jenner indicated that it was very difficult to answer whether there was a realistic prospect of Mr Baker being redeployed into a meaningful job ‘because of the uncertainties in the regulatory environment, and, you know, what roles may or may not become vacant in the future.’ 76
[68] He agreed with the proposition that, as with Mr Millman, the organisation was happy enough for the circumstances relevant to Mr Baker just to continue on till some unforeseen point in time. 77
[69] During his re-examination, Mr Jenner indicated that over the past 12 months, positions that had become available were more commonly at lower pay grades. 78
[70] The CFMEU submitted that Mr Baker and Mr Millman had been bullied at work by Mr Humphreys and there was a risk that the bullying behaviour would continue. 79
[71] Section 789FD of the FW Act states:
‘(1) A worker is bullied at work if:
(a) while the worker is at work in a constitutionally-covered business:
(i) an individual; or
(ii) a group of individuals;
repeatedly behaves unreasonably towards the worker, or a group of workers of which the worker is a member; and
(b) that behaviour creates a risk to health and safety.
(2) To avoid doubt, subsection (1) does not apply to reasonable management action carried out in a reasonable manner.
[…]’
[72] Section 789FF of the FW Act sets out the power of the Commission to make orders to stop bullying:
‘(1) If:
(a) a worker has made an application under section 789FC; and
(b) the FWC is satisfied that:
(i) the worker has been bullied at work by an individual or a group of individuals; and
(ii) there is a risk that the worker will continue to be bullied at work by the individual or group;
then the FWC may make any order it considers appropriate (other than an order requiring payment of a pecuniary amount) to prevent the worker from being bullied at work by the individual or group.
(2) In considering the terms of an order, the FWC must take into account:
(a) if the FWC is aware of any final or interim outcomes arising out of an investigation into the matter that is being, or has been, undertaken by another person or body—those outcomes; and
(b) if the FWC is aware of any procedure available to the worker to resolve grievances or disputes—that procedure; and
(c) if the FWC is aware of any final or interim outcomes arising out of any procedure available to the worker to resolve grievances or disputes—those outcomes; and
(d) any matters that the FWC considers relevant.’
[73] The CFMEU described the alleged bullying behaviour in this way:
‘That the applicants (Mr Baker and Mr Millman) have been left without a meaningful role and sufficient meaningful work for a lengthy period of time, and that such circumstances will likely continue, amounts to repeated unreasonable behaviour. That is the relevant bullying behaviour.’ 80
[74] The CFMEU submitted that Mr Millman had gone to work since 28 November 2014 and been paid $2,026.34 a week for 15 months and literally had nothing to do. While he had been placed on a work placement in November 2015, it was evident that the work placement was a sham. He had not been given a single task to perform. 81
[75] Likewise, Mr Baker had been left without a meaningful role or sufficient meaningful work. As a consequence, Mr Baker had gone to work for 15 months and had very little or nothing to do and been paid $2,795.49 per week. 82 While he also was given a work placement in January 2016, it also was a sham. The only tasks given to Mr Baker were the Essential Water duties that he had previously performed, and these by themselves did not constitute sufficient meaningful work.83
[76] The CFMEU submitted that in the past 6-12 months, Essential Energy had made a significant number of employees redundant and there were also a significant number of excess and unfunded jobs in Broken Hill. Both applicants had unsuccessfully looked for other suitable positions. It was evident that redeployment had been exhausted. Mr Baker and Mr Millman simply would not be redeployed into suitable positions. Both applicants had unsuccessfully applied for voluntary redundancy:
‘The unsatisfactory and unfair circumstances described above only continue because of a decision taken by the respondent. That being, to refuse to make any employee in the Far West redundant if their redundancy pay entitlement exceeds 52 weeks.’ 84
[77] The CFMEU submitted that:
‘[t]he relevant bullying behaviour has been persistent and repeated. Mr Millman has been the subject of the relevant bullying behaviour since at least 28 November 2014. Mr Baker has been the subject of the relevant bullying behaviour since 12 December 2014.’ 85
[78] The CFMEU referred to the decision of Hatcher VP in Amie Mac, in which he said:
‘Unreasonableness is a conclusion which may be applied to a decision which lacks an evident and intelligible justification.’ 86
[79] The CFMEU submitted that it was unreasonable for Essential Energy to continue to incur the substantial costs involved in continuing to employ the two men when there was no (or very little) meaningful work for them to do, no reasonable prospect of finding them such work in the foreseeable future, and both men were willing to exit the business through voluntary redundancy. 87
[80] The CFMEU accepted that it was not inherently unreasonable for an employer to take into account cost considerations when deciding whether to accept an expression of interest for voluntary redundancy. 88 However, it said it was unreasonable in the circumstances under consideration:
‘MR WALKADEN: ‘In circumstances where, we say, the pure financial difference between, on the one hand participating in these circumstances of 15 months with no end point in sight, of paying the wage week in/week out for no return for Mr Millman’s case, eight hours of work after 15 months. And in Mr Baker’s case, five hours work in that same period…
THE SENIOR DEPUTY PRESIDENT: But that’s just a bad decision as opposed to an inherently unreasonable decision.
MR WALKADEN: Well it goes to a question of unreasonableness because you then take into account, for example, the impact the decision has had on both men….On a purely financial basis … you can be reasonably comfortable that either now or shortly into the future the cost of simply paying out the redundancy as per their entitlements, would be less than paying their wage week in and week out…Plus the on-costs.’ 89
[81] The CFMEU also contended that the relevant bullying behaviour had created a risk to the health of the applicants. For example, Mr Baker referred to the ‘mental anguish’ he had suffered. It was also submitted that the management action had not been carried out in a reasonable manner. The applicants had essentially been left idle or placed on sham work placements. Direct communication with the applicants had either been non-existent or of very poor quality. 90
[82] Essential Energy, by contrast, submitted that the applications were misconceived and the relevant behaviour relating to Mr Baker and Mr Millman constituted reasonable management action carried out in a reasonable manner, and therefore did not meet the statutory definition of being ‘bullied at work’ under the FW Act. 91
[83] Essential Energy submitted that the impugned behaviour could never be bullying as defined by the FW Act as it was not alleged to have been undertaken by an ‘individual’ or ‘group of individuals’. There is no evidence that Mr Humphreys had ever properly met Mr Millman or Mr Baker, let alone directed any behaviour towards them. The CFMEU’s complaint is essentially in relation to a company policy or directive, not behaviour undertaken by individuals directed toward Mr Millman and Mr Baker. 92
[84] In any case, Essential Energy submitted, the action it had taken had been reasonable management action. In particular, it was reasonable management action to:
a) make a decision not to accept the expression of interest for voluntary redundancy submitted by Mr Baker and Mr Millman;
b) continue to look for redeployment opportunities; and
c) provide Mr Millman and Mr Baker with temporary work placements until permanent positions could be identified. 93
[85] Bullying, as defined in the FW Act, is behaviour engaged in by an individual or a group of individuals. Anti-bullying orders are designed to prevent individual workers being bullied by other individuals or groups of individuals. To meet the definition it must involve behaviour towards the worker who has been bullied by another individual or group of individuals. The use of the word ‘toward’ implies that the behaviour must be directed to or at the individual.
[86] The anti-bullying applications seek orders based on alleged bullying by the Acting Chief Executive Officer, Mr Humphreys. However, there is no evidence of any behaviour by Mr Humphreys directed towards either Mr Millman or Mr Baker. Indeed, he appears to have had either no (or very little) personal contact with either of them.
[87] It is true of course that Mr Humphreys, as part of Essential Energy’s executive, decided to adopt a policy of not accepting applications for voluntary redundancy from employees who would be eligible for redundancy payments in excess of 52 weeks. This certainly had implications for Mr Millman and Mr Baker (as well as for other employees). However, there is simply no basis on which to infer that the decision to adopt this policy was directed to or at either of them personally.
[88] This is, I consider, enough to dismiss the applications for anti-bullying orders, as there is no evidence that Mr Humphreys had bullied either applicant.
[89] I consider whether the decision to adopt the policy not to accept applications for voluntary redundancy for employees who would receive payments in excess of 52 weeks was unreasonable below, in relation to the applications made pursuant to the dispute settlement procedures in the 2011 and 2013 agreements.
[90] The CFMEU characterised the dispute brought under the dispute settlement procedures in the 2011 and 2013 agreements as about whether Mr Millman and Mr Baker are entitled to redundancy pay.
[91] According to the CFMEU, the role of the Commission in arbitrating the dispute is to interpret Clause 9.1 of the 2011 agreement (which covers Mr Baker) and Clause 10.1 of the 2013 agreement (which covers Mr Millman). 94
[92] Both clauses contain identical wording. They provide as follows:
‘FAR WEST REDUNDANCY PROVISIONS
(a) Where Essential Energy has made a definite decision that an employee’s job is redundant, Essential Energy shall hold discussion with the employee directly affected and their Union.
Discussions are to identify alternatives to retrenchment including transfers to other work, retraining and voluntary redundancy programs.
For the purposes of the discussion Essential Energy shall, as soon as practicable, provide to the employees concerned and their Union or Unions, all relevant information about the proposed redundancy including the reasons for, the number and categories of employees likely to be affected, and the number of workers normally employed and the period over which the retrenchments are likely to occur. Essential Energy shall not be required to disclose confidential information, which is not in its business interests.
(b) Where an employee is transferred to lower paid duties as an alternative to retrenchment, the employee shall be entitled to four (4) weeks’ notice of transfer and the prevailing salary maintenance program as agreed between the Unions and Essential Energy will be applied.
(c) Where a business is, before or after the date of this Agreement, transmitted to Essential Energy and an employee who as a result of the transmission transfers to Essential Energy:
(i) The continuity of the employment of the employee shall be unbroken because of a transmission; and
(ii) The period of employment, which the employee had with the transmitter or any prior transmitter, shall be service with Essential Energy.
(d) During the period of notice of termination given by Essential Energy an employee shall be allowed at least one day’s time off without loss of pay during each week of notice for the purpose of seeking other employment.
(e) Where a decision has been made to make a position redundant, Essential Energy shall notify the appropriate agency as soon as possible of the number and categories of the employees likely to be affected and the period over which the terminations are intended to be carried out.
(f) An employee whose employment is terminated shall be entitled to the following amount of severance pay in respect of a continuous period of service:’
[93] The following clause in both agreements then indicates the amount of severance pay applicable, depending on years of service. For employees with service of 18 years and over, it provides:
‘Severance pay at the rate of three (3) weeks per year of continuous service, with pro-rata payments for incomplete years of service to be on a quarterly basis.’
[94] The CFMEU submitted that:
‘…it is an inescapable conclusion that Essential Energy has made a definite decision that Mr Baker’s and Mr Millman’s job is redundant. After all, Essential Energy has provided both Mr Baker and Mr Millman with written notification that their roles are no longer required.’ 95
[95] The CFMEU submitted that it was clear that the requirement to pay redundancy pay is enlivened when the employment of the employee is terminated by reason of redundancy.
‘It follows that the critical question is whether the employment of Mr Baker and Mr Millman has been terminated by reason of redundancy.’ 96
[96] Quoting the decision of a Full Bench of the Australian Industrial Relations Commission in Charlton v Eastern Australia Airlines Limited, 97 the CFMEU submitted that a termination of employment occurs when a contract of employment is terminated. This can occur even though the employment relationship continues. The CFMEU submitted that the conduct of Essential Energy had resulted in a substantial diminution of the status, responsibilities and duties of Mr Baker and Mr Millman.
‘These factors demonstrate that their respective contract of employment has been terminated. Consistent with the above, it follows that the employment of Mr Baker and Mr Millman has been terminated within the meaning of clause 9.1(f) of the 2011 Agreement and clause 10.1(f) of the 2013 Agreement respectively, notwithstanding that the employment relationship continues. The reason for the termination is clearly redundancy.’ 98
[97] In the alternative, the CFMEU submitted that the refusal to accept the applications for voluntary redundancy were not a valid exercise of managerial prerogative. The relevant principle to be applied is that established in the XPT Case, 99 that is, whether the employer’s decision is unjust or unreasonable. The CFMEU submitted that it was unreasonable to leave Mr Baker and Mr Millman without a meaningful role and sufficient meaningful work for a lengthy period of time.
[98] Essential Energy submitted that:
‘[i]n circumstances where Mr Baker and Mr Millman have been offered alternative work placements, have accepted these work placements, and performed the work placements, their employment cannot be said to have terminated.’ 100
[99] Ms DeBoos agreed that the roles of the two employees had been made redundant,
‘[b]ut there can be no dispute that their employment has actually been terminated. They have turned up for work. It doesn’t matter whether or not there was any work for them to do. They have turned up for work in accordance with the work wages bargain. They have presented themselves as ready, willing and able to perform duties and Essential Energy has continued to pay them.
It’s gone further than that. Through its conduct it has shown, we would say, that it does intend to continue to be bound by the employment relationship because it’s gone to the effort of allocating these people a redeployment case manager…’ 101
[100] Essential Energy argued that it was acting reasonably when it:
a) made the decision not to accept the expression of interest for voluntary redundancy submitted by Mr Baker and Mr Millman;
b) continued to look for redeployment opportunities; and
c) provided Mr Millman and Mr Baker with temporary work placements until permanent positions could be identified.
[101] The reasons it did so were those given by Mr Jenner, namely:
a) Essential Energy wishes to maintain discretion over the acceptance or rejection of voluntary redundancies;
b) Essential Energy has cash flow constraints which make it difficult to pay redundancy entitlements in excess of 52 weeks; and
c) paying voluntary redundancy payments only up to 52 weeks is consistent with other areas of the business, particularly those under the Essential Energy Enterprise Agreement 2013. 102
[102] I am satisfied that Essential Energy has not terminated the employment of Mr Millman and Mr Baker. The employment relationship is clearly continuing. Moreover, there is no sound basis for finding that either party has repudiated the contract of employment. There is, as is well recognised, no contractual obligation for an employer to provide work to its employees. 103 Nor has Essential Energy breached the terms of the 2011 or 2013 agreements. Essential Energy has not, in my opinion, acted unlawfully.
[103] However, that is not the end of the matter. The terms of the dispute settlement procedures in the 2011 and 2013 agreements allow the Commission to resolve the disputes by arbitration. Section 739(4) of the FW Act empowers the Commission to do so. Under s. 739(5) of the FW Act, the Commission must not make a decision inconsistent with the FW Act or a fair work instrument that applies to the parties (which would include the 2011 and 2013 enterprise agreements). However, in the absence of any specific limitation imposed by the dispute settlement procedure itself, the Commission is not restricted merely to considering whether the employer has acted lawfully. In particular, it is not enough simply to find that Essential Energy has not breached the relevant enterprise agreements (or, for that matter, its own policies).
[104] The CFMEU has raised the issue of whether the actions of Essential Energy are a valid exercise of managerial prerogative. The relevant principle to be followed in these types of matters was set down in the XPT Case:
‘…the proper test to be applied and which has been applied for many years by the Commission is for the Commission to examine all the facts and not to interfere with the right of an employer to manage his own business unless he is seeking from the employees something which is unjust or unreasonable.’ 104
[105] The meaning of the term ‘reasonable’ (and the related term ‘reasonably’) was considered by French J (as his Honour then was) in Bropho:
‘There is a number of definitions of “reasonable” in the Shorter Oxford English Dictionary. The relevant ones are:
3. agreeable to reason; not irrational, absurd or ridiculous.
4. Not going beyond the limit assigned by reason: not extravagant or excessive; moderate.
The adverb “reasonably” is defined as “in a reasonable manner; sufficiently, fairly.”
There are elements of rationality and proportionality in the relevant definitions of reasonably. A thing is done “reasonably” in one of the protected activities in paras (a), (b) and (c) of s 18D if it bears a rational relationship to that activity and is not disproportionate to what is necessary to carry it out. It imports an objective judgement. In this context that means a judgement independent of that which the actor thinks is reasonable. It does allow the possibility that there may be more than one way of doing things “reasonably”.’ 105
[106] The test is not whether Essential Energy could have acted more reasonably, let alone whether the Commission would have taken the approach adopted by Essential Energy if it was the employer.
[107] It was not unreasonable for the Executive of Essential Energy to adopt a general policy that it would not accept requests for voluntary redundancy from employees who would receive payments above 52 weeks payment. To do so was certainly not ‘irrational, absurd, or ridiculous’. It was reasonable to have regard to the cost to the organisation of accepting requests for voluntary redundancy, and adopting a threshold of 52 weeks was logical, given that this was generally the maximum redundancy entitlement for most employees employed by Essential Energy. I think the relevant issue is cost – rather than ‘cash flow’. 106
[108] However, the reasonableness of that policy is undermined where the employer is unable to find useful work for employees whose roles have been abolished and who would like to take a voluntary redundancy.
[109] The evidence in relation to both Mr Millman and Mr Baker was compelling: despite the efforts of their employer, they have had virtually no real work to do since their roles were made redundant. Nor do I consider, based on the evidence before me, that there is any real prospect of there being any significant work for them in the foreseeable future.
[110] However generous their redundancy entitlements, there will clearly come a time – probably in the near future – when it will have cost Essential Energy more to keep them on its payroll than it would have had it let them take voluntary redundancy. Yet they are making no meaningful contribution to the work of Essential Energy. Moreover, the cost of keeping them on, in all probability while they continue to do virtually no meaningful work, will continue to mount, month by month and in all probability year by year. Such a situation is objectively irrational, absurd and ridiculous. It easily fits the definition of ‘unreasonable’.
[111] Moreover, I consider that the impact of these circumstances on Mr Millman and Mr Baker is harsh. Having had the opportunity to see them in the witness box, I am satisfied that both men are finding their situation very distressing. This is hardly surprising.
[112] I should emphasise that these findings relate solely to the particular circumstances surrounding Mr Millman and Mr Baker. I am not suggesting that Essential Energy does not generally have the right to refuse requests for voluntary redundancy.
[113] I order that Essential Energy accept David Baker’s application for voluntary redundancy.
[114] I order that Essential Energy accept Stephen Millman’s application for voluntary redundancy.
SENIOR DEPUTY PRESIDENT
Appearances:
A Walkaden for the Construction, Forestry, Mining and Energy Union.
A DeBoos, solicitor, with E Baxter, solicitor, for Essential Energy and Mr Gary Humphreys.
Hearing details:
Sydney.
2016.
March 30, 31.
1 AE891081.
2 AE405695.
3 Exhibit E1, paragraph 5.
4 Ibid paragraph 6.
5 PN69-PN70.
6 Exhibit E1, paragraph 8.
7 Ibid paragraph 7.
8 Exhibit CFMEU2, paragraphs 1-6.
9 Ibid paragraphs 8-9.
10 Ibid paragraphs 10-3.
11 Ibid annexure SJM-5.
12 Ibid annexure SJM-6.
13 Ibid paragraphs 20-1, annexure SJM-8.
14 Ibid paragraph 22.
15 Ibid paragraph 23.
16 Ibid paragraph 27.
17 Ibid annexure SJM-10.
18 Ibid paragraph 33.
19 Ibid paragraphs 34-5.
20 Exhibit E1, paragraph 13.
21 Ibid paragraph 14.
22 Exhibit CFMEU2, paragraphs 36, 38, 81 and annexure SJM-12.
23 Ibid annexure SJM-15.
24 Ibid paragraph 45.
25 Ibid paragraphs 53-8.
26 Ibid paragraphs 60-3.
27 Ibid paragraphs 66-7.
28 PN1460.
29 PN1472.
30 Exhibit CFMEU2, paragraph 69.
31 PN1433.
32 PN1440.
33 PN1535.
34 Exhibit CFMEU2, paragraphs 75-6.
35 Exhibit CFMEU2, paragraphs 88-90.
36 PN1416-PN1420.
37 PN1423-PN1424.
38 PN1425-PN1427.
39 PN1590.
40 PN1608-PN1612.
41 Exhibit CFMEU1, paragraphs 1, 3.
42 Ibid paragraph 4.
43 Ibid paragraph 9.
44 Ibid paragraphs 5-6.
45 Ibid paragraphs 10, 13.
46 Ibid paragraphs 18-9.
47 Ibid annexure DGB-7.
48 Ibid paragraph 22.
49 Ibid paragraph 25.
50 Ibid paragraph 27.
51 Ibid paragraphs 28-9.
52 Ibid paragraph 32.
53 Ibid paragraph 38
54 Ibid paragraphs 40-4.
55 Ibid paragraph 45.
56 Ibid paragraph 49.
57 Ibid paragraphs 24, 54.
58 Exhibit E1, paragraphs 13-4.
59 Exhibit CFMEU1, paragraph 56.
60 Ibid paragraphs 58-62.
61 PN1206-PN1212.
62 PN1274.
63 PN1288-PN1289.
64 PN1327.
65 PN1332.
66 PN1362-PN1364.
67 Exhibit CFMEU3, paragraphs 51-52; PN713-PN714.
68 PN718.
69 Exhibit CFMEU 3, attachment GPB-17.
70 PN739.
71 PN742.
72 PN744.
73 PN746.
74 PN766.
75 PN768.
76 PN773.
77 PN774.
78 PN1072.
79 CFMEU written submission relating to the AB matters, paragraph 6.
80 Ibid paragraph 50.
81 Ibid paragraphs14-6.
82 Ibid paragraphs 23-4.
83 Ibid paragraphs 28-30.
84 Ibid paragraph 35.
85 Ibid paragraph 54.
86 Amie Mac v Bank of Queensland & Ors [2015] FWC 774 [89].
87 CFMEU written submission relating to the AB matters, paragraph 56; PN2306-PN2308.
88 PN2518.
89 PN252-PN258.
90 CFMEU written submission relating to the AB matters, paragraphs 60, 66; PN2594.
91 Essential Energy written submission relating to the AB matter, paragraph 6.
92 Essential Energy written submission relating to the AB matter, paragraph 28.
93 Essential Energy written submission relating to AB matter, paragraph 37.
94 CFMEU written submission relating to the dispute matter, paragraph 9.
95 Ibid paragraph 17.
96 Ibid paragraphs 18-9.
98 CFMEU written submission paragraph 21
99 Australian Federated Union of Locomotive Enginemen v State Rail Authority of New South Wales (1984) 295 CAR 188 (‘XPT Case’), 191.
100 Essential Energy written submission relating to the dispute matter, paragraph 34.
101 PN2679-PN2680.
102 Essential Energy written submission relating to the AB matters, paragraphs 37-8.
103 Collier v Sunday Referee Publishing Co Ltd [1940] 2 KB 647, 650.
104 Australian Federated Union of Locomotive Enginemen v State Rail Authority of New South Wales (1984) 295 CAR 188 (‘XPT Case’), 191.
105 Bropho v Human Rights and Equal Opportunity Commission and Anor [2004] FCAFC 16 [79].
106 See interchange at PN144-PN146.
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