DECISION

Fair Work Act 2009
s.739—Dispute resolution

National Tertiary Education Industry Union
v
La Trobe University
(C2019/7339)

Alleged dispute about any matters arising under the enterprise agreement and the NES – calculation of severance pay – effect of increased time fraction.

[1] The National Tertiary Education Industry Union (NTEU) has made an application to the Fair Work Commission to deal with a dispute pursuant to s.739 of the Fair Work Act 2009 (FW Act) in accordance with the dispute settling procedure of the La Trobe University Collective Agreement 2018 1 (the Agreement).

[2] The dispute is in relation to the retrenchment entitlements of NTEU member Mr Wesam Saad under the Agreement and in accordance with the NES. Mr Saad was employed as a Lead Developer, Enterprise in ICT Enterprise Applications with La Trobe University (the University). His employment was terminated by reason of redundancy on 22 November 2019.

[3] Prior to the hearing I granted permission to the University to be represented pursuant to s.596 of the FW Act.

JURISDICTION

[4] There is no dispute between the parties and I accept that the provisions of the dispute settling procedure have been followed prior to the application being made to the Commission. Those steps of the dispute settling procedure have not resolved the matter.

[5] Further I am satisfied that the dispute is in relation to the provisions of clause 32 – Redundancy Procedures and, more specifically, clause 32.11 – Calculation of Payments of the Agreement. There is no dispute between the parties in relation to other provisions of clause 32.

[6] The dispute arises from changes made to Mr Saad’s hours of work and how these changes interact with clause 32.11 of the Agreement and hence the calculation of retrenchment benefit.

[7] The NTEU seeks that the University calculate Mr Saad’s severance benefit on the basis of Mr Saad’s full-time employment at the time of the termination of his employment. This is a matter that arises directly from the provisions of the Agreement and the dispute can therefore be characterised as one arising under the Agreement.

[8] In these circumstances I am satisfied that the Commission has jurisdiction to deal with the dispute.

THE AGREEMENT

[9] Clause 32 of the Agreement sets out the procedures to be applied in the event of redundancy and are generally unremarkable. The procedures provide for notice of redundancy, redeployment procedures, early separation benefits, notice period and severance pay.

[10] Severance pay calculations are based, in part, on completed years of service.

[11] Clause 32 of the Agreement sets out the basis on which the severance payments are calculated. It states as follows:

32.11 Calculation of Payments

(a) The calculation of all severance payments will be based on the Employee’s substantive salary as at the date of cessation of employment

(b) For the purpose of this clause, “substantive salary” means the salary (including paid allowances and loadings) for the Employee’s continuing position at the University, excluding payments awarded for the temporary or fixed-term performance of additional responsibilities (including, but not limited to, higher duties, coordination responsibilities, secondments or other positions of responsibility of less than three (3) years).

(c) If, at the time of receiving notice pursuant to sub-clause 32.4, an Employee is working on a temporary reduced time fraction (up to a maximum of two years) by reason of return to work after parental leave, illness or injury, all payments under this clause shall be calculated on the basis of their normal time fraction of employment worked prior to the parental leave, illness or injury (including paid allowances and loadings).

EVIDENCE AND BACKGROUND

[12] The NTEU filed a witness statement of Mr Saad and the University filed a witness statement of Mr Mark Farmer. Neither was required for cross-examination.

[13] The NTEU raised an objection to the second sentence of paragraph 13 and all of paragraph 17 of the statement of Mr Farmer on the grounds of hearsay, supposition and relevance.

[14] To the extent that paragraph 13 of Mr Farmer’s statement contains supposition I have not had regard to it. To the extent that paragraph 17 is not relevant to interpretation of the Agreement I have not had regard to it.

[15] The parties provided the Commission with a chronology of agreed facts. 2 As is directly relevant to these proceedings these are:

[16] In addition to the agreed facts Mr Saad’s evidence is that, during the period from 1 July 2019 he had increased his hours to full-time (but was taking 2 days per week long service leave), his position as Lead Developer, Enterprise did not change and he did not complete any temporary or fixed-term performance of additional responsibilities. 5

[17] Mr Farmer gave evidence that, following the finalisation of the change proposal, staff affected by the restructure were asked to develop a handover plan. He met with Mr Saad late in October to discuss his plan. Mr Saad had about 4 weeks’ work in his handover plan but this did not get completed. 6

NTEU Submissions

[18] The NTEU says that the University has incorrectly applied clause 32.11 of the Agreement in calculating Mr Saad’s severance pay. This gives rise to a question of the correct interpretation of clause 32.11.

[19] The NTEU says that clause 32.11 of the Agreement is clear in its terms. It says that the clause is directed to determining the employee’s substantive salary at the time of the cessation of employment. The purpose is to properly determine the amount of severance pay due to the employee.

Substantive salary

[20] The NTEU says that “substantive salary” is defined by clause 32.11(b) of the Agreement which states that it is the “salary…for the Employee’s continuing position”.

[21] “Continuing position” can only mean the position held by an employee at the time of redundancy and is distinguishable from a temporary or fixed-term position. With respect to Mr Saad the NTEU submits that his continuing position at the time of redundancy was Lead Developer, Enterprise as it has been since 1 November 2017. This did not change when his contract was varied effective from 1 July 2019 to increase his time to a 100% time fraction (from the 60% time fraction worked from November 2017 to that point in time).

[22] The excluded payments “for the temporary or fixed-term performance of additional responsibilities (including, but not limited to, higher duties, coordination responsibilities, secondments or other positions of responsibility of less than three (3) years)” clarifies those payments which are not included in the calculation of severance benefits. The NTEU says that the list in parenthesis, whilst not exhaustive, is directed to the types of “temporary or fixed-term performance of additional responsibilities” and cannot be expanded beyond such a class of considerations.

[23] In Mr Saad’s case the NTEU submits that he did not have any “additional responsibilities” at the time he was made redundant and his duties had not changed at all. It submits that, contrary to the submission of the University, the taking of leave (2 days per week of long service leave in Mr Saad’s case) is not of the character of “temporary or fixed-term performance of additional responsibilities” listed in the clause as warranting some exclusion.

[24] The NTEU submits that the exception in clause 32.11(c) of the Agreement does not apply in Mr Saad’s case as the provisions are directed to employees working a temporarily reduced time fraction. Clause 32.11(c) limits the circumstances where a temporary reduction in time fraction is discounted for the purposes of calculating severance pay. It cannot be read that it allows a discount to a previously increased time fraction. In considering the intent of clause 32.11(b) of the Agreement the NTEU submits that it is instructive to understand the intent in clause 32.11(c) of the Agreement.

As at the date of cessation of employment

[25] The NTEU submits that Mr Saad’s substantive position at the time of cessation of his employment was Lead Developer, Enterprise. At the date of cessation of his employment he was working a full-time fraction. His severance payment must be calculated on this basis.

Application of the National Employment Standards

[26] The NTEU submits that the University has failed to apply the National Employment Standards (NES).

[27] Section 119(2) of the FW Act directs that employers are to calculate redundancy pay on “the employee’s base rate of pay for his or her ordinary hours of work.”

[28] In this respect the NTEU says that Mr Saad’s payslip identifies his base rate of pay and his ordinary hours of work.

La Trobe University submissions

[29] The University says that:

•  Clause 32.11(a) of the Agreement specifies the obligation to base severance payments on an employee’s “substantive salary” at a specified point in time (the date of cessation);

•  Clause 32.11(b) of the Agreement defines “substantive salary” as being that for the continuing position and excludes certain payments;

•  Clause 32.11(c) of the Agreement deals with employees working temporary reduced time fractions in specified circumstances.

Continuing position

[30] The University submits that while “continuing position” is not defined in the Agreement a review of the Agreement suggests that “continuous appointment” and “continuing position” are used to convey types of employment that are not temporary, time bound, contingent or casual in nature.

[31] It says that “appointment” is typically used to convey engagement of an employee in a particular position and “position” is used to convey the employee’s posting with the employer and what that entails such as duties, hours, location, etc.

[32] The University submits that its proposition with respect to what is the “continuing position” finds support in the decisions in Thomson v Orica Australia Pty Ltd 7 (Thomson) and Amcor Ltd v Construction, Forestry, Mining and Energy Union and Ors8 (Amcor).

[33] On the basis of these decisions the University says that Mr Saad’s continuing position at the date of cessation of his employment was Lead Developer, Enterprise at a 60% time fraction. At the time of the cessation of Mr Saad’s employment the University submits that his position involved a temporary payment at the full-time rate.

[34] The University says that the temporary arrangement did not form part of Mr Saad’s “continuing position” and that at all material times his continuing position was part-time on a 60% time fraction. The University submits that the exclusion of employment that might be temporary or time bound operates to exclude Mr Saad’s temporary increase in hours to a 100% time fraction.

[35] In determining Mr Saad’s substantive salary the University says that it is not required to look beyond Mr Saad’s continuing position. On this basis it is not necessary to consider the exclusions in clause 32.11(b) of the Agreement.

[36] This, the University submits, resolves the issue.

[37] In relation to the exclusion in clause 32.11(b) of the Agreement in the phrase “excluding payments awarded for the temporary or fixed-term performance of additional responsibilities” the University submits that the circumstances of this matter are that Mr Saad’s increased time fraction was based on a requirement by Mr Farmer that he reduce his excess long service leave. Mr Saad agreed to the direction given to him and that direction was temporary in nature.

[38] Further, the University submits that the terms in the parenthesis (“including, but not limited to…”) should not be seen as limiting or fencing those matters which might be considered as additional responsibilities but rather the term “including, but not limited to” should be accepted as enlarging those types of matters that might be accepted as additional responsibilities beyond the types in the list that follows.

[39] In this respect the University submits that the clause allows consideration of the type of arrangement entered into by Mr Saad to reduce his long service leave as the temporary performance of additional responsibilities, the payment for which is excluded by clause 32.11(b) of the Agreement. For this reason it submits that Mr Saad is not entitled to have his severance pay calculated on a 100% time fraction as part of this was the temporary performance of additional responsibilities he accepted in reducing his long service leave.

National Employment Standards

[40] The University says that the effect of s.55(6) of the FW Act is that, at its highest, the NES only applies as a minimum standard. In the case of redundancy this is to the amount set out in the table at s.119 of the FW Act. The University submits that where an agreement provides a higher entitlement than the calculation set out in s.119 of the FW Act, the NES has no broader application. 9

INTERPRETING THE AGREEMENT

[41] The principles relevant to interpreting the provisions of the Agreement are not disputed by the parties. They are succinctly set out in the decision in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Berri Pty Ltd (Berri). 10

[42] In considering the meaning of the Agreement I concur with the caution added by the University that:

(a) Narrow or pedantic approaches to interpretation of industrial instruments is unwarranted.

(b) Drafters of such documents are of a practical bent of mind. It is justifiable to read industrial instruments to give effect to evident purpose, having regard to context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. 11

(c) Interpretation should arrive at “a sensible industrial outcome”. Meanings which avoid inconvenience or injustice may reasonably be strained for. 12

WHAT DOES CLAUSE 32.11 OF THE AGREEMENT MEAN?

[43] I am satisfied that clause 32.11(a) of the Agreement is clear. Further, I am satisfied that the date of cessation of employment is without dispute. It is also clear that the basis of the calculation is to be the employee’s substantive salary as at the date of cessation.

[44] Where an employee works a set time fraction and has not taken parental leave or other leave as specified in clause 32.11(c) of the Agreement and has not received any payments for additional responsibilities, there is no room to dispute the substantive salary at the date of cessation.

[45] In the case where an employee’s time fraction has changed, or additional payments are being made, clauses 32.11(b) and (c) of the Agreement require an investigation into the reason for the change and hence a determination of the effect of that change on the severance amount payable.

[46] Clause 32.11(c) of the Agreement deals only with what is to occur should an employee’s time fraction be reduced for specified reasons. It does not address what is to occur when a time fraction is increased.

[47] Clause 32.11(b) of the Agreement does not, on its face, deal with an increase (or decrease) in the time fraction of an employee but rather is directed to the circumstances where an employee is awarded payments for the temporary performance of additional responsibilities.

[48] Neither paragraph explicitly deals with the circumstances where an employee has increased his or her time fraction where this is not associated with additional responsibilities or where the increase occurs for a limited period of time.

What is the continuing position?

[49] Clause 32.11(a) of the Agreement requires that severance payments be based on the employee’s substantive salary. The substantive salary is that paid in the employee’s continuing position (clause 32.11(b) of the Agreement).

[50] Clause 32.1(a) of the Agreement limits the application of the clause to academic and professional employees in continuing positions. It does not apply to casual employees, employees on fixed-term contracts or employees on Senior Staff Performance Based Contracts (clause 32.1(b) of the Agreement) nor to a number of classes of employee, presumably regardless of the status of the position they occupy.

[51] “Continuing position” is not defined in the Agreement although it is generally agreed that it is otherwise a position that is not time bound in some way. Further, there is little if anything in the Agreement that provides guidance in determining the continuing position in circumstances such as those of Mr Saad.

[52] The Agreement does define the types of employment of an employee. This includes continuing appointment, research continuing appointment, fixed-term appointment, casual appointment, seasonal part year or annualised hours appointment and scholarly teaching fellow appointments. 13 The Agreement also contemplates that such employment may be on a full-time or part-time basis.14

[53] That a position may be a continuing position should not be confused with the type of employment (or status) of the employee who occupies the position. The Agreement contemplates, for example, a fixed term employee undertaking work replacing an on-going employee for a defined period during recruitment activity. 15 In such a circumstance the “continuing position” is occupied by an employee who does not have a continuing appointment.

[54] There is no doubt that the position occupied by Mr Saad was a continuing position. The matter to determine is if the continuing position was at a 60% time fraction.

[55] Given the lack of definition or assistance elsewhere in the Agreement for determining what a continuing position may be, an alternative starting point is to consider the contract entered into by Mr Saad in November 2017 16 when he commenced working a reduced time fraction.

[56] The contract has, as an integral part, “Special Conditions.” In Mr Saad’s case these include standard information such as the location of work, supervisor title, classification, remuneration etc. It provides that the La Trobe University Collective Agreement 2018 is the applicable industrial instrument. Importantly it also provides that:

•  Mr Saad’s Position Title is “Lead Developer, Enterprise / 50142812;

•  the Nature of Appointment is “Part time, (60%) Continuing”.

[57] The contract of employment lends support to the conclusion, drawn from clause 11.1 of the Agreement, that Mr Saad’s “type of employment” is a continuing part-time appointment at a 60% time fraction. That is, Mr Saad has continuing appointment on a part-time basis.

[58] This supports a conclusion that Mr Saad’s continuing position of Lead Developer, Enterprise is a full-time position albeit that Mr Saad is appointed to that position on a part-time (60%) continuing basis. There is nothing in the contract or the Agreement that supports any contrary conclusion.

[59] I am not satisfied that the cases relied on by the University aid in resolving the matter as each case is particular to its circumstances in considering the meaning of “position”. In Thomson “position” was taken to be of some breadth to indicate equivalence in the work undertaken prior to the maternity leave and offered on return. In Amcor the definition was highly contextualised in that it related to the nexus between positions and employees where both were used in the description of a redundancy. On this basis I am not satisfied that either provides guidance in determining the particulars of the matter before me.

[60] In this case the “position” Mr Saad occupied is clearly indicated in his contract. That an organisational chart shows that Mr Saad worked a 60% time fraction does not mean the position he occupied was a part-time position. Again, it would be wrong to conflate the characteristics of his appointment with those of the position occupied.

[61] In these circumstances there is no basis to conclude that Mr Saad’s continuing position changed when his time fraction increased to 100%.

[62] This finding is consistent with the record in ASKHR which was amended to reflect Mr Saad’s changed time fraction. 17 The job title and position number did not change from that on his contract of employment. There was no change to his continuing position. What was changed was the time fraction of his continuing appointment from 60% to 100%.

[63] This is the most sensible construction that is not pedantic and does not require reading into the Agreement things that are not there but accounts for contextual matters.

[64] If Mr Saad was made redundant prior to the increase in his time fraction there would be none of the debate now being had. He would have been paid out his appropriate retrenchment benefit in weeks calculated at his 60% time fraction – that is, at his substantive salary at that point in time. However, this does not resolve the question for Mr Saad as from 1 July 2019 he was engaged on a 100% time fraction in the position of Lead Developer, Enterprise suggesting that, at the time of his redundancy, his substantive salary was calculated at the 100% rate.

[65] It is therefore necessary to consider whether the additional payments over the 60% time fraction received by Mr Saad was excluded by the operation of clause 32.11 of the Agreement.

What is intended by the term “additional responsibilities”?

[66] It is accepted that Mr Saad increased his hours to a 100% time fraction for the purpose of taking off 2 days per week on long service leave in order to manage his excess long service leave credits. In these circumstances Mr Saad did not increase the amount of time he spent at work but he did decrease his long service leave credit without reducing his time actually at work.

[67] In considering the intent of clause 32.11(b) of the Agreement it would be wrong to look narrowly at limited words in the clause and analyse them devoid of context. It is not enough, therefore, to consider if the direction to take excess leave for the purpose of reducing an excess leave credit is an additional responsibility. The clause, by its words, seeks to exclude payments that are awarded for the temporary performance of additional responsibilities. In determining if any particular additional responsibilities are excluded it is necessary to consider if any payment is made for the performance of those responsibilities.

[68] Even if it is accepted that the taking of leave for the purpose of reducing excess leave credits constitutes the undertaking of “additional responsibilities”, there is a question of whether payment was “awarded for the…performance of [those] additional responsibilities” 18.

[69] I am not convinced that the payment received by Mr Saad for taking (excess) leave is a payment awarded for taking on an additional responsibility. Certainly, there may well have been some obligation (through the agreement reached with Mr Farmer) on Mr Saad to reduce his leave credits, but I am not convinced payment is then made for reducing those credits. Rather, the payment to Mr Saad for the two additional days per week was received by right on the taking of the leave. That is an entitlement and cannot be characterised as a payment “awarded” for the additional responsibility of reducing his leave credits. No employee taking leave within their normal working time fraction as a result of an agreement to reduce excess leave is considered to be in receipt of some payment for “additional responsibilities.” I am therefore not convinced that Mr Saad should be so considered. Further, there is no evidence that, had the taking of excess leave occurred outside a redundancy context, the taking of the leave would be considered an additional responsibility as otherwise provided for in the Agreement.

[70] My conclusion is supported by the existence of express provisions in the Agreement clearly designed to deal with excess leave situations. Clause 38.2 of the Agreement deals with managing excess annual leave credits and clause 44.4 of the Agreement with managing excess long service leave. The University did not have to deal with Mr Saad’s excess leave credits as it did. In fact, it could have directed Mr Saad to reduce his leave credits with such a direction in respect of, at least, long service leave being final. 19

[71] I am satisfied that the payments awarded to Mr Saad for the two days each week he took on leave were therefore not “payments awarded for the temporary or fixed-term performance of additional responsibilities” such that, for that reason alone they should not be excluded from calculation of his substantive salary.

What is the effect of “including, but not limited to”?

[72] The issue to determine is if the phrase “additional responsibilities (including, but not limited to higher duties, coordination responsibilities, secondments or other positions of responsibilities of less than three (3) years)” is intended to include circumstances where an employee’s time fraction is increased on a temporary basis for the purpose of taking leave.

[73] There is no doubt that the phrase “including, but not limited to” indicates that the examples given is intended to indicate a non-exhaustive list of additional responsibilities – that is, the list indicates some types of additional responsibilities but there could be others that are not on the list. I am satisfied however that those things that may be considered in the list must be matters that relate to responsibilities for which payment is awarded for the temporary or fixed-term performance of the additional responsibilities. However, for the reasons given above, I do not consider that I need to definitively determine if the terms within the parenthesis are intended to limit the class of matters that can considered or allow an enlargement of that class as put by the University because I do not consider that what Mr Saad was doing in increasing his hours to reduce his long service leave constituted additional responsibilities for which he was awarded payment.

The National Employment Standards

[74] Given my conclusion in relation to additional responsibilities, I do not need to determine the requirements of the NES.

CONCLUSION

[75] For the reasons given above I am satisfied that Mr Saad’s continuing position at the time he was made redundant was the Lead Developer, Enterprise ICT and he was engaged as a continuing employee at a 100% time fraction. He was not, at the time he was made redundant, in receipt of any additional payments of the type described in or contemplated by clause 32.11(b) of the Agreement.

[76] It may well be thought that Mr Saad has come to a windfall gain to which some may think he was not otherwise entitled. As I observed above there were ways for the University to manage Mr Saad’s excess leave. As the University said, Mr Saad’s managers had been attempting to manage the excess leave from 2017 onwards. The University did not have to enter into the arrangement with Mr Saad that it did from 1 July 2019 and, further, it did not have to make him redundant when it did.

[77] Whilst the outcome in this case may seem inconvenient, it is caused by the convergence of a range of circumstances, the combination of which is unlikely to arise again. It is a circumstance that could not possibly have been foreseen by the drafters of the Agreement. The management of excess leave was seen as a real issue to be addressed by the drafters of the Agreement and a tool for this purpose was clearly provided in the Agreement.

[78] Given these conclusions it would appear that Mr Saad’s severance benefit should therefore be calculated on his substantive salary at the 100% time fraction.

[79] For all of the reasons given above I determine that the University erred in its interpretation of clause 32.11 of the Agreement and hence its calculation of severance payments due to Mr Saad.

[80] As a consequence of this determination I recommend that Mr Saad’s redundancy entitlements be recalculated in accordance with this decision.

COMMISSIONER

Appearances:

C. Rabaut and L. Gale for the Applicant.
L. Howard, of counsel, for the Respondent.

Hearing details:

2020.
Melbourne by telephone:
April, 22.

Printed by authority of the Commonwealth Government Printer

<PR719446>

 1   AE428963.

 2   Exhibit R2.

 3   Exhibit R3, attachment MF-3.

 4   Exhibit A1, attachment WS-3.

 5   Exhibit A1, paragraph 16.

 6   Exhibit R3, paragraphs 15-17.

 7   (2002) 116 IR 186.

 8   (2005) 222 CLR 241.

 9   Construction, Forestry, Mining and Energy Union v Glendell Mining Pty Ltd (2017) 249 FCR 495, [112]-[121] (per White and Bromwhich JJ).

 10   [2017] FWCFB 3005, [114].

 11   Kucks v CSR Limited (1996) 66 IR 182, 184 (Madgwick J); Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241, [96] (Kirby J), [129] – [130] (Callinan J).

 12   Ibid. That does not mean, however, that one should read words into an agreement to reach a conclusion as to what might be considered fair.

 13   AE428963, clause 11.1.

 14   Ibid, clause 12.

 15   Ibid, clause 13.2(c).

 16   Exhibit A1, attachment WS-1.

 17   Exhibit A1 attachment WS-2.

 18   AE428963, clause 32.11(b).

 19   Ibid, clause 44.4(c).