AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
Workplace Relations Act 1996
s.170GB applications for order where employer fails to
consult trade union about terminations
CPSU, the Community and Public Sector Union
and
Vodafone Network Pty Ltd
(C2001/5739)
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
and
Vodafone Network Pty Ltd
(U2001/5770)
Various employees |
Telecommunications services |
COMMISSIONER SMITH |
MELBOURNE, 14 NOVEMBER 2001 |
Application for orders to consult unions.
EX TEMPORE DECISION
[1] The following decision, now edited, was given in transcript this morning. It has been edited to properly reflect my reasoning but the conclusion is not altered.
Introduction.
[2] Applications dated 12 and 13 November 2001, the CPSU, Community and Public Sector Union (CPSU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) sought, pursuant to s.170GB of the Workplace Relations Act 1996 (the Act), an order to be made under s.170GA of the Act.
[3] The order sought is against Vodafone Network Pty Limited (Vodafone).
[4] The CPSU and CEPU argue that Vodafone has decided to terminate fifteen or more employees for reasons of an economic, technological, structural or similar nature.
Jurisdiction.
[5] Section 170GA of the Act provides:
"170GA(1) Subsection (2) applies if the Commission is satisfied that an employer has, on or after 26 February 1994, decided to terminate the employment of 15 or more employees for reasons of an economic, technological, structural or similar nature, or for reasons including such reasons, and that:
(a) the employer did not, as soon as practicable after so deciding and in any event before terminating an employee's employment pursuant to the decision, inform each trade union of which any of the employees was a member, and which represented the industrial interests of such of those employees as were members, about:
(i) the terminations and the reasons for them; and
(ii) the number and categories of employees likely to be affected; and
(iii) the time when, or the period over which, the employer intended to carry out the terminations; or
(b) the employer did not, as soon as practicable after so deciding and in any event before terminating an employee's employment pursuant to the decision, give each such trade union an opportunity to consult with the employer on:
(i) measures to avert the termination, or avert or minimise the terminations; and
(ii) measures (such as finding alternative employment) to mitigate the adverse effects of the termination or terminations.
(2) The Commission may make whatever orders it thinks appropriate, in the public interest, in order to put the employees whose employment was terminated pursuant to the decision, and each such trade union, in the same position (as nearly as can be done) as if:
(a) if paragraph 1(a) applies - the employer had so informed the trade union; and
(b) if paragraph 1(b) applies - the employer had so given the trade union such an opportunity.
(3) Subsections (1) and (2) do not apply in relation to a trade union if the employer could not reasonably be expected to have known at the time of the decision that one or more of the employees were members of the trade union."
[6] The power to make orders under s.170GA(2) of the Act is constrained by the establishment of certain jurisdictional facts set out in S170GA(1) of the Act. The power is further constrained by s.170CC of the Act and reg. 30B of the Workplace Relations Regulations which excludes certain classes of employees from the operation of, inter alia, Subdivisions D & E of Division 3 of Part VIA of the Act, being the Subdivision in which s. 170GA of the Act appears.
[7] A matter which is central to this decision is the construction of the power in s.170GA(2). That section provides both a right to employees and the relevant trade union. Whilst it is not free from doubt I have construed this beneficial legislation a providing a right to a trade union which is different from the right conferred on an employee. The right conferred on an employee is only enlivened following a termination. A distinction may be drawn for a trade union where, to use the language of 170GA(1)(b), consultation can take place "before terminating an employee's employment" If I be wrong on this point then the order I will make falls to the ground and the balance of the reasoning also falls.
[8] In addition, the Commission must not make an order under s.170GA of the Act unless it has received an application for the making of an order from a relevant employee or trade union. In the case of a trade union, it must, under its rules, be entitled to represent the industrial interests of the persons affected.
[9] Finally, the Commission must refrain from considering an application if the Commission is satisfied that there is available a relevant alternate remedy.
[10] A further issue which arises in these proceedings is the application made by both the CPSU and CEPU that the order contain a provision prohibiting the termination of person until consultation has occurred. This also gives rise to the question as to whether or not such an order is within power.
[11] The Objects of Division 3 of Part IVA of the Act are:
"170CA The principal object of this Division is:
(a) to establish procedures for conciliation in relation to certain matters relating to the termination or proposed termination of an employee's employment in certain circumstances; and
(b) to provide, if the conciliation process is unsuccessful, for recourse to arbitration or to a court depending on the grounds on which the conciliation was sought; and
(c) to provide for remedies appropriate to a case where, on arbitration, a termination is found to be harsh, unjust or unreasonable; and
(d) to provide for sanctions where, on recourse to a court, a termination or proposed termination is found to be unlawful; and
(e) by those procedures, remedies and sanctions, and by orders made in the circumstances set out in Subdivisions D and E, to assist in giving effect to the Termination of Employment Convention.
(2) The procedures and remedies referred to in paragraphs (1)(a) and (b), and the manner of deciding on and working out such remedies, are intended to ensure that, in the consideration of an application in respect of a termination of employment, a "fair go all round" is accorded to both the employer and employee concerned."
[12] The question may be posed: if the Commission has the power to arbitrate to reinstate a dismissed person then why is it not also comprehended by the Act that the Commission can restrict the power to dismiss where an employer has not consulted and consideration has not been given to averting or mitigating the effects of termination of employment? Such a proposition is fortified by the fact that s.170GA of the Act is an integral part of Division 3 of Part VIA of the Act which deals comprehensively with matters relating to termination of employment at the initiative of the employer in circumstances where the termination is otherwise found to be harsh unjust or unreasonable.
[13] On one reading, s. 170GA of the Act, if properly applied, can overcome the need for an application to be made under other sections of the Division. In my view, the power to stop at source a potential unfairness is within power, particularly in circumstances where the scheme of the Act is to firstly consider making an order requiring the employer to reinstate the employee.
[14] It would appear from the decision in Construction, Forestry, Mining and Energy Union v The Newcastle Wallsend Coal Company Pty Ltd (Newcastle Wallsend) [Print R0234], that the power goes further, although I do not need to decide that point in this matter.
Jurisdictional findings.
[15] To begin, it is appropriate that I find that Vodafone employs persons who are, or are eligible to be, members of the two unions who have made these applications. A relevant finding of dispute has been made against Vodafone in matters C2001/2975 and C2001/1824.
[16] In relation to the requirements of 170GA(1)(a)&(b) of the Act, I find:
[17] Vodafone, on or after 26 February 1994, decided to terminate the employment of fifteen or more employees for economic and structural reasons. Whilst the Human Resources Manager of Vodafone, Ms Bryant, has written to both the CPSU and the CEPU stating: "At this stage, we are reviewing business functions, not staff numbers"[Exhibits B1 and B2], this is plainly inconsistent with public statements attributable to the Chief Operating Officer, Mr Grahame Maher. For example, in the Age newspaper, the following is attributed to Mr Maher:
"There will be job losses because there's too many staff - Is there a number? No" [The Age 13 November 2001].
[18] This is accompanied by reports that there needed to be a 50 per cent cut in operating costs. The question posed to counsel representing Vodafone was: Could a guarantee be given that less than fifteen staff would be affected by the projected cut in operating costs? Certain undertaking were offered but they were rejected by the unions. In my view, no adequate assurance or undertaking was given.
[19] In the absence of any denial by Vodafone that the statements of Mr Maher were misreported or not made, I find that Vodafone did not, as soon as practical, after so deciding and in any event before terminating an employee's employment pursuant to such a decision, inform the CPSU or the CEPU about the terminations and the reasons for them; the number and categories of employees likely to be effected, and the time period over which it intended to carry out the terminations.
[20] I also find that Vodafone did not, as soon as practicable after deciding to terminate and in any event before terminating an employee's employment pursuant to such a decision, give the CPSU and the CEPU an opportunity to consult on measures to avert or minimise the terminations and/or to mitigate the adverse effects of the terminations.
[21] Section 170GC of the Act provides that no order can be made if an alternative remedy exists. Section 170GC of the Act provides:
"170GC The Commission must refrain from considering an application, or from determining it, if the Commission is satisfied that there is available to the applicant, or to the employees whom the applicant represents, an alternative remedy under machinery:
(a) that exists under a law of the Commonwealth (other than this Division) or under a law of a State or Territory; and
(b) by which effect will be given to the requirements of Article 13 of the Termination of Employment Convention in relation to the employees and trade unions concerned."
[22] Article 13 of the Convention concerning Termination of Employment at the Initiative of the Employer provides:
"1. When the employer contemplates terminations for reasons of an economic, technological, structural or similar nature, the employer shall:
(a) provide the workers' representatives concerned in good time with relevant information including the reasons for the terminations contemplated, the number and categories of workers likely to be affected and the period over which the terminations are intended to be carried out;
(b) give, in accordance with national law and practice, the workers' representatives concerned, as early as possible, an opportunity for consultation on measures to be taken to avert or to minimise the terminations and measures to mitigate the adverse effects of any terminations on the workers concerned such as finding alternative employment.
2. The applicability of paragraph 1 of this Article may be limited by the methods of implementation referred to in Article 1 of this Convention to cases in which the number of workers whose termination of employment is contemplated is at least a specified number or percentage of the workforce.
3. For the purposes of this Article the term the workers' representatives concerned means the workers' representatives recognised as such by national law or practice, in conformity with the Workers' Representatives Convention, 1971."
[23] No submissions were advanced on this point and so I find that no alternative remedy exits.
[24] Against that background, it is appropriate that I turn to consider the discretionary aspect of whether or not to grant the application.
[25] In deciding whether or not to make the orders sought I have considered the importance of consultation. Consultation is not perfunctory advice on what is about to happen. This is common misconception. Consultation is providing the individual, or other relevant persons, with a bona fide opportunity to influence the decision maker. Section 170GA(1)(b) of the Act speaks of measures to avert or minimise terminations or to mitigate the adverse effects of the terminations. Consultation is not joint decision making or even a negative or frustrating barrier to the prerogative of management to make decisions. Consultation allows the decision making process to be informed, particularly as it may effect the employment prospects of individuals. The opportunity to seek to avoid or mitigate the effects of a termination can not be underestimated by those who wield power over those and their families who will the subject of the exercise of that power.
[26] As the Full Bench said in Liu v Windsor Smith [Print Q3462]:
"We add that in ordinary circumstances it is reasonable for an employer who is contemplating redundancies to discuss the matter with the employees, and their representatives should the employees so desire, to enable alternatives to be canvassed and to allow employees who are in peril of losing their employment to adjust their affairs accordingly."
[27] That this should be so is not surprising given the history of the concept which, in part, can be traced to an agreement of Employers, Unions and Government in the guidelines adopted by the tripartite National Labour Advisory Council (NLAC) in 1969. This consensus is dealt with in the Termination Change and Redundancy Case [Print F6230].
[28] In this case it appears plain that Vodafone has decided that persons will be dismissed. It would be idle to pretend, in the face of the economic imperative loudly outlined in the media reports, that such was not the case. Vodafone seeks to draw a distinction between a decision in principal and identifying persons and deciding to dismiss those person. In my view, in the circumstances of this case, such an approach creates a too narrow meaning of the phase "decided to terminate" in s. 170GA(1) of the Act. To begin, 170GA(1)(ii) of the Act speaks of the those likely to be affected. In addition, to allow the process to advance to such a late stage may have the effect of mitigating against bona fide consultation in relation to the matters covered by 170GA(1)(b)of the Act. Again I emphasise that each case will turn on its own facts and the approach here may not be possible in circumstances where it is unclear if one of the jurisdictional requirements may not be met; namely, a decision to terminate the employment of fifteen or more employees.
[29] It is an exercise in sophistry to suggest that a decision has not been taken against the clear statements by Mr Maher. To proffer another suggestion would be to undermine the efficacy of the reported economic circumstances facing Vodafone and the public statements of its Chief Operating Officer.
[30] Given the operation of s.37 of the Act, the panel over which her Honour Senior Deputy President Marsh presides, has had to face significant changes in what is know as the "telco's sector". The experience in this area fortifies the conclusion that the prospect of job losses are real and not illusory.
[31] I will grant the application, save that I will not restrict the termination of employment at the initiative of the employer for misconduct or where an employee consents in writing to being terminated for reason of redundancy.
[32] Leave is granted to Vodafone to seek an amendment to the order in the event that it believes that the process of consultation is being abused and that delays and frustration are the primary motives of the unions rather than bona fide consultation.
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COMMISSIONER
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