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TRANSCRIPT OF PROCEEDINGS
Fair Work Act 2009                                                    

 

COMMISSIONER JOHNS

 

C2021/7993

 

s.739 - Application to deal with a dispute

 

CPSU, the Community and Public Sector Union

 and

Commonwealth Of Australia (Services Australia)

(C2021/7993)

 

Department of Human Services Agreement 2017-2020

 

Sydney

 

10.17 AM, FRIDAY, 25 FEBRUARY 2022

 

Continued from 20/12/2021

 


PN1          

THE ASSOCIATE:  Parties, the Commissioner has joined the line and the recording has started.  The Commission is now in session in the matter of C2021/7993, CPSU v Services Australia, for arbitration.

PN2          

THE COMMISSIONER:  Associate, can you hear me?

PN3          

THE ASSOCIATE:  Yes, I can, Commissioner.

PN4          

THE COMMISSIONER:  Thank you.  Can I ask you to call the matter on again?  I just couldn't hear it.

PN5          

THE ASSOCIATE:  Parties, the Commissioner has joined the line and the recording has started.  The Commission is now in session in the matter of C2021/7993, CPSU v Services Australia, for arbitration.

PN6          

THE COMMISSIONER:  Thank you.  Good morning.  Ms Fawcett, can you hear and see me?

PN7          

MS FAWCETT:  Yes, Commissioner, I can hear you.

PN8          

THE COMMISSIONER:  Very good and Ms Sekler?

PN9          

MS SEKLER:  Yes, Commissioner, I can both hear and see you.

PN10        

THE COMMISSIONER:  Very good.  Ms Sekler, am I required to give you permission?  Have I done that already?

PN11        

MS SEKLER:  Commissioner, I'm an employee of the Commonwealth being an employed AGS solicitor.

PN12        

THE COMMISSIONER:  Right.

PN13        

MS SEKLER:  So strictly speaking you're not required to do so.

PN14        

THE COMMISSIONER:  To the extent that I would be required, I grant you permission pursuant to section 196.

PN15        

MS SEKLER:  Thank you.

PN16        

THE COMMISSIONER:  Yes, Ms Fawcett.

PN17        

MS FAWCETT:  Thank you, Commissioner.  If it pleases the Commission I might commence with some opening remarks.

PN18        

THE COMMISSIONER:  Yes, I've read the submissions but thank you, yes.

PN19        

MS FAWCETT:  Thank you.  This dispute is about the Commonwealth's obligations under the Fair Work Act as a national system employer.  Parliament has seen fit to amend the NES to insert a universal casual conversion term into the NES, and this provision imposes an obligation on employers to offer permanent employment to casual employees who meet the eligibility criteria.  That is employees who have more than 12 months service and those who work a regular pattern of hours.

PN20        

Services Australia is a very large employer that maintains a significant casual workforce, currently about 3,500 employees strong.  Under the transitional provisions last year it assessed over 2,000 casual employees for eligibility for conversion.  It's also an employer being so large and a service delivery agency of the Commonwealth that is frequently recruiting.  It conducts large national bulk recruitment rounds so that it can draw on merit calls of suitable candidates at its convenience.

PN21        

These candidates are put through all of the processes required to be included in such a pool.  The vacancies the candidates apply for are advertised in the Public Service Gazette, they're available to be applied for by the entire Australian community.  The candidates are tested and interviewed and ranked, and they're rated.  If they're rated suitable in that process they can be placed in a merit pool and can be offered a position at any time in the next 12 months.  That was under the 2016 Commissioner's directions, that's now been extended to 18 months under the 2022 directions that have been recently issued.

PN22        

A number of Services Australia's long-term casuals were sitting in active merit pools at the time they were assessed for conversion last year.  Having been put through a full merit selection process consistent with the Public Service Act and Commissioner's directions.  So they were sitting in active merit pools capable of being made an offer of employment at any time by the Agency.

PN23        

THE COMMISSIONER:  Can I interrupt you there just to ask you one question, clarify for myself?  Is the work that they're doing as a casual the same work that they applied for in the merit process and are ranked in?  Because sometimes people apply for a different job and get ranked on merit for that.  So give me a hard example, give me an example of what this person is doing.

PN24        

MS FAWCETT:  Yes, so these casuals are APS3 customer service officer positions and when they apply in these bulk recruitment rounds they will typically apply for an APS3 and 4 role at the same time, but the CPSU position would be that they would be eligible for conversion for an APS3 role.  That would be - - -

PN25        

THE COMMISSIONER:  Doing the same work?  They would be doing the same work.  If the conversion occurred they would be doing exactly the same work that they're doing as a casual and in respect of which they're sitting in a merit pool?

PN26        

MS FAWCETT:  That's correct, yes.

PN27        

THE COMMISSIONER:  Thank you, I'm assisted by that.

PN28        

MS FAWCETT:  Thank you, Commissioner.  Despite their eligibility for conversion and despite being capable of being made an offer of ongoing employment due to being in this active merit pool, these employees who I describe as the vacancy cohort, they were not made such an offer, and this is because the Agency claims that it doesn't have to make such an offer, that it can exercise its discretion under the Commissioner's directions to say there's no vacancy to appoint them to.

PN29        

The Commonwealth relies on section 66C to D of the Fair Work Act which is one of the reasonable grounds for not making an offer, to claim there needs to be a pre-existing vacancy at the time the casual is assessed for conversion and that this is an essential element of the recruitment and selection processes required under Commonwealth law.  But what this does is it introduces an effective veto.

PN30        

It allows the Agency to do what no other employer in the country can do and that is to say, yes, we have these casual who are eligible, they meet the eligibility criteria at section 66B(1) and, no, there's nothing standing in the way of them being made an offer because they're in an active merit pool for a position at level that's the same duties, but we're going to exercise our discretion and say that there's no vacancy to offer them.

PN31        

What this does is allow the Agency to assert a preference that that work continues to be performed on a casual basis instead of an ongoing basis.  This cannot be the correct application of the casual conversion term which Parliament has seen fit to subject the Commonwealth as an employer to.  That's the essential basis of the dispute raised by the CPSU.

PN32        

If I can turn to the question before the Commission.  The Commission is asked by the parties to determine what is required for an employee in the general circumstances that I've described those employees in that vacancy cohort, to be made an offer that is consistent with the recruitment or selection processes required by or under Commonwealth law.

PN33        

The answer to that question requires an interpretation of the casual conversion term, and that includes the correct approach and the nature of the employer's obligations under section 66B and, importantly, in the APS it requires an examination of the scope and correct application of section 66C which provides that an employer does not have to make an offer where there are reasonable grounds not to do so.

PN34        

The CPSU will show that section 66B imposes an obligation to create and offer permanent employment to eligible employees and in the APS that's referred to as the creation of a vacancy.  The CPSU will argue that section 66C(2)(d) only allows the Agency to decide not to make an offer where it cannot make an offer that confirms with the recruitment or selection process required by or under Commonwealth law.

PN35        

If an offer can be made that conforms with those requirements, then it must be made, and in the case of the eligible casuals that I've described in that vacancy cohort, they were sitting in an active merit pool at the time of assessment.  They were capable of being made an offer and they were required to be made an offer.  The Commission would be assisted by the evidence of Mr Nicholas Coady filed by the CPSU, and the Commission will hear about the circumstances of employees in the vacancy cohort, their eligibility under the casual conversion term, the merit selection processes they were subject to, and the reasons they were not made an offer of ongoing employment.

PN36        

The CPSU will outline its answer to the question before the Commission, which is set out in the five requirements in table 1 of its primary submissions.  The CPSU will argue that if these requirements are met at the time the casual employee is assessed for conversion and assuming the casual is eligible, they meet the criteria at section 66B(1) then they can and must be made an offer of ongoing employment.

PN37        

These steps proposed by the CPSU would see the Commonwealth meeting its obligations at section 66B of the Fair Work Act, applying section 66C(2)(d) correctly and exercising its employer powers under the Commissioner's directions consistently with its Fair Work Act obligations.  Those are my opening remarks, thank you, Commissioner.

PN38        

THE COMMISSIONER:  Just in terms of the question, I know the parties have worked on it but I'm wondering whether it could be recast in a different way.  What I have in mind, just bear with me, so I'm wondering whether the question could be like this.  If an employee:  (a), has been employed by Services Australia for a period of 12 months;  and, (b), during at least the last six months the employee has worked a regular pattern of hours;  and, (c), has been rated suitable in a merit selection process in the last 12 months, does Services Australia have to offer the employee casual conversion?  Then you would say the answer to the question is yes, and Services Australia says no.

PN39        

MS FAWCETT:  Commissioner, I think that the Union would be largely amenable to that.  I think there would need to be a slight amendment to (c) which would be to say the employee has been rated suitable in a merits selection process in the last 12 months for a similar vacancy.  Because there does need to be - - -

PN40        

THE COMMISSIONER:  Yes, I understand.  The question would be, if an employee:  (a) – just bear with me a second.  I've put the proposed question in the chat function so that everyone has it in front of them.  Can I suggest that we have an adjournment for about 10 minutes so that both sides can get some instructions about whether they're content with my version of the question.

PN41        

MS SEKLER:  Thank you, Commissioner.  I apologise but we can't see the chat function.  We're in Canberra.

PN42        

THE COMMISSIONER:  Are you participating by MS Teams?

PN43        

MS SEKLER:  Yes, it might be because of the way it's been brought up.  I might have to go closer to the computer which will mean that I will leave the desk, I apologise.

PN44        

THE COMMISSIONER:  No, that's all right.

PN45        

MS SEKLER:  I'm so sorry, it's no disrespect of course is intended.

PN46        

THE COMMISSIONER:  Can you see it in the chat function, Ms Fawcett?

PN47        

MS FAWCETT:  Thank you, commissioner, I can see it just fine.

PN48        

MS SEKLER:  I can see it now.

PN49        

THE COMMISSIONER:  I'll jump off.  You can probably cut and paste that.

PN50        

MS SEKLER:  Thank you.

PN51        

THE COMMISSIONER:  Put it in an email and send it to your instructors and then get some instructions, and we'll come back at 10.40, thank you.

PN52        

MS SEKLER:  Thank you, Commissioner.

PN53        

MS FAWCETT:  Thank you.

SHORT ADJOURNMENT                                                                   [10.32 AM]

RESUMED                                                                                             [11.29 AM]

PN54        

THE COMMISSIONER:  Thank you, parties.  I just have the question in front of me, just a moment, I'll call it up.  Is this now an agreed position?

PN55        

MS FAWCETT:  Yes, Commissioner, it's agreed.

PN56        

MS SEKLER:  Yes, Commissioner.

PN57        

THE COMMISSIONER:  I must say, I thank the parties for the time they've spent working on the question.  It's, I think, a clearer cut question for me to answer in the course of the proceedings, so I thank you for the time you spent working on that, I'm very content to have that as the articulated question.  Thank you.  Ms Fawcett, we've had your opening.  I don't know that the new articulated question changes your opening other than you would urge me to answer the articulated question in the affirmative.

PN58        

MS FAWCETT:  I'll leave it there, thank you, Commissioner.

PN59        

THE COMMISSIONER:  Very good.  Do we now hear from Mr Coady?

PN60        

MS FAWCETT:  Yes, Mr Coady is online.  He is available for the respondent.

PN61        

THE COMMISSIONER:  Ms Sekler, do you require Mr Coady for cross-examination?

PN62        

MS SEKLER:  Commissioner, I've got very, very few questions for him.  Essentially a handful.

PN63        

THE COMMISSIONER:  Let's call Mr Coady.

<NICHOLAS COADY, CALLED                                                       [11.32 AM]

PN64        

Mr Coady, good morning, it's Commissioner Johns.  Can you hear and see me?‑‑‑I can, Commissioner.  Thank you.

PN65        

Very good.  Do you have a copy of your witness statement there with you?‑‑‑I do.

PN66        

It is at page 56 of the court book.  I should have indicated to the parties that I propose to mark as an exhibit in the proceeding each of the documents contained in the digital court book, the exhibit number will correspond with the tab in the court book.  So, for example, exhibit 1 will be the format 10 application.  Exhibit 10 will be the applicant's outline of submissions.  Exhibit 11 will be the witness statement of Nicholas Coady.  With your witness statement in front of you, Mr Coady, are there any amendments you'd like to make to the statement?‑‑‑No amendments, Commissioner.

PN67        

Are its contents true and correct?‑‑‑They are true and correct.

PN68        

Would you have me receive it as your evidence in these proceedings?‑‑‑I would, Commissioner.

PN69        

Thank you.  As I said, it's been received as exhibit number 11 in the proceeding.  Ms Sekler might have some questions for you if you just wait there a moment.

EXHIBIT #11 WITNESS STATEMENT OF NICHOLAS COADY

<NICHOLAS COADY, AFFIRMED                                                  [11.32 AM]

CROSS-EXAMINATION BY MS SEKLER                                      [11.33 AM]

PN70        

MS SEKLER:  Mr Coady, my name is Ms Sekler and I appear for the Commonwealth.  If at any point you can't hear me, please do speak up.  It can happen from time to time in video link proceedings.  I only have a few brief questions for you and if it's suitable to the Commissioner, I would certainly be content for you to refer to your statement.  Mr Coady, would you please go to paragraph 30 of your statement, that's page 60 of the court book?‑‑‑Thank you, Ms Sekler, I'm now at page – paragraph 30.

***        NICHOLAS COADY                                                                                                                    XXN MS SEKLER

PN71        

In relation to paragraph 30 there you were reliant on what Ms Maroney-Phillips told you, weren't you?‑‑‑That's correct.

PN72        

You didn't make your own inquiries?‑‑‑No, I did not.

PN73        

You don't know if Services Australia had an ongoing vacancy which she could have been offered?‑‑‑No, I wasn't instructed from Ms Maroney-Phillips in that regard.

PN74        

It's possible, isn't it, that there was no recruitment at around that time for service officers?‑‑‑Only with respect to the content of paragraph 3 and what I was instructed.  I relied upon Ms Maroney-Phillip's instructions with respect to her understanding of work availability at those listed sites.

PN75        

Mr Coady, in relation to paragraphs 31 and 32, and feel free to read them and take the time that you need, when you use the word 'staffing capacity' there, you mean physical space?‑‑‑That's correct, Ms Sekler, yes.  So desk space essentially.

PN76        

THE COMMISSIONER:  As opposed to something like ASL?‑‑‑That's correct.

PN77        

Yes.

PN78        

MS SEKLER:  Mr Coady, might I take you to NC15 to your statement, it's on page 102 of the court book.  NC15 is some emails that are attached to your statement?‑‑‑Thank you, Ms Sekler, I'm at NC15 now.

PN79        

If you could please turn to page 2 of that chain which should be the next page, and that's at page 103 of the court book?‑‑‑Yes.

PN80        

The second email down that page of Thursday, 14 October 2021 at 9.21 am, have you got that?‑‑‑I do, Ms Sekler.

PN81        

Ms Clothier in that email says in the third paragraph down, the second line:

PN82        

At my workplace there are unfilled ongoing positions.

***        NICHOLAS COADY                                                                                                                    XXN MS SEKLER

PN83        

In relation to that, you didn't make your own inquiries, is that correct?‑‑‑That's correct, Ms Sekler, I didn't make any - - -

PN84        

You're dependent on what she told you – sorry, I apologise?‑‑‑That's okay.

PN85        

I didn't mean to cut across you?‑‑‑That's okay.  No, that's correct, I relied upon the instructions of (indistinct) in respect to that.

PN86        

You don't know whether there was, in fact, any such vacancy that she could have been offered at that time?‑‑‑I don't know that for certain.  My understanding is that that was her understanding, hence it being communicated to the email.

PN87        

There might not be?‑‑‑There's a possibility of that.

PN88        

Mr Goddard, might I – I apologise, Mr Coady, that was completely my error.  I'm about to ask you about Ms Goddard.  Mr Coady, might you turn to NC10 to your statement?  It's on page 84 of the court book?‑‑‑Thank you, Ms Sekler, I'm at NC10.

PN89        

The document headed, 'Affected Members', and if you turn the page halfway down the next page which is 85 of the court book, it says, 'No vacancy group'?‑‑‑Yes.

PN90        

There's a reference to Tiffany Goddard, is the second person listed?‑‑‑Yes, I'm there.

PN91        

Mr Coady, are you aware of whether or not Ms Goddard has been offered a permanent position?‑‑‑We've got instructions from Ms Goddard that she has, indeed, been offered a permanent position is my understanding.

PN92        

No further questions.

PN93        

THE COMMISSIONER:  Thank you very much.  Ms Fawcett, anything arising?

PN94        

MS FAWCETT:  Only one question, thank you, Commissioner.

PN95        

THE COMMISSIONER:  Yes.

***        NICHOLAS COADY                                                                                                                    XXN MS SEKLER

RE-EXAMINATION BY MS FAWCETT                                          [11.38 AM]

PN96        

MS FAWCETT:  Mr Coady, Ms Sekler has asked you about Ms Tiffany Goddard, and you've advised that Ms Goddard has advised the Union that she has been offered an ongoing position.  Is it your understanding that that offer arose from the casual conversion process or some other process?‑‑‑Thank you, Ms Fawcett.  My understanding is that it arose otherwise than by casual conversion and presumably through the regular recruitment processes by virtue of being on an active merit list.

PN97        

Just to clarify, she was not offered casual conversation, it was a completely separate sort of unrelated process that has seen her be made that offer?‑‑‑That's correct.  That's my understanding.

PN98        

Thank you, Mr Coady.  That's all, thank you, Commissioner.

PN99        

THE COMMISSIONER:  Thank you.  Mr Coady, can I thank you for your attendance here today, you're now excused as a witness?‑‑‑Thank you, Commissioner.

<THE WITNESS WITHDREW                                                          [11.40 AM]

PN100      

THE COMMISSIONER:  Ms Fawcett, as I understand it, that's the evidence on behalf of the Union.

PN101      

MS FAWCETT:  Yes, thank you, Commissioner.

PN102      

THE COMMISSIONER:  Thank you.  Ms Sekler, would you like to make some brief opening statements?  You should take it that I've read your submissions so don't feel obliged to make an opening submission but you're welcome to.

PN103      

MS SEKLER:  Commissioner, I will be very brief.

PN104      

THE COMMISSIONER:  Yes.

PN105      

MS SEKLER:  Particularly given what has just been said.  There's obviously a gulf between the parties and the correct interpretation of the legislation, and it's set out quite clearly in the respective submissions;  I won't belabour those.  In the interest of seeking to - - -

***        NICHOLAS COADY                                                                                                                RXN MS FAWCETT

PN106      

THE COMMISSIONER:  But let me just ask, I mean, let me ask this.

PN107      

MS SEKLER:  Yes.

PN108      

THE COMMISSIONER:  It does seem that the way that Services Australia articulates its position, if I look at the articulated question, we've got employees who have been employed for a period of 12 months.  In the last six months at least worked a regular pattern of hours.  They've gone through a selection process and been put in a merit pool and the vacancy that they applied for in respect of which they're in a merit pool, they're performing exactly the same work as a casual.

PN109      

In any other employment circumstance the legislation would – well, put it this way, in the private sector, if all this arises in a private sector notwithstanding the fact that most private sectors don't have merit pools and the like but the employer by virtue of casual conversion provisions, would be required by the legislation to offer casual conversion.  In this case Services Australia says, well, we don't have to do that because the Secretary hasn't declared a vacancy.

PN110      

But in a sense there was a vacancy declared in order to allow the people to go through the merit selection process, and then they satisfy all the other criteria and then I'm struggling to understand how then converting them is inconsistent with a recruitment process mandated on the Commonwealth.  There just seems to be an unfairness or a – how do I put it differently?  An employer in the private sector is compelled, if all these circumstances are met, to offer conversion.

PN111      

In a sense what Services Australia are saying is, well, we're not like that, we can't be compelled.  But that's the whole point of the casual conversion provisions and the NES, to compel employers to do something that they otherwise wouldn't want to do.  I'm just struggling to comprehend, the Parliament would have known about APS recruitment processes.

PN112      

I mean, that's why the carve-out is there but it can't have been the intention of the Parliament to have the provision utilised in a way that really frustrates its entire purpose.  The Services Australia position seems to do that.  It seems to frustrate the entire purpose of the casual conversion provisions in the NES and what the Parliament intended.  That's really what I'm grappling with.  I'm happy for you to go to that now, if you'd like to.

PN113      

MS SEKLER:  Commissioner, the short answer which of course would be expanded upon later, is that as you so carefully said, Parliament would have known about APS recruitment processes, that's patently clear.  It was a very specific carve-out in section 66C(2)(b), carefully and intentionally drafted.  It then picks up those recruitment processes and selection processes and they are the ones that create that need for the additional vacancy.

PN114      

It might well be that that puts Commonwealth employees in a different position than a person would be in the private sector.  The provision is not just directed at the Commonwealth, it's at the States and the Territories as well.  It creates a distinction between public and private sector employees and that being said it operates harmoniously.  Section 66B and C operate harmoniously together and in doing so they pick up those processes.  That's what is plain on the words.  That's essentially the nutshell of our position.

PN115      

THE COMMISSIONER:  You would say to me, Commissioner, to the extent that on the analysis you've just put to me the Secretary can frustrate casual conversion, lock it, that was the intention of the Parliament.

PN116      

MS SEKLER:  It is left to the Secretary to make the decision about whether there is an existing vacancy and the Commonwealth employment issues are immensely complex.

PN117      

THE COMMISSIONER:  Yes.

PN118      

MS SEKLER:  That being said, Commissioner, when you look at section 66C(2), even as that applies to the private sector, there is still room there even for a public service – sorry, I apologise – a private sector employer to make decisions about things that are within their control that will lead to an offer not needing to be made.  I apologise - - -

PN119      

THE COMMISSIONER:  No, not at all.

PN120      

MS SEKLER:  I'm so sorry, I just have to take some water.  I really do apologise.

PN121      

THE COMMISSIONER:  No, no, you don't need to apologise at all.

PN122      

MS SEKLER:  Commissioner and Ms Fawcett, I should just say, I had some radiation treatment about a year or so ago, it occasionally causes me to dry up.  I have lots of water here.  It's been easing, I thought I was past it but I do apologise to both of you and it shouldn't interfere with this hearing in any way.

PN123      

THE COMMISSIONER:  Ms Sekler, there's no need to apologise or explain.  It's perfectly fine, thank you.

PN124      

MS SEKLER:  Essentially we say that the plain terms of those provisions, whilst they do provide for that need for that second vacancy, and we do appreciate that that is not what many employees might push for and what the CPSU might wish for, but we say that that is the plain meaning of the legislation in that it is not intended and not in any way, shape or form, perverse.

PN125      

Ultimately from a factual perspective, even on Mr Coady's evidence, we do know that casual conversion has been offered to some employees in Services Australia, so it's not a question of it being completely blocked but it is a route that has been chosen by the Parliament that respects, picks up and essentially embraces those Commonwealth processes and that leaves us with that need for the second vacancy.  That's our argument in a very small box, Commissioner.

PN126      

THE COMMISSIONER:  Yes, thank you, I appreciate that.  Ms Fawcett, do you require either Ms Houghton or Mr Stroppiana, for cross-examination?

PN127      

MS FAWCETT:  Yes, Commissioner, I expect my questions to be fairly brief.

PN128      

THE COMMISSIONER:  Both?

PN129      

MS SEKLER:  Is - - -

PN130      

THE COMMISSIONER:  Yes, sorry, go ahead.

PN131      

MS SEKLER:  I apologise.  Might I just raise some issues of facts which the Commonwealth does not dispute because it might be of assistance too and cut down - - -

PN132      

THE COMMISSIONER:  Yes.

PN133      

MS SEKLER:  - - - some of the issues?  Firstly, we do not dispute that Ms Maroney-Phillips and Ms Clothier are both casual employees of Services Australia who were employed prior to 27 March 2021, being the start of the casual conversion transition period under clause 47 of schedule 1 of the Fair Work Act.  We don't dispute that in the six months prior – and I should say that we can send this both to the associate and to Ms Fawcett if it would be of assistance once I finish.

PN134      

THE COMMISSIONER:  Yes, yes.

PN135      

MS SEKLER:  We'll do that.  That in the six months prior to 27 September 2021 Ms Maroney-Phillips and Ms Clothier both worked a regular pattern of hours on an ongoing basis within the meaning of section 66B(1)(b) of the Fair Work Act.  We don't dispute that Ms Maroney-Phillips and Ms Clothier had applied for and through a merits selection process been found suitable for APS3 and 4 positions in the Agency, which were notified in the Public Service Gazette on 15 December 2020.

PN136      

We don't dispute that the respondent did not make an offer of casual conversion to either Ms Maroney-Phillips or Ms Clothier and that in doing so it issued them each with a notice under section 66C(4) of the Fair Work Act in equivalent terms to the notice which is at NC6 to Mr Coady's statement.

PN137      

THE COMMISSIONER:  Thank you.  If your instructors could forward that to my chambers and to Ms Fawcett, and what I will do is mark as agreed factual matters – sorry, factual matters conceded by Services Australia, as exhibit 40 in the proceeding.

EXHIBIT #40 FACTUAL MATTERS CONCEDED BY SERVICES AUSTRALIA

PN138      

MS SEKLER:  Thank you, Commissioner.

PN139      

THE COMMISSIONER:  Who are we hearing from first?  Ms Houghton or Mr Stroppiana?

PN140      

MS SEKLER:  Ms Houghton, Commissioner.

PN141      

THE COMMISSIONER:  Yes, is she available?

PN142      

THE ASSOCIATE:  Associate speaking.  I'm just admitting her from the lobby now.

PN143      

THE COMMISSIONER:  Thank you, Associate.

PN144      

THE ASSOCIATE:  Commissioner, we have Ms Houghton on the line.

PN145      

THE COMMISSIONER:  Thank you.  Ms Houghton, can you hear and see me?  It's Commissioner Johns.

PN146      

MS HOUGHTON:  I can.  Good morning.

PN147      

THE COMMISSIONER:  Good morning.  Do you have a copy of your witness statement there with you?

PN148      

MS HOUGHTON:  I do.

PN149      

THE COMMISSIONER:  Yes.  Let me administer the affirmation.

<RACHEL HOUGHTON, AFFIRMED                                             [11.53 AM]

EXAMINATION-IN-CHIEF BY THE COMMISSIONER              [11.53 AM]

PN150      

THE COMMISSIONER:  Looking at your witness statement, are there any amendments that you'd like to make to it this morning?‑‑‑No, there's not.

PN151      

Are its contents true and correct?‑‑‑Yes, they are.

PN152      

Would you have me receive it as your evidence in these proceedings?‑‑‑Yes.

PN153      

Yes, thank you.  The witness statement of Rachel Houghton is exhibit 29 in the proceeding.

EXHIBIT #29 WITNESS STATEMENT OF RACHEL HOUGHTON

PN154      

If you just wait there a moment, Ms Fawcett has some questions for you.

CROSS-EXAMINATION BY MS FAWCETT                                  [11.55 AM]

PN155      

MS FAWCETT:  Thank you, Commissioner.

PN156      

Good morning, Ms Houghton, can you hear me okay?‑‑‑I can.

PN157      

Thank you.  My name is Ms Fawcett and I'm appearing for the CPSU today.  I'll be asking you a number of questions.  So you're the General Manager Senior Executive Band 2 of the Service Delivery Capability Division?‑‑‑That's correct.

PN158      

***        RACHEL HOUGHTON                                                                                                 XN THE COMMISSIONER

***        RACHEL HOUGHTON                                                                                                            XXN MS FAWCETT

You have oversight of the workforce planning for the service delivery workforce of Services Australia?‑‑‑Yes.

PN159      

If I can take you to paragraphs 12 to 17 of your statement.  So there you describe how national recruitment rounds are conducted and how merit pools are created.  So that process of creating merit pools that assists the Agency to fill expected vacancies?‑‑‑It does.

PN160      

You have these merit pools with candidates who have put in their application, they've been through the process, the interview, the testing, all of that and they've been rated suitable in that process?‑‑‑Yes.

PN161      

Then when a need arises, a vacancy comes up, those employees can be made an offer?‑‑‑Yes.

PN162      

Yes and they can be made that offer because they've been rated suitable, the merit pool is ready for the Agency to draw from?‑‑‑That's right.

PN163      

Services Australia currently has a casual workforce of about 3,500 employees, is that right?‑‑‑Approximately.  I don't have the exact number.

PN164      

Approximately 3,500, yes.  This might also be approximate but that would be around 11 per cent of the Agency's workforce, is that right?‑‑‑I think it's more like nine per cent but, again, I don't have the exact data.

PN165      

If I can take you to paragraph 18 of your - - -

PN166      

THE COMMISSIONER:  Sorry, before you move on from that, you were just asked the percentage of casual employees compared to the overall workforce.  Have you got a pen and paper there?  You might need it.  If you can just assess for me and I appreciate you might not be able to but how many casuals, they've been employed by Services Australia for a period of 12 months.  During at least the last six months they've worked a regular pattern of hours.  They've been rated as suitable in a merits selection process in the previous 12 months and they're doing the job now that they were ranked on the merit list for?‑‑‑I don't have that data.

PN167      

No?‑‑‑No.

***        RACHEL HOUGHTON                                                                                                            XXN MS FAWCETT

PN168      

Can I ask, Ms Sekler, if you could ask, I mean, in terms of the articulated question I would like to know from Services Australia how many employees fall within that class of employees.

PN169      

MS SEKLER:  Yes, Commissioner, we'll seek those instructions.

PN170      

THE COMMISSIONER:  I mean, if you said to me there are no employees that fall in that class, then I'd be asking what the utility of this proceeding is but I suspect that a number of people do and I would be assisted to know the number of people who fall in that class and the percentage of Services Australia workforce they comprise.  Sorry to interrupt you, Ms Fawcett.

PN171      

MS FAWCETT:  Thank you, Commissioner.

PN172      

If I can take you to paragraph 18 of your statement which is where you talk about how vacancies are identified.  You've mentioned forecasted demand, including whether the nature of the work is ongoing or not ongoing.  So there's a decision there, isn't there, about how demand is met, whether that's by ongoing roles, non-ongoing roles, casual roles.  Is that correct?‑‑‑Particularly if the work is not ongoing then there is a decision about whether we fill that vacancy through the non-ongoing employment type or through the irregular and intermittent employment type.  Or, incidentally, if we redeploy existing staff for that period of time.

PN173      

There's an assessment there about whether the work is likely to continue or not?‑‑‑Yes.

PN174      

The Agency has discretion, doesn't it, to create ongoing vacancies or fixed term roles or rely on casual employees.  The Agency decides that appropriate mix?‑‑‑The Agency decides, based on the factors that I have listed in the statement.

PN175      

Thank you.  At some stage a decision is taken about the appropriate mix, is that correct?‑‑‑That's right.  I could probably add that it's not at some point, it's a very dynamic decision that's assessed on a regular basis.  Because our demand changes on a regular basis, it's very fluid.

***        RACHEL HOUGHTON                                                                                                            XXN MS FAWCETT

PN176      

You've mentioned that you have quite a large casual workforce of 3,500 employees.  That suggests that there's a significant body of work for casual employees to currently perform in the Agency, is that right?‑‑‑I don't think it's as easy to be characterised like that.  So I would say there is a significant demand that the Agency manages and some of that demand presents in peaks and troughs and so, as a result, we often choose to use irregular and intermittent employees to undertake that work.  But in the same way we could choose to redeploy existing staff.  So it's not a single – it's not a direct line to the use of casual employees.

PN177      

I put it to you at the time the CPSU filed its application there were roughly somewhere between two and three thousand casual employees and that number is now, the most recent number if 3,500 as at 31 January, so it seems that that demand is increasing.  Would you agree?‑‑‑No.  So how we use our casual employees, the number, if it's 3,500, doesn't directly translate to how much they're used.  Because they are irregular and intermittent they're not used at the rate of one IIE equals one full-time equivalent, so an ongoing staff member.  So they might work one or two shifts a week or they might work more but it's very dependent on the demand.

PN178      

But if you have a casual workforce of 3,500, the Agency is opting to meet a significant proportion of its demand through casual labour?‑‑‑Yes.

PN179      

Yes.  If I can take you to paragraph 22 of your statement - - -

PN180      

THE COMMISSIONER:  Sorry, before you move on, Ms Fawcett;  Ms Sekler, what I'd like to add to my request for information arising out of that evidence from Ms Houghton, I would like to understand in respect of the cohort of employees who fall within the articulated question, I want to know how long those people have been with Services Australia.  So say, for example, say it's 10 people who fall within the cohort, we might say two have been there for two years, three have been there for six years.  So I want it broken down by number and years of service, please.  Because I must say, Ms Houghton, one of the things I don't understand is if you've had an employee as a casual for, say, four years and they've been through a merits selection process in the last 12 months and they've been accepted as on the merit pool, why wouldn't you convert them to full-time, save the taxpayer some money?‑‑‑It depends, Commissioner, where the vacancies arise.  So, for example, if that person is based in - - -

PN181      

Say they're in Canberra – no, say they're in Toowoomba.  Let's choose somewhere remote.  You've got someone who's been in Toowoomba for six years working two days a week for six years as a casual.  They've gone through a merits selection process and they've been assessed as suitable for APS3, you know, ongoing or part-time.  Why wouldn't you just convert them in Toowoomba?‑‑‑So partly the decision is about the location but the other part is about the demand - - -

***        RACHEL HOUGHTON                                                                                                            XXN MS FAWCETT

PN182      

But I don't understand.  You've needed them to work two days a week for six years in Toowoomba.  Unless you've made an assessment that Toowoomba is going to close down in the next 12 months, I can understand if that was the case and that would fall clearly within the casual conversion reasonable business exemption.  Setting aside that, why wouldn't you convert them?  What do you lose?‑‑‑So the issue, Commissioner, would then be the issue of demand.  So if we have needed them, based on your example, for two days a week in Toowoomba, if the work hasn't – if the demand hasn't presented that we actually needed them to work on a full-time basis, we'd essentially be adding an employee for an additional three days a week that we didn't actually require.

PN183      

No, you'd be adding a part-time employee?‑‑‑If they were wanting to work part-time.

PN184      

Yes, but when you convert someone you convert them to what they're currently doing?‑‑‑Typically we convert people to full-time ongoing employees and they can - - -

PN185      

No, you wouldn't do that.  If someone's working three days a week and they've been doing that for six years as a casual, you would offer them casual conversion to a three-day-a-week part-time employee.  That's what you would do.  Why don't you do that?‑‑‑We typically offer ongoing full-time hours and then - - -

PN186      

I hear you say you typically do that.  What I'm saying to you is why wouldn't you do something different to that, which is in respect of a casual employee who's been there three days a week for six years, offer them conversion to three-day-a-week part-time?  Why wouldn't you do that?  I mean, it just makes – it seems to me it makes – that's how the casual conversion provisions are meant to operate, you convert the casual from what they're doing into ongoing, permanent, in the sense of if they're working 40 hours you'd make them full-time.  If they're working part-time, you offer them part-time.  Why wouldn't you just do that and save the taxpayer heaps of money on casual loadings?‑‑‑Commissioner, I might have to defer to my People Division colleagues on that one.  It might be, and I can't confirm this, but it might be that based on the way the enterprise agreement operates the decision to work part-time is one that the employee makes rather than the agency but, as is aid, I can't confirm - - -

PN187      

Yes and that's how casual conversion works.  You say to the employee, you've been casual, working three days a week for six years, we are offering you casual conversion to convert those three days a week as a casual into three days a week as a part-time employee.  And the employee can say, having been offered casual conversion, no, thank you.  So if the employee says yes, the employee is electing to be part-time.  I don't understand why you can't do that?  Why you don't do that?‑‑‑I understand what you're saying, I just, I can't provide advice based on – I don't know is the answer.

***        RACHEL HOUGHTON                                                                                                            XXN MS FAWCETT

PN188      

Ms Sekler, it might be useful if there's someone in the Department who can explain to me why that isn't done.  I mean, I know you say the Secretary hasn't created a vacancy, so I understand why you say this argument.  But just as a practical measure, I just can't understand why you wouldn't do it.  Anyway, Ms Fawcett, sorry to interrupt.

PN189      

MS FAWCETT:  Thank you, Commissioner.  Ms Houghton, are you aware that there were only 47 casual employees in the Face-To-Face Division that met the eligibility criteria for conversion who were sitting in active merit pools, who didn't receive an offer of ongoing employment because there were no vacancies?‑‑‑No.

PN190      

You weren't aware?‑‑‑No.

PN191      

With the employees who were not offered ongoing employment, not offered casual conversion, Services Australia didn't say to those employees, 'Don't come back, we're cancelling your shifts', did it?‑‑‑Not to my knowledge, no.

PN192      

Services Australia hasn't since last September, when it went through that assessment process, it hasn't reduced its number of casual employees, has it?‑‑‑I don't have that information.  We do go through a review, the contracts are for 12 months and so it is possible that some of the contracts have not been renewed and it's possible, in fact, I am aware that we did recruit additional casual employees in Western Australia.

PN193      

You're the general manager who's responsible for workforce planning, the demographic data is regularly provided and made available.  The number at 31 January 2022 was 3,500, that number is higher than the sort of two to three thousand at September, isn't it?  I mean, just as a matter of aggregates that number is higher?‑‑‑As a matter of aggregates, yes.  It's not necessarily the same people though.

PN194      

Thank you.  Those are my questions, Ms Houghton.

PN195      

THE COMMISSIONER:  Thank you.  Ms Sekler, is there anything arising?

RE-EXAMINATION BY MS SEKLER                                              [12.09 PM]

***        RACHEL HOUGHTON                                                                                                                RXN MS SEKLER

PN196      

MS SEKLER:  Ms Houghton, what, if anything, can you tell the Commissioner about where you see Services Australia's needs in the future?‑‑‑In relation to casual employees, it's probably worthwhile to note that we will likely have an ongoing need for casual employees and that largely relates to how our business presents.  So whilst the core of our workforce will always be ongoing APS employees, Services Australia has a range of peaks and troughs as part of our core business, that we use our irregular and intermittent employees to surge in to undertake increased hours at those times.  Then we also have the disaster seasons so bushfires, floods, those kinds of emergencies.  But, again, we use our irregular and intermittent employees.  Over the last 18 months and before that as well, however, I joined the Agency about 18 months ago, of course we have been in the pandemic, so essentially an unpredictable and extended surge.  So there have been really useful to use our IIE cohort during that time.  Hoping that the pandemic doesn't continue in its current format for too much longer, I would say that the ongoing use for Services Australia will remain peaks and troughs, and the disaster season, our response to emergencies.

PN197      

THE COMMISSIONER:  But in the context – I completely understand why there will be peaks and troughs but aside from the peaks and troughs there will continue to be a cohort of casuals who have been with you a long time and have been doing the same job for a long time?‑‑‑Yes, there are other categories, Commissioner, potentially useful to mention.  So, for example, when our long-term employees seek to retire, we're actually standing up an initiative called the Services Australia Alumni Reserve.  Now, that's a group of casual employees who have extensive experience in the Agency and they might choose to be casual employees for five years, 10 years as part of their transition into retirement.  There are also groups of people that our casual employment often attracts.  University students, for example, who never seek to have ongoing employment with us but would like to maintain a casual employment relationship with us for three or four years.

PN198      

Yes, that's absolutely fine, that's the whole point behind casual conversion.  The obligation is on the employer to offer and it's absolutely at the discretion of the employee to say, 'No thanks, I like being a casual because I'm at uni and it works with my uni schedule', or, 'No.  Thanks for the offer of being a permanent employee but I like being a casual because I'm transitioning to retirement.'  That's the whole point of it.  So it wouldn't limit Services Australia to have those continuing cohorts of people?‑‑‑No, absolutely not but it's more to the point that we do have casuals with us for a number of years who intend to be casuals and do not wish for ongoing employment but I absolutely take your point.

PN199      

Nothing in this proceeding would stop that.  Yes, anything further arising, Ms Sekler?

***        RACHEL HOUGHTON                                                                                                                RXN MS SEKLER

PN200      

MS SEKLER:  Ms Houghton, what if anything can you tell the Commissioner about the influence of technology on the need for staff?‑‑‑Yes, it's a really important point for our agency.  We have a fairly broadly publicised transformation agenda where we have been transforming a lot of our core systems and technology and equally modernising a lot of our approaches and our systems and our business processes.  So noting that the last 18 months to two years have been characterised by a worldwide pandemic, the impact of that transformation has somewhat been hidden, I guess, from the workforce model.  So the workforce model pre-pandemic and the business model that it maps to, is quite difference as we emerge from the pandemic.  So what we see is, a couple of examples, we have a range of processes like our aps, like our interactive voice recognition which actually reduce the more transactional work that our staff have previously undertaken, so that the staff can then dedicate their efforts to the more complex work that is left over after our customers have the opportunity to use online channels or more streamlined approaches to undertake their business to self-service essentially.  So there is quite an ongoing transformation that the Agency has undertaken which will have an impact on the workforce model that's required.

PN201      

Ms Houghton, when you say an impact on the workforce model, what do you mean?‑‑‑What will be – sorry, my light's gone off.  What will be reduced is the transactional repetitive work that the workforce undertakes.  So essentially we'll become more efficient at doing the work that we do and we will need, instead of staff doing those types of functions, we will transition staff into the more complex case management type work.  So it's requiring a higher level of capability from the workforce and has an increasing focus on how we build those skills in a sustainable iterative way within our ongoing workforce.

PN202      

No further questions, Commissioner.

PN203      

THE COMMISSIONER:  Thank you.  Ms Houghton, can I thank you for your attendance here today.  You're now excused as a witness?‑‑‑Thank you.

PN204      

Thank you very much.

<THE WITNESS WITHDREW                                                           [12.16 PM]

PN205      

THE COMMISSIONER:  Do we have Mr Stroppiana available?

PN206      

MS SEKLER:  Commissioner, we've just encouraged Mr Stroppiana to press the link right now.

PN207      

THE COMMISSIONER:  Thank you.

PN208      

MS SEKLER:  I apologise, we thought he was in the waiting room.  He should be joining right now.

***        RACHEL HOUGHTON                                                                                                                RXN MS SEKLER

PN209      

THE COMMISSIONER:  Thank you.  Whilst we're waiting, Ms Sekler, it occurs to me that, look, I'm not here to judge the rationality of the decisions that Services Australia makes about its recruitment.  I asked some questions of Ms Houghton about, well, why wouldn't you convert them.  It seems to me that that's not relevant to the question, the articulated question.  I'm not here to judge the efficient spending of Commonwealth resources, that's a matter for senate estimates.

PN210      

To the extent that it makes no sense to me that you wouldn't convert a casual to part-time or whatever, senators in another place can pursue that line of questioning, I think.  But I still would be assisted by understanding the cohort of employees who fall within the articulated question.  Their percentage as a percentage of the workforce, and their years of service based on the number of employees.

PN211      

MS SEKLER:  Thank you, Commissioner.

PN212      

THE COMMISSIONER:  Let's admit Mr Stroppiana.  Mr Stroppiana, good morning.  It's Commissioner Johns, can you hear and see me?

PN213      

MR STROPPIANA:  Yes, I can, Commissioner.

PN214      

THE COMMISSIONER:  Very good.  Have I done okay with your surname?

PN215      

MR STROPPIANA:  Yes, Commissioner, Stroppiana.

PN216      

THE COMMISSIONER:  Stroppiana, very good.  Do you have a copy of your witness statement there with you?

PN217      

MR STROPPIANA:  I do, indeed, yes.

PN218      

THE COMMISSIONER:  Yes.  I'll administer the affirmation.

<MARK STROPPIANA, AFFIRMED                                                [12.19 PM]

EXAMINATION-IN-CHIEF BY THE COMMISSIONER              [12.19 PM]

PN219      

THE COMMISSIONER:  Thank you.  Looking at your witness statement, are there any amendments you'd like to make to it?‑‑‑No, Commissioner.

***        MARK STROPPIANA                                                                                                   XN THE COMMISSIONER

PN220      

Are its contents true and correct?‑‑‑They are.

PN221      

Would you have me receive it as your evidence in these proceedings?‑‑‑I would.

PN222      

Thank you.  Just wait there a moment, Ms Fawcett has some questions for you?‑‑‑Right.

CROSS-EXAMINATION BY MS FAWCETT                                  [12.20 PM]

PN223      

MS FAWCETT:  Thank you, Commissioner.

PN224      

Good morning, Mr Stroppiana.  Can you hear me okay?‑‑‑Yes, no, I can hear you fine.

PN225      

Great.  You're an Assistant Director of Workplace Relations for Services Australia?‑‑‑That's correct.

PN226      

Your responsibilities involve the administration of the casual conversion term to the Agency's casual employees?‑‑‑Yes, to put that in context, the changes to the Fair Work Act, a project team was developed to assess our casual employees before 27 September last year, and I led that project to undertake that assessment process.

PN227      

Thank you.  Can you confirm that in applying that term, that new provision, employees wo met the eligibility criteria under section 66B(1), they weren't made an offer by the Agency if there was no existing vacancy at the time they were assessed, is that correct?‑‑‑Yes.

PN228      

That's a point in time assessment?‑‑‑That's right.

PN229      

The vacancy has to exist at the very moment the employee is assessed for conversion under the Act?‑‑‑Well, bearing in mind that the project we were running was assessing all Agency casuals and we were required to do that before 27 September 2001, so the assessment was done.  So we assessed all eligible Agency casuals who had commenced employment prior to, I think, 27 March 2001 as we're required to under the Act.  So, yes, so that assessment was done at a point in time in, you know, mid to late September, to assess our casuals as we're required to do under the Act.  You're right, if a casual otherwise met the requirements in the Fair Work Act but there wasn't a vacancy available, then we did not make them an offer for casual conversion on that basis.

***        MARK STROPPIANA                                                                                                              XXN MS FAWCETT

PN230      

You assessed some 2,200 casual employees, is that correct?‑‑‑Yes, the exact number, there was 2,166 casuals with the Agency who commenced employment prior to 27 March 2021.

PN231      

That was two thousand and – sorry, if you could repeat the number?‑‑‑Sorry, yes, 2,166.

PN232      

Yes, who were assessed, thank you.  If I can take you to paragraph 9 of your statement?‑‑‑Yes.

PN233      

Then various email exchanges you had with the Face-To-Face Division in the lead-up to the deadline for assessment?‑‑‑Yes.

PN234      

In that email exchange you list some 47 employees in the Face-To-Face Division who met the eligibility criteria and who were sitting in active merit pools at the time, is that correct?‑‑‑No, it wasn't 47.  The number was less than 47.  There were 46 employees all up across all divisions within Services Australia, who had met the eligibility criteria, namely they'd been employed for more than 12 months, they were on a current merit list and they had worked a regular pattern of hours over the preceding six months leading up to the assessment.  So there were 66 – sorry, 46, I should say.  Now, the exact number of those in the Face-To-Face Division, look, I can – I've – it was listed in that spreadsheet.  It was, you know, roughly probably 19 or 20.  Maybe 19.  Maybe not that many.  But because there were also casuals in other divisions.

PN235      

Yes, thank you for clarifying but if we can just get this right, Mr Stroppiana.  So this email exchange says:

PN236      

See attached a list of 47 employees who satisfy the criteria for consideration for casual conversion.

PN237      

You're saying that's across all divisions?‑‑‑Yes, so this is an email – I've got – I assume this is this email which I sent to Jacquie Bell on 17 September.  Is that the one you're referring to?

PN238      

We've got a series of emails?‑‑‑Yes, yes.

PN239      

I think it starts with - - -?‑‑‑Yes, yes, and you're – sorry.

***        MARK STROPPIANA                                                                                                              XXN MS FAWCETT

PN240      

The series of emails, it starts with your email to Ms Bell on 17 September?‑‑‑Yes, that's right.

PN241      

In which you say there are 47 casual employees who satisfy the criteria for consideration for conversion?‑‑‑That's right.

PN242      

That's across - - -?‑‑‑That's across - - -

PN243      

- - - all divisions?‑‑‑That's across four different divisions within Service Delivery, so that's the Face-To-Face Division, the Smart Centre Division, Health Service Delivery and I think the last one was Payments and Integrity, from memory.  So there were assorted divisions but so they weren't all in Face-to-Face.  And you're right, the number was 47.  When we sent those lists over what emerged is one of those employees actually wasn't on a merit list and the actual number was 46.  But you're right, the initial email says 47 and then when we checked with the individual divisions – and I forget the exact details but I remember one of the employees actually wasn't on a merit list, so then that number was reduced to 46.

PN244      

We have 46 employees who met the eligibility criteria, who were sitting in an active merit pool at the time?‑‑‑Yes, yes.

PN245      

Yes, so that number is 46.  Thank you for clarifying?‑‑‑That's all right.

PN246      

You've mentioned those four divisions but they were all Service Delivery employees, is that correct?‑‑‑That's correct, yes.

PN247      

Thank you for clarifying that, that's helpful.  There was a decision – these employees, they met the eligibility criteria and they were sitting in active merit pools for Service Delivery roles but a decision was taken not to offer ongoing employment?‑‑‑Well, the decision – well, the approach we adopted, consistent with the guidance we received from the APSC was that we made an offer of casual conversion where we had a vacancy.  And so the reason I wrote to Jacquie and provided her with that list of 47 employees, which was subsequently reduced to 46, was for her then to send that out to other people within her group who were specifically responsible for recruitment activities in the individual divisions, to let me know, hey, look, these are the people who meet the criteria, do we have a vacancy.

***        MARK STROPPIANA                                                                                                              XXN MS FAWCETT

PN248      

Thank you.  As sort of the person heading up the project team for casual conversion, you didn't decide to go and seek approval for the creation of vacancies for those 46 employees?‑‑‑No, no.  We relied upon – because we relied upon the individual divisions and this is the way it works within Services Australia, the individual divisions manage their vacancies.  Very early in the piece I had a discussion with the recruitment team to say, look, how do I assess or work out our vacancies, and the advice I received very clearly was the vacancies were managed by the individual divisions and we have to liaise with them because they have approval to fill vacancies within each of their divisions as they arise.

PN249      

No one sought the approval to create vacancies for those 46?‑‑‑No, no, that's right.

PN250      

Workplace Relations can – I mean, you've got a broad HR function, you can request the creation of vacancies, right?‑‑‑No, it's not - - -

PN251      

In no circumstances can you do that?‑‑‑Well, no, like – well, certainly I can't and I couldn't imagine my boss or my boss' boss could.  You know, the management of vacancies is conducted, because we're obviously like all agencies, we operate within funding limits.  So the management of personnel numbers and the creation of vacancies are decided at a senior level.  Certainly I and the workplace relations function would have no ability to create a vacancy.

PN252      

Not create a vacancy;  request the creation of a vacancy.  Are you telling me no one in Workplace Relations can request the creation of a vacancy?‑‑‑That's right.

PN253      

THE COMMISSIONER:  Who does request?‑‑‑Yes, well, within – well, maybe if I – the – within the Service Delivery Division, the vacancies are determined each month and approved by the Deputy CEO.  So and so the reason I sent these lists to Jacquie Bell is that her team is involved in that process of working out vacancies within – across customer service delivery, and each month there's an approval process where the Deputy CEO, who is the most senior person with Customer Service Delivery, approves vacancies.  So that's what I'm saying.  Like, I and the Workplace Relations Team has no role in creating/approving vacancies.

PN254      

You just send the data up?‑‑‑Yes.

PN255      

Someone makes a decision.  Who makes the decision or to approve?‑‑‑Well, ultimately it's the Deputy CEO - - -

PN256      

Deputy CEO?‑‑‑ - - - of the Customer Service Group.

PN257      

Thank you.  Sorry, Ms Fawcett.

PN258      

MS FAWCETT:  Thank you, Commissioner.

***        MARK STROPPIANA                                                                                                              XXN MS FAWCETT

PN259      

But, Mr Stroppiana, you didn't send an email to the division saying, 'Hey, we've got these eligible employees.  Any chance you can create a vacancy for them.'  You didn't ask that, did you?  You just said, 'Are there any existing vacancies'?‑‑‑That's correct.

PN260      

You've got on the one hand Workplace Relations administering the casual conversion term and over here you've got the division itself?‑‑‑Yes.

PN261      

That can create vacancies?‑‑‑Yes.

PN262      

So there's no inquiry at the time you administer the casual conversion term about whether it might be possible to offer ongoing employment to those employees.  You have no capacity to do that?‑‑‑No, and well prior to sending those to Jacquie Bell, I'd had numerous conversations with Jacquie and her boss, Kylie Donovan, about this issue and how we would navigate the determination of vacancies and it was abundantly clear to me the process which I sort of just discussed previously, that the group determines their vacancies within their funding limits on a month-to-month basis.  They are determined at a very senior level and so, you know, it was abundantly clear that, you know, vacancies are determined and that once we had assessed casuals who otherwise met the criteria, we would then need to check if there were vacancies and if there were we would be able to proceed and make offers of casual conversion.

PN263      

Those decision-makers at that very senior level within the divisions who have the power to create vacancies, they weren't responsible for administering the casual conversion term and conducting the assessments of those employees, were they?‑‑‑No.

PN264      

I take it from that email exchange that there were three employees on that list of 47 who were made an offer but not casual conversion, they were offered a role following the bulk recruitment round, a separate process.  Is that right?‑‑‑That's correct, yes, yes.  So and to put that in context what was occurring prior to – well, simultaneously, is bulk recruitment is really an ongoing process where each month – well, periodically across Customer Service Division they'll work out their vacancies and make offers of employment.  It's part of the normal merit-based recruitment process.

PN265      

That is completely separate to casual conversion?‑‑‑That's right.

PN266      

Separate and distinct, yes?‑‑‑That's right.

***        MARK STROPPIANA                                                                                                              XXN MS FAWCETT

PN267      

As for the employees who were not made an offer on that list, Services Australia didn't cancel their contracts or reduce their shifts or take any decision like that, did it?‑‑‑They're casual arrangements.

PN268      

Yes but there was no decision following those employees receiving the notice to say, 'No, we don't need you anymore'?‑‑‑that's correct, they continued to be casual employees engaged by the Agency.

PN269      

The number of casual employees in the Agency at the moment is about 3,500, isn't it?‑‑‑Roughly.  Look, I don't know the exact figure but that sounds roughly correct.  That's sort of been the number for – it does fluctuate with people with COVID.  We need at times to surge and bring on additional staff, and then that can go, but that's probably around correct.  I don't know the exact figure at the moment.  The Agency does tend to maintain a casual workforce or it has in the last 12 months, about two to three thousand, isn't it?‑‑‑That's correct.

PN270      

If I can take you to paragraph 8 of your statement?‑‑‑Yes.

PN271      

Just bear with me.  You say there that there were 237 vacancies in the Brisbane area but they weren't in the Face-To-Face Division?‑‑‑Yes, so what I'm saying there is that since that initial ad was posted which created the APS3 and 4 pool, there's been 237 offers made and accepted of permanent employees across Customer Service Delivery, the various divisions in the Brisbane area, but none of those have been in the Face-To-Face Division.

PN272      

When you were looking for existing vacancies for the eligible casuals that you might place them in or make an offer for, you didn't look at broader service delivery, you just looked at Face-To-Face, is that right?‑‑‑For the Face-to-Face Division casuals, that's right.

PN273      

When an employee applies for a customer service role that's gazetted, they don't apply for the Face-To-Face Division, do they?  They apply for customer service and they could end up serving customers on the phone or serving them in a service centre face-to-face?‑‑‑Look, that's correct but certainly the practice is from merit pools that we normally draw people from – who are on merit pools, you know, so if we've got people in Smart Centres and a vacancy in Smart Centres, we'll draw people who already work in Smart Centres doing the duties in the Smart Centre rather than selecting someone from the merit pool from another division.

PN274      

That's the practice?‑‑‑Yes.

***        MARK STROPPIANA                                                                                                              XXN MS FAWCETT

PN275      

But if you've got an eligible casual and they're working in a face-to-face role doing service delivery and they've applied for a service delivery role that could be in a Smart Centre or Face-To-Face, you could look at a Smart Centre, couldn't you?‑‑‑You could.

PN276      

Thank you, Mr Stroppiana, I don't have anymore questions for you.

PN277      

THE COMMISSIONER:  Ms Sekler, anything arising?

PN278      

MS SEKLER:  Commissioner, if I might just have one moment to seek instructions and confer with Mr Reed.

PN279      

THE COMMISSIONER:  Yes.  Do you need a short adjournment for that or can you do it on the run?

PN280      

MS SEKLER:  I think I can do it on the run but I'll certainly ask for an adjournment if I need one but thank you so much.

PN281      

THE COMMISSIONER:  That's all right.

RE-EXAMINATION BY MS SEKLER                                              [12.38 PM]

PN282      

MS SEKLER:  Mr Stroppiana, what if anything can you tell the Commissioner about what offers of casual conversion have been made?‑‑‑Sure.  In – well, of those 46 employees that we assessed as eligible for casual conversion and, in September, from memory, I think we made 27 offers of casual conversion to employees.  Six of those declined the offer and remained casuals, and 21 accepted, so there were 21 employees who received an offer of casual conversion and became permanent employees.  And of that 46, I think there were 19 who were in circumstances where there was not a vacancy available to them.  Subsequent to that process in September during a – sorry, during January, two more offers of casual conversion were made to eligible casual employees who accepted those offers.  So and now it's a month-to-month process of course, as we have casuals who tick over 12 months of service, we go through the same process of assessing their eligibility using the same criteria.

PN283      

No further questions, Commissioner.

PN284      

THE COMMISSIONER:  Thank you.  Mr Stroppiana, can I thank you for your attendance here today.  You're now excused as a witness?‑‑‑Thank you.

***        MARK STROPPIANA                                                                                                                  RXN MS SEKLER

PN285      

Thank you.

<THE WITNESS WITHDREW                                                           [12.40 PM]

PN286      

THE COMMISSIONER:  As I understand it, Ms Sekler, that's the case on behalf of the Agency.

PN287      

MS SEKLER:  Yes.

PN288      

THE COMMISSIONER:  Yes.  Arising out of my exchange with Ms Houghton, I think the articulated question needs to be changed a little bit.  When we look at the articulated question, it's really this last bit about, 'Does Services Australia have to offer the employee casual conversion?'  I think it needs to be very clear about what we're converting the casual employee into.

PN289      

Now, correct me if I'm wrong, Ms Fawcett, but if we had a casual employee into Toowoomba who's been there for six years and has been through this merit selection process, my understanding is what would be offered to them is three days a week part-time.  You're not proposing that they be offered a full-time position, are you?

PN290      

MS FAWCETT:  On a strict reading of the requirements of the Act, they would be offered the three days a week part-time.

PN291      

THE COMMISSIONER:  Yes.

PN292      

MS FAWCETT:  That's what's required, that's the bare minimum that's required under the legislation.  However, because the employee is sitting in a merit pool and they've applied for a full-time position the Agency could say, well – and I understand there is another large public service agency who has done this – it's just cleaner for us to offer you a full-time position, but it's not required.

PN293      

THE COMMISSIONER:  I think the articulated question needs to say, 'Does Services Australia have to offer the employee casual conversion in respect of the actual position the employee is performing as a casual?'  So make it very clear, if they're currently three days a week and I answer the question yes, they get offered a three-day-a-week part-time position.  I'm not – so I wouldn't be saying they have to be turned into a full-time employee.

***        MARK STROPPIANA                                                                                                                  RXN MS SEKLER

PN294      

Conversion is like for like.  Can I put those words into the articulated question?  So at the end of 'Does Services Australia have to offer the employee casual conversion?' we add, 'in respect of the actual position the employee is performing as a casual'.  Does that make sense if I can add those words?

PN295      

MS FAWCETT:  The CPSU doesn't object to that, Commissioner.

PN296      

THE COMMISSIONER:  Thank you.

PN297      

MS SEKLER:  We don't object either, Commissioner.

PN298      

THE COMMISSIONER:  Then likely in the decision I'm going to use this example, e.g. if an employee is a casual employee working three days per week and otherwise fits the definition in the cohort, does Services Australia have to offer conversion to a three-day-per week part-time position?  That's sort of my bench-mark example, yes.  Good.  I think that is useful to clarify the question that way and I will do so.  Did you want to make some further final submissions?  I don't know that there's much more you could add but you're welcome to, arising out of the evidence?  Or did you want to make some further written submissions?  I'm in your hands.

PN299      

MS FAWCETT:  The Union would appreciate the opportunity to make some final closing remarks.

PN300      

THE COMMISSIONER:  Oral submissions now or written submissions?

PN301      

MS FAWCETT:  Oral.  Let's just deal with this expediently, I think.

PN302      

THE COMMISSIONER:  Yes.

PN303      

MS FAWCETT:  Perhaps a short adjournment of half-an-hour would be welcome.

PN304      

THE COMMISSIONER:  Yes, Ms Sekler, is that a convenient way forward?

PN305      

MS SEKLER:  Yes and I apologise, Commissioner, because I spoke over you for a second.

PN306      

THE COMMISSIONER:  No.

PN307      

MS SEKLER:  We would prefer written submissions and we note that we also have to provide - - -

PN308      

THE COMMISSIONER:  You've already provided extensive written submissions which no doubt were informed by the evidence.  Not much of the evidence has really changed today, I can't imagine how your written submissions change today.

PN309      

MS SEKLER:  We'll do oral submissions, Commissioner.

PN310      

THE COMMISSIONER:  Then we will adjourn until 1.15.  Thank you.

PN311      

MS FAWCETT:  Thank you, Commissioner.

LUNCHEON ADJOURNMENT                                                          [12.44 PM]

RESUMED                                                                                                [1.17 PM]

PN312      

THE COMMISSIONER:  Thank you.  Ms Fawcett.

PN313      

MS FAWCETT:  Thank you, Commissioner.  Just a moment.  If I can turn directly to the relevant provisions, Parliament has inserted the casual conversion term into the NES.  The NES applies to the Commonwealth as a national system employer.  The obligation, the key obligation, created by the casual conversion term is located at section 66B which if the employees who are to be assessed meet the eligibility criteria at that section, the employer must offer the employee who meets that criteria, permanent employment.

PN314      

That is the primary function of the casual conversion term, to impose that obligation on employers.  If the casual employee meets the criteria then they must be offered permanency unless there are reasonable grounds not to do so.  That brings in, in respect of APS employment, section 66C to D which says that if an employee is not capable of being made an offer that conforms with the merit requirements of the Public Service Act, then there are reasonable grounds not to make the offer.

PN315      

Section 66C(2)(d) properly constructed requires the APS agency to ask whether an offer cannot be made that conforms with public sector recruitment requirements.  That means that a reasonable ground only exists under this section if an offer cannot conform with the requirements.  Or, to put it another way, if an offer can be made that conforms it must be made.  A reasonable ground must be based on facts that are known at the time.  Section 66C doesn't allow the employer to say, well, it isn't my preference or that wasn't the plan, or we don't want to have permanent jobs here.  Those preferences are irrelevant.

PN316      

We need to look, then, at the interaction between those provisions and the Public Service Act and the Commissioner's directions.  Now, merit-based engagement in the public service derives from the Public Service Act which outlines the elements of merit-based decision-making which include that all eligible members of the community are given an opportunity to apply, assessment is based on the candidate's work-related qualities and those required to perform the role, the candidate's ability to achieve outcomes in the role, and it requires following these processes that merit is the primary consideration in making engagement decisions.

PN317      

The merit principle is about ensuring that APS employment is open to all Australians, that decisions to engage APS employees are made on the basis of who is best suited for the role, not patronage and nepotism.  The Commissioner's directions then set out those requirements in more detail including how the merit selection process is conducted, at section 19 of the 2016 directions.  The requirement for vacancies to be advertised in the gazette at section 20.  The ability of agency heads to establish merit pools at 20(1)(a), and the requirement restated here that merit is the primary consideration when making engagement decisions.  That's at section 19(2).

PN318      

These taken together are the characteristics of merit-based engagement in the APS.  Now, the new Commissioner's directions clarify some ambiguities and the 2022 directions recently released do make it clear that when a candidate is engaged from a merit pool there does need to be a second and similar vacancy.  So to summarise the interaction between the Fair Work Act and the Commissioner's directions, the Public Service Act and the Commissioner's directions are subject to the Fair Work Act.

PN319      

Section 8 of the Public Service Act makes that quite clear.  Agency head decision-makers must exercise their powers and functions under the Public Service Act and Commissioner's directions consistently with their obligations under the Fair Work Act.  If we look at the explanatory memorandum to the Public Service Act, Parliament made it quite clear that the APS operates in the general workplace relations framework and that any exemptions from that framework are to be specifically set out in the Public Service Act.

PN320      

That brings us to section 66B(1) and the obligations therein as the starting point.  Casual employees must be assessed for eligibility against the criteria at section 66B(1).  If they are eligible, then the question that is asked is:  are there reasonable grounds not to make an offer?  Section 66C(2)(d) provides reasonable grounds not to make an offer where that offer wouldn't conform with the requirements that I've set out under the Public Service Act and the Commissioner's directions and in line - - -

PN321      

THE COMMISSIONER:  Sorry, Ms Fawcett, sorry to cut across.  We're now on page 5 of 17 of your submissions.  All I'm hearing you do is repeat what's in your written submissions.

PN322      

MS FAWCETT:  I can turn to the evidence, if it assists.

PN323      

THE COMMISSIONER:  I've read your submissions.  I don't need you to read them to me or to re-paraphrase them.  I need you just to take me to what in addition you want me to have regard to.  And the same when I come to you, Ms Sekler, I don't want you to repeat your written submissions or just paraphrase them.  Thank you.

PN324      

MS FAWCETT:  Before I turn to the evidence, Commissioner, I do want to just make two points.

PN325      

THE COMMISSIONER:  Yes.

PN326      

MS FAWCETT:  The first is that on a correct construction of section 66C(2)(d) there is no obstacle to employees who are sitting in an active merit pool, being made an offer.  So they must be made an offer.  The second point is just about the way the casual conversion term and Commissioner's directions interact, and that is that the casual conversion term imposes an obligation to offer permanent positions.

PN327      

It's a position of logic that a position can't be offered unless it exists, so the obligation is to create and offer the permanent role, and in APS land the terminology used is the creation of a vacancy.  Those are the two summary points I'll make on the correct construction of those provisions.  If I can turn to what actually happened to employees in the vacancy cohort those employees met the eligibility criteria, the evidence of Mr Coady goes to that.

PN328      

There were two examples of employees in that cohort who were offered, in that evidence, and they were placed in merit pools following a full merit selection process.  Mr Stroppiana's evidence shows in that email exchange between Workplace Relations and the Face-To-Face Division, that the Agency was only prepared to offer eligible casuals in the vacancy cohort an ongoing role if there was a pre-existing vacancy.

PN329      

Mr Stroppiana concedes that Workplace Relations didn't seek approval for vacancies to be created to be offered to those eligible employees.  Employees in that cohort were sitting in active merit pools at the time of assessment and Ms Houghton concedes that Services Australia can draw from active merit pools at its convenience at any time to offer candidates ongoing employment.

PN330      

That being the case, in respect of those employees in the vacancy cohort, section 66C(2)(d) cannot be relied on as reasonable grounds for not making an offer.  There was no obstacle to an offer being made.  Employees can be drawn from those merit pools at any time, as Ms Houghton concedes.  The employees in that cohort were capable of being made an offer and should have been made an offer.

PN331      

In answer to the question before the Commission, there are four requirements set out contained in that question.  Item C there corresponds to certain steps in the CPSU's table 1 of its submissions.  Item C corresponds with steps 1, 2, 4 and 5, which goes to the requirement that there be an active merit pool, that the vacancy is advertised correctly, the selection process has been conducted properly and that merit was the primary consideration for determining the employee's rating of suitability.

PN332      

Item D in the question before the Commission goes to step 3 or requirement 3 in table 1, and that is that the duties engaged to – for the employee to perform are similar to the vacancy that was applied for and that's set out in detail there in table 1 of the CPSU's submissions.  So the CPSU says if those four conditions contained in the question are met then Services Australia must offer casual conversion and the five requirements set out in the table correspond to those requirements in more detail.

PN333      

If I can turn to the respondent's position, the respondent's position is that there must be a pre-existing vacancy at the time of assessment or an offer can't be made, and it says this constitutes reasonable grounds under section 66C(2)(d) which the CPSU says provides the Agency with an effective veto.  Services Australia is not backwards about its intentions here, as we can see from the contracts it started to offer to its casuals this year.  Attached to Mr Coady's witness statement at NC16, that's at page 106 of the court book, which states unequivocally that:

PN334      

Services Australia does not propose to offer you the opportunity to convert to full-time or part-time employment.

PN335      

We see quite clearly there the intentions of the Agency in those contracts.  This is an unfortunate approach to the NES that the Commonwealth is directly subject to as a national system employer.  The respondent says that the Commissioner's directions must be followed and that an – if an offer was made in the absence of a pre-existing vacancy then that would be inconsistent with the Commissioner's directions.

PN336      

Let's be clear here that there is no inconsistency.  Employees in the vacancy cohort are sitting in active merit pools that can be drawn on at any time, and the Commonwealth's witnesses have conceded that.  There's nothing stopping an agency from offering those employees ongoing employment.  There is a frustrating circularity here in the Commonwealth's position.

PN337      

Services Australia says that its agency decision-makers can't be forced to create a vacancy but the fact is the Fair Work Act requires all national system employers to create permanent positions if the eligibility criteria at section 66B(1) are met.  Parliament hasn't been excluded from the NES or from the casual conversion term.  It's the same obligation for other employers, that obligation is to create an offer of permanency where the eligibility criteria are met and in the APS the language that's used is the creation of a vacancy.

PN338      

The respondent also talks about Parliament's intentions that it intended this carve-out for public sector employers, and it relies on the explanatory memorandum there but what we'd say there was that Parliament didn't intend an absolute carve-out.  It's a contingent carve-out.  The explanatory memorandum says that the public sector employer would not be required to make an offer of casual conversion if this would be inconsistent with its statutory obligations.

PN339      

But as the union's submitted, there's no inconsistency here at all.  These employees are sitting in active merit pools that can be drawn on at any time and these employees are capable of being made an offer.  Once employees are capable of being made an offer, then section 66C(2)(d) requires that the employer make the offer.

PN340      

The respondent says that workforce planning and the filling of demand is a complex process of workforce planning.  The respondent suggests that the creation of a vacancy is a removed process, apparently out of the hands of those applying the casual conversion term.  The CPSU position is that the creation of a vacancy is simply a decision that there are duties to be performed and it's appropriate to engage someone to perform them.

PN341      

It's not some situation that the Agency finds itself in that it can't do anything about.  The Agency can't effectively say, well, this casual is eligible but we will exercise our discretion to say whether there is a vacancy or not.  What this does is introduce a veto allowing the Agency to assert a preference for the work to be performed on a casual basis.

PN342      

Ms Houghton confirms that the Agency maintains a large casual workforce of approximately 3,500 at this point in time and that that has increased this year.  She agrees that demand can be met by ongoing employees, fixed term employees and casual employees, and she concedes that the Agency has a choice and at some level a decision is taken about the mix of employment types that are relied on to meet demand.  She agrees that Services Australia doesn't have a policy of cancelling shifts of casuals who are not offered conversion.  She agrees that the Agency is opting to meet a significant proportion of its demand through casual labour.

PN343      

Similarly, Mr Stroppiana confirms the Agency maintains a large casual workforce of anywhere between two and three thousand at any point in time.  He confirms that if a casual is not offered ongoing employment under the casual conversion clause, then Services Australia doesn't cease to use that casual.  He also concedes that a large proportion of the Agency's work continues to be performed by a casual workforce.

PN344      

Here what we see on this evidence is the Agency's preferences in action.  It wants to maintain a casual workforce.  It agrees it has a choice about the mix of employment types it uses and it's that choice that comes into play when an Agency decision-maker says there's no vacancy at the time of casual conversion assessment.  It's asserting that preference for the work to be performed on a casual basis.

PN345      

Mr Stroppiana also concedes that Workplace Relations didn't ask for approval for the creation of vacancies so that eligible casuals could be made an offer, even though there are agency decision-makers who can request the creation of vacancies.  In answer to the question before the Commission, the CPSU's position is that if those four requirements are met then, yes, Services Australia does have to offer casual conversion.

PN346      

The answer to the question before the Commission must require the Commonwealth to meet its obligations under the NES, like every other national system employer, and it must require Agency heads to exercise their powers under the Public Service Act and Commissioner's directions consistently with their obligations under the Fair Work Act.  That is what section 8 of the Public Service Act clearly requires and, unfortunately, the respondent's position falls short on both counts.  Thank you, Commissioner, those are the CPSU's closing submissions.

PN347      

THE COMMISSIONER:  Thank you, Ms Fawcett, I've been assisted by those.  Thank you.  Ms Sekler.

PN348      

MS SEKLER:  Commissioner, there's a gulf between the CPSU's and the Commonwealth's constructions of what 66B and 66C require.  As I addressed you on in our opening, our construction of 66C and B is one that is harmonious and where 66C(2)(d) picks up those Commonwealth recruitment processes, 66C(2)(d) talks - - -

PN349      

THE COMMISSIONER:  Sorry.

PN350      

MS SEKLER:  Sorry, I apologise.

PN351      

THE COMMISSIONER:  No, no, not at all.  I'm just looking at 66B(2)(d), it says:

PN352      

Making the offer would not comply with a recruitment or selection process required –

PN353      

what do you say is the recruitment or selection process required by or under a law of the Commonwealth?

PN354      

MS SEKLER:  Commissioner, it's essentially, it's the Public Service Act and it's following the steps in the directions for the employees which are our test cohort, our two employees.  That was the 2016 directions.  So those processes, the Public Service Act is obviously a law of the Commonwealth and section 10A, the APS employment principles are relevant, as is section 10A(2) which is that decisions to engage or promote based on merit.  The directions then fall under or essentially are recruitment or selection processes required by or under a law of the Commonwealth in two ways.

PN355      

Firstly, section 42A(2) of the Public Service Act requires Agency heads to adhere to them.  Secondly, section 11A stats the Commissioner may issue the directions in relation to engagement and promotion.  And in 11A(2) may issue the directions in relation to any APS employment principle for the purpose of ensuring the APS incorporates and upholds the principles and determining, where necessary, their scope and application.

PN356      

Essentially, the directions are delegated legislations and that is, itself, a law of the Commonwealth and because it's delegated legislation, it's recognised in Krombholz v the Secretary, Department of Defence [2016] FCA 345 at 21 where his Honour Bromwich J characterised – and I should say this was the 2013 APSC Directions, so the ones that preceded the 2016 ones, as delegated legislation.

PN357      

Then a law of the Commonwealth also encompasses essentially what is made under its legislative power, as either directly or indirectly, and that is established in R v Foster, Ex Parte Commonwealth Steamship Owners' Association [1953] 88 CLR 549 at 556.  The ultimate gulf between the parties in relation to the steps is about that second vacancy.

PN358      

The Commonwealth submits the second vacancy is simply required under the Directions.  The union submits, in paraphrase, that the Fair Work Act somehow causes this second vacancy to be created or come to exist or otherwise forces that vacancy to be made or to arise, as we understand their argument.

PN359      

But there's nothing in the text or the structure or the context, we submit, of the casual conversion provisions which indicates that this is what Parliament intended in the Commonwealth context.  That indication from section 66B is simply not available.  66B has to operate harmoniously with 66C, and 66C then – I apologise, Commissioner.

PN360      

THE COMMISSIONER:  Why is it different to what – you know, if we think about in the private sector, a private sector employer says, 'I don't have a permanent position', and the legislation is saying you've got to create one.  If the employ ticks all these boxes, if a casual employee ticks all these boxes, you've got to create one.  So why isn't the legislation saying to the Agency head, 'Look, I know you say you haven't got a vacancy for this, you know, three-day-a-week casual in Toowoomba but you've got to create one because they otherwise tick all the boxes'?

PN361      

MS SEKLER:  There's two answers to that.  The first one is section 66C(2)(b) expressly carves out the Commonwealth and the States and the Territories and puts them in a different position.  It picks up those recruitment processes that are already contained in other acts and instruments, and that is what Parliament intended to do.  It recognised the special position of the Commonwealth and the States and the Territories as public sector employers.

PN362      

The second answer is that even a private sector employer, under section 66C(2) has reasonable grounds that might relate to their business or at least the opportunity to put forward reasonable grounds that relate to their business.  There might be reasons why they don't have that position, that they can put forward relating to their workflow, relating to the sort of decisions they have to make about their business.

PN363      

There is nothing in section 66C which indicates that those sorts of decisions, and 66C(2) does talk about decisions, things that have to be immutable, is a word, that the CPSU I think used in one of its written submissions or out of the employer's control.  It just has to be a reasonable ground.  For the Commonwealth that reasonable ground or a reasonable ground has already been circumscribed in 66C(2)(e) and it's expressed to pick up those provisions and those provisions do include in the directions the second vacancy.

PN364      

Essentially, we say that construed properly sections 66B and C and section 66C(2)(d), picks up those Commonwealth processes.  It strongly indicates an intention that runs completely contrary to the CPSU's construction.  The intention was to import and preserve the processes that are there or as might be made.  Parliament clearly, clearly put its mind directly to public sector employers and to the Commonwealth specifically.

PN365      

It was a clear legislative choice and another could have been made but it was not – if Parliament wanted to force a vacancy into existence for the Commonwealth, it could have done that.  The provisions could have been framed differently but they weren't.  Ultimately, the CPSU's argument really requires very substantial reading in or reading down, depending on which approach you might take, and the basis for that is just not there on the plain face of the provisions.  Commissioner, have I answered the question in a way that would or I should feel ready to move on, or can I assist further on this point?

PN366      

THE COMMISSIONER:  No, you should go on, you're right.

PN367      

MS SEKLER:  It is clear that casual conversion still operates with respect to the Commonwealth.  It's not, from a statutory perspective, frustrated.  From a factual perspective, Commissioner, you've heard the evidence with Mr Stroppiana showing that a very large number of the cohort that would otherwise have been eligible were made casual conversion offers.  Neither in fact nor in law could it be said that casual conversion does not operate with respect to the Commonwealth.

PN368      

It does and an offer would have to be made if the vacancy, in fact, exists, the employees are assessed as being suitable for a similar vacancy which had been notified and the agency head is satisfied that the person is at least equal in merit to any other candidate from the merit pool, and this would be if there was another issue under section 66C, another reasonable ground, well, that might be something else.  But in terms of how the provision operates, it still does operate in relation to the Commonwealth but it expressly recognises through section 66C those pre-existing processes.

PN369      

There is no inconsistency or conflict with the Fair Work Act as between the Public Service Act and the Directions when applied this way.  Section 66B, section 66C of the Fair Work Act, the Directions and the Public Service Act are pieces of the puzzle that fit neatly together.  That was what was intended.

PN370      

The union's argument, there's references in the submissions to sidestep or override or discretion preference circularity, broadening the scope of the reasonable grounds but all Services Australia did was follow those processes that are set out in the Directions that meet the requirements of the Public Service Act and which then are picked up by section 66C, and it meant that some people were made an offer and some people weren't.

PN371      

THE COMMISSIONER:  But it means that – if you're right on your construction, it means that because of what is in the Public Service Directions, the notion of casual conversion as legislated for, which was intended to compel employers to do something they didn't want to do.  By virtue of your construction of it and what's in the Public Service Directions, casual conversion is a furphy in the public service.  That's the necessary conclusion that must be drawn because all you have tod o is put something in the Public Service Directions to frustrate the operation of the legislation.

PN372      

MS SEKLER:  But the Directions, themselves, and the Public Service Act are picked up under 66C.

PN373      

THE COMMISSIONER:  But you concede then that the implication of that is that casual conversion is a furphy in the public service, Commonwealth public service.  You're saying because of the Directions no Secretary can be compelled to make an offer of casual conversion.  That's what you're saying.

PN374      

MS SEKLER:  Well - - -

PN375      

THE COMMISSIONER:  That is what you're saying, isn't it?  Yes or no?

PN376      

MS SEKLER:  If I might have one moment, Commissioner?

PN377      

THE COMMISSIONER:  Yes.

PN378      

MS SEKLER:  No, because the offer still has to be made when there is an existing vacancy and this problem can't be approached on the basis that those decisions are being made in some perverse or improper way.  There are complex work need issues that arise in the public service and there's evidence before you, Commissioner, in relation to some of those.  This provision could have been drafted very, very differently were it not for the fact – well, were this not the intended outcome but this is what has been protected under section 66C(2)(d).

PN379      

THE COMMISSIONER:  All right.

PN380      

MS SEKLER:  But we're not dealing - - -

PN381      

THE COMMISSIONER:  I understand what you're saying.

PN382      

MS SEKLER:  Essentially it's just the position that is facilitated and contemplated by the Fair Work Act.  I've addressed the question of control and accidental situations, as the Union has sometimes said in its submissions and it not being immutable.  Commissioner, we're not addressing the hypothetical situation where the Directions have been changed in some way, where no offer could ever be made.

PN383      

That's not the question before you and it's one of those extreme examples that are not necessarily useful in determining questions of statutory construction because it's about what's in the Directions that are before you right now, Commissioner.  A reference to not being essentially drawn to those extreme examples and distorting possibilities, as it's sometimes said in the legislation, is found in Forge v Australian Securities and Investments Commission [2006] 228 CLR 45.  Commissioner, might I have one moment to confer with Mr Reeves and to confer with my clients?

PN384      

THE COMMISSIONER:  Yes, you may.  Then when you come back there's one matter that I think you do need to amplify from your written submissions.

PN385      

MS SEKLER:  Yes.

PN386      

THE COMMISSIONER:  It's paragraph 9 where it's contended that I don't have jurisdiction to hear this dispute.  I'm wondering whether that's seriously pressed.  I just don't understand how the Agency agrees with the CPSU as to the source and scope of the Commission's jurisdiction, that is said in paragraph 8, but then in paragraph 9 it's submitted that I don't have jurisdiction.

PN387      

MS SEKLER:  Commissioner, we're not intending to suggest that and perhaps that's my error in the way that I drafted that.  We were not intending to say that you did not have jurisdiction to hear this dispute.  It's largely a question of statutory interpretation applied to the individual circumstances of the example employees.  That's well within your jurisdiction.

PN388      

THE COMMISSIONER:  Would it be better to read that as, 'The Commonwealth submits the Commission' – because it's not really about jurisdiction to hear but what it's saying is I don't have the power to direct an Agency head to do anything.

PN389      

MS SEKLER:  Yes, in the scope of this dispute.

PN390      

THE COMMISSIONER:  I understand.  I understand how that's frame now, thank you.  But, yes, if you could get some instructions about whether you need to - - -

PN391      

MS SEKLER:  Thank you.

PN392      

THE COMMISSIONER:  - - - make submissions.  And how did you go with your instructors getting the additional evidence that I wanted?

PN393      

MS SEKLER:  Commissioner, I know that they have been working on it but I also know that there was some complexities and that there was a concern about ensuring that the data that you were provided, Commissioner, was correct as would be completely appropriate.

PN394      

THE COMMISSIONER:  All right, that's - - -

PN395      

MS SEKLER:  I'll take this opportunity to check.

PN396      

THE COMMISSIONER:  That's all right, I don't want to rush it.

PN397      

MS SEKLER:  Sorry.

PN398      

THE COMMISSIONER:  No, no, no, I don't want to rush the Department, so when we wrap up I won't reserve my decision, I'll leave the matter open.

PN399      

MS SEKLER:  Yes.

PN400      

THE COMMISSIONER:  So that the additional evidence can be filed.  I will then ask Ms Fawcett whether she wants to examine on that.  If not, then I will reserve my decision.  Yes, all right.  You get the instructions you need.

PN401      

MS SEKLER:  Thank you.  Thank you, Commissioner, for this indulgence.  We're in the final moments.  Thank you, Commissioner, I appreciate the opportunity and I'm very grateful for it.  Nothing further.

PN402      

THE COMMISSIONER:  Thank you.  I've been assisted by those submissions.  Ms Fawcett, anything in reply?

PN403      

MS FAWCETT:  Just very briefly, thank you, Commissioner.  I did want to make two final points.  The first one being that section 66C must have limits.  It can't be expanded to include whatever an employer wants.  So if section 66C allows an agency to ask at the time of assessment, 'Do we prefer this work to be done by an ongoing employee or do we prefer it to be done by a casual employee?'  Effectively, 'Do we want to create a vacancy or not?'  Then section 66C is expanded to allow the employer to include its own preferences.

PN404      

As the Commissioner has alluded to, if that reasoning holds, the respondent could re-write the Commissioner's directions to directly say, well, casual conversion never applies in the APS at all.  If section 60C has no limits, then this would be permissible.  The position of Services Australia actually isn't too far off that with just how wide a scope it gives the Agency to say that it doesn't wish to make offers of ongoing employment.  This is the first point I wanted to make in reply.

PN405      

The second point I wanted to make is just about the nature of what the Commission can do in this matter.  The Commission has the power to make a binding determination on the parties with respect to the application of the NES.  In doing so it can form a view about the correct interpretation of the Commissioner's directions and the Public Service Act.

PN406      

To the extent that the Agency head exercises the employer powers of the Commonwealth, then the Commission is empowered to make a binding determination about the application of the NES that the agency head must follow.  It is squarely a dispute about the application of the NES and the Commission is empowered to make a binding determination with respect to that.  Thank you, Commissioner.

PN407      

THE COMMISSIONER:  Thank you.  As I have flagged, we will adjourn today to a date possibly to be fixed, if the respondent could file the additional evidence.  Can I ask them to do that within seven days and then, let me just look at my calendar.  If the additional evidence could be filed by 4 March and then I will provisionally list the matter for 10 am on 10 March.  However, if Ms Fawcett advises my chambers that she does not require the deponent of that evidence for cross-examination, that hearing date will be vacated.  Does that make sense?

PN408      

MS FAWCETT:  Thank you, Commissioner.

PN409      

MS SEKLER:  Thank you, Commissioner.

PN410      

THE COMMISSIONER:  Then we are adjourned.  Good afternoon.

ADJOURNED TO A DATE TO BE FIXED                                         [2.00 PM]


LIST OF WITNESSES, EXHIBITS AND MFIs

 

NICHOLAS COADY, CALLED............................................................................ PN63

EXHIBIT #11 WITNESS STATEMENT OF NICHOLAS COADY................. PN69

NICHOLAS COADY, AFFIRMED....................................................................... PN69

CROSS-EXAMINATION BY MS SEKLER........................................................ PN69

RE-EXAMINATION BY MS FAWCETT............................................................ PN95

THE WITNESS WITHDREW............................................................................... PN99

EXHIBIT #40 FACTUAL MATTERS CONCEDED BY SERVICES AUSTRALIA PN137

RACHEL HOUGHTON, AFFIRMED................................................................ PN149

EXAMINATION-IN-CHIEF BY THE COMMISSIONER.............................. PN149

EXHIBIT #29 WITNESS STATEMENT OF RACHEL HOUGHTON.......... PN153

CROSS-EXAMINATION BY MS FAWCETT.................................................. PN154

RE-EXAMINATION BY MS SEKLER.............................................................. PN195

THE WITNESS WITHDREW............................................................................. PN204

MARK STROPPIANA, AFFIRMED.................................................................. PN218

EXAMINATION-IN-CHIEF BY THE COMMISSIONER.............................. PN218

CROSS-EXAMINATION BY MS FAWCETT.................................................. PN222

RE-EXAMINATION BY MS SEKLER.............................................................. PN281

THE WITNESS WITHDREW............................................................................. PN285