WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATE’S COURT

PARTIES AUSTRALIAN MUNICIPAL, ADMINISTRATIVE, CLERICAL AND  SERVICES UNION OF EMPLOYEES, W.A. CLERICAL AND ADMINISTRATIVE BRANCH

CLAIMANT

-v-

CITY OF STIRLING

RESPONDENT

CORAM INDUSTRIAL MAGISTRATE G. CICCHINI

HEARD TUESDAY, 22 NOVEMBER 2005, WEDNESDAY, 7 DECEMBER 2005, THURSDAY, 22 DECEMBER 2005

DELIVERED THURSDAY, 22 DECEMBER 2005

CLAIM NO. M 93 OF 2005

CITATION NO. 2006 WAIRC 03440

CatchWords Redundancy - redeployment - restructure - significant effects - major changes - severance - termination of contract of employment.

Legislation  Workplace Relations Act 1996

Local Government Officers (City of Stirling) Award 2000

City of Stirling Salaried Officers’ Enterprise Agreement 2004

Local Government Act 1995 (WA)

Minimum Conditions of Employment Act 1993 (WA)

Result The claim is not proved

Representation 

CLAIMANT MS K WARLOCK AND MR S BIBBY OF THE CLAIMANT APPEARED AS AGENTS FOR THE CLAIMANT.

RESPONDENT MS K REID (OF COUNSEL) INSTRUCTED BY MINTER ELLISON LAWYERS APPEARED FOR THE RESPONDENT.

REASONS FOR DECISION

Background

1         The Claimant is an organisation of employees registered pursuant to the provisions of the Workplace Relations Act 1996.  The Respondent is a Local Government created pursuant to the provisions of Division 2 of Part 2 of the Local Government Act 1995 (WA).

2         The Claimant and Respondent are named parties of the Local Government Officers (City of Stirling) Award 2000 (the Award), being an award of the Australian Industrial Relations Commission.  They are also parties to the City of Stirling Salaried Officers Enterprise Agreement 2004 (EBA), being an agreement certified by the Australian Industrial Relations Commission pursuant to the Workplace Relations Act 1996.

3         The Respondent has employed Ms Pamela Butler for 18 years. She currently holds the position of Administrative Officer within the Health and Compliance Department of the Respondent’s Planning and Development Division.  She has held that position since 8 March 2005.  Before that she held the position of section Secretary within the Respondent’s Building Services Department, for about 11 years. 

4         On 4 February 2005, Mr Ross Povey the Director of Planning and Development by memorandum addressed to Ms Butler, informed her that the Council had decided to undertake a restructure of the Town Planning, Building and Environmental Health Business units within his directorate.  They were to be replaced by three new business units namely Approvals, Policy and Strategic Development, and Health and Compliance.  The memorandum addressed the impact of the restructure upon staff.  Ms Butler was informed therein that the restructure would not involve any reduction in staffing levels but might involve the acquisition of additional knowledge and skills for which training would be offered.  The specific detail of the restructure insofar as it related to Ms Butler was contained in attachment 3 to the memorandum.  Attachment 3 stated:

ATTACHMENT 3 – YOUR POSITION

This attachment contains the details of the position which the City intends to offer you within the new structure.  The duty statement for this position has been attached for your information (Attachment 4).

Under clause 10.2(b) of the EBA, the City is required to give prompt consideration to any matters raised by employees in relation to these changes.  The City will finalise your duty statement and your appointment to this position following this.

YOUR CURRENT POSITION

Title    Secretary

Business Unit  Building Services

Manager   Andre Gillot

Your current level  Level 3 + AA

Your current salary  $36,225

RESTRUCTURED POSITION

Title:    Admin Officer

Business Unit  Health and Compliance

Manager   Les Float

Position classification: Level 4

Your proposed salary $35,698 + $527 personal allowance

Your proposed level  Level 4 Step 1

Position description: Attached

Your current salary includes an above award component.  This has now been translated to a personal allowance which will apply to you in your new position.  This component of your salary will not be subject to increases commensurate with your EBA increases.  Your total salary package (base plus personal allowance) is guaranteed under this arrangement.

5         The position description of Administration Officer – Health and Compliance was also annexed to the memorandum.  The key responsibilities were identified therein as being:

1. To respond to customer enquiries, via the phone and direct contact, on all matters relevant to the Business Unit.

2. To maintain appropriate corporate records of the unit through relevant corporate processes and systems.

3. To coordinate the acceptance, receipting, reviewing, administration and movement of a range of application types and business unit services relevant to the Business Unit, including:

• The checking of applications received to ensure completeness;
• Liaise with applicants to ensure additional information required is supplied;
• The receipting and logging of applications and clearances and their distribution to case officers;
• The maintenance of accurate databases on all of the above, and the status and location of all application types handled by the business unit.

4. To administer the receipting and management of any necessary fees, fines, performance, bonds, bank guarantees and development contributions.

5. To remain alert to customer service and feedback, and to highlight/report customer comments, ideas and criticisms (either immediately, or as necessary) and proactively solve problems.

6. To provide general administrative support to the business unit, including clerical work, copying and scanning, word processing and data input, or other Business Units within the Directorate, as directed by the Manager.

6         Ms Butler was invited to make comment in writing by no later than 18 February 2005 concerning the proposed restructure that was due to commence on 8 March 2005.

7         On 16 February 2005 Ms Butler wrote to Mr Povey concerning the restructure.  She said inter alia,

 “ … it would appear I am being redeployed to a completely new business unit with a completely different position description.

There does not appear to have been any feedback regarding redundancy in the case of someone such as myself being moved as appears to be the case, in the event that the new position is not acceptable to me.”

8         On 25 February 2005 by memorandum addressed to all Planning, Building and Environment Health staff, Mr Povey responded to concerns raised by various staff members with respect to the restructure.  At paragraph 19 thereof he said, that the “first aim of the restructure was to find all affected/displaced employees with a suitable/alternative job”.  He said also that if an employee was referred to a job then such employee could not refuse the offer of the job except where the employee could demonstrate that he or she did not have the skills to undertake the new role, and could not develop the skills within a reasonable period, or that the acceptance of the position would financially disadvantage him or her.

9         On 4 March 2005 Mr Povey responded directly to Ms Butler’s comments concerning the restructure and in doing so referred her to his memorandum dated 25 February 2005 addressed to all Planning, Building and Environmental Health staff as containing an adequate response to the issues that she specifically raised.

10      On 8 March 2005 Ms Butler commenced in her new position.  The operation of the restructure coincided with the relocation of the entire City of Stirling Administration to new premises.  Ms Butler’s first day in her new position as an Administrative Officer in the Health and Compliance unit was to her mind unsatisfactory.  It seemed to her that no one appeared to know what her role was to be.  On that day she did little more than to answer the telephone. The experience disheartened her.  She had moved from her previous job, which demanded responsibility, knowledge and skill to one that was devoid of responsibility and with respect to which only limited knowledge and skill was required.  In her former position she prepared strata certificates for signature, assisted with the preparation of building licences, assisted in budget preparation, maintained the filing of letters and minutes, recorded inward and outward mail, monitored the principal Building Manager’s telephone calls, maintained a record of legal actions, procured and maintained stationery requirements and supervised the preparation of building reports to Council.  Such role necessitated a low degree of customer contact.  Her new role, which has become increasingly structured as time has passed involves accepting, receipting, reviewing and administering applications, completing records, administering fees, fines, performance bonds, bank guarantees, development contributions, maintaining accurate databases, and responding to customer enquiries by phone or direct contact. 

11      Ms Butler continues to work in her new position albeit unhappy about it.

12      On 10 March 2005, Ms Butler wrote to the Principal Environmental Health Officer in the following terms:

Dear Sir

RESTRUCTURE OF HEALTH, BUILDING AND PLANNING

I believe that my former position as Building Department Secretary has now been made redundant.

I have been redeployed as Administration Officer, Compliance.

In accordance with Clause 12.1 of the City of Stirling Salaried Officers Enterprise Agreement, I hereby request redundancy as I do not wish to accept this position.

13      A copy of the letter was forwarded to Mr Ross Povey.  It is of note however that Ms Butler had in fact accepted her new position albeit reluctantly.  She did so by commencing in her position on the operative date of restructure being 8 March 2005.  The employment relationship continued with Ms Butler performing a different role to that previously undertaken.

14      On 14 March 2005 Ms Butler again wrote to Mr Povey this time by way of e-mail.  I set out the relevant portions of her e-mail,

As you are aware, I have been allocated to the position of Admin Officer, Compliance.  At present there don’t appear to be any duties attached to this position.

It has come to my attention, through casual conversation only, that at present I am still attached to Building.

I would like official confirmation, in writing please, as to what my current duties are to be, the timeframe involved and which Business Unit Manager I am responsible to.

I am happy to undertake duties required ‘Without Prejudice’ to my application for redundancy under Section 12.1 of the City of Stirling Salaried Officers Enterprise Agreement.

15      On 18 March 2005 Mr Povey prepared a memorandum that was sent to Ms Butler on 21 March 2005 pointing out that the Respondent was unable to consider her redundancy application as it could not qualify as “bona fide” because there were other vacant positions requiring similar skills to that possessed by her in which she could be placed.  Furthermore, redundancy based on early retirement could not be achieved because the Respondent could not meet the Australian Taxation Office’s requirements for redundancy under the “Early Retirement Scheme”.

16      On 14 May 2005 Mr David Schwenke took up the position of Compliance Co-ordinator within the Health and Compliance unit.  He, on appointment, became Ms Butler’s direct supervisor.  On 7 June 2005 Ms Butler wrote to him stating inter alia,

…on 18 March 2005 I was officially notified by Ross Povey, Director Planning and Development, that my application for redundancy had been refused and the grounds for this refusal.

However, regardless of the duties of the position of Admin Officer, Compliance, I still contend that my former position has fundamentally disappeared from the restructured business units, the position is now redundant and I have been redeployed to a completely different business unit.  As previously advised, I do not wish to accept the new position in accordance with Clause 12.1 of the City of Stirling Salaried Officers Enterprise Agreement.

In accordance with the Dispute Settlement Procedure Clause 17.2(1) in the EBA, I would appreciate a response from you within 3 days.

17      Mr Schwenke referred the matter to Mr Float the Manager of Health and Compliance.

18      On 14 June 2005 Mr Float wrote to Ms Butler stating that her position had never been abolished but rather had been redesigned, with changes in some of the duties and responsibilities to fit into the restructured business unit.  On the same day Ms Butler wrote to Mr Float to invoke the dispute settlement procedure contained in clause 17.2(ii) of the EBA.  It sufficies to say that Ms Butler and the Respondent were unable to resolve the dispute causing Ms Butler’s approach to the Claimant union concerning the matter.  Correspondence passing between the Claimant and the Respondent also failed to resolve the matter, which resulted in the Claimant lodging its claim on 19 August 2005.

The Claim

19      The Claimant alleges that the Respondent has breached clause 12 (Employment Security) of the EBA.  It contends that the transfer of Ms Butler to her current position constitutes redeployment within the terms of the EBA and that in redeploying her, the Respondent failed to provide her with the opportunity of redundancy.  The Claimant therefore seeks to recover a redundancy payment payable to Ms Butler equating to 60 weeks pay in accordance with clause 12.2.2 of the EBA amounting to $41,924.15.  Interest thereon is also sought.  Furthermore the Claimant seeks the imposition of a penalty for the alleged breach.  The Claimant maintains that the redundancy entitlement should run to 7 March 2005 and that wages received by Ms Butler subsequent to that date should not be set off against such entitlement.

Response

20      The Respondent submits that redeployment both under the EBA and in general industrial usage presumes a transfer between jobs.  It is asserted that Ms Butler was not transferred between jobs and in fact is currently doing the same job that she was doing prior to the restructure.  It is argued therefore that redeployment within the meaning of clause 12.1 of the EBA has not occurred.  Furthermore the Respondent contends that clause 12.1 is predicated on an employer making an offer of redeployment to an employee, which an employee declines.  In that regard the Respondent says that even though Ms Butler may not have been happy with being transferred to a new business unit, she has been performing her job within that unit for some 38 weeks.  She has therefore not declined the offer of transfer within the meaning of clause 12.1 of the EBA.  Finally the Respondent argues that in any event, a severance payment is payable only on termination of employment, that is when the relationship is “severed”.  The Respondent says that the employment relationship between Ms Butler and the Respondent has never come to an end.  The Respondent has not terminated the employment of Ms Butler and she has not resigned.  The question of a severance payment under clause 12.2.2 of the EBA therefore does not arise.

The Award and EBA

21      The relevant version of the award for my consideration is that which was varied as at 3 November 2004.  Clause 7.2 of the EBA provides that the EBA shall be read and interpreted wholly in conjunction with the Award.

22      Clause 10 of the Award deals with redundancy and severance payments.  The definition of “Redundancy” as contained in clause 10.1, which provides:

10.1 Definition

Redundancy occurs where an employer decides that the employer no longer wishes the job the employee has been doing to be done by anyone and this is not due to the ordinary and customary turnover of labour.

23      Clause 12.1 of the EBA provides inter alia

“In the event of major changes, where an employee does not wish to accept redeployment, then redundancy shall apply in accordance with item 12.2.2 of this agreement”.

24      It suffices to say that clause 12.2.2 contains the formula for calculation of severance pay.  The Award provision is also relevant given that the EBA states at clause 12.2 that

“(t)he terms and conditions shall be in accordance with each respective Award.......”.

25      It will be obvious that the pivotal issues to be determined are those as to whether or not Ms Butler was redeployed as a consequence of the restructure which became operative on 8 March 2005 and whether as a result redundancy is payable to her.

26      There is no real dispute about the fact that the restructure was a major change implemented by the Respondent.  Although the meaning of “major change” is not defined in the EBA, reference to major change is found at clause 10.2(a)(i) thereof which states:

 “Where the City has made a definite decision to introduce major changes in production, program organisation, structure or technology that is likely to have significant effects on employees, the employer shall notify the ECG and the employees who may be affected by the proposed changes”

27      Significant effect is defined in clause 10.2 (ii) of the EBA as follows:

“Significant effects” include termination of employment, major changes in composition, operation or size of the employer’s workforce or in the skills required, the elimination or diminution of job opportunities, promotion opportunities, or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations and the restructuring of jobs.  Provided that where the award makes provision for alteration of any of the matters referred to herein, an alteration shall be deemed not to have significant effect.

28      The restructure impacted directly upon Ms Butler who was required to leave the Building Service unit and move to the Health and Compliance unit.  It could be said that the restructure had a significant effect upon Ms Butler.  However major changes having significant effects on employees within the meaning of the Award and EBA do not axiomatically lead to redeployment, although they may do so.

Determination

Was Ms Butler Redeployed?

29      The term “redeployment” is not defined in either the Award or the EBA.  The Oxford Paper Back Dictionary defines “redeployment” at page 669 as meaning,

“to send (troop or workers etc) to a new place or task”.

30      “Redeploy” in the Australian context is defined in the “The Macquarie Dictionary 3rd Edition” to mean,

 “to rearrange, reorganise, or transfer (a person, department, military unit, or the like), as in order to promote greater efficiency”.

31      Not every rearrangement or reorganisation in the workforce results in redeployment.  To some extent, whether redeployment results is a question of fact dependant upon the nature of the change. Sometimes redeployment does not occur even if the change is a major change having significant effects on employees.  However redeployment will inevitably occur both under the EBA and general industrial usage if an employee is transferred between jobs.  In this matter the Claimant contends that Ms Butler’s job was abolished and that she was transferred to a different job.  The Respondent on the other hand says that Ms Butler is doing the same job now as she was prior to the restructure and that therefore redeployment within the meaning of clause 12.1 of the EBA has not occurred.

32      I find that Ms Butler’s job, as Administrative Officer within the Health and Compliance unit is, in nature, the same as that which she previously performed as a secretary within the Building Services unit.  Her role then, as is now, was one that provided administrative assistance.  The pith and substance of her work remains constant.  An analysis of Ms Butler’s former and current duties reveals that her role and duties are intrinsically the same in nature.  She now uses the same sorts of skills previously used in her former position.  Having said that I acknowledge that there have been changes to her duties and responsibilities.  Such will inevitably occur when one moves from one position to another.  Each position has its unique characteristics but those differences do not change the fundamental nature of the job.  Her tasks in providing administrative assistance have varied to reflect the requirements of the Health and Compliance unit.  Notwithstanding that the rudimentary aspects of Ms Butler’s job however described remain the same. Furthermore there has been no change to Ms Butler’s pay, classification or other entitlements, which also reflects continuum.  In those circumstances it cannot be said that there has been a redeployment that would trigger and facilitate redundancy if sought.

Has there been a redundancy?

33      Aligned to the question of whether or not redeployment has occurred is the question of whether or not there has been a redundancy.

34      In The Queen v The Industrial Commission of South Australia; Ex Parte Adelaide Milk Supply Co-operative Limited and Others (1977) 16 S.A.S.R.6 Bray CJ said at 8,

“… the concept of redundancy in the context we are discussing seems to be simply this, redundant when an employer no longer desires it performed by anyone.”

35      His Honour’s view was codified in clause 10.1of the Award hereinbefore referred to. The Award definition provides the foundation for my consideration on the issue.

36      In Jones v Department of Energy and Minerals (1995) 60 IR 304 Ryan J said at 308,

“However, it is within the employer’s prerogative to rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions.  It is inappropriate now to attempt an exhaustive description of the methods by which a reorganisation of that kind may be achieved.  One illustration of it occurs when the duties of a single, full-time employee are redistributed to several part-time employees.  What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge.  If there is no longer any function or duty to be performed by that person, his or her position becomes redundant in the sense in which the word was used in the Adelaide Milk Co-operative case.”

37      In The Australian Rail, Tram and Bus Industry Union of Employees, West Australian Branch v Public Transport Authority 2005 WAIRC 00513, Smith C said at paragraph 101,

“For an employer’s decision to be a decision that the job will not be done by anyone, the substantive duties roles and responsibilities of the job must not be required to be done in the employer’s organisation.”

38      The restructure has resulted in a reallocation of duties and responsibilities to achieve efficiency.  The change in Ms Butler’s role as a consequence of the restructure does not amount to redundancy.  Her job has not been abolished and in fact still exists albeit differently described.  Those skills previously used in the performance of her job in the position described as a Secretary are now being used to do her job in the position described as Administrative Officer.

Redundancy Payment

39      Notwithstanding the fact that Ms Butler is unhappy about having been assigned to a new business unit, the fact remains that she has been performing her job in that unit since 8 March 2005.  In those circumstances even if it could be said that redeployment had occurred she has not declined the offer of transfer within the meaning of clause 12.1 of the EBA.  At no stage has her employment relationship with the Respondent come to an end.  The Respondent has not terminated her employment nor has she resigned.  Accordingly the question of severance payment under clause 12.2.2 of the EBA does not arise.  Severance payment is payable on termination of the employment, that is, when the relationship is severed.

40      In the Termination, Change and Redundancy Case (1984) 8 I.R 34 at 73 the Australian Conciliation and Arbitration Commission said,

 “We prefer the view that the payment of severance pay is justifiable as compensation for non transferable credits and the inconvenience and hardship imposed on employees”.

41      Ms Butler continues to be employed by the Respondent.  The employment relationship has survived the restructure.  There is no evidence to support the Claimant’s submission in closing that Ms Butler’s contract of employment ended on 7 March 2005.  Ms Butler has not resigned or refused to work.  Severance of the relationship has therefore not occurred either actually or constructively. There has been no change in her pay or other entitlements since the restructure nor has she experienced any form of financial detriment, inconvenience or loss.  Ms Butler has not lost anything.  Compensation in the circumstances does not arise.  Given that the employment relationship subsists there can be no entitlement to redundancy.  In any event, as indicated earlier, the payment of redundancy pursuant to clause 12.1 of the EBA is predicated on the Respondent making an offer of redeployment to Ms Butler, which Ms Butler declined.  That has not occurred.

Result

42      The Claimant has failed to prove that the Respondent has breached clause 12 of the EBA.

G. Cicchini

Industrial Magistrate