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Australian Industrial Relations Commission Transcripts |
AUSCRIPT PTY LTD
ABN 76 082 664 220
Level 4, 179 Queen St MELBOURNE Vic 3000
(GPO Box 1114J MELBOURNE Vic 3001)
DX 305 Melbourne Tel:(03) 9672-5608 Fax:(03) 9670-8883
TRANSCRIPT OF PROCEEDINGS
O/N 0278
A 25.09.01
AUSTRALIAN INDUSTRIAL
RELATIONS COMMISSION
COMMISSIONER SIMMONDS
C2001/4430
AUSTRALIAN SERVICES UNION
and
AUSTRALIAN TAXATION OFFICE
Application under section 170LW of the Act
for settlement of dispute re alleged failure
to assist excess employees and consult with
ASU and requiring staff to work below their
classification
MELBOURNE
9.07 AM, MONDAY, 3 SEPTEMBER 2001
PN1
MR LAPIDOS: I am appearing for the Australian Services Union. Appearing with me is MR K. MEYNELL on my right. I have also MR R.McPHEE sitting behind. We might call upon him to assist us during the day if that is necessary.
PN2
MS S. POWELL: I appear for the Community and Public Sector Union. MR S. O'CONNELL will also be appearing for the CPSU. He has unfortunately been delayed this morning because of family commitments. Commissioner, I just would like to advise you in advance that I have to leave at 11 o'clock this morning. I may be able to return this afternoon. Thank you. Mr O'Connell will be here from 9.30 on.
PN3
THE COMMISSIONER: I see, so you would be - yes, okay, I understand.
PN4
MS POWELL: Yes, thank you.
PN5
THE COMMISSIONER: Your organisation is a party to the agreement, but I suppose you are seeking to intervene in this dispute notification; is that the situation?
PN6
MS POWELL: Yes, Commissioner.
PN7
MR R. JAMES: I appear for the Commission of Taxation, and with me today is R. KEMP and G. BYRNE.
PN8
THE COMMISSIONER: Is there any objection to Ms Powell's application for intervention?
PN9
MR LAPIDOS: No objection.
PN10
THE COMMISSIONER: Yes, leave is granted.
PN11
MR JAMES: No objection.
PN12
THE COMMISSIONER: Yes, leave is granted. Yes, Mr Lapidos.
PN13
MR LAPIDOS: Thank you, Commissioner. Commissioner, this is a notification to the Commission about the applications of clauses 109, 108, 93 and 60 of the ATO General Employees Agreement. I thought I might just try and outline our argument in brief. We maintain that the ATO has been in a potentially excess employee situation for several months now, and we believe that has been the case since the Federal Budget on 22 May or within a couple of days of that.
PN14
We say that the ATO has failed to comply with clause 109, steps 1 and 2; they deal with the provision of information to staff and unions about the reasons why employees are likely to become excess, the number and categories of employees likely to be affected and the time and the period over which that is likely to occur, and also provision for consultation with staff and their unions about the four types of issues: measures that could be taken to remove or reduce the potential for excess employees, redeployment prospects, appropriateness of using voluntary redundancy and methods for identifying employees as excess.
PN15
Commissioner, we believe that the ATO has been planning measures to reduce the potential for excess employees since the May Federal Budget and that they have also undertaken wide-ranging redeployment action since early August purportedly under the guise of clause 108, but we say invite indifference to its terms.
PN16
There are a number of specific problems that have arisen as a result of the ATOs approach to this potentially excess employee situation. They include not informing staff about the potential excess employee situation, not assisting staff who are in a potential excess employee situation. They have been inducing some employees to voluntarily - or they call it voluntarily reduce their classification to a lower level, and they have also been assigning lower classification work to employees than their own classification in contravention of clause 93.
PN17
There are two major issues in dispute: how staff should be redeployed in this situation and the changed relationship between the Tax Commissioner and staff and the unions when the ATO is in a potentially excess employee situation. It is only now - I suppose since Thursday or Friday, Thursday afternoon just past - that the ATO is prepared to comply with clause 109. We had a meeting on Friday with Assistant Commissioner Sue Goodyer where she confirmed that the ATO now considered - or then considered it was in a clause 109 situation and it was prepared to formally provide information and consult. We say that that should have occurred in the days immediately following the Federal Budget.
PN18
The reason staff are likely to become excess should have been obvious to the Tax Commissioner at that time, if only in broad general terms. The agreement doesn't create a problem for the Office if it has doubts about exact numbers and categories of staff that are likely to be affected. The ATOs obligation under clause 109.4, step 1, is to talk about reasons why staff are likely to become excess, the number and categories likely to be affected and the period that is likely to occur, so they don't need exact numbers.
PN19
We are saying that over time they could have kept on talking to staff and the unions and progressively refined their forecasts of the staff likely to be affected and the time periods, etcetera. In fact, that is what they have been doing, but behind closed doors, Commissioner, and that has been the biggest single obstacle that we have experienced, that has been trying to open these doors.
PN20
We also say that the provision of reasons why employees are likely to become excess is vital to the operation of step 2 in clause 109.4 for without the reasons, the consultation process about measures that could be taken to reduce or remove the potential excess employee situation would be meaningless. At the time of the Federal Budget, we could see from the numbers that there would be a potential excess employee situation, that the Office was in a position to provide further detailed reasons as time went on.
PN21
We believe the types of reasons that the Office should have been advancing included a decision to stop funding to particular work types and the reasons for that, and we would then be able to use that information - those reasons in the consultation process. One issue that came up during discussions was the question about the period for consultation. In step 2 there is a reference to a period of one month for consultation, and just in passing I wanted to make it clear that one month period isn't a fixed period and there is provision for it to be either extended or reduced.
PN22
In our experience, Commissioner, the ATO either does not understand clause 108 or will not apply it. We say that clauses 108 and 109 need to be read together. Redeployment action under clause 108 occurs when clause 109 applies and then continues through the clause 109 process if it continues on past step 2.
PN23
Commissioner, there has been an issue in relation to clause 108 and the assistance that is to be provided to potentially excess staff, and that is the meaning of vacancy. In clause 108.5 there is reference to the need to identify possible vacancies, and we have come up with a formulation for the definition of a vacancy, a working definition which we believe will assist.
PN24
Commissioner, in terms of the role that we are seeking from you, we would refer you to clause 122. 12, step 3, and in particular the last two full paragraphs. It might be a little bit easier to understand - a typographical error exists there, I believe. The first word in the sentence is "settle". It goes on, "settle matters that would otherwise be excluded", and "settle" is in lower case, the "s". It makes a little bit more sense if it is understood to be a capital "S".
PN25
Again there is no objection to that interpretation from my colleagues at the table, and what we are asking you to do is to determine whether the Commissioner was required to consult in the ways that we will put to you and we will ask you if we are right and the Commissioner hasn't consulted, that you determine what steps are necessary to achieve compliance. And similarly, we will be saying that the Commissioner hasn't complied with certain obligations under the agreement and we will be asking you to determine whether that is the case or not and to determine what steps are necessary to achieve compliance.
PN26
THE COMMISSIONER: (a) and (b) are really the same, aren't they? I mean, (a) is specific, but it would work without (a)?
PN27
MR LAPIDOS: I think that is right, Commissioner, providing in the way it is expressed in the agreement whether consult is expressed in a way that it is an obligation. I suppose it is possible to concede that - and I haven't checked this - that there may be some reference to consultation procedures that are expressed in a way that it is not an obligation.
PN28
THE COMMISSIONER: Yes, if there is not an obligation, there would be no requirement.
PN29
MR LAPIDOS: Well, that is right, so perhaps if I - - -
PN30
THE COMMISSIONER: But yes, I understand what you are saying, the point being if there is no requirement to consult, there is no work for this Commission under (a).
PN31
MR LAPIDOS: Yes, that is right.
PN32
THE COMMISSIONER: Yes. And if there is a requirement to consult, well, then it is an obligation under the agreement anyhow.
PN33
MR LAPIDOS: Yes.
PN34
THE COMMISSIONER: Thus would fall within (b).
PN35
MR LAPIDOS: Well, it just shows what can happen in the hothouse of negotiating an agreement, Commissioner.
PN36
THE COMMISSIONER: Well, no, I am simply putting that that is how it seems. It may be there is another view about it.
PN37
MR LAPIDOS: Yes. Commissioner, I thought it might be worthwhile if I take you through the details of the matters in dispute and a little bit of the history. I won't take you back too far in terms of documentation, but there is a certain amount, so if I can trouble your Associate to jump up and down a bit during the morning.
PN38
THE COMMISSIONER: Yes, Mr Lapidos.
PN39
MR LAPIDOS: Thank you. Commissioner, we formally notified the Commissioner of our concerns by letter dated 21 August in accordance with step 2 of clause 122.6 of the agreement, and we sought an urgent conference, and the Commissioner agreed to that conference and it did occur on Wednesday, 22 August. In this letter we explained our concerns about the size of the funding cuts and that we were concerned that adequate information hadn't been provided and that there hadn't been genuine consultation.
PN40
PN41
MR LAPIDOS: Commissioner, as I said, we did meet with the Tax Office and the Commissioner was represented by Assistant Commissioner Sue Goodyer. We prepared a report of that conference for our membership. I can hand you up an exhibit which is our report.
EXHIBIT #L2 REPORT OF CONFERENCE BETWEEN ASSISTANT COMMISSIONER AND ASU HELD ON 22/01/2001
PN42
MR LAPIDOS: As I said, the meeting took place on Wednesday the 22nd, but this report wasn't issued until 27 August. I took our membership through the nature of the discussions and the first section basically went through the concerns that we raised. Commissioner, the CPSU were at that conference and we didn't object to them being there, so they had an opportunity to raise issues at that conference as well. We raised issues about the funding and what the Commissioner was doing about obtaining further funding for the Tax Office, about the lack of information being provided to staff generally, about the planning process going on behind closed doors, about hearing of cuts in functions being planned, that the Tax Office wasn't providing numbers to us, that clause 108 wasn't being complied with in just about every way, that it wasn't complying with the requirements of clause 109.
PN43
We proposed some measures to avoid redundancies such as no more SES staff to be appointed. I might just mention - it is explained in the document, but we had been told that the Office had reached a conclusion that there were already too many SES given the funding situation, but they had continued to appoint new SES. And raised concerns about measures that they were already implementing to deal with the potentially excess situation without having consulted with us first.
PN44
The bottom line in terms of the ATOs response is really in the second half of the second page. Basically the ATO were saying that they knew the funding cuts were coming, that they had been planning for it and it was a difficult planning process. Importantly, in the fourth last paragraph we were told that Tax Office National Program Managers collectively had recognised in July that there had to be redundancies. We asked for information at that meeting about staff numbers and scenario plans by the various business lines, but nothing has been provided since that meeting, and it was clear that there was a significant difference between us about the obligations that the Office has to potentially excess staff.
PN45
Commissioner, I have got another exhibit for you. Because of the lack of response to our request for information, I thought I would put it on a more formal basis, so I - - -
PN46
PN47
MR LAPIDOS: - - - so I issued a notice in accordance with section 285B of the Workplace Relations Act to obtain documents from the Commissioner of Taxation on the basis of a suspected breach of clause 109 of the agreement. If you look at the second page at the dot points I will refer to the types of documents that I was seeking. They were documents prepared by the ATOs Chief Financial Officer for the Commissioner or the ATOs management board, high level national workforce planning accommodation and budget documents and similar documents for each of the business lines. I ask for a response on the day in terms of - I think by the next day in terms of confirming whether they were prepared to accept their responsibility to provide this documentation, but I have not received a response to this letter, Commissioner.
PN48
Commissioner, I have got another exhibit for you. This is a response by the Tax Office to the conference that we had on 22 August. Assistant Commissioner Sue Goodyer confirmed that she would provide a response. If that could be marked as an exhibit.
EXHIBIT #L4 RESPONSE BY TAX OFFICE TO CONFERENCE HELD ON 22/08/2001
PN49
MR LAPIDOS: That was provided on 30 August, and from our perspective, Commissioner, the response really just confirmed the nature of the dispute between us. They are basically saying in terms of lack of information, when we have finalised all our decision making and planning, then we will tell you further information. There is no resolution of the clause 108 issues.
PN50
In terms of staff being required to work below their classification, we raised two types of examples. Only one of them is addressed here; that is, APS4s in the personal tax area of the Tax Office being required to do APS3 call centre work, and the Tax Office response is that the 4s will be required to answer more complex calls and those calls that would normally be escalated to Interpretation and Compliance, where those staff had come from.
PN51
The problem with that response for us, Commissioner, was that while it is true as far as it goes, it is in fact a misleading response because the vast majority of the work that those people are being asked to do is in fact APS3 work. In my discussions with affected APS4 staff at Moonee Ponds, they made it clear that in their estimation that the number of calls coming in of a more complex nature would probably be less than one per cent of the calls that they would be expected to take.
PN52
There is no addressing the situation of APS3 staff at the Cheltenham Call Centre being required to do APS2 work through a temporarily reassignment of duties to another business line called ATO Production, and that reassignment of duties at Cheltenham, we have been told, is for three to six weeks.
PN53
There was small movement in terms of providing information from regional workforce adjustment committees, and there was an undertaking to provide information a little bit more directly and quickly. You will see there that - in the last section on the last page under the heading, Consultation Proposal, that once the final budget figures are known, etcetera, that the Office will commence the formal consultation process under clause 109. In fact, the Commissioner made an announcement on Thursday, and I will provide you shortly with a copy of transcript of what he said.
PN54
PN55
MR LAPIDOS: This is an ATO National Office minute dated 16 May 2001, and this shows the advanced stages of the ATOs planning process and some other documents I will be showing you, Commissioner, because ultimately what is happening is all the things that we are saying the Tax Office should be doing in consultation with staff and unions and providing information to staff and unions, they have been doing by themselves behind closed doors. This document was something of an exception in that it was asked to be widely distributed to all staff.
PN56
The significant things from this particular document authored by a First Assistant Commissioner or then Acting First Assistant Commissioner Glenda Sullivan, was that it confirms that she had told the Tax Office Reform Steering Committee of the desirability of an end 2000/2001 financial year target of 19,000 staff which then required a reduction of 300 staff. She referred to a new process being required, a formal approval process - this is in the last paragraph of the first page:
PN57
A formal approval process including National Program Manager approval, work value classification confirmation and sign off from regional workforce adjustment forums is now required before any recruitment is undertaken.
PN58
On page 2 there is a requirement that:
PN59
Recruitment may only occur where there are no staff in the region who could be redeployed to the vacancy.
PN60
That is at point 3 in about the second - might call the second paragraph, and the other important issue on page 2 also in the second last paragraph:
PN61
The ATO Corporate Employment Group manages the workforce adjustment processes to support business and service lines through any activity around redeployment, relocation and retrenchment as a result of resource constraints and/or structural and organisation change, but the effectiveness of these processes relies on effective BSL participation.
PN62
That is one of the things that we will come back to, the failure of business lines to effectively participate in these processes. Commissioner, the Federal Budget was handed down on 22 May, and it is central to our case that in fact as a result of that budget, there was a potential excess employee situation, and if I can give you an exhibit of three pages, two of them from the Budget papers, then I will ask Mr Meynell to take you through these documents to - - -
PN63
PN64
MR LAPIDOS: - - - to explain to you the significance of the funding cuts and the cuts in staffing levels.
PN65
MR MEYNELL: Commissioner, as you can see from the first page of that exhibit, the actual dollar reduce by roughly 10 per cent and this was the - which is shown the employees' expense, being 1.12 billion in the previous year and for this year falling to 1.016 billion. This is supported by the Office's estimates, and these figures were provided by the Australian Taxation Office to the Treasurer for inclusion in the Budget, and they showed that the number of staff that could effectively be employed throughout the whole year or average staffing levels fell from 19,000 in the previous year to 17,500.
PN66
Now, that is a significant reduction and although staff are leaving, as we have seen from the May restrictions on recruitment, recruitment was restricted, but given the level of natural separation, it was unrealistic and the Office was well aware that a reduction in ASL of that order of magnitude could not be achieved without further intervention, and it was obvious at that stage that the Office was in a potential excess situation. The senior management in the ATO were well aware of that, but did not inform us, and at the time that we were given the Budget briefing where the ASU questioned the need for further intervention, we were told there would be no redundancies and that there was no money set aside in the Budget to pay for redundancy pay outs.
PN67
Also in terms of strategies to reduce the need for redundancies, we noted that from Glenda's minute which was issued in May to the early pay figures on the third page, that the Office, despite these measures of restricting recruitment, had failed in any way to reduce the numbers of staff, and that at page 3 they stood at full time equivalence of 19,340. So the level of intervention is obviously much higher, and further beyond the average staffing level for a longer period of time requires greater intervention later in the financial year to bring the Budget back to a balance situation, so we were particularly concerned when we saw these figures because it means that the measures that had earlier been outlined in Glenda's minute back in May had been totally ineffective in reducing the number of staff.
PN68
MR LAPIDOS: Commissioner, that meeting that Mr Meynell referred to with the Tax Office where we asked about the issue about redundancies and planning for redundancies in the Budget, took place on 24 May, only two days after the Budget, and that briefing on the ATOs finances was led by its Chief Finance Officer, Ms Donna Moody.
PN69
Commissioner, as I said, the Tax Office has been doing these things that we say it should have been doing with staff and the unions anyway, and that even been acknowledging the situation direct to staff. This document, if I can tender as an exhibit, Commissioner - - -
PN70
PN71
PN72
MR LAPIDOS: - - - is from a Tax Office weekly electronic magazine, and there is a column in each week's magazine reserved for the Commissioner or the Acting Commissioner to say something to the staff, and in this particular edition on 4 June 2001 the Commissioner confirms:
PN73
There is a need to scrutinise expenditure on supplier costs to ensure the ATO maximises its staffing numbers.
PN74
It says that on page 1. And he also confirms that:
PN75
The ATO will consider retraining, redeployment and redundancies as part of its planning for the new financial year.
PN76
So even though we are not told anything in any formal way, the Commissioner goes and makes statements like that to the staff generally, but without honouring the other obligations under the agreement.
PN77
PN78
MR LAPIDOS: This is a statement by the Tax Commissioner to all ATO staff and was made on 6 August. It is entitled ATO Priority, but sent out electronically to virtually all ATO staff, certainly all that have got computer access on their desks, personal computer access. In it Mr Carmody confirms that the Tax Office has been planning what work it will fund and how expenditure can be reduced to maximise the number of staff the ATO will employ. On page 2 in the first paragraph under the heading, An Organisation-wide Redeployment Approach, Mr Carmody advises that:
PN79
Redeployment and redundancy will be necessary for the ATO to manage within budget.
PN80
He goes on to say that:
PN81
Non-ongoing and labour hire employees will be replaced by the redeployment of ongoing ATO staff and that about 400 will be redeployed to two business lines in particular, ATO Production and Client Account Management.
PN82
So these are all measures to minimise the need for redundancies. He says that:
PN83
Corporate planning has been undertaken to match skills to location so most transfers are within buildings, with a small number of transfers across the metropolitan area, and that where a direct transfer skill match cannot be adopted, there will be an expression of interest process and a suitability assessment. Various transfers are foreshadowed from the start of September.
PN84
And he says:
PN85
This action is being taken consistent with clause 108 of the agency agreement; that is, the movement of staff and work to minimise the need for reduction of our workforce.
PN86
That is said in the last paragraph of page 2. Then on page 3 in the second last paragraph he says:
PN87
The planning process will continue and we will finalise what work and employees are potentially excess and what levels of redundancy we will be facing.
PN88
The redeployment processes that are outlined in this document didn't comply with clause 108, Commissioner, and I will take you to examples of that later on. Commissioner, I would like to tender another document. This is a National Office minute from Acting First Assistant Commissioner ATO Corporate, Michael McDermott, dated 10 August about corporately agreed principles for workforce adjustment.
EXHIBIT #L9 NATIONAL OFFICE MINUTE FROM ACTING FIRST ASSISTANT COMMISSIONER ATO CORPORATE, MICHAEL McDERMOTT, DATED 10/08/2001
PN89
MR LAPIDOS: If you look at the bottom of the first page you will see four dot points there which are specific things that National Program Managers are told they should do to continue as part of a corporate approach, and that is to manage workforce adjustment. And they are:
PN90
Cease recruitment action, release -
PN91
they mean dismiss -
PN92
labour hire contractors and non-ongoing staff, cease the payment of higher duties allowance and redeploy staff from where work is no longer required to where the future focus will be.
PN93
Of some significance, Commissioner, in that document there is no reference at all to the regional workforce adjustment forums which in practical terms are described in clause 108, though not mentioned there by that name. Just to basically bring this story to near its end in terms of this charting of the things the Tax Office was doing, if I can tender another document for you, Commissioner.
EXHIBIT #L10 TRANSCRIPT OF A BROADCAST BY TAX COMMISSIONER MICHAEL CARMODY ON 30/08/2001
PN94
MR LAPIDOS: This is a transcript of a broadcast by the Tax Commissioner, Michael Carmody, which took place on 30 August, which was Thursday just past. In it he announces in the second last paragraph of the first page that the Tax Office is looking at around 1300 or so redundancies and then goes on in the next page to talk about where those redundancies will occur in the various business lines and which lines are exempt.
PN95
It is of interest though, for example, in the second last paragraph of the second page he says:
PN96
Immediate workloads also mean there will be no redundancies in ATO production or client account management.
PN97
And the significance of immediate workloads relates to assurances that staff were given who were to be redeployed into those two business lines that they would not become excess in the current financial year, and the Tax Office has given those staff no commitments about what might happen in the next financial year.
PN98
Commissioner, the Tax Office hasn't been complying with its obligations under our agreement and in terms of clause 108 we would say one of the first obligations the Tax Office has is to identify potential excess employee situations. That is required in clause 108.4 where:
PN99
There is a requirement for business lines to participate in regular meetings at the regional level to identify potential excess employee situations where employees may need to be redeployed in the ensuing three months. The information from those meetings is to be made available to staff and unions.
PN100
Commissioner, the way that information from those meetings is conveyed to unions is by publication of minutes, and what I would like to do is to tender some minutes. I thought these could be one exhibit together.
EXHIBIT #L11 REGIONAL WORKFORCE MINUTES FOR VICTORIA AND TASMANIA 04/07/2001 AND 01/08/2001, AND NEW SOUTH WALES FOR 07/08/2001
PN101
MR LAPIDOS: Commissioner, the Tax Office has a small business line which operates what it operates what it calls business call centres at the Bankstown and Cheltenham offices, Bankstown in the Sydney area and Cheltenham near here. Staff at the Cheltenham office were advised that their call centre would close in early September this year. In practical terms, Commissioner, that call centre has, to all intents and purposes, now closed with staff there being reassigned duties in another business line, but still located there at Cheltenham.
PN102
The staff at the Bankstown office were told that their call centre would close in November this year; that has been known for quite some time that that call centre would close if only because the whole Tax Office has intended not renewing its lease on the Bankstown office which expires, I think, in May next year.
PN103
Now, if I can refer you to the August minutes of the New South Wales workforce adjustment forum, and you will see through it at item 4, business lines specific issues, and you will see there that there is a list of the various business lines and their situation. I am embarrassed, Commissioner, there is only three pages in that one instead of five. I think pages 4 and 5 are by the photocopier, Commissioner. All I can say is that in the pages that aren't before you, which I can arrange to provide perhaps later in the afternoon, the minutes actually do refer to the call centre in Bankstown and refers to potentially excess staff at the APS5 and APS6 level, but there is no mention of staff at the APS3 level.
PN104
Then if you look at the Victorian minutes, which mercifully appear complete, you will see a similar situation with business line updates, and if you look at the July minutes on the third page in the second row you will see SB call centres, and they acknowledge there that they have potentially excess staff at the APS6 level and at the 4 level, no mention of the APS5s who were told they were potentially excess in another matter before this Commission, it must have been a good month ago; it may have been after 4 July, being charitable to the Tax Office. But no mention of 3s.
PN105
If you look at the August minutes for Victoria, there is two mentions of the SB call centres, one in the third row of item 4, and all it says is funding and planning not yet finalised, and in the last row of the second page, SB National Call Centre, similar things, budget details not final. We would have expected that those staff at the Cheltenham call centre would have been identified as potentially excess. I am just giving you these examples of potentially excess employee situations which should be without any doubt potential excess employee situations, and yet they are not being referred to in these minutes so that everyone knows about these potential excess employee situations.
PN106
If I can get you to momentarily go back to exhibit L8, you will see in it that there are on page 2 a number of redeployments that the Commissioner has decided upon, and he talks about in the fourth last paragraph of the second page, he says:
PN107
Around 190 APS3 staff will transfer into CAM from Personal Taxes and GST.
PN108
Now, that is nationally, but that did occur in Victoria. Now, that ATO priority message was on 6 August, yet when we look at the Victorian minutes for 1 August where one might have thought that these staff that were being redeployed were potentially excess, and I ask you to go back to exhibit L11, the 1 August minutes from the Victorian/Tasmanian region, and look at GST, for example, on the second page, one is shown as GST compliance and another is shown as GST technical, there is no information available there about potential excess employee situations.
PN109
And Personal Taxes, all we find there is - also on the second page - waiting for finalisation of the budget, and yet within a week, there are redeployments going on.
PN110
Commissioner, the next issue is the ATOs dismal failure in notifying vacancies. If I can refer you to the ATO General Employees Agreement at clause 108.5(a), it says that:
PN111
Where one or more lines identify the need for redeployment of employees and possible vacancies have been identified in other lines, these other things are to take place.
PN112
It is a clear part of the redeployment approach in clause 108 that vacancies or possible vacancies must be identified. Taking you back for a moment to exhibit L8, which is the Commissioner's ATO priority message, where he has announced the redeployment of staff from one lot of positions - this is particularly in page 2 - to another lot of positions, and we would say that these are all vacancies.
PN113
It is interesting in this particular case, staff are being redeployed from one business line to another business line, and yet potentially excess staff aren't being given the opportunity to express interest in these positions. Commissioner, if you have a look at clause 108.5(a), it says:
PN114
Where there is a need for redeployment and possible vacancies have been identified, employees at the appropriate level who are willing to move will be assessed for suitability for the vacancies prior to filling the positions by open selection.
PN115
We say it is very clear from the context that the employees who are to be given the opportunity to express willingness to move, are potentially excess employees. Now, we know that there are potentially excess APS5s at the Cheltenham office who were not given the opportunity of expressing interest in APS5 positions in client account management in the Victorian region which we believe were covered by this announcement by the Commissioner on 6 August. So that is just one example of a failure to notify vacancies and a failure to provide assistance to potentially excess staff, and that failure to provide assistance to potentially excess staff is - or the requirement to do that or the obligation to do that is in clause 108.3(b).
PN116
Commissioner, I wanted now to - I have already dealt with the situation of staff being assigned duties below their classification. The next issue I wanted to raise with you was the issue of regression, and I think this should be the last document that I will seek to exhibit before you.
EXHIBIT #L12 DOCUMENT FROM ASSISTANT COMMISSIONER TO ATO BUSINESS CALL STAFF AT CHELTENHAM, DATED 07/08/2001
PN117
MR LAPIDOS: This is a document from Assistant Commissioner John Ryan dated 7 August 2001 and it is a message to ATO business call staff at the Cheltenham tax office, and it follows the Commissioner's ATO priority message of 6 August and talks about opportunities that exist at Cheltenham. And in the last paragraph he says, and if I can read it out:
PN118
I would also like to draw your attention that, in addition to the positions indicated above re ATO productions in Cheltenham ...(reads)... Craig will discuss this further with you tomorrow.
PN119
Commissioner, if I can refer you to two parts of the agreement, clause 109.4 step 6, paragraph 3. Now, at this stage of the clause 109 process staff have been identified as excess. Staff who are identified as excess are offered a voluntary redundancy and, in order to get to step 6, they must have refused the offer of voluntary redundancy. And if they have refused that offer of voluntary redundancy, they are placed on a retention period. And there are steps that are meant to continue during the retention period and, in particular, as step 6 refers to it there are steps which should be taken within the first three months of this retention period to try and find someone a suitable job.
PN120
Now, what it says is if you can't be placed in a suitable job within three months of declining your offer of voluntary redundancy, you can be given four weeks notice of the intention to reduce your classification so that you can be redeployed to suitable employment, and if that occurs income maintenance applies instead of an involuntary redundancy benefit.
PN121
If I can also refer you to clause 60 entitled: Salary on reduction, and that deals with this issue of regression. And 60.2 says:
PN122
Permanent movement to a lower paid job constitutes a transfer on reduction. Unless the employee agrees to the reduction, this can only be done as a result of invalidity, misconduct, redundancy or unsatisfactory performance processes.
PN123
Now, what is happening out at Cheltenham is that the Tax Office has a lot of APS2 jobs there and that work - a lot of that work has been done by either non-ongoing staff or labour hire staff. And as a result of the Commissioner's decisions, most or all of those non-ongoing staff and labour hire staff were terminated. But I understand that since then they may have re-engaged a number of labour hire staff until the end of February next year. But they are still keen in order to avoid redundancies to encourage these APS3 staff to regress to the 2 level. We say that that is in contravention of the restrictions in the agreement.
PN124
THE COMMISSIONER: How come?
PN125
MR LAPIDOS: Well, what we are saying is, it does talk about agreement; unless the employee agrees. But what we are saying is that this agreement has to be a genuine agreement and not coerced. And where the employee is in a redundancy situation which - in a potentially excess employee situation, we say that clause 109 overrides that permission of people to agree to the reduction and that such a reduction should only occur in the circumstances set out in step 6 of clause 109.4.
PN126
THE COMMISSIONER: So even if all of the other things had been done, you would say that people can only transfer on redeployment - once they have been - - -
PN127
MR LAPIDOS: Once they are potentially - - -
PN128
THE COMMISSIONER: Well, hang on. Once they find themselves in a situation that is potentially excess - - -
PN129
MR LAPIDOS: Yes.
PN130
THE COMMISSIONER: - - - they can only be redeployed voluntarily or otherwise to a lower position if it is treated as a compulsory redundancy.
PN131
MR LAPIDOS: As a compulsory
PN132
THE COMMISSIONER: Redundancy.
PN133
MR LAPIDOS: No, not I am not - - -
PN134
THE COMMISSIONER: Well, but for the compulsory redundancy, they get put into a lower position and get income maintenance. That is the way I read it, under the provision of 109 - - -
PN135
MR LAPIDOS: Yes, but there is a number of choices before they get to step 6.
PN136
THE COMMISSIONER: But they must be in a compulsory redundancy situation to get to step 6.
PN137
MR LAPIDOS: That is right. They are at risk of being - - -
PN138
THE COMMISSIONER: So how can a person - no, no, they are in a compulsory - they have been - 109, as I read it, only applies to someone who has been identified as redundant.
PN139
MR LAPIDOS: As excess, yes.
PN140
THE COMMISSIONER: As excess, yes. Not to someone who is in a group that is potentially excess.
PN141
MR LAPIDOS: That is right.
PN142
THE COMMISSIONER: See, the difference is, at least on one reading of 108 and 109, is that 108 refers to a group which may contain people as yet other than identified who will be made potentially excess, and 109 talks about the individual who is made potentially - who is described as potentially excess.
PN143
MR LAPIDOS: Yes, but it also refers to potentially excess employees as well.
PN144
THE COMMISSIONER: Yes, but they are employees who are potentially excess, no longer at work. That seems to be - at least on my reading of 108 and 109, that 108 - - -
PN145
MR LAPIDOS: Well, it is still talks about 109.2 a potential excess employee situation and this supports our argument that 108 and 109 should be read together and operate together.
PN146
THE COMMISSIONER: All right. Look, I am happy to accept that but I really can't see how, because you have got an excess situation - - -
PN147
MR LAPIDOS: Then if you look at step 3 - - -
PN148
THE COMMISSIONER: Well, okay. Hang on, bear with me. Are all of the APS3s at Cheltenham potentially excess?
PN149
MR LAPIDOS: I believe that they were advised so at the end of the day, towards the end of the day yesterday, Commissioner. We would say that they should have been so advised earlier.
PN150
THE COMMISSIONER: Yes, okay. Look, I understand your argument. It strikes me as being, at least on its face, a bit hard to - - -
PN151
MR LAPIDOS: Well, once you are potentially excess the redeployment issues - - -
PN152
THE COMMISSIONER: Well, you know, no, no, doesn't it come back - look, I don't want to get into an argument about this, Mr Lapidos.
PN153
MR LAPIDOS: Yes.
PN154
THE COMMISSIONER: Let me just say it seems to me that you are saying that a person under no - once they are in a potentially excess situation, under no circumstances can they agree to be regressed in classification.
PN155
MR LAPIDOS: Except in accordance with step 6 of 109 - - -
PN156
THE COMMISSIONER: Well, yes. Well, if they can't agree - - -
PN157
MR LAPIDOS: Yes.
PN158
THE COMMISSIONER: - - - then it is forced on them.
PN159
MR LAPIDOS: Yes. Well, it is not necessarily forced on them. There are a number of choices in step 6 as well as appeal mechanisms that are available against regression. And we would say that normally what would happen is - - -
PN160
THE COMMISSIONER: Yes, I understand what you are saying.
PN161
MR LAPIDOS: - - - that would be done by agreement with the - - -
PN162
THE COMMISSIONER: Look, I understand what you are saying, Mr Lapidos. Try and understand what I am saying, that is the bit I am trying to get across. It strikes me that the clause that provides, which was clause 60.2 goes to the issue of agreement. Now, it doesn't say that the only time that that can happen is when there is no redundancy around.
PN163
MR LAPIDOS: That is correct, Commissioner. It doesn't say anything like that there - - -
PN164
THE COMMISSIONER: But you seem to be asking to say that.
PN165
MR LAPIDOS: Well, but what I am saying is that - - -
PN166
THE COMMISSIONER: I know what you are saying, but you are saying that clause 60.2 can have no application in terms of agreement in circumstances where there is potential redundancy.
PN167
MR LAPIDOS: That is right.
PN168
THE COMMISSIONER: Yes.
PN169
MR LAPIDOS: Because that potential redundancy situation is dealt with by clauses 108 and 109.
PN170
THE COMMISSIONER: Well, but you say it is exclusively dealt with.
PN171
MR LAPIDOS: Yes.
PN172
THE COMMISSIONER: Now, where is there any basis for saying it is exclusively dealt with by 108 and 109?
PN173
MR LAPIDOS: Because 108 and 109 are the clauses that deal with redeployment of staff - - -
PN174
THE COMMISSIONER: I know that, I know that.
PN175
MR LAPIDOS: - - - in potentially excess situations.
PN176
THE COMMISSIONER: I know that, but why can't an employee agree pursuant to clause 60.2?
PN177
MR LAPIDOS: Because the situation - - -
PN178
THE COMMISSIONER: Because you say 108 and 109 - - -
PN179
MR LAPIDOS: - - - is covered by 108 and 109.
PN180
THE COMMISSIONER: Yes. So what? Where does it say in clause 60.2 that it does not apply? I mean, on the contrary it actually says:
PN181
Unless the employee agrees, this can only be done as a result of invalidity, misconduct, redundancy...
PN182
So redundancy is actually mentioned there in clause 60.2.
PN183
MR LAPIDOS: Yes.
PN184
THE COMMISSIONER: And it seems to be saying that that is when you can do it without agreement, but you can be doing it by agreement in all other - in all situations.
PN185
MR LAPIDOS: Well, people in a redundancy - a redundancy situation is covered by - we would say a redundancy situation is a potentially excess employee situation.
PN186
THE COMMISSIONER: Yes, I understand that.
PN187
MR LAPIDOS: And it is covered by 108 and 109.
PN188
THE COMMISSIONER: It becomes circular, it becomes very circular. All you are saying, and all you are doing by repetition is saying that 108 and 109 provide a complete code for what everyone can do in a situation of redundancy. You are going to tell me that people can't resign now.
PN189
MR LAPIDOS: No, I am not going to say that, Commissioner.
PN190
THE COMMISSIONER: Right. Well, why not? Because someone finds themselves in an excess situation and says, I don't want to deal with all this stress, I am going to resign; bang. You would, by logic, you know - - -
PN191
MR LAPIDOS: Well, there is a difference between resignation and redeployment.
PN192
THE COMMISSIONER: Oh, go on.
PN193
MR LAPIDOS: Well, I am just - - -
PN194
THE COMMISSIONER: Go on. Tell me something I don't know.
PN195
MR LAPIDOS: I am trying to make a point in respect of - - -
PN196
THE COMMISSIONER: Well, I know you are trying to make a point and I am trying to make a point right back to you to get your response to it, and I am not being helped - - -
PN197
MR LAPIDOS: Can you just - - -
PN198
THE COMMISSIONER: I am not being helped by a response that doesn't meet the point.
PN199
MR LAPIDOS: Well, I am just - - -
PN200
THE COMMISSIONER: Now, you are saying that 108 and 109 provide a complete code for an employee who is caught in a situation of potential redundancy - - -
PN201
MR LAPIDOS: Yes.
PN202
THE COMMISSIONER: - - - if I understand your argument.
PN203
MR LAPIDOS: That is right.
PN204
THE COMMISSIONER: And employee caught in a situation of potential redundancy, therefore, if it is a complete code, can't resign - - -
PN205
MR LAPIDOS: Well, I certainly don't go that far.
PN206
THE COMMISSIONER: - - - in the circumstances that I have described, because it is a complete code on your argument.
PN207
MR LAPIDOS: Well, I don't agree with that, Commissioner.
PN208
THE COMMISSIONER: Well, is it a complete code or is it not?
PN209
MR LAPIDOS: Could you just excuse me for a moment, please, Commissioner? Commissioner, after taking some advice, what we are saying is that - and I hope I am not just repeating myself, is that the situation at Cheltenham is that they are short of APS2 staff. They have got alternatives for dealing with that situation. There are measures that are available, potentially available to the Tax Office to deal with its funding issues. One of those ways of dealing with that, for example, is to provide higher duties to APS1s to fill - to do that work. Another way is to hire external staff to do that work. Another way is not to do the work. Commissioner, what is happening there is that those staff are in - who are potentially excess are effectively being intimidated into taking an APS2 position in order to protect their job.
PN210
THE COMMISSIONER: I understand that and it is the word "intimidation" that I have some difficulty with. I mean, it seems fairly clear to me that they are being given the option of avoiding an excess situation, personal excess situation, by taking a salary cut, by agreeing to it.
PN211
MR LAPIDOS: Well, they - - -
PN212
THE COMMISSIONER: Now, you want to characterise that as intimidation, that is fine. Where is the evidence? If the only evidence you have got of intimidation is L12 I have got to, with respect, disagree that that amounts to intimidation. You know, it is just not. Intimidation is when someone comes along and says: Do this or else.
PN213
MR LAPIDOS: Commissioner, we would say that to move someone from the 3 level to the 2 level is a form of redeployment, and redeployment is dealt with by clause 108 and that is why we say - - -
PN214
THE COMMISSIONER: Well, it is not a form of - why do you say it is - I mean, you grab this thing. Why is it a form of redeployment?
PN215
MR LAPIDOS: Well - - -
PN216
THE COMMISSIONER: It is not described as redeployment in clause 60.2. It is described as permanent movement to a lower paid job, constitutes a transfer on reduction.
PN217
MR LAPIDOS: A transfer, that is right, Commissioner.
PN218
THE COMMISSIONER: Well, not redeployment. Redeployment is a situation where someone is I guess transferred but the word is redeployed, and it happens in a situation where they have been declared excess, etcetera, etcetera, etcetera. Now, here there is the potential. As I read exhibit L12, there is the potential and I am sure it is well recognised and I am sure that - I mean, the people at Cheltenham who are APS3 are being given an opportunity ahead of everybody else who may be APS2 to protect their job. Now, what sort of protection they are going to get, I don't know, but that is for them to judge. But they are being advantaged over the others, no doubt about that.
PN219
MR LAPIDOS: Well, I don't - - -
PN220
THE COMMISSIONER: And if they chose not to take it, well, then they are not - they are going to go into an ongoing job, aren't they? There is 1300 people you have just been telling me aren't.
PN221
MR LAPIDOS: Well, the thing is, Commissioner, it is just as likely that these 1300 people will be found through voluntary redundancy processes, will be talking to the Tax Office about in coming weeks.
PN222
THE COMMISSIONER: Well, the individuals can make that choice, can't they? Those individuals - - -
PN223
MR LAPIDOS: Well, it is quite difficult to make those choices - - -
PN224
THE COMMISSIONER: Well, life is difficult and it is full of difficult choices.
PN225
MR LAPIDOS: Yes, Commissioner.
PN226
THE COMMISSIONER: I don't know that the Commission can do much about that. I mean, if you are saying that this agreement says that the only way people can - once a - I mean, it is what you are saying I think that once people are in an excess situation or once - yes, once there is an excess situation declared, other options aren't available.
PN227
MR LAPIDOS: That is exactly what I have been trying to say.
PN228
THE COMMISSIONER: Yes, all right, okay. That, therefore, means to use the point that I used before, that the option of resignation is not available.
PN229
MR LAPIDOS: Well, except - - -
PN230
THE COMMISSIONER: I just don't think that that can be correct.
PN231
MR LAPIDOS: We don't go that far, Commissioner.
PN232
THE COMMISSIONER: I don't think that can be correct. I mean, what is so different between someone copping an agreed reduction to someone copping a total reduction?
PN233
MR LAPIDOS: Well, either can occur in step 6.
PN234
THE COMMISSIONER: Of course it can, but you are not really saying that the person who doesn't want to face all this nonsense - sorry, bad word, someone who doesn't want to face the stress - look, I can't account for the differing personalities out there but it is within my experience that some people don't want to go through the hassle, what they perceive as a hassle, and they just want to get on with their life and so they will leave. Other people might not want to go through the hassle and be prepared to take a drop in salary from APS3 to the maximum of APS2. And if they want to make that choice, you want to stand in their way.
PN235
MR LAPIDOS: Well, Commissioner, if I am wrong about the position I am putting to you in terms of the code - and this is available to people - I would say that it can only be available to people where people are - where staff are fully informed and where, first, there has been a process of consultation about measures to avoid - about measures that should be taken to reduce the redundancy situation. And that hasn't occurred.
PN236
THE COMMISSIONER: Yes. Well, I understand that, I understand that part of the argument. And the difficulty with that is that I think you have got to be right about the first bit to be right about the second, because there is absolutely no - I mean, the requirement for information transparency, whatever you want to say about it, arises when you are going through that other process. I am not sure that someone faced with the prospect can choose to - well, they can, they can choose to disregard what is being said. They can - I mean, someone who saw the Budget and made an assessment that this is going to be a pretty tough time and I would rather have some certainty about my life, and went to the appropriate people and said, I want to - I have made a judgment of these APS2 positions, they are pretty safe, and I am currently APS3 and, look, I don't want the hassle, it is clear there is going to be a huge reduction in staff, I want a bit of certainty, I have been here so long I am pretty experienced, I will survive as a 2, I might not survive as a 3. They could do that, couldn't they?
PN237
MR LAPIDOS: I can understand someone having that view, Commissioner. I don't have any trouble seeing that. The difficulty is first in terms of the information provided to staff by the Tax Office.
PN238
THE COMMISSIONER: Well, they read the tax papers, read the newspapers, read anything. I mean, it doesn't really matter much. Someone can act without having full information. They do all the time.
PN239
MR McPHEE: Commissioner, can I just - - -
PN240
THE COMMISSIONER: Yes, Mr McPhee.
PN241
MR McPHEE: In terms of regression, maybe there is a problem if, for instance, the 3s are being offered 2 positions but at that time there is a whole lot of - many other people in the 2 and they are potentially excess. Well, it is not practically the case at the moment.
PN242
THE COMMISSIONER: But it may well arise, yes.
PN243
MR McPHEE: It may be - - -
PN244
THE COMMISSIONER: But that is within the contemplation of the scenario I was putting forward. If the person is a 3, they make a judgment that they may not survive as a 3, but when the cut comes and they go to the 2s, because of their experience, their skill, etcetera, etcetera, they will survive. And so they say, well, I want to go to a 2. But I don't have any more information than that.
PN245
MR McPHEE: That is right.
PN246
THE COMMISSIONER: I will make a judgment, now right or wrong, it is their judgment.
PN247
MR McPHEE: That is right. That is their individual judgment.
PN248
THE COMMISSIONER: Yes.
PN249
MR McPHEE: That is right. In a situation where you had, say, many potential excess employees at the 2 level, what would then be the justification to say, well, we can fill these 2 positions by taking 3s on regression; that is so that the existing people at the 2 level wouldn't be able to fill those jobs.
PN250
THE COMMISSIONER: Yes. Well, the agreement seems to allow for that in clause 60. I mean - - -
PN251
MR McPHEE: The agreement says you can just - in that situation - well, we are saying that in certain circumstances clause 60 is overridden, this code argument. Because what we are saying is in a situation where you need redeployment - and whether you accept that regression should be termed redeployment or not, I don't know - but where there is a potential excess employee situation, it is in a sense that business as usual stops, you must deal with the potential employee situation.
PN252
If you have got a situation where you have got, say, you have got 60 APS2s but only 40 APS2 jobs, what is the potential rationale in a theoretical sense of allowing, say, 3s to fill the 2 jobs? What you have to do is to deal with the situation of potentially excess APS2s. So we are saying in the sense that when there is this crisis situation with potentially excess employees, then the ordinary operation of filling jobs with people has to cease and you have to deal with that.
PN253
THE COMMISSIONER: Well, where is that in the agreement?
PN254
MR McPHEE: Clause 108 and clause 109.
PN255
THE COMMISSIONER: Well, I don't - I think you are reading far too much into it but, anyhow, now I understand what you are saying. That, therefore, means very much what I was saying before, that no one can resolve it. And I just find that an absurd proposition.
PN256
MR McPHEE: Commissioner, in fact the agreement has got no clause in it about resignation. Now, but I can see the force of your point. You are saying, if you say that when 108 is a potentially employees - employees situation exists, then all kinds of ridiculous results occur, then - and, therefore, the argument about 60 cannot operate because it is obvious the logical situation the argument - the proposition you are putting. Indeed, there might be other examples other than resignation we could think of. Well, if you press your point, aren't you saying something ridiculous?
PN257
THE COMMISSIONER: Well, where do I get their right to resign from?
PN258
MR McPHEE: I think they could probably get it under the Public Service Act. In fact, I don't think the Public Service Act mentions resignation in particular terms in any case. If they did resign, then they could be sued obviously but that is really a decision of the individual.
PN259
THE COMMISSIONER: It is in a very complicated area:
PN260
This agreement operates to the exclusion of all conditions of employment prescribed by regulation 30Z(e) of the Workplace Relations Regulations ...(reads)... except to the extent provided by the preceding provision.
PN261
That would seem to suggest to me on a very quick reading of it that if there is a conflict, an agreement applies.
PN262
MR McPHEE: That is true but only in terms of the specific areas mentioned in regulation - - -
PN263
THE COMMISSIONER: Well, you are talking to the specific areas. Aren't you talking about a specific area, that is that once a redeployment situation occurs they must comply with 108 and 109?
PN264
MR McPHEE: That is right, Commissioner. In fact, the Public Service Act doesn't - - -
PN265
THE COMMISSIONER: So maybe, maybe - I don't put it any higher than that - this resignation isn't open to someone, if you are correct; particularly if they are resigning because they want to avoid the hassle.
PN266
MR McPHEE: They can always resign, as I understand it, because I can't off the top of my head think of any particular restriction in the Public Service Act about that. As far as I am concerned, there is nothing in particular in the agreement in any case.
PN267
THE COMMISSIONER: All right. Well, it might be a bad - well, you know, it could be a bad example, but it just seems to me that you are saying that - I mean, it is the conflict that we come across all the time in this place. On the one hand the collective position should apply and the individual should not, but that is - and I understand the force of that in terms of, if you like, the quote "justice" unquote but I am not sure that it derives from the agreement, that somehow the individual right to agree to a reduction that is provided for in clause 60 goes out the window in circumstances of the other sort.
PN268
MR McPHEE: Well, Commissioner, you are - - -
PN269
THE COMMISSIONER: Now, I understand the - - -
PN270
MR McPHEE: Commissioner, you are quite correct. Clause 60 doesn't say: but there shall be no regression where 108 applies, or should apply, whatever. It says that. I mean, you understand that we have got a problem with the situation where there are potentially excess employees and the Tax Office is saying to those employees: listen, don't be left hanging, take these positions. In the context where throughout the ATO there are potentially excess employees and it is our belief that, of course, what naturally happens is that people in particular business areas are looking after their own. And it is quite clear that clause 60 doesn't - clause 108 on - - -
PN271
THE COMMISSIONER: Well, I might agree with you up to all of that point where you said all of that, I can't agree with you up to the point where someone agrees to take a salary reduction.
PN272
MR McPHEE: Yes.
PN273
THE COMMISSIONER: So long as that is a free choice, so long as that is a free choice.
PN274
MR McPHEE: Well, Commissioner, then the question comes down to - - -
PN275
THE COMMISSIONER: They can use all sorts of encouragement but, you know, that - so long as there is no intimidation, if people are being threatened and all that sort of stuff, well, there is responses to that and - - -
PN276
MR McPHEE: Well - - -
PN277
THE COMMISSIONER: But there is no evidence that anyone - no evidence before me here that anyone is being threatened. L12 talks about - - -
PN278
MR McPHEE: That is quite right, Commissioner. You are saying, as I understand it, that what is wrong with people, individuals saying: I don't want the hassle, I want the security of having a job, I am prepared to take a cut in salary - - -
PN279
THE COMMISSIONER: In the context of the agreement, yes.
PN280
MR McPHEE: That is right. I guess what we would say in response is clause 109 involves a process of determining what duties are going to be continued to be done by the ATO, and how those duties should be performed, and which employees should perform them. There are - it involves a process of open selection, for instance. We would say that regression should not occur until those processes have gone through. 109 contemplates the concept of reducing people in classification but in terms of certain principles about how you go and do that. If you have a reading of the agreement which suggests that - - -
PN281
THE COMMISSIONER: But they don't do it voluntarily under 109, do they?
PN282
MR McPHEE: That is quite right.
PN283
THE COMMISSIONER: It happens to them compulsorily. But, you know, 60 provides - - -
PN284
MR McPHEE: Well, maybe you are failing - well, Commissioner, it probably is a failing in the agreement, it may be in the terms of the agreement. Perhaps it might be preferable to say that through the process of identifying what work goes on and where you have your potentially excess employees, that can be a consideration of how you go about dealing with the situation. At the moment you can only be regressed after you have refused your redundancy and, therefore, been put on the road down to compulsory retrenchment.
PN285
THE COMMISSIONER: I understand that, I understand that, but I am not sure that that is what the agreement says. It would have been so easy for it to say it.
PN286
MR McPHEE: Well, Commissioner, as I recall the negotiations of clause 60, clause 60 was put to the unions in these terms saying if an individual wants to take a low paying job for a period or so, or something like that, it was actually - - -
PN287
THE COMMISSIONER: That is 60.3 though, not 60.2.
PN288
MR McPHEE: That is right. No, I was mistaken there. Mr Lapidos recalls it was said to be an alternative to retirement.
PN289
MR LAPIDOS: Excuse me, Commissioner, it was like someone is getting on in years and - - -
PN290
THE COMMISSIONER: Yes, sure. Look, I can think of a million purposes but it is ultimately - what was said doesn't take us any further.
PN291
MR LAPIDOS: That is right, you have only got the words on the page. And you are saying, well, if that was your intention, you could have easily put those words in.
PN292
THE COMMISSIONER: Well, in 108 or 109. But once a potentially excess situation has been declared or whatever in a particular area, access to clause 60 except pursuant to - well, I said it was easy, didn't I, but it is getting hard.
PN293
MR McPHEE: But, equally, Commissioner, what is - if you have the argument that what is to stop someone accepting regression outside the context of 108/109, even though 108/109 situation exists, then equally you can say, well, what is to stop employees taking - or the ATO offering a package to employees where 108 or 109 don't apply in any case? They say, well, we can offer you a package in any case outside the terms of the agreement. What is wrong with that? We both agree to it, therefore we can do it.
PN294
THE COMMISSIONER: Probably nothing.
PN295
MR McPHEE: Well, then - - -
PN296
THE COMMISSIONER: Other than the fact that the Taxation Department would be the first person to say that it is not a genuine redundancy and you can't get that sort of package.
PN297
MR McPHEE: But it quite often happens. Sometimes it quite often happens in practice in little places where the people want a package. But in any case - - -
PN298
THE COMMISSIONER: That would be a curious result for this particular department, wouldn't it?
PN299
MR McPHEE: It would be odd. Anyway, you understand what we are saying.
PN300
THE COMMISSIONER: But I suspect nothing, I suspect nothing there to stop them doing it.
PN301
MR McPHEE: No, no one does. Well, do you understand what the argument - - -
PN302
THE COMMISSIONER: I certainly understand the argument and I am just expressing my difficulty with it because I think up to that point, you know, it is not without legs. But that bit seemed to me lacking a few legs. Anyhow, I understand what is being put.
PN303
MR LAPIDOS: Thank you, Commissioner. Commissioner, that - we basically tried to set out the facts as we have understood them and tried to take you through the relevant parts of the agreement. And I guess in terms of our submissions, we are interested in finding out your attitude to whether the Office has complied with its obligations. And in terms of your procedure today, perhaps it might be worthwhile hearing from the other parties before we address what we would submit should be done to - in terms of 122.12 step 3, (a) and (b), the second (a) and (b), to determine what steps are necessary to achieve compliance or to - yes, what steps are necessary to achieve compliance obligations and consultations.
PN304
THE COMMISSIONER: Yes, I hear all of that. They really do need to know what they have got to meet though. They know what the argument is they have got to meet, but they are not quite sure what it is that you want the Commission to do that they have got to meet. But I am - subject to what everyone else has to say, I am prepared to take that as opening of what is going on, hear from the others, and then perhaps we will proceed into conference because I am obliged to attempt to conciliate these matters, too.
PN305
MR LAPIDOS: Good. Thank you, Commissioner.
PN306
THE COMMISSIONER: But you might like to, if you haven't already reflected on it, you might like to reflect a bit more on what it is you want the Commission to do.
PN307
MR LAPIDOS: Thank you.
PN308
THE COMMISSIONER: Ms Powell.
[10.30am]
PN309
MS POWELL: Thank you, Commissioner. Mr O'Connell is here with us now and, as I indicated earlier, I need to leave at 11 o'clock so - - -
PN310
THE COMMISSIONER: Well, the issue is whether you want to go or whether you want Mr O'Connell to - - -
PN311
MS POWELL: I am going to address a couple of issues and Mr O'Connell will address some others.
PN312
THE COMMISSIONER: Yes, that is fine.
PN313
MS POWELL: So I will address mine first so that I have then time to do that before I need to leave. The two issues that I specifically wanted to address was one of the issues that Mr Lapidos raised which was requiring staff to work below their classification. The CPSU is also concerned following an announcement on Friday, 17 August, that staff were to be redeployed from the interpretation and compliance section of personal taxes to the personal tax client contact centre. The work performed in the interpretation and compliance section is largely at the APS4 level and the work in the personal tax client contact centre is at the APS3 level.
PN314
The CPSU has taken action to try and resolve this issue. This was brought to our attention by members in the affected areas in a number of offices. It was not in the notice that was sent from the Assistant Commissioner to the staff in those areas but staff at one level were being asked to perform work at a lower level. So the action taken so far by the CPSU to resolve this issue is - we have had meetings with members in the affected sites and members of the CPSU have met with local management to voice their concerns and to try and have the issues addressed. And we have also held discussions with the Assistant Commissioner in - with national responsibility for this area.
PN315
The main concerns identified by members, there were three of those, Commissioner, and they were: how long will they be working in that personal tax client contact centres. Members wanted guarantees that they weren't being asked to do this work for a set period and that at the end of that period they would be returning to their previous area of employment. They weren't thrilled about doing this type of work for a period but were happy to help out for a short period, given that there is a staffing crisis in the ATO and that at this time it is the peak processing time for personal tax returns so there is a lot of work that is required in the personal tax client contact centre and in previous years they have assisted staff in those areas for short periods. But they wanted a guarantee that they were going back to their other work.
PN316
Another concern was that the level of work is at a lower classification level so they were concerned about the potential for de-skilling. Clause 93 is already referred to by Mr Lapidos, especially if the work was ongoing. So the first concern about how long this was for was a particular issue in terms of ensuring that they were not de-skilled over a long period. But another concern was also that they may be made more vulnerable in any future ATO redundancy processes because they were not in an area where the work was generally at the APS5 level.
PN317
A response to these concerns was - in response to these concerns raised by CPSU, both at the national level and at local meetings with management was the letter sent by Stuart Smiley to all staff affected by the transfer and, Commissioner, I have a copy of that letter.
EXHIBIT #P1 LETTER FROM STUART SMILEY TO ALL STAFF AFFECTED BY THE TRANSFER
PN318
THE COMMISSIONER: Commissioner, it is in the form of an e-mail to me from a Francis Dee, who is in the personal tax business line, and it is a copy of a letter that has been sent to people in personal tax who have been moved to public assistance, and it was sent on Friday, 24 August. If you go to the last paragraph on page - on the first page there, it says:
PN319
Particular concerns have been raised that people have about returning to jobs in the areas that they came from.
PN320
And at the top of the next page, it says:
PN321
We are working on the expectation that the current deployments are for the tax time period and will finish at the end of October.
PN322
The second issue raised is in the next paragraph, the level of work people will be undertaking personal assistance, and it says:
PN323
Many of you being redeployed are APS4s and know the usual level of phone work is APS3.
PN324
So there is recognition of that issue:
PN325
Our intention is that where possible the more complex calls and those calls which would normally be dealt with INC -
PN326
interpretation and compliance -
PN327
will be directed to APS4 staff, looking at a range of functions and how to achieve that.
PN328
But the last sentence there is:
PN329
I cannot guarantee that only these calls will be sent to APS4s.
PN330
And the next paragraph indicates the concern about:
PN331
...whether being involved in this process might in some way make them vulnerable in any redundancy process.
PN332
And there is an assurance that being part of this process will not of itself make you a target for a redundancy, but they will be considered in the same situation as other people in the interpretation and compliance area.
PN333
So that letter was sent to staff, as I said, on Friday, the 24th. So our members met again at the beginning of last week to consider that response and at that time they found out that there was to be an announcement on the Thursday afternoon about the overall situation in tax. So they decided that at that meeting that they would wait until that announcement was made. That announcement was made on Thursday, 30 August, and then there were briefings of staff in the personal tax business line by members of the senior executive service, both on Thursday, the 30th, and Friday, 31 August, in terms of the impact of those decisions on those particular areas and on these particular staff.
PN334
Commissioner, we have not yet - I certainly don't yet know the impact of the decision on staff in those areas. As I said, they were only briefed on Thursday and Friday. The union has not been formally addressed on this issue, though I believe there are to be meetings later this week where we will find out that information. So staff have received that letter. They have been briefed about the situation and the approach that the CPSU was taking is that there would be further meetings of members in the affected area to consider all the information and to consider what further action they wanted to take so - and whether or not their concerns had been addressed sufficiently or whether they were concerned: whether or not the period of two months was too long in terms of de-skilling, whether or not the redirection of calls was sufficient in terms of ensuring that they were doing work at the APS4 level. Those sort of issues were still to be considered.
PN335
If at the end of the day members were concerned that those issues had not been addressed, then they would consider what further action they wanted to take. And we may have, indeed, notified a dispute to the Commission in relation to this issue or members may have decided to take some other action. So in terms of that issue, we certainly support Mr Lapidos' dispute in relation to - that, yes, there are staff who on the face of it appear to be at the APS4 level working, doing APS3 level work. We have tried to address the issues as identified by members and we are still working through that process but we certainly support the view as put forward that they are working below their classification level and there is a concern about de-skilling. But certainly the issue is still alive and we are still considering it, Commissioner.
PN336
Just in relation to the last issue that was raised which was the staff being asked in terms of regression. Certainly we are aware of that letter to staff and the CPSU also attended the briefing on the next day, 8 August, where Mr Craig Fox who is referred to in L12 addressed staff at the Cheltenham office, and the option of regression was discussed and it is our view that it was presented as an option to Cheltenham staff. There has been no feedback from members that they felt intimidated by it. But one thing that is pertinent I think to the discussion that you have already had is that whilst it is an option to staff if they agree, and certainly we have instances of members at all different levels using this option of regressing.
PN337
They are only able to regress if there is a job at the lower classification level. You can't just say I want to regress and, boom, it happens. There has to be a job of work to do at the lower level. So in a redundancy situation that may not always be able to be - always be available. We have got the situation where there are 1300 redundancies in the Tax Office and there may not be vacancies available at all levels in terms of staff being able to say: I volunteer to regress, I want to do that, it is my way of dealing with this situation. But there needs to be a position available for staff to be able to regress.
PN338
THE COMMISSIONER: Well, that is the debate about positions and vacancies, too.
PN339
MS POWELL: Yes.
PN340
THE COMMISSIONER: But you would say vacancy rather than position.
PN341
MS POWELL: Yes, that is right. And the clause 108 talks about in the first instance, where you have a possible vacancy. So you are looking at filling it, then the first priority is people who are potentially excess.
PN342
THE COMMISSIONER: Yes.
PN343
MS POWELL: So that would be the first priority. If you exhausted that pool of people who are potentially excess and then there was someone who wanted to voluntarily regress to that position, then that would be an option available to them. Now, at the APS2 level the ATO does not have enough staff at that level. They have less staff than they need at that APS2 level which is why regression is an option for staff at the APS3 level, particularly in Cheltenham where there are jobs at that level in that site. And that certainly is a priority for staff, they prefer to stay in the site in which they are currently located because, as you can imagine, Commissioner, they have set up their other arrangements around working at that particular site.
PN344
So clause 108 and 109 can certainly work with clause 60 in terms of, yes, if that process is gone through and you have looked at potential excess employees and there are no potential excess employees at a particular level, then the regression could be an option provided it was voluntarily, as you say, with genuine agreement and no coercion.
PN345
THE COMMISSIONER: But it wouldn't need 108 or 109 to be in place anyhow, would it?
PN346
MS POWELL: No. No, it can happen at any time. But given that we are in a situation, then there are processes that, yes, you would normally follow in terms of 108 and 109 in terms of giving priority to potentially excess staff to any potential vacancies.
PN347
THE COMMISSIONER: But somebody can jump the queue, it seems to me, and that was the complaint; that some people can jump the queue.
PN348
MS POWELL: But I think 108 sets out the process where there is a potential vacancy - - -
PN349
THE COMMISSIONER: Yes.
PN350
MS POWELL: That the priorities first of all - - -
PN351
THE COMMISSIONER: But that might all be happening, that might all be happening.
PN352
MS POWELL: Yes.
PN353
THE COMMISSIONER: But that doesn't stop an individual because the only way you can regress under 108/109, taken together assuming that that is the correct approach, is when you get to step 6; that is you have got to be declared excess, you have got to not take voluntary redundancy, you have got to - and be forced to take it. Whereas clause 60 seems to allow someone to take a regress - to regress to a lower classification if they wish.
PN354
MS POWELL: Yes, but I am saying that for clause 60 to take effect, there must be a vacancy for them to go into.
PN355
THE COMMISSIONER: Oh, yes, sure.
PN356
MS POWELL: But if there is a vacancy - - -
PN357
THE COMMISSIONER: And there clearly are vacancies.
PN358
MS POWELL: Yes, but if there is a vacancy, then clause 108 says the first people you have to give priority to are potentially excess. So there is that restriction in 108 in terms of stopping people using clause 60 to jump the queue.
PN359
THE COMMISSIONER: Then that raises the much broader question, doesn't it, about all the other matters that Mr Lapidos has raised?
PN360
MS POWELL: Well, I think - - -
PN361
THE COMMISSIONER: Where people have been, you know, without any - well, without any apparent recourse to the requirements of 108/109, people have been redeployed, both within business lines and across business lines. And maybe that is what Mr O'Connell is going to talk to me about, I don't know.
PN362
MS POWELL: That is - I was just addressing the point of clause 60 and how it interacts with clause 108 and 109. But certainly there is provision in clause 109 but, as you say, Commissioner, it is after people have been declared excess and they have started their retention period, and that is certainly not a situation that we want to see happening in the ATO where people are compulsory excess. So I just leave my comments there.
PN363
THE COMMISSIONER: Yes.
PN364
MS POWELL: And Mr O'Connell will address the other issues. Thank you.
[10.55am]
PN365
THE COMMISSIONER: Yes, Mr O'Connell.
PN366
MR O'CONNELL: Thank you, Commissioner, and thank you for accommodating my personal circumstances this morning. I guess I wanted to speak more broadly. Ms Powell has covered the situation of those particular employees, but I wanted to speak more broadly about the ATOs failure to consult. There is no doubt that this is a very serious time for the ATO with the prospect of 1310 redundancies and I guess lots of movement around the organisation.
PN367
I would have to say, we have received some information late on Friday which I am yet to seek to verify with the ATO but it might be useful to get it as a point of record when the ATO responds that this is, in fact, part of a broader ATO plan. I forget the exact name of that plan, it was relayed to me. But I would seek the ATOs assurance that this is the only known plan at this stage in terms of redundancies for the organisation. Certainly the information that I have received talked about far more significant numbers. So we need to get that on the record and, again, if it is not the complete picture of where the ATO is going, then we need to know that.
PN368
I do raise that in the context - I don't normally go to formal bodies on the basis of information but when one looks at the - I guess, the budgetary situation that the ATO faces, it certainly didn't rule that information out firstly as the ASU has tabled that information. I think that does verify that there are some big questions that need to be answered by the ATO when they respond.
PN369
Commissioner, we support the application of the ASU in terms of the ATOs failure to consult around the redeployment and redundancy aspects, and we do so because of what has happened over the past three months or so but, of course, with a view to what happens in the next period and, indeed, what may happen again in the future.
PN370
We have already been through in recent history a fairly extensive redundancy process so we do have lessons to learn - that we have learned at least from that process from about November 1995 through to 1998 when the ATO accumulatively had about 3_ thousand redundancies. So it is not without precedent, and some of the lessons that were learned from that period were the major one being that the ATO failed to engage and consult with the unions at the appropriate level during that period and that led to a flow of other circumstances that were I guess regrettable in terms of the way that process was managed.
PN371
I have to say that the CPSU has tried to be as patient and consultative as it could over the last three months or so to ensure that we felt that we were being consulted on a genuine basis; that we did have input to where the ATO was going, both in terms of development of their plans and in terms of I guess consultation, what consequently happened on the ground in terms of redeployment and redundancy.
PN372
We had come to the point I guess late last week that we were also about to notify a dispute with the ATO and we had, in fact, formally advised - or, sorry, informally advised the ATO of that intent to move down that particular track. So I guess the ASU has beaten us here. But nonetheless we don't dispute that that was now the correct course of action to try and ensure that what happened from here on in was in accordance with the agreement, and what happened on any subsequent occasion the ATO was pretty clear about what it needed to do, particularly in relation to clause 108.
PN373
We do so as part, of course, of an overall strategy. We, as a union, have a view that notwithstanding the processes within clause 108 and 109, there is a more fundamental problem addressing the ATO but that is something that we would seek to address in other places other than the Commission, but certainly the Commission can play a useful part in terms of ensuring that the ATO meets its obligations.
PN374
The ATO if one reflects, as we have heard already the ATO received its budget with budget figures from the Federal Budget on 22 May and that is now more than three months since that period. We believe in summary I suppose that ATO has fallen far short of the requirements of clause 108, given that it is quite clear view, of course, that the intention of 108 when that agreement was signed was to ensure that this type of situation was addressed at the earliest possible situation. That is, that every possible step was done under 108 to avoid movement to 109. When you look at the figures, of course, it was probably never likely to avoid clause 109, that is a redundancy situation, but every possible step should have been made in conjunction with the unions to ensure that those redundancies were minimised. And I guess the redeployment processes around the organisation were done in a sensible and a co-operative fashion. And, as we have seen in certain circumstances, not only in Cheltenham but information from other places, there is certainly angst coming through from members that people are basically being told about what ought happen.
PN375
I do note that in those sort of circumstances the Commissioner has indicated that there should be evidence of intimidation, and I guess one of the faults in the current agreement is that you actually have to provide written confirmation to agree to a temporary reduction in classification, whereas it doesn't appear to go across to permanent. Certainly to avoid the necessity for us to, I guess, table the information about intimidation, and a lot of the employees would feel rather concerned about that, it would be simple for the ATO to put in a procedure that said they will get written confirmation from all employees that they intend to move to a different classification in writing, and to do so. That would have ensured that the processes were kept very much open and honest.
PN376
Anyway back to the - I guess, the failure to consult. We have expressed the view to the ATO quite clearly, as late as - or as early as Wednesday, 22 August, that we had not been fully consulted, in our view, about the discussions that have been going on behind closed doors amongst senior management about the functions they intended to change around the organisation with the consequent impact. And certainly the impact of clause 108 is that those sorts of discussions were meant to be held at a regional level, and in other clauses perhaps that they should have been held at national level, right down to the impact of I guess proposals that were being developed - as they were developed to ensure that the corporate planning processes engaged the unions right throughout. And I think that is pretty consistent in clause 108.
PN377
We are now at the point of view I suppose that the ATO has made its formal announcement and is, I guess, formally announcing to the unions to commence the process over 109. So I think there needs to be some comments made about the future and continuous activities or process the ATO intends to follow over 108 because we don't believe it is the end of the story, notwithstanding that some might say and the ATO might even submit that, well, we are past 108 now or, as they put it to us on several occasions, they weren't even 108 and perhaps only acting in the spirit of 108. That needs to be set down fairly clearly in terms of undertakings for the future, particularly as we go through what is obviously going to be a bumpy ride, probably, not only for the next six months but beyond that.
PN378
So in summary, the CPSU does support the application that basically the ATO has failed to consult adequately under clause 108 and we look forward to, I guess, moving towards some recommendations from the Commission about how they can do so better in future and, in terms of clause 109, to set from hereon in to ensure that the ATO does abide by the agreement given the evidence that has now been accumulated on their, I guess, application of 108 to ensure that 109 is similarly not adhered to. I will leave it there, thank you, Commissioner.
PN379
THE COMMISSIONER: Am I to take it that you think that we have got to the stage where redeployment measures do not resolve the situation, whatever the situation is? I am a bit confused. As I understand Mr Lapidos, there is a situation that existed prior to last Thursday where there was a failure by the ATO to comply with the requirements of 108. I am uncertain as to what his position is subsequent to last Thursday, whether there aren't still a series of situations there where redeployment measures may be effective. What is your position?
PN380
MR O'CONNELL: Sorry; are you asking did you think that redeployment could, I guess, solve all the issues facing the ATO?
PN381
THE COMMISSIONER: Well, it clearly can't. I mean, it is not going to - but has 108 done all the work? Is the opportunity for 108 to do any work now over, in your view, or not?
PN382
MR O'CONNELL: Not necessarily, because we are not satisfied at all that the figure of 1310 is the end of the process. There are going to be, quite clearly, processes under 109 but we always saw 108 as a clause that handled situations that led into potentially excess situations and we are still of - - -
PN383
THE COMMISSIONER: That is what I thought a whole swag of these exhibits were about, that there were situations where things were done that didn't involve the steps in 108 and there was a complaint about the compliance there pursuant to clause 122.
PN384
MR O'CONNELL: Yes. And we don't believe that 1310 redundancies is necessarily the end of the story and so therefore we would say that 108 still has a role to play. It might be odd to say it runs alongside 109 when its primary purpose, I suppose, is to be a pre-109 and then you move to 109, but we still are of the view that that is going to be an extremely useful clause in terms of ensuring that any future and further excess employee situations are minimised.
PN385
THE COMMISSIONER: Well, it seems to be that there has been a denial that there was an excess employee situation until last Thursday. Is that your reading of it?
PN386
MR O'CONNELL: Well, it was an interesting debate.
PN387
THE COMMISSIONER: Because they haven't done the things that 108 requires. I mean, either there was a denial that there was a potential excess situation, notwithstanding some of the exhibits information, which seem to fly in the face of the facts, or there was a failure to comply with the requirements of 108, or I guess there was a compliance with 108. They are the possibilities, aren't they?
PN388
MR O'CONNELL: Well, I wasn't sure what their position was from about last Monday, let alone last Thursday, but prior to that I was led to believe that they were saying that they weren't in 108. From our information there seemed to be two schools of thought in management, one that was in the 108 camp and one that said that they weren't in the 108 camp or the pro-108 camp, but were acting in the spirit of 108. So I think the evidence though suggests that any line that says that they shouldn't have been operating in 108 is quite false in my own reading of the situation, was that attempt to avoid the obligations of 108 was simply at the end of a manoeuvre by the ATO to avoid those obligations. So they should have been in 108 even if they are in denial that they weren't.
PN389
THE COMMISSIONER: Or alternatively 108 is simply dealing with locality type stuff, where the ATO is transferring work around from one area to another.
PN390
MR O'CONNELL: Well, look at 108.1(b) there are more employees of a greater class - - -
PN391
THE COMMISSIONER: In a particular location.
PN392
MR O'CONNELL: - - - than necessary for the efficient and economical working of the ATO. Yes, in a particular location, but you could always describe that that the ATO because of its - we might have an argument that says that there certainly aren't more employees on another front: there aren't more employees for the efficient and economical working of the ATO. We believe that there should be about 20,000 employees doing the work of the ATO, not the proposed 17,500 permanent employees, but once you get past that, there certainly has been a decision made that there are more people in various locations around the country already. So, yes.
PN393
THE COMMISSIONER: I think that is right. I was just raising it in advance of - - -
PN394
MR O'CONNELL: Yes, thanks for that.
PN395
THE COMMISSIONER: Yes, thank you, Mr O'Connell.
PN396
MR O'CONNELL: Thank you.
PN397
THE COMMISSIONER: Mr James.
PN398
MR JAMES: Thank you, Commissioner. Commissioner, the ASUs notification of a dispute listed four areas and I would just like to address those in turn. The first one was failure to consult with the ASU in a potential excess employee situation under clause 109. As has been acknowledged this morning, Commissioner, the consultations with the CPSU and ASU under clause 109, met last week on Thursday, 30 August and Friday, 31 August.
PN399
Commissioner, these consultations could not have commenced any earlier as it was not until 30 August that the ATO had the necessary information that made it clear that the ATO was in a potential excess staff situation, and we didn't have the information to provide to the unions as required as part of step 1, clause 109, Commissioner. That information includes the number and categories of employees likely to be affected.
PN400
THE COMMISSIONER: So it was only when you decided who was going to be affected that you came to a view about who was likely to be affected; is that what you are saying?
PN401
MR JAMES: I am saying, Commissioner, it was only last week that the ATO actually knew its total resource allocation - - -
PN402
THE COMMISSIONER: That is not what it requires, is it? You knew your resource allocation when the budget came out.
PN403
MR JAMES: No, there were still negotiations happening with the Department of Finance after that.
PN404
THE COMMISSIONER: When did they cease?
PN405
MR JAMES: I understand they ceased just in the last week and a half, Commissioner. For example - - -
PN406
THE COMMISSIONER: Are you saying that the numbers likely to be affected is a synonym for the numbers to be affected?
PN407
MR JAMES: I am saying the ATO didn't have any accurate figure of the numbers likely to be affected, Commissioner.
PN408
THE COMMISSIONER: And you say you need accurate figures about who is likely to be affected rather than broad figures before the provisions of 109 are brought into play?
PN409
MR JAMES: Yes, Commissioner. We believe - - -
PN410
THE COMMISSIONER: So why do they use the word "likely" rather than - if that is the case? I mean, it strikes me as a curious use of the language.
PN411
MR JAMES: Yes, part (b) in step 1, Commissioner, talks about the numbers and categories of employees likely to be affected.
PN412
THE COMMISSIONER: Yes.
PN413
MR JAMES: The figure of 1300, as I understand it, was only known to the Commissioner within the last week.
PN414
THE COMMISSIONER: That is the precise number.
PN415
MR JAMES: Yes. And before that, the number could have been way above or way below that depending on what happened. We - - -
PN416
THE COMMISSIONER: Well, what sort of percentages are we talking about?
PN417
MR JAMES: I can't give you - - -
PN418
THE COMMISSIONER: I mean, it is a likelihood, isn't it? It is a question of what is likely.
PN419
MR JAMES: Yes, it is, but the - depending on the - - -
PN420
THE COMMISSIONER: So was it ever likely that 2000 were going to be affected? Was it ever likely that 1000 were going to be affected?
PN421
MR JAMES: Yes, Commissioner, that - - -
PN422
THE COMMISSIONER: When did it become certain that it was something less than those figures?
PN423
MR JAMES: Commissioner, the planning process that the ATO has been through has been through a number of iterations, and in fact the Deputy Commissioners in charge of business lines submitted some draft plans to the Commissioner, as I understand, about two or three weeks ago, and it was originally expected that an announcement about the redundancies would be made up to, I think, three weeks ago, Commissioner.
PN424
The Commissioner of Taxation was not satisfied with some initial material that he had from ATO business lines, and my understanding is that he was also in discussions with the Department of Finance about final resource allocations, and he sent work back to the business lines to be re-done, Commissioner, so that was one aspect of the uncertainty.
PN425
The other aspect was the discussions with the Department of Finance where the Commissioner of Taxation was obviously out for the best arrangement possible with the Department of Finance. One outcome that I understand came out of that, Commissioner, was that the ATO is not required to meet the efficiency dividend for this financial year. So those sort of decisions could have had a significant effect on the likely number of excess employees. If I could just table some papers, Commissioner. This is an explanation of the proposed process.
PN426
MR JAMES: Commissioner, this document was provided to the - hand-delivered to the CPSU on Thursday and was hand-delivered to the ASU on Friday, so I am a little perplexed that the ASU stated in their submission that they had not been provided with any further information about the size of the redundancy process or the nature of the process.
PN427
Commissioner, if you look about halfway through that document on page 4 - I am sorry, because the numbering actually changes - after page 16 of 16 it begins page 1 of 11, Commissioner, and it says Context for our Resourcing Decisions. After page 16, we go back to page 1 of 11. If you look at the fourth page after that there is a chart, Commissioner, which lists the approximate redundancies by business line and by state and territory, by region in the ATO, with approximately 1310 redundancies.
PN428
So this information has now been decided and we are in the stages of consulting about numbers and categories. I would point out, Commissioner, that previous consultations on an informal basis have taken place with the union since 8 August 2001. Ms Goodyer, Assistant Commissioner in ATO Corporate, has been meeting on a weekly basis, on an informal basis, and it has been no secret to the unions or to staff that redundancies were likely, but we felt that we could not commence the formal process of 109 until some firm decisions were taken, Commissioner. Commissioner, I would also like to table a bundle of corporate communication messages which have been sent out.
PN429
MR JAMES: Commissioner, these messages go back to July and they are a combination of one-off ATO priority articles, and the weekly "Commish Column" of ATO Extra, which is the weekly electronic staff communication magazine, and in the early stages, Commissioner, these articles talked about the process of making planning decisions, kept people informed of what was happening. As we acknowledged, there have been some delays in getting a final figure. It announced on 7 August the movement of people into ATO production and client account management. The top article, Commissioner, is the one that is in the ATO Extra column today, 3 September, and in that column the Acting Commissioner on the front page makes the observation:
PN430
The final number of redundancies ended up being significantly lower than initially thought and feedback from staff regarding these numbers was very positive.
PN431
So it is just in the last week, Commissioner, that we have been able to actually give some information of substance to staff and to the unions. In regards to consultation, Commissioner, the ATO has offered to continue this weekly consultation process throughout the redundancy process, regardless of whether the clause 109 formal consultation period is one month or some period less than one month, the ATO is willing to continue with that weekly consultation which actually commenced on 8 August, so we do want to continue the process there.
PN432
THE COMMISSIONER: So you commenced the process on 8 August even though the numbers weren't - I mean, there is a contradiction there, isn't there? You are saying that there was no requirement on you to commence this process until last Thursday when you identified the numbers. Now you are saying that the process really commenced on 8 August. Which is it?
PN433
MR JAMES: It commenced on 8 August, Commissioner, but not under clause 109, not the formal process under 109.
PN434
THE COMMISSIONER: So how can the month date from 8 August?
PN435
MR JAMES: Sorry, I didn't mean that, Commissioner. The one month consultation period would commence from last Thursday or Friday. I was just make the point that we have kept the unions informed about the planning process and the fact that it was taking longer than expected and the sorts of issues that were being looked at generally even though we couldn't provide hard figures.
PN436
The second issue that the ASU has raised is the failure to assist potentially excess employees. The ATOs main objective has been to reduce or limit the number of excess employees and redundancies. Now, it is true that since the May budget the situation is not looking good in terms of ATO funding. The process of reviewing resources, which was undertaken by the Commissioner of Taxation and the Deputy Commissioners of Taxation, has taken longer than expected. It took longer because the Commissioner of Taxation wanted to get the figures right and, as I said, he was trying to get the best possible arrangement with the Department of Finance.
PN437
The reasons for this delay, Commissioner, were explained to staff in a video message from the Commissioner of Taxation on Thursday, 30 August. I believe you already have the script of that message tabled. I think it is also exhibit J1, Commissioner.
PN438
THE COMMISSIONER: It is exhibit L10.
PN439
MR JAMES: It is in J2, Commissioner; I am sorry. It is in the bundle of papers called J2. I guess the point that I am making is that the ATO has tried to limit the number of redundancies through the planning process. In regard to the movement of staff into priority areas - this was exhibit L8 from the ASU, Commissioner - the ATO has recently assigned several hundred employees to high priority work in ATO production and client account management areas of the ATO. This is because one of the ATOs main business priorities has been to bed down the processing aspects of the new tax system, in particular debt and lodgment functions, affecting those two areas.
PN440
The movements of those people took place under section 25 of the Public Service Act, which is reassignment of duties under section 25, and they took place while the ATO was still in the process of looking at reducing supplier costs, such as - - -
PN441
THE COMMISSIONER: So you say that if you did it under 25 the agreement doesn't apply and it is for you to decide whether - for that reason or because of the other?
PN442
MR JAMES: No, Commissioner, we are not saying that. We are saying that while the moves were consistent with the spirit of clause 108, they could not be considered as redeployments under subclause 108.4 or 108.5 because those sort of movements can only take place once the business line knows what their resource allocation is and the consequential staffing situation at the regional level.
PN443
THE COMMISSIONER: That surely can't be right, can it? I mean, you either have got vacancies to fill, in which case - the reality is at the time that this was done, there were potential excess employee situations in place, weren't there?
PN444
MR JAMES: Not as a result of this 1300 - there were other situations - - -
PN445
THE COMMISSIONER: No, there were others in place. I mean, we were dealing with one last week, weren't we?
PN446
MR JAMES: Yes, Commissioner, there were other situations - - -
PN447
THE COMMISSIONER: There were others in other situations, so why didn't those vacancies go to the - why weren't they made available - I mean, what happened was that people who might have had rights under this agreement had those rights denied because the Commissioner went ahead and transferred people using section 25.
PN448
MR JAMES: Well, at the APS2 level, Commissioner, the ATO was short on APS2, so it is a matter of moving all available APS2s into - - -
PN449
THE COMMISSIONER: So it was only APS2s that were moved, was it?
PN450
MR JAMES: No, there were other movements.
PN451
THE COMMISSIONER: That is what I thought. Now, I mean, clearly, if you have got no APS2s who are the subject of a possible redundancy, then there is no need to do anything but if you have got people who are, aren't you taking away their rights by just going ahead under 25?
PN452
MR JAMES: I don't think that those rights - I can't say that those rights categorically were or weren't considered, Commissioner.
PN453
THE COMMISSIONER: Well, if they didn't go to the regional committees and say we have got these vacancies, so that people could go through the process that was set up, surely they were, weren't they?
PN454
MR JAMES: Some of these things are happening right now, Commissioner.
PN455
THE COMMISSIONER: Can I just interrupt. Can you please open the door because some people might be being denied their rights. This is an open court. Sorry, Mr James.
PN456
MR JAMES: That is okay. Some of these moves, particularly at the higher levels, Commissioner, from the APS3 to the APS6 level, are still taking place, as I understand it, into ATO - or are still being arranged - - -
PN457
THE COMMISSIONER: But when were the vacancies ever notified to the regional committees?
PN458
MR JAMES: I can't say whether they were or they weren't, Commissioner.
PN459
THE COMMISSIONER: Well, isn't that one of the matters that I have to decide, whether there has been compliance with 108 in the past?
PN460
MR JAMES: And I would like to tender some evidence about that, Commissioner, when I - - -
PN461
THE COMMISSIONER: Yes, but the evidence before me is that there were vacancies.
PN462
MR JAMES: Vacancies were created, Commissioner, by letting go non-ongoing staff and contract staff.
PN463
THE COMMISSIONER: But there were vacancies.
PN464
MR JAMES: Yes.
PN465
THE COMMISSIONER: They were real vacancies, not just positions. They were vacancies that were going to be filled, for which there was funding.
PN466
MR JAMES: That is right. They were ongoing positions with funding.
PN467
THE COMMISSIONER: And currently not filled, and were filled by the use of 25, not by the uses of the process that is available under 108.
PN468
MR JAMES: We would say both of those can work in tandem with each other, Commissioner.
PN469
THE COMMISSIONER: They might be able to work in tandem. You are going to show me where 108 worked at all, are you, in regard to these matters?
PN470
MR JAMES: I am, Commissioner. The point about the 1300 redundancies, Commissioner, is that because business lines didn't know - or the ATO corporately didn't know the number of potential excess staff - - -
PN471
THE COMMISSIONER: Where is there a requirement under 108 to know the number?
PN472
MR JAMES: Well, there is a requirement at least to - - -
PN473
THE COMMISSIONER: You might be right in 109; you might be right there but I can't for the life of me see a requirement to do any more than whatever 108.1 describes and there is pretty clearly, at least on a broad reading of 108.1(b), an excess, there has been since the day of the budget an excess - "more employees of a given class necessary for the efficient and economical work of the ATO in a particular location."
PN474
MR JAMES: Commissioner, that is true in a sense that we have known that we are likely to get into a potential excess - - -
PN475
THE COMMISSIONER: So haven't you then been obliged since that date to do all of the things that are required in 108.2, 3, 4, 5, 6?
PN476
MR JAMES: We have not had the information, Commissioner, about the levels at which people would be excess.
PN477
THE COMMISSIONER: I understand that but if you accept that there are more employees since October, since May 24, "more employees will be given" - you would have to be blind Freddie not to accept that. I mean, you might want to play games and say, well, okay, that doesn't - I am sorry, I will retract that. You might want to take the point that that is referring to a totally different situation, and I did raise that with Mr O'Connell and it may well be that it is, but if you take a broad reading of 108.1(b) and give it any meaning at all, because, presumably, 108 has got some work to do, then it would have been obvious to anybody that the ATO potentially had more employees of a given class generally anyhow.
PN478
Now, if you say that should be read down and read to read that there has to be a particular location and a particular class identified before that comes into play, then that is fine and I will have a series of questions about that if that is the case. But if you accept that means that from the day of the budget we knew we had too many people and therefore they have brought into play the rest of 108, then you are going to have to show me how you have complied with 108.2, 3, 4, 5, 6. But if it didn't, then I have the very serious question about whose job it is to characterise whether 108 comes into play.
PN479
MR JAMES: Commissioner, we certainly acknowledge that since the budget was announced we expected that there would be a potential excess situation but if I could just look at 108.4 and 108.5, at the point of view of the business line at the regional level, those business lines did not know whether their particular region was going to be overstaffed. They didn't know at what level they may be overstaffed because those decisions have only just been - - -
PN480
THE COMMISSIONER: But they knew that they had vacancies.
PN481
MR JAMES: Some business lines either had faxes - - -
PN482
THE COMMISSIONER: Right. When did they allow therefore 108.5 to come into play, because that is the real complaint as I hear it from Mr Lapidos under the point that says that you failed to assist potential excess employees. He may not have articulated it in those terms - well, no, I think he did, to be fair, but he may not have articulated it that briefly but that seems to me to be the real thrust of his argument under point 2, that there was a failure to assist because there was a failure to provide the vacancies that were there to the mechanism that was set up.
PN483
MR JAMES: Well, I would like to table some evidence about that.
PN484
THE COMMISSIONER: J3.
PN485
MR JAMES: Commissioner, in tabling this evidence I would just like to point out that it does contain some personal information about staffing issues and I would just trust that the parties would treat it as a staff in confidence document.
PN486
THE COMMISSIONER: Well, I am not sure how I am to treat it. I understand how I am treat it personally but - - -
PN487
MR JAMES: I think it is necessary for me to table it to demonstrate the - - -
PN488
THE COMMISSIONER: Yes, and it then goes on a public file, so I think this particular exhibit needs to be restricted in access. So I will direct that it be restricted in its access to the immediate persons at the bar table and to the Commission as presently constituted. That relates to exhibit J3.
PN489
MR JAMES: Thank you, Commissioner. I am sorry it is a little bit difficult to read but there is a bundle e-mail messages which are exchanges between business lines and our regional workforce adjustment committees, which only deal with some of the situations and I point out these are only some of the situations where the regional workforce adjustment process has intervened to ensure that potential excess employees have their rights considered under clause 108.
PN490
THE COMMISSIONER: Sorry, you misunderstood my question. I am sure they have done that. My question goes the other way. When were those vacancies that were in L8 ever before the committees? If you go to exhibit L8 we have the Commissioner on 6 August describing a series of vacancies where people are going to be transferred. Now, those vacancies, presumably, didn't come out of thin air. They were around before 6 August. That was one group and there was another group, wasn't there, Mr Lapidos, that you said that there were some vacancies that were never before the - that you understand not being before the - - -
PN491
MR LAPIDOS: Commissioner, I definitely referred to this lot in L8. The difficulty is knowing about all the circumstances in the Tax Office and I don't believe I - - -
PN492
THE COMMISSIONER: No, but I thought you did identify some others, but you didn't.
PN493
MR JAMES: Commissioner, without taking some advice on this I can't - I could not give you an assurance that these vacancies were in all cases notified to committees or that they weren't. I would have to - - -
PN494
THE COMMISSIONER: Because you said before that we use 25, section 25 of the Act to reassign people. If you did without notifying the vacancies to the local groups, then how did you comply - that was my question, how did you comply with the - I mean, you might have done a whole lot of other things and I didn't hear any complaint about the things you did do. The complaint was about the things you didn't do.
PN495
MR JAMES: I would have to check on that, Commissioner, if I could, during the day.
PN496
THE COMMISSIONER: Yes, because I think otherwise you are just going to pile me up with information that really doesn't go to the - I mean - - -
PN497
MR JAMES: I guess my point in tabling this - - -
PN498
THE COMMISSIONER: I could invite Mr Lapidos to do this, and that is seek a subpoena that you provide information of all vacancies that occurred between date A and date B that were not provided, because that is going to be much more useful in determining whether or not there has been a non-compliance with 108 than showing me all the information about where there has been a compliance with 108. I mean, someone can give me an exhibit three times the size of J3 if they want, and what does that show? That on some you have complied with the requirements of 108. But of course the real issue is that there are - the allegation that there are occasions on which you did not comply with 108.
PN499
MR JAMES: I think what it shows, Commissioner, is a genuine intent on the part of the ATO that 108 is there to be complied with and that these committees have acted in a real way to either at the stage when a vacancy is going into the gazette or either at the stage where a selection report is just about to be finalised to draw the attention to business lines of potentially excess people's claims. That was my intent, Commissioner.
PN500
THE COMMISSIONER: No, I accept that but it doesn't - all I am saying is it is not very helpful in the context of what is being alleged, because you have got exhibit L8; you have had exhibit L8 before you as long as I have. Well, in reality you have had what was exhibit L8 since 6 August but you have certainly had knowledge of it in the context of these proceedings as long as I have. Now, I don't know; you say you have got to get further advice. That is fine. I put you on notice that I want that.
PN501
MR JAMES: Yes, Commissioner.
PN502
THE COMMISSIONER: Because that seems to me the crux. Now, let me make the point there may be very good reasons why you have not, at least prima facie, complied with 108. You may want to say that you have complied with 108, that section 25 overrides 108. I don't know; I haven't heard all that argument, the point being that the allegation that is being made against you is the one you have got to meet, not the allegation that isn't being made. I don't think the allegation has ever made that those committees hadn't done any work.
PN503
MR JAMES: Well, no, perhaps not, Commissioner. There may be another issue associated with these particular redeployments and that is the way the vacancies came about. I mean, I will be seeking advice and getting back to you - - -
PN504
THE COMMISSIONER: No, I think it is probably better you give me a considered response rather than - and I am sure you wouldn't ever not give me a considered response.
PN505
MR JAMES: Commissioner, so just to finish off what I was saying about the 1300 redundancies, with those particular redundancies business lines haven't until just last week been in a position to know at the regional level what numbers of staff they had to shed, nor at what levels they had to shed those staff. So I think, similar to what Mr O'Connell said, that we would probably be saying that there may be some potential now for 108 to operate for a period whilst 109 has actually commenced. I guess that is not the normal interpretation I would put forward to you, Commissioner.
PN506
Normally I think 108 is about one business line helping out another business line in a particular region when one is growing and one is shrinking. We are now in a situation where we have got eight business lines sharing approximately 1300 redundancies. We have got the remaining six in a no growth situation. So the opportunities for redeployments under clause 108 may not be great but - - -
PN507
THE COMMISSIONER: It is a no growth not a no change, isn't it. There are all these other business lines that have got initials for them, from what I understand - - -
PN508
MR JAMES: Yes, there is - - -
PN509
THE COMMISSIONER: - - - where there are going to be staffing reductions.
PN510
MR JAMES: Some may actually be achieving - planning to achieve reductions by natural attrition.
PN511
THE COMMISSIONER: But it does say redeployments too.
PN512
MR JAMES: Yes, and I think we should explore that at the regional level now that we have got some information but I just don't know what real potential there will be for clause 108 redeployments.
PN513
THE COMMISSIONER: But there is always going to be some frictional vacancy, isn't there. Someone will go and someone will need to replace them. They will need to be replaced. They are not saying in here that there will be no replacements.
PN514
MR JAMES: No.
PN515
THE COMMISSIONER: Then I would suspect that even if something happened to somebody who was a deputy commissioner or something, they would be replaced, creating a vacancy somewhere that would have to be filled and wouldn't that - deputy commissioner is probably a bad choice because they probably don't fit within the terms of the agreement but you know what I mean. There will be people that are sufficiently senior or necessary - people whose positions are sufficiently necessary that they would have to be made - the position would have to be filled.
PN516
MR JAMES: Yes, I would agree with that, Commissioner, and - - -
PN517
THE COMMISSIONER: And the 108 must have work to do in that - perhaps it doesn't.
PN518
MR JAMES: I think there is an argument, Commissioner, that redeployment continues throughout 109 and - because there is still a requirement on the parties to try to achieve redeployment throughout the steps of clause 109. So whether you say 108 becomes - redeployment measures under 108 actually fall under more formal steps under 109 - - -
PN519
THE COMMISSIONER: Some of the situations are going to be resolved by redeployment, aren't they. Some of the situations that arise out of the decision in regard to the 1300 are going to be resolved through redeployment.
PN520
MR JAMES: I would hope so, Commissioner. If there are vacancies that - - -
PN521
THE COMMISSIONER: Just because vacancies are going to arise between now and whenever the period finishes. They will arise for all the wrong reasons - some of them might arise for the right reasons. Someone might win Tattslotto and leave. People will be retiring and there will be that sort of thing going on. In an operation the size of the Tax Office it must go on. So one would presume that then raises the question of whether the vacancies are going to be filled within the business line or whether they are going to become generally available, that issue that we were discussing in the matter before me last week. Now, I would have thought that that is a matter we can talk about more in conference.
PN522
MR LAPIDOS: Can I just say then - - -
PN523
THE COMMISSIONER: No, you can't. I did say we can talk about it more in conference. We are going to go into conference where we can explore some of this a bit more.
PN524
MR JAMES: Commissioner, if I could, without taking too much time, talk a little bit about the intent of clause 108.
PN525
THE COMMISSIONER: Sure.
PN526
MR JAMES: I know this may be a little bit boring for people but the intent of clause 108 from the ATOs point of view has always been to encourage across business line cooperation and to minimise excess employee situations. However, Commissioner, the intention of the ATO has been to have business lines managed responsibly and to be accountable for their own outcomes and their own resources, and to reflect that we believe that workforce issues are firstly to be resolved within the lines where possible and, if necessary, corporately by cooperation between the lines.
PN527
In particular, clause 108 was developed to achieve cooperation between lines in situations where one or more lines in a region is growing while another line is reducing staff numbers. So the ATO view is that where a particular business line has the need and the capacity in terms of resources to take on an extra person at the regional level and such a job would otherwise be filled by an open merit selection process, clause 108 operates to require that business line to consider any expression of interest lodged by an employee from other lines in the same region who are affected by potential excess situations. We do not believe that clause 108 was intended to interfere with any process that merely involved a business line reassigning duties amongst existing workforce.
PN528
THE COMMISSIONER: Well, I think that reassigning duties is fine but, see, it is a bit more than that, isn't it. I mean, if you say that quickly it doesn't sound like much but you can reassign duties and then avoid a vacancy and yet someone from another business line might have been capable of being redeployed there. I mean, it is hard to reconcile what you are putting.
PN529
I have got to say it and I have said it before but I will put it on the record here. It is hard to reconcile what you are saying with the principle in 108.3(a) that potential excess employee situations will be dealt with as a whole of ATO issue, because really what you are saying is that when stuck with a potential excess situation, the business line can avoid doing it if it wishes to because it just doesn't notify a vacancy.
PN530
MR JAMES: Could I just go on a little bit, Commissioner?
PN531
THE COMMISSIONER: I think - let us say that they have got vacancies. Until they have to advertise those vacancies they don't have vacancies is what you are saying.
PN532
MR JAMES: We are saying that a vacancy means an ongoing funded job that would mean you getting an extra person into your business line because that is the - - -
PN533
THE COMMISSIONER: Yes, but if you have got - but then you might have some excess jobs in your business line and you can shift them across without making it a whole of ATO issue. In other words, if you are an employee in a business line that has got the luxurious position of having some vacancies, you have got more chance of being redeployed than you have if you are not, if you are on another business line.
PN534
MR JAMES: I don't believe that an employee in that situation would be in a potential excess situation if they were in a line that had other vacancies. If an employee in that situation was moved to one of those vacancies and if the job they came from was backfilled, then I agree the line has taken on an extra - - -
PN535
THE COMMISSIONER: Okay, a business line that has got a vacancy at Melbourne and a position that is excess in Cheltenham. There are "more employees of a given class than is necessary for the efficient and economical working of the ATO in a particular location", we have got an excess situation. It has got to be dealt with on a whole of ATO basis. There is another business line that has got an excess person in Cheltenham and no vacancies.
PN536
MR JAMES: In that situation, Commissioner, I think that - - -
PN537
THE COMMISSIONER: How have you not got in both of those cases a situation falling within 108?
PN538
MR JAMES: Well, the ATO believes there that the line that has got the person in Cheltenham who is potentially excess but a vacancy in Melbourne would have every right to move that person from Cheltenham to Melbourne to fix up their staffing situation.
PN539
THE COMMISSIONER: They might have every right to do it but how do they have a right to avoid the provisions of 108?
PN540
MR JAMES: Well, Commissioner, if, for example, they move the other person in from the other business line into the vacancy in Melbourne, then they would be potentially excess by one extra - - -
PN541
THE COMMISSIONER: But isn't that what is supposed to happen? It is supposed to go to the regional committee and we say, look, we have got a vacancy here in Melbourne and we have got an excess person here in Cheltenham and the other people have got an excess person in Cheltenham and you then look at who is the best person for the job. Isn't that what the assistance that is required under 108.5 is all about?
PN542
MR JAMES: That is correct, Commissioner, but I think our view is that the person in the business line that has the vacancy in Melbourne, that line is not in a potential excess situation and - - -
PN543
THE COMMISSIONER: Yes, it is. There are "more employees of a given class than is necessary for the efficient and economical working of the ATO in a particular location".
PN544
MR JAMES: So if the relocation is to Cheltenham in that case?
PN545
THE COMMISSIONER: Yes.
PN546
MR JAMES: I guess we - - -
PN547
THE COMMISSIONER: How is there not?
PN548
MR JAMES: We have been reading it as region, Commissioner.
PN549
THE COMMISSIONER: Okay, well, let us try today.
PN550
MR JAMES: Maybe that is not right but our view has been that where a business line - a business line can move people between offices within a region and that is clearly possible under clause 88 of the agreement. So if there was not a job in Cheltenham in a particular line and there was someone there but there was a job in Melbourne, then the business line would simply move the person under clause 88 - - -
PN551
THE COMMISSIONER: That is in a situation where you don't have an excess situation. The reality is you have because you have got two people and one position, a potential excess situation.
PN552
MR JAMES: I guess that is - well, maybe that is where we have a different understanding of what 108 means, Commissioner.
PN553
THE COMMISSIONER: I can't see any - I mean, it would have been so easy - it is the same argument I had with Mr Lapidos in a different way, except it would have been easier to actually exclude that situation in 108, simply saying that this does not apply where it is a move in the business line, but it doesn't say that. It says something quite the contrary. It says in 108.3(a), "Potential excess employee situations will be dealt with as a whole of ATO issue."
PN554
MR JAMES: But, Commissioner, if you read 108.4 it talks about the process - - -
PN555
THE COMMISSIONER: We had this discussion, and if you are going to turn principles into practice without applying the principles then I have got to read that down, don't I.
PN556
MR JAMES: Well, I guess the practice set out clarifies the principle, Commissioner, in this case. It talks about business lines looking at their staffing on a regional basis and that business line at those regional meetings putting up their hand and saying: look, I have a problem; I can't usefully allocate my staff across the region. I have got more staff than I can allocate across the region, and any other business line helping.
PN557
THE COMMISSIONER: But possible vacancies have to be identified in other BSLs and in the case that I have just given there is clearly a vacancy in Melbourne for that BSL.
PN558
MR JAMES: Yes, Commissioner, but not one that is going to go to filling by open selection.
PN559
THE COMMISSIONER: And it would have been so easy to say that.
PN560
MR JAMES: Sorry, Commissioner?
PN561
THE COMMISSIONER: It would have been so easy to say that somewhere in this document. I mean, it is alluded to, I accept, in 108.5(a) but - - -
PN562
MR JAMES: I guess we believe that the term - - -
PN563
THE COMMISSIONER: It conflicts with - I mean, you are asking me to give a positive interpretation to 108.5(a), a positive interpretation to something that gives effect to a principle with which it is at odds in 108.3(a).
PN564
MR JAMES: Yes, but, Commissioner, 108.3(a) does have some words at the end, "even if handled primarily in a single business line", and that is the balance we think that has to be struck between things being done corporately and a business line managing their staffing at the regional level within their own - - -
PN565
THE COMMISSIONER: But you are giving people rights with this agreement. You are giving them a right to be assisted, and you are asking me to interpret it in a way that doesn't give them a right.
PN566
MR JAMES: No, I don't believe so, Commissioner. I believe - - -
PN567
THE COMMISSIONER: Because if you are in a business line that hasn't got a vacancy you don't get the rights but if you are in a business line that has got the vacancy you are lucky.
PN568
MR JAMES: If you are a business line that is only filling a vacancy by moving people within its line, then we do not regard that as a - - -
PN569
THE COMMISSIONER: I know you don't regard it but from one location to another. I don't think you have got a problem when you are within the same location but the moment you are moving a location, because of there being more employees of a given class than necessary.
PN570
MR JAMES: I do agree that some of the wording of 108 is problematic and - - -
PN571
THE COMMISSIONER: Well, to the extent that it is I must go back to the principles that it is seeking to give effect to. Now, it may be that everyone agrees that whole of ATO doesn't mean whole of ATO but until they can come to that agreement I am going to see it for what it is. Anyhow, I understand your position. I think in the context of this conversation it has become absolutely apparent that I understand your position. It is that if there is a vacancy in a business line and the business line has someone who can fill that vacancy, then there is no requirement to make that available to another business line.
PN572
MR JAMES: That is correct, Commissioner.
PN573
THE COMMISSIONER: Because it wouldn't have been put up for open - - -
PN574
MR JAMES: That is right.
PN575
THE COMMISSIONER: But the moment that the business line puts it up for open advertisement, then before - sorry. The moment the business line makes a decision to put it up for open advertisement, they have got to put it to the regional committee.
PN576
MR JAMES: That is right, Commissioner.
PN577
THE COMMISSIONER: And it would have been so easy to say that but they didn't. Okay, I understand.
PN578
MR JAMES: Commissioner, I might move on to - there was another aspect, I think, that was raised by the ASU, was the provision of information on workforce adjustment to the unions. As I think has been acknowledged this morning the ATO does put records of meetings - are published on ATO Connect and those records are sent to the unions. As noted in this Good News letter of 30 August, which I think is - - -
PN579
THE COMMISSIONER: L10. That was the letter or the - sorry, L10 was the Commissioner's address.
PN580
MR JAMES: I think it might be L3, Commissioner. Yes, it is exhibit L3 in that letter to the ASU it has been noted that - - -
PN581
MR LAPIDOS: I am sorry, it is not L3.
PN582
THE COMMISSIONER: No, L3 is to the Taxation Commissioner seeking his - - -
PN583
MR JAMES: L4, sorry. In exhibit L4, that letter of 30 August, Ms Goodyer has noted that she has asked regional committees to submit copies of their minutes to the unions as soon as possible, rather than waiting for collected set from all regions and we hope that that will make the process work a bit better, sharing that information. There is also an undertaking or noting in that letter that information received by regional committees will be provided directly to all potentially excess staff in the region, and we hope that might help to alleviate some of the ASUs concerns on that point.
PN584
I think the practice has been in some cases to alert the manager of the area with potentially excess staff so that the manager can then pass that on to the employees but there is a change of process envisaged here, Commissioner, where it goes directly to the employees. Commissioner, moving on to the next matter, which was requiring staff to work below their classification level. This - - -
PN585
THE COMMISSIONER: I thought there was within that context of the information in exhibit L3 and the failure to respond. Exhibit L3 was the - - I mean, I don't know that I want to take it much further but - - -
PN586
MR JAMES: Yes. Was that about section 285(3)?
PN587
THE COMMISSIONER: Yes.
PN588
MR JAMES: Yes. That letter I have not seen - this is the first time I have seen that letter, Commissioner, and we have checked with Ms Goodyer, who has not seen that letter also. So I just don't know where that letter was sent to or who has got it.
PN589
MR LAPIDOS: If I may, Commissioner, it was sent direct to Michael Carmody and I confirmed with his personal assistant that it had been received.
PN590
MR JAMES: We can investigate where that has gone, Commissioner. The next issue was about staff being asked to, allegedly, work below their classification level and there were two issues raised. One was in relation to Cheltenham and I think Mr Lapidos acknowledged there that in a separate listing under C0013632, Commissioner, before yourself, we arrived at an understanding in conference about that. The other matter was about APS4s and personal tax and that was also a concern of the CPSU. Ms Powell outlined the outlined the steps that have been taken to try to resolve that.
PN591
I have got information this morning that might assist and it is pretty much in line with the minute that Ms Powell tabled before, which was exhibit P1. The people who normally work in interpretation and compliance in the public assistance area have been asked to work in the public assistance part of the personal tax line. It is only a short term measure, expected to end at the end of October but what management has done, they have arranged for all work that has normally escalated to the interpretation and compliance people, for that not to be escalated but to be done by the APS4s while they are physically in the public assistance area.
PN592
There is normally an escalation process of more complex inquiries from the public assistance area to the interpretation and compliance area. So it is probably true that the APS4 people will be taking a range of types of phone calls but the ATO has at least ensured that some of that more complex work will remain with the APS4s while they are in public assistance. After the peak tax time, Commissioner, the APS4s will be going back to interpretation and compliance and will just be treated like anybody else in interpretation and compliance.
PN593
So I think that issue, hopefully, may be on the way to being resolved and there is certainly no intention for people to be de-skilled. It is a customary process for ATO employees to be temporarily deployed onto different functions during our peak processing period. The next issue, Commissioner, was - - -
PN594
MR LAPIDOS: Excuse me, just to clarify something that Mr James purported to address one of the issues that I had raised by referring to the situation of APS5s in the Cheltenham call centre and said that we dealt with that last week. While that is true, I did not raise at all the situation of those people today. The situation I raised was APS3s at the Cheltenham call centre being asked to do 2 work. So perhaps that is the issue that Mr James should address.
PN595
MR JAMES: Sorry. I misunderstood you. I don't know whether that matter was raised in discussions under the step 2 of ..... or not.
PN596
MR LAPIDOS: If you look at L2, Commissioner, on the second page in what I have called the second major dot point, Cheltenham, going down about the fifth sub-dot point: "Cheltenham call centre staff are being required to do ATOP work, 3s to do 2 work", and then reference to 5s was before our hearing.
PN597
MR JAMES: I might have to get back on that one, Commissioner.
PN598
THE COMMISSIONER: Yes.
PN599
MR JAMES: The next issue, Commissioner, is about intimidating staff to accept regression. The ATO is not aware of any staff being intimidated into accepting regression and the exhibit tabled by the ASU, which was Mr Ryan's note to call centre employees - I think that was L12 - that suggestion was done in the terms of Mr Ryan's words: "People might like to consider the prospects of regressing to the APS2 level." Now, that was mentioned as merely one option which also drew the attention to staff of other jobs in ATO Production, Cheltenham and the call centre Casselden Place.
PN600
I guess the ATO is reluctant to rule out its option when an employee is fully informed of their available options and voluntarily elects to move to a lower paid job. There could be good personal reasons for requesting that, Commissioner, such as working at a preferred site, preferred type of work or for other sound, personal reasons. The ATO does have some empathy, I guess, for the view that it could be inappropriate in some situations and we would be prepared to talk to the parties more about that.
PN601
It may be inappropriate for someone to agree to a voluntary reduction under clause 60 when a reduction or classification under the provisions of clause 109 is imminent and would afford the employee's income maintenance for the balance of their retention period. That would be one example where we would think that the employee would be counselled not to accept reduction under clause 60. So the ATO is prepared to discuss that matter with the parties.
PN602
Commissioner, just to sum up, the ATOs view on the way forward in this matter is that clause 109 has now clearly been activated. Employees and unions have been advised of the situation in terms of step 1 of clause 109. Ms Goodyer actually met with the ASU last Friday afternoon to try to discuss the particular issues raised in an effort to avoid the hearing proceeding today but that wasn't possible. The ATO view is that the longer it takes the ATO to reduce its staffing to an affordable level, then it could mean that the cuts become more severe. This is not a new point, Commissioner. This has been discussed between the ATO and the unions since early August.
PN603
So the ATO would like to proceed without delay with the consultation process in clause 109 so the offers of voluntary redundancy and swaps can be made as early as possible. Whilst we can't rule out the prospect of involuntary redundancy absolutely, it is the ATOs strong preference that staffing reductions are achieved by voluntary redundancy. So we would like to work with our employees and unions to achieve that in the shortest reasonable time frame, Commissioner. Thank you.
PN604
MR LAPIDOS: Commissioner, could - - -
PN605
THE COMMISSIONER: No, we will adjourn into conference. You will have an opportunity to come back later, subject to what we do in conference.
NO FURTHER PROCEEDINGS RECORDED
INDEX
LIST OF WITNESSES, EXHIBITS AND MFIs |
EXHIBIT #L1 LETTER FROM ASU TO COMMISSIONER OF TAXATION DATED 21/08/2001 PN41
EXHIBIT #L2 REPORT OF CONFERENCE BETWEEN ASSISTANT COMMISSIONER AND ASU HELD ON 22/01/2001 PN42
EXHIBIT #L3 DOCUMENTS SOUGHT BY ASU FROM ATO PN47
EXHIBIT #L4 RESPONSE BY TAX OFFICE TO CONFERENCE HELD ON 22/08/2001 PN49
EXHIBIT #L5 ATO NATIONAL OFFICE MINUTE DATED 16/05/2001 PN55
EXHIBIT #L6 DOCUMENTS, INCLUDING EXTRACT FROM BUDGET PAPERS PN64
EXHIBIT #L7 TAX OFFICE WEEKLY ELECTRONIC MAGAZINE DATED 04/06/2001 PN71
EXHIBIT #L8 STATEMENT BY THE TAX COMMISSIONER TO ALL ATO STAFF ON 06/08/2001 PN78
EXHIBIT #L9 NATIONAL OFFICE MINUTE FROM ACTING FIRST ASSISTANT COMMISSIONER ATO CORPORATE, MICHAEL McDERMOTT, DATED 10/08/2001 PN89
EXHIBIT #L10 TRANSCRIPT OF A BROADCAST BY TAX COMMISSIONER MICHAEL CARMODY ON 30/08/2001 PN94
EXHIBIT #L11 REGIONAL WORKFORCE MINUTES FOR VICTORIA AND TASMANIA 04/07/2001 AND 01/08/2001, AND NEW SOUTH WALES FOR 07/08/2001 PN101
EXHIBIT #L12 DOCUMENT FROM ASSISTANT COMMISSIONER TO ATO BUSINESS CALL STAFF AT CHELTENHAM, DATED 07/08/2001 PN117
EXHIBIT #P1 LETTER FROM STUART SMILEY TO ALL STAFF AFFECTED BY THE TRANSFER PN318
EXHIBIT #J1 ATO PROPOSED PROCESS PN426
EXHIBIT #J2 BUNDLE OF CORPORATE COMMUNICATION MESSAGES PN429
EXHIBIT #J3 BUNDLE OF DOCUMENTS IN CONFIDENCE PN489
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