C2002/354, Transcript of Proceedings [2006] AIRCTrans 891 (18 July 2006)

AUSCRIPT PTY LTD
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TRANSCRIPT OF PROCEEDINGS

O/N VT10149
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER SMITH

C2003/354

AUSTRALIAN MUNICIPAL, ADMINISTRATIVE,
CLERICAL AND SERVICES UNION

and

AUSTRALIAN TAXATION OFFICE

Application under section 170LW of the Act
for settlement of dispute (certification of
agreement) re the alleged failure of the ATO
to help a probationary employee improve her
work performance

MELBOURNE

10.36 AM, MONDAY, 13 JANUARY 2003

Continued from 9.1.03 (Not Transcribed)

PN1

THE COMMISSIONER: I will take appearances again, thank you.

PN2

MR J. LAPIDOS: I appear for the Australian Services Union. With me is MS L. EID.

PN3

MR J. McWHINNEY: I appear for the CPSU. With me is MS L. ROTUNNO.

PN4

MR R. JAMES: I appear for the ATO. With me is MR B. O'SHEA.

PN5

THE COMMISSIONER: Thank you. Now, Mr McWhinney, have you been advised of the question that I am being asked to answer today?

PN6

MR McWHINNEY: Yes, Commissioner, we have.

PN7

THE COMMISSIONER: Good. All right, has there been any discussion about how this should go, or are you up, Mr Lapidos?

PN8

MR LAPIDOS: Thank you. We have had discussion about the respective arguments. There is a provision in our dispute avoidance procedures that say:

PN9

Prior to any AIRC hearing the parties to the dispute will provide each other with relevant documents and information.

PN10

This is, I beg your pardon, Commissioner, in clause 141.5, step 3, in the paragraph that commences:

PN11

Prior to referring the matter to the AIRC - - -

PN12

THE COMMISSIONER: Yes.

PN13

MR LAPIDOS: And it says:

PN14

...will provide each other with relevant documents and information and an outline of the case that they will put to the Commission at least 48 hours prior to the scheduled appearance.

PN15

We weren't able to do it in 48 hours but there have been continuing discussions. I had discussions with the CPSU on Friday and with Mr James on Friday and we have all spoken this morning before the hearing. So I don't think any of the parties would be caught by surprise. That was the purpose of that provision.

PN16

THE COMMISSIONER: Yes.

PN17

MR LAPIDOS: Just to state for the record, the question we are determining today, as I understand it, is: Does clause 108 of the ATO General Employees Agreement 2002, in conjunction with other provisions of the agreement, apply to probationers.

PN18

Just to confirm for you, Commissioner, in terms of your power to determine this question, and I should - - -

PN19

THE COMMISSIONER: Is it raised as an issue?

PN20

MR LAPIDOS: I don't believe so, but just for your own satisfaction perhaps.

PN21

THE COMMISSIONER: Yes.

PN22

MR LAPIDOS: If I can refer you again to the dispute avoidance procedures. In 141.5, step 3, it talks about the power of the Commission, and it says:

PN23

In order to resolve the matter the parties empower the Commission to settle disputes over the application of the agreement.

PN24

And it talks about three separate types of disputes: those that are covered by section 89A with allowable matters; others where all the parties agree to accept and comply; and three, matters that would otherwise be excluded. And we would say in any case that there might be some doubt about whether this is an allowable matter or not, but in any case we would say that it is covered by step 3(b) where this is about determining whether or not a person bound by this agreement has complied with any procedural obligation, employee entitlement or condition under the agreement, and that if a person bound has not complied with a procedural obligation, employee entitlement or condition under the agreement, the Commission may determine what steps are necessary to achieve compliance, and really, the purpose of today's hearing is to determine whether another hearing will occur tomorrow to determine whether that has occurred in practise with an individual employee on probation.

PN25

Commissioner, if I can just refer you to the Workplace Relations Act, to section 170LJ(3)(b). That clause simply says that the employer must take reasonable steps to ensure that the terms of the agreement are explained to employees. And also to section 170LT(7), and that section speaks about explanation of the agreement being provided in ways that are appropriate, having regard to persons particular circumstances and need. Examples are given and we would say that probationary employees are one type of employee whose particular circumstances and needs need to be taken into account.

PN26

The only purpose for referring you to these provisions is that we say that in terms of the words of the agreement that they should be - a probationary employee and other employees should be entitled to take their plain reading and if there is any doubt then the explanatory material that are provided by the employer, we could make reference to that, and we would also - I will provide you shortly with material that was prepared by the ASU as well - but any strange constructions that might care to be put on a clause by the employer after the event should not be relied on.

PN27

Commissioner, there was a change between 2001 agreement and the 2002 agreement and I just wanted to draw that to your attention, and also provide you with the Tax Office's explanation or summary of changes that were agreed as part of the 2002 agreement. And I will also give you at the same time if that is all right an extract from the 2001 agreement.

EXHIBIT #ASU1 BUNDLE OF DOCUMENTS

PN28

MR LAPIDOS: Thank you. If you can turn to page 17 of the Tax Office summary of agreed changes. If you look down the lefthand side you will see, under the heading: Section N, employee performance, the numbers 93 going down, and if you look particularly at clause 95 and 96. And what happened was there was agreement between the parties to change the numbering system, and so clause 95 because clause 108 and clause 96 became clause 109. And if you look at the, I suppose you would call it a legend or explanation: Description of change is on the righthand side against 95: Counselling. You will see it says, the document says there is no change, and against 96: Unsatisfactory performance procedures, it reads: Updated, clarifies that this clause only applies to on-going employees who are not on probation.

PN29

We don't think any of the other changes that were made to clause 96 are relevant. And really, just for the sake of completeness, so that you can see it yourself, you can see in the extract from the old agreement, clause 95 and part of 96, and if you compare them with the new 108 and 109, you will see in fact that the words in the old clause 95: Performance counselling, are exactly the same as the new clause 108. In the new agreement they are situated in a slightly different part of the agreement, there is agreement about reshaping how the agreement was presented. But the clause itself stayed the same, and in fact what has happened is the clauses dealing with under-performance were moved away from clauses that dealt with how to assist staff more generally but support the office would provide to staff generally.

PN30

In 109, the difference - sorry, the difference in 109 from the old - the difference in the new 109.1 compared to the old 96.1 of the addition of the words at the end, "These procedures only apply to on-going employees who are no longer on probation."

PN31

There is one other document I would like to hand up to you, Commissioner. This is a document that was prepared by the ASU.

EXHIBIT #ASU2 SUMMARY OF PROPOSED AGREEMENT PREPARED BY ASU

PN32

MR LAPIDOS: This document was prepared by the ASU which was a summary of the proposed agreement and was released by us prior to the vote to inform members and staff about the changes. It was prepared by our industrial officer, Mr McPhee. If I can take you to page 10 of the document that is attached to the email, there is a section there on inefficiency and probationary employees. It is probably sufficient if I ask you to read it.

PN33

THE COMMISSIONER: Yes.

PN34

MR LAPIDOS: So what has happened is the ASU has alerted our members and staff to changes effectively to clause 96. We haven't made any mention of a change to clause 95 because we were quite sure there was no change to clause 95 other than it being re-numbered.

PN35

In terms of the application of the agreement to probationers and do probationers have any other special provision under the agreement other than the exclusion in the new 109.1, if I can refer you to clause 133 of the 2002 agreement. It answers the question, who does the agreement cover. Clause 133.

PN36

THE COMMISSIONER: Yes.

PN37

MR LAPIDOS: And under the heading: Employees, all employees at the Tax Office excluding the Australian valuations office who are employed in classifications below APS Executive Level 2, except those who are engaged overseas or who aren't employed under the Public Service Act, and those exclusions don't affect us in this matter at all.

PN38

Commissioner, I have looked through the agreement perhaps a little superficially in preparation for this hearing, but in looking at it and in my recollection of this agreement, the negotiation of this agreement and all the other agreements that I have been part of the negotiations, all the Taxation Office agreements back to 1994, I am not aware of any other provisions in this agreement that act in any overt way to exclude probationary employees. Probationary employees are paid by the Tax Office at the same rate as an on-going that has passed their probationary period. They don't get - there is no bonus or new pay scale for them once they get through their probationary period. As far as I am aware they enjoy the benefits and responsibilities of the whole of the rest of the agreement, and there is only one part of the agreement they are excluded from and that is the benefits and responsibilities at clause 109.

PN39

In our submission, what happens in practise or what should happen in practise with a probationary employee under 108, they are entitled to know if their team leader thinks that their work performance is at risk of falling below the general standard that is expected of their classification, and what should happen at 108.2 is they should be given help to improve their work performance to a satisfactory level through fair procedures that protect the respective interests.

PN40

THE COMMISSIONER: What do you say those fair procedures are?

PN41

MR LAPIDOS: Well, they aren't specified.

PN42

THE COMMISSIONER: Aren't they?

PN43

MR LAPIDOS: I believe because they will vary from circumstance to circumstance.

PN44

THE COMMISSIONER: Why wouldn't they be informal discussions as described in 108.3?

PN45

MR LAPIDOS: Why wouldn't they be?

PN46

THE COMMISSIONER: Informal discussions.

PN47

MR LAPIDOS: The mere fact of informal discussions being sufficient to be fair procedures?

PN48

THE COMMISSIONER: Yes. Because 108.3 says where informal discussions don't lead to acceptable improvement then there is some formality injected. And it is that formality which is then excluded on your argument.

PN49

MR LAPIDOS: No, no. It says, and I will have to acknowledge the assistance of my colleague from the CPSU perhaps on this point, it says, further clarifying this, formal work performance counselling or unsatisfactory performance procedures should take place.

PN50

THE COMMISSIONER: Yes.

PN51

MR LAPIDOS: So what happens, it will depend, I believe, on the nature of the risk that the employee faces. A person may make a single mistake and have that drawn to their intention informally. If it repeats, for example, and there is another simple mistake the team leader might then be - might make a record of it, and the fair procedure in that circumstance might be that the discussion, the employee is given a copy of the note - - -

PN52

THE COMMISSIONER: That is a formal procedure, isn't it; a record?

PN53

MR LAPIDOS: Well - - -

PN54

THE COMMISSIONER: Once you start making records, doesn't that make it formal?

PN55

MR LAPIDOS: Yes.

PN56

THE COMMISSIONER: Well then, why can't I read, if you are right, that 108 applies, why can't I read it to say 108 applies to probationers but is limited to informal discussion?

PN57

MR LAPIDOS: Because formal work procedures are available and it also says - - -

PN58

THE COMMISSIONER: But then they are excluded.

PN59

MR LAPIDOS: No, no. They are only excluded from unsatisfactory performance procedures.

PN60

THE COMMISSIONER: They are not excluded from formal work - - -

PN61

MR LAPIDOS: Performance counselling. The whole - the title of clause 108 is performance counselling.

PN62

THE COMMISSIONER: Well, where in the agreement is formal work performance counselling?

PN63

MR LAPIDOS: Well, performance counselling is referred to in 108 and the procedures for unsatisfactory performance are in 109. There is a difference - the difference between the two is, unsatisfactory performance I believe is something that really happens over a period of time. The risk of becoming unsatisfactory is not because an individual employee makes a mistake. There is in the agreement a whole section on skilling and development and the idea of providing feed-back to staff. And all staff, whether probationers or not, will make mistakes or do things that can be improved on, and the mere fact that a person makes a mistake in their work doesn't mean that they should be subject to performance counselling.

PN64

Certainly the old agreement talked about positive and corrective feed-back - would you just excuse me for a moment, Commissioner?

PN65

THE COMMISSIONER: Yes, of course.

PN66

MR LAPIDOS: Commissioner, if I can refer you to clause 125 of the 2002 agreement.

PN67

THE COMMISSIONER: Yes. Performance system.

PN68

MR LAPIDOS: It is called section (f), and that outlines the performance system. And it was substantially re-written compared to the 2001 agreement and hence I will have to admit that I am not as closely familiar with it. But, for example, in 125.5 says:

PN69

You will receive regular feed-back from your team leader or director. Feed-back will be formal and informal and include your progress against your performance agreement.

PN70

And then it talks about the role that the feed-back will take to:

PN71

... recognise contributions, emphasise business outcomes and behaviours. Allow you to comment and provide evidence as required. Clarify performance issues. Clarify mutual expectations.

PN72

There is in 125.6 a distinction between informal feed-back and formal feed-back in 125.7:

PN73

The formal feed-back is part of an idea of regularly formally reviewing performance and informal feed-back is something that is provided frequently to you during the course of your work.

PN74

I wasn't able to see the expression "positive and corrective feed-back" in this area. They were words that were used in the 2001 agreement and for some reason I am not aware of appear not to be included again in the clause 125. But I would argue that all performance feed-back, in practice, is going to include positive feed-back on one's achievements, and potentially, depending on - perhaps even the most exceptional people have got avenue for corrective feed-back. And clause 125 in my submission applies to probationers as well. They have the opportunity to participate in that and so does the Tax Office. We haven't had a separate discussion with the Tax Office about whether clause 125 in particular applies to probationers, but we did, well, I believe it does and we will hear what they have to say.

PN75

So, I mean, this is a comprehensive agreement and so there - 108 is only applying when there is something more than the need for occasional corrective feed-back that a team manager might want to provide to the employee that they are responsible for. And 108 really is triggered when the issues have become significant enough to think that there is a risk that they may fall below the general standard that is expected of their classification.

PN76

THE COMMISSIONER: Why isn't 108 triggered:

PN77

Where informal discussions with employees about their work performance does not lead to an acceptable improvement in performance, formal work performance counselling or unsatisfactory performance procedures should take place.

PN78

MR LAPIDOS: Well, I believe that there is really a two stage process in 108. One is an informal discussion and then there is formal work performance counselling. The time that unsatisfactory performance procedures take place, in fact, is when there is a finding that their work performance actually becomes unsatisfactory. If you look at 109 - - -

PN79

THE COMMISSIONER: So if your work performance is not unsatisfactory, you can have formal work performance counselling.

PN80

MR LAPIDOS: Yes.

PN81

THE COMMISSIONER: If it is unsatisfactory, then it doesn't come under the heading of formal work performance counselling.

PN82

MR LAPIDOS: That is right. In fact, if you look at 109, at the structure of it, it - - -

PN83

THE COMMISSIONER: Deals with unsatisfactory performance.

PN84

MR LAPIDOS: Yes, but before a finding can be made of unsatisfactory performance, there is a natural justice process or procedural fairness process that is gone through, and you will see in 109.2 that before there is a final warning there are usually informal discussions. Then 109.3 gives an explanation of what unsatisfactory performance is:

PN85

If they fail to attain and subsequently maintain a standard of efficiency that could reasonably be expected.

PN86

But before issuing the final warning, which is described in 109.2, 109.4 says the director has to be satisfied of a number of things about: the procedure to date being fair and free from bias, that the employee has seen and had an opportunity on the team leader's recommendation, the employee has been given an opportunity to put their case. So those things have happened prior to a finding by the director of unsatisfactory performance.

PN87

THE COMMISSIONER: But again, 109.2, to the extent it is necessary to reinforce the view of 108.3, talks about informal discussions.

PN88

MR LAPIDOS: Yes. It does, except that you would have to read that sentence with all the things that follow it, Commissioner, because, in fact, what happens in practise the Tax Office endeavours to comply reasonably closely with the procedures that follow.

PN89

THE COMMISSIONER: Yes.

PN90

MR LAPIDOS: And what happens is that a team manager has to make a recommendation.

PN91

THE COMMISSIONER: I am looking at what the agreement requires. I am going no further than that.

PN92

MR LAPIDOS: Well, yes, but I am saying - I understand that, and I don't know that the Tax Office goes any further than what the agreement requires because what happens in these unsatisfactory performance procedures, they are done in a very formal way.

PN93

THE COMMISSIONER: Yes. But you see, what I am putting to you is that if you are right that 108 applies, then the guidelines for dealing with probationers to the extent that that extends beyond informal discussions may be in addition to the agreement, not required by the agreement.

PN94

MR LAPIDOS: Well, I have not made any submissions about their guidelines at all.

PN95

THE COMMISSIONER: No.

PN96

MR LAPIDOS: Their guidelines are their guidelines and, if we think that they are inconsistent with the agreement, we can raise that with the Tax Office.

PN97

THE COMMISSIONER: Yes.

PN98

MR LAPIDOS: I have thought that they were inconsistent with the agreement because they make no reference, in fact, to clause 108 at all that I could see. What appears to be concerning you, Commissioner, is this idea of - we have a situation where there are informal discussions. My view has been that in terms of fair procedures, they do need to be documented. I have argued consistently in recent times, because this is not the only case I have had occasion to deal with, that in order for procedures to be fair there should be a formal meeting between the employee and the manager, and that the employee should have the opportunity of having an employee support person with them and that - - -

PN99

THE COMMISSIONER: But where do you get that from 108?

PN100

MR LAPIDOS: Well, if I can also refer you to clause 4.

PN101

THE COMMISSIONER: Clause 4?

PN102

MR LAPIDOS: And it talks about employees having the right to have the support of another person in any formal interview, or in preparing formal representation.

PN103

THE COMMISSIONER: Well, is 108 formal?

PN104

MR LAPIDOS: Well, it also - but it also says ", a performance management process."

PN105

THE COMMISSIONER: Is that performance management, 108?

PN106

MR LAPIDOS: Yes, yes.

PN107

THE COMMISSIONER: Is it? Okay.

PN108

MR LAPIDOS: I believe it is. In the 2001 agreement it was called a performance development and management system. In the 2000 agreement it was called a performance management system. The changes in the names of the performance management system were intended to reflect changes in emphasis over time. So, for example, in the 2001 agreement the change of the name from the performance management system to the performance development and management system was to clarify a change in emphasis that the performance system was intended to help employees develop their skills further, rather than just manage them. In this agreement - - -

PN109

THE COMMISSIONER: It all comes under the heading of under-performance, 108 and 109 comes under the heading of under-performance.

PN110

MR LAPIDOS: It does, and I mean I would say that managing a person's performance includes managing under-performance as well as managing above-performance. And what really would happen, in my submission, in terms of clause 4 with employee support, if you are invited to a meeting with your manager, your manager might want to be saying what a great employee you are and have no reservations about their performance at all. In my submission, under clause 4 an employee is entitled to have the support of another person with them. Some people might feel nervous, for example - - -

PN111

THE COMMISSIONER: Yes.

PN112

MR LAPIDOS: - - - appearing before their manager, even if they are outstanding. They might want to argue they are even more outstanding than their manager has thought they were.

[11.10am]

PN113

The distinction between informal discussions and formal discussions aren't very - the only real clue, as I said, was in that clause 125 where - in term of another clause, where formal feedback is part of a structure. There is a structure in this where there is a formal half-yearly and annual performance review that is meant to be documented in some way and all managers are expected to provide that feedback every six months to staff as well as informal feedback in between times.

PN114

In terms of clause 108 itself, I believe the distinction between informal discussions and formal work performance counselling, keeping in mind the heading of 108 is Performance Counselling, depends on how much nudging the person needs. Work performance includes, I believe, for example, punctuality, diligence. We might get some clue to it in salary advancement.

PN115

In clause 12 there is provision for salary advancement because there are a number of pay points within each classification, and in 12.4 salary advancement is subject to the employee's diligence, efficiency, attendance for duty and overall performance being assessed as satisfactory. I might add it says there:

PN116

The team leader director will refer to the ATO performance system in making this assessment.

PN117

I don't know how consistent all the provisions are in this agreement in terms of all the expressions that are used. We do try and make them consistent, but sometimes things don't necessarily follow. And so, for example, a manager in supervising a probationary employee or any employee is meant to have regard to those types of things that mentioned in 12.4.

PN118

So it might be that someone comes in late one day and there will be an informal discussion between the manager and the employee saying, well, really you should have been in by 9.30, for argument's sake, you have come in at 20 to 10, you should watch out in future. And presumably in a circumstance like that, there won't be very much argument about whether the employee was late or not. There may be - but you would expect that the employee would have the opportunity to explain why, and if it was a once-only occasion, then you would think that that would be sufficient for - as an informal procedure, but if it became consistent, then you would expect that there would be some formal thing where it was - you would think if it happened a second time, then the manager might become concerned and start doing something formal about it.

PN119

The formal process might be for a probationary employee, for example, to draw their attention to what the probationary rules are and to set something in place through some fair procedures so that it is going to be monitored properly in future and that they are fully aware that it is going to be monitored.

PN120

Commissioner, I think that is about as far as I can take it at the moment subject to hearing what the other parties say.

PN121

THE COMMISSIONER: Thank you. Mr McWhinney.

PN122

MR McWHINNEY: Thank you, Commissioner. The focus of the CPSU submission will basically be on the reading of 108. Commissioner, CPSU would contend that clause 108 says that employees should be made aware where there are - or where there is a risk of their work performance falling below the general standard expected. And it then goes on to say in 108.3 that if informal discussions are not successful in achieving an acceptable improvement in performance, that there are then formal procedures that can be moved to.

PN123

There is a distinction made in 108.3 between formal work performance counselling and unsatisfactory performance procedures, and the CPSU would contend that where probationers are precluded from the unsatisfactory performance procedures in 109.1, that doesn't mean that they are then precluded from either the informal processes under 108 or indeed the formal work performance counselling mentioned in 108.3. That is the essence of our submission.

PN124

THE COMMISSIONER: Thanks, Mr McWhinney. Mr James.

PN125

MR JAMES: Thank you, Commissioner. Commissioner, I would just like to, in my submission, look at the words of clauses 108 and 109, and secondly, I would like to look at what we can understand to be the intent of the parties in negotiating the new agreement. Firstly, Commissioner, looking at the words of clause 109, subclause 109.1 states that these procedures only apply to ongoing employees who are no longer on probation. In this context, Commissioner, the words "these procedures" could be read narrowly to mean only clause 109 itself or to be mean both clauses grouped under the heading of Under Performance, that is both clauses 108 and 109.

PN126

The ATO acknowledges that clause 109 is entitled Unsatisfactory Performance Procedures, but we submit that the reference to "these procedures" in subclause 109.1 could refer to both clauses dealing with underperformance. In terms of the wording, Commissioner, we would like to also draw your attention as we have discussed already to subclause 108.3 which states that:

PN127

Where informal discussions with employees -

PN128

etcetera -

PN129

do not lead to an acceptable improvement, formal work performance counselling or unsatisfactory performance procedures should take place.

PN130

The ATO believes it is clear that the reference there to unsatisfactory performance procedures in subclause 108.3 is referring to clause 109. Given this, Commissioner, we believe that clause 108 cannot apply to probationers as the unsatisfactory performance procedures of clause 108 only apply to ongoing employees who are not on probation - who are no longer on probation. We believe there is a natural progression from clause 108 through to clause 109 from the process of informal discussions through to either formal counselling or unsatisfactory performance procedures.

PN131

We believe, Commissioner, reading clause 108 as applying to probationers would mean, for example, that a manager would do part of the process envisaged by clauses 108 and 109, and then come to a halt when they reach the situation set out in subclause 108.3. The manager would be faced - - -

PN132

THE COMMISSIONER: But what is wrong with that? What is wrong with the process that simply says informally that I think your work performance is at risk of falling below the general standard accepted for your classification and here is what I expect you to do to improve.

PN133

MR JAMES: Commissioner, we believe that that is an incomplete process, and as I will go on to hopefully show, we believe our probation guidelines set out a complete scheme for probationers - - -

PN134

THE COMMISSIONER: Yes.

PN135

MR JAMES: - - - which talk about the whole process from go to whoa. Commissioner, we believe the answer to that - a manager could be faced with a question, right, what do I do now? I have had some informal discussions with the employee, the probationary employee, but I can't proceed to the next step of clause 109. And I guess, as I was just saying, our answer to that dilemma is that there is an holistic process set out in the ATO probation guidelines which obviously applies to probationers. We submit that clause 108 does not apply to probationers, nor is there any need for it to apply to them.

PN136

Commissioner, we would also draw your attention to the wording of subclause 109.26. Subclause 109.26 includes a statement that:

PN137

The parties to this agreement will consult in the development of ATO procedures, addressing the performance issues for non-ongoing employees within six months of certification of the agreement.

PN138

Clearly, Commissioner, clause 109 does not apply to non-ongoing employees by virtue of subclause 109.1, but this statement in subclause 109.26 suggests that both clauses 108 and 109 do not apply to non-ongoing employees. The intent of the parties is to develop separate ATO procedures addressing performance issues for this group of employees. Such an interpretation, Commissioner, would seem to be consistent with the view that both clauses 108 and 109 only apply to one grouping of ATO employees; that is, ongoing employees who are no longer on probation.

PN139

THE COMMISSIONER: Casual employees not ongoing?

PN140

MR JAMES: They are regarded as non-ongoing, Commissioner. Under the Public Service Act they are typified as employees engaged for irregular or intermittent duties. They are listed as a distinct group to those engaged for a specified term or a specified task, but both of those groups are commonly referred to as non-ongoing employees.

PN141

THE COMMISSIONER: Yes, thank you.

PN142

MR JAMES: Commissioner, looking to the intent of the parties in relation to the 2002 agreement, the ATOs clear intent was that the ATO probational guidelines would set out the procedures and processes that managers were required - in relation to probationers. Certainly, Commissioner, the ATO did not want a situation where a probationer, having work performance problems, could access this Commission for a review of the process prior to any decision about termination of employment.

PN143

The ATOs view on that point is that the Workplace Relations Act and Regulations set limits on the ability of a probationer to obtain a review by the Commission of a decision to terminate employment, that is, provided the probation period is set at a reasonable length and is determined in advance of employment, there is no avenue of review by the Commission. The ATOs intent was not to extend the review rights of probationers, Commissioner.

PN144

Looking at some of the material that was used to explain the agreement, Commissioner, the document that was tabled by the ASU, ASU1, which was the main ATO document summarising the changes agreed in negotiating the 2002 agreement, as Mr Lapidos has pointed out, that does note that the old clause 96 - the new clause 109 - has been changed to clarify that it only applies to ongoing employees who are not on probation.

PN145

We acknowledge that in relation to clause 95, the document notes that there was no change to clause 95 - the new clause 108 - and I understand that there was not any discussion about - or any detailed discussion at all about clause 95, Commissioner, I acknowledge that point. However, Commissioner, this does not mean, we believe, that the ATO meant or intended for clause 108 to apply to probationers. With the benefit of 20/20 hindsight, a clear statement to that effect could have been included in clause 108 to make it absolutely clear, but that unfortunately did not occur.

PN146

However, Commissioner, there are some documents I would like to table as well, and the first one of those is a record of discussions that was - Commissioner, that document - - -

PN147

THE COMMISSIONER: What is it a record of discussions of?

PN148

MR JAMES: Sorry. That is a record of discussions of the Conditions Subgroup for the agency agreement negotiations for the 2002 agreement.

PN149

THE COMMISSIONER: Any objection to those being tendered?

PN150

MR LAPIDOS: No, Commissioner.

PN151

MR McWHINNEY: No. No, Commissioner.

EXHIBIT #ATO1 RECORD OF DISCUSSIONS OF THE CONDITIONS SUBGROUP FOR THE AGENCY AGREEMENT NEGOTIATIONS FOR THE 2002 AGREEMENT

PN152

MR JAMES: Commissioner, I would just like to draw your attention to clause 96 there on the third page. I haven't included the whole document here, Commissioner. This is an extract of the document which includes the - shows the membership of the group and just mainly what was said about clause 96. In the right-hand column, Commissioner, the - I am submitting this document just to show the ATOs intent was clearly that for probationers we believe they are not included by the unsatisfactory performance procedures, but they are protected by alternate guidelines and those guidelines were indeed provided to the group during the negotiations.

PN153

And it goes on to say:

PN154

The ATO position is that this process is not for probationers.

PN155

THE COMMISSIONER: Well, you have got absolute agreement on that proposition, haven't you?

PN156

MR JAMES: Yes. I guess - we have, Commissioner. I guess the document goes to show our view that the ATO believe that there was a comprehensive scheme available elsewhere for probationers - - -

PN157

THE COMMISSIONER: Yes.

PN158

MR JAMES: - - - other than in the agency agreement. The other - I would like to exhibit another document, Commissioner, which is really about the structure of the two agreements. There are actually two documents here which go together and these are extracts of the clauses themselves dealing with underperformance and the index clauses to the agreement, Commissioner.

EXHIBIT #ATO2 EXTRACTS OF CLAUSES DEALING WITH UNDERPERFORMANCE AND INDEX CLAUSES TO THE AGREEMENT

PN159

MR JAMES: Commissioner, as Mr Lapidos noted in his submission, the two clauses in question, if you look at the document ATO General Employees Agreement 2001, clauses 95 and 96 were together in a section entitled Employee Performance, section N of the 2001 agreement. If you look at the document entitled ATO General Employees Agreement 2002, Commissioner, these new clauses are in the new agreement 108 and 109, have been moved together to section E of the new agreement, but under a separate heading of Underperformance.

PN160

We believe it is material, Commissioner, that these two clauses have been kept together and moved together to their new location in the new agreement and we believe that there is, as I said, a natural progression between these two agreements. They both deal with underperformance and they could be described as a pigeon pair.

PN161

Commissioner, just looking at the material that the ASU published in relation to the new agreement, as Mr Lapidos said, we shared this material before the hearing, the exhibit ASU2 cut some benefits to the final draft 2002 agreement. At page 10 of that document, Commissioner, I just, I suppose, summarise that, commenting on the ATOs proposed change. This publication reinforces that probationary employees who are terminated will not be able to argue that the termination was unjust because the ATO failed to apply inefficiency procedures.

PN162

It records the fact that the ATOs intent was that the probationary guidelines would apply to probationers with performance issues as they include requirements to observe natural justice, and it includes a statement, Commissioner, and I quote:

PN163

The probationary employee has no rights to appeal an unjust termination if they are expressly excluded from clause 96.

PN164

There is one last document I would like to table, Commissioner, and that is another explanatory document that the ASU published.

EXHIBIT #ATO3 EXPLANATORY DOCUMENT PUBLISHED BY ASU

PN165

MR JAMES: On page 3 of that exhibit, Commissioner, there is a - page 3 there is a bold heading halfway down the page, Particular Types of Jobs. In relation to probationary employees it notes that they are to be excluded from inefficiency procedures and then in the right-hand column says this is a cut in condition for probationary employees and it says probationers can't appeal to the Industrial Relations Condition if treated badly. Commissioner, while the ATO does not intend to treat probationers badly, we agree that they have no right of appeal to the Commission.

PN166

In conclusion, Commissioner, the ATO believes that a close examination of the wording of clauses 108 and 109 leads to the conclusion that clause 108 does not apply to probationers. We submit that this conclusion is supported by our arguments relating to the intent of the parties as can be surmised from the explanatory material and we believe, Commissioner, the alternate view would result in probationers who were experiencing any problems during their probation being able to seek a procedural review by the Commission prior to termination and in addition to any unfair dismissal rights under the Workplace Relations Act.

PN167

Such an outcome was certainly not intended by the ATO, nor would it seem envisaged by the other parties to the agency agreement. Thank you, Commissioner.

PN168

THE COMMISSIONER: Thank you. Mr Lapidos.

PN169

MR LAPIDOS: Thank you, Commissioner. I would just like to make it clear, based on the ASU document that have been put before you, we had no understanding whatsoever that the Tax Office intended that clause 108 should not apply to probationary employees. I was completely taken by surprise when the Tax Office advised me of that.

PN170

In our publications, the quick summary that the Tax Office handed up in ATO3, and in our slightly more detailed explanation in ASU2, we make it clear that the problem - we were advising our members and staff of problems with the agreement as we saw it, because generally from our perspective anything that is a cut in conditions is a problem and we were alerting them to the changes in 96, we did not believe there were any changes whatsoever in 108. The Tax Office document that we handed up in ATO1 confirmed our understanding.

PN171

The other thing I would ask you to consider is that we have got a very comprehensive agreement. Even in the circumstances of non-ongoing employees which were referred to by Mr James and the special provision that was in 109, given that there was agreement that those inefficiency procedures didn't apply to non-ongoing employees, there was to be special consultation about it.

PN172

THE COMMISSIONER: Within in six months of certification, yes.

PN173

MR LAPIDOS: That is right.

PN174

THE COMMISSIONER: Yes.

PN175

MR LAPIDOS: There is nothing like that in relation to probationary employees. What should be happening - what 108 does is give, we say, probationary employees as well as all other employees early notice if there are problems in their performance, an opportunity to deal with them through fair procedures. There is nothing extraordinary about that. It does not prevent the Tax Office from dismissing a probationary employee prior to the conclusion of their three-month or four-month probationary period, whatever it happens to have been set at at the beginning, presuming the period of time complies with the provisions in the Workplace Relations Act.

PN176

The Tax Office, when it came to us during the negotiations of these, they wanted to ensure that in terms of 96, the old clause 96, the new 109, that it couldn't be used to delay a probationary employee getting through their probation period because of the application of the procedures. That was its purpose, that was the only reason, and that was the reason I agreed to it because it was a contentious issue within our union. There was debate about it, whether we - how hard we should push on this particular issue, but I personally felt that it didn't cause a major problem for the employees, probationary employees, because they still had the provisions of 108 available to them and there was nothing to give me any indication otherwise other than what I have heard since we have come to the Commission in this matter. I don't think I can add anything further, Commissioner.

PN177

THE COMMISSIONER: Thanks, Mr Lapidos. Mr McWhinney.

PN178

MR McWHINNEY: Thank you, Commissioner. Basically, our contention would be that if 108 does not apply to probationary staff members, then there is nothing in the agreement that entitles them to be advised by their team leader if their performance is at risk of falling below expected standards. And where ATO argue that there is a natural progression from 108 to 109, that may be the case for non-probationary staff members, but that - that probationary staff members are precluded from 109, doesn't preclude them from 108 because there is that distinction in 108 between unsatisfactory performance procedures and formal work performance counselling.

PN179

THE COMMISSIONER: Yes, thank you. Very well. I will consider what has been put to me and I will deliver my decision - I will sit and deliver my decision at 2.15 today. The matter is adjourned until that time.

SHORT ADJOURNMENT [11.35am]

RESUMED [2.17pm]

PN180

THE COMMISSIONER: I have reached a decision in the matter. I will subsequently publish this decision and have it in the hands of the parties as soon as practicable.

PN181

This is an application pursuant to section 170LW of the Workplace Relations Act 1996. The Australian Municipal, Administrative, Clerical and Services Union have raised through the disputes procedure of the ATO (General Employees) Agreement 2002, a controversy with the Australian Taxation Office over the proper application of clause 108 of the agreement. Conciliation occurred on Thursday, 9 January, but agreement could not be reached.

PN182

In accordance with my usual practice, I invited the parties to agree upon the questions to be resolved in the proceedings. It was agreed that two questions arose in relation to the proper application of the agreement. They were firstly, does clause 108 of the agreement, in conjunction with other provisions of the agreement, apply to probationary employees? If the answer to that question is yes, then has clause 108.2 been properly applied in the facts and circumstances of this case?

PN183

In AMWU v David Syme, the approach to resolving matters under section 170LW was considered. In dealing with this matter, I consider that approach to be still relevant. I have also taken it to be the case that I am acting under clause 141.5 of the agreement. No submissions to the contrary were made.

PN184

The clauses in issue. It was agreed that the first question would be determined so that the need or otherwise to determine the second question would be apparent. On that basis, I now turn to the first question. The ASU argue that clause 108 applies to probationers as there is nothing on its face to suggest otherwise.

PN185

Clause 108 provides - and I will include the clause in the decision.

PN186

The ASU also drew upon the material which was forwarded to all its members before the vote was taken in relation to the agreement. In that material it was highlighted that the predecessor clause to 108 in the 2001 agreement was not changed. The CPSU, the Community and Public Sector Union, argue that clause 108 applied to probationary employees and that such employees were entitled to know if their work performance was such that they were at risk of falling below the general standard expected for the classification level.

PN187

The ATO contend that clause 108 is under the general heading of Underperformance in the agreement and must be seen in the context of clause 109 which is in the same section. Indeed, the placement of clauses 108 and 109 was changed in the 2002 agreement from its placement in the 2001 agreement. This change, it was argued, reflected the view that clauses 108 and 109 should be seen as interdependent.

PN188

Particular attention was drawn to clause 109 which provides - and I quote clause 109.1.

PN189

It is argued by the ATO that if the procedures are read as a whole, it would following that clause 108 and 109 would not apply to probationary employees. It was submitted that it creates an absurdity to refer to clause 109 in clause 108 and then to specifically exclude the operation of clause 108 in 109. The ATO argued that it never intended to provide an avenue where probationary employees could enjoy more rights of review by the Commission than those conferred under the Act.

PN190

I have formed the view that clause 108 applies to probationers. The clause distinguishes between informal and formal processes. It is clear that where formal processes are necessary as envisaged by clause 109, then those provisions in clause 109 do not apply. However, it is not inconsistent with the proper application of the agreement or, for that matter, proper practice that probationary employees are entitled to firstly know if their work performance is at risk of falling below the general standard expected for the classification level, and secondly, be given help to improve their work performance to a satisfactory level through fair procedures that protect the interests of the ATO and its employees and its clients.

PN191

Clause 108.3 begins by stating, quote:

PN192

Where informal discussions with employees about their work performance does not lead to an acceptable improvement in performance -

PN193

and I end the quote - formal processes will take place. The ASU and the CPSU seek to distinguish between work performance counselling and unsatisfactory performance. I am not sure that such a distinction exists, but assuming it did, then the combined operation of clause 108.3 and 109.2 would provide for informal discussion in circumstances involving unsatisfactory performance.

PN194

It follows that where a probationer was not performing and therefore placing her or his continued employment at risk, then that would be characterised as unsatisfactory performance. It would also follow that a proper application of the agreement is that a fair procedure for a probationer whose performance is not satisfactory would be satisfied if there had been informal discussions where the probationer had been advised that their work performance was at risk of falling below the general standard expected for the classification level and they were given help to improve their work performance to a satisfactory level.

PN195

Unless those fair procedures were limited to informal discussions, the intent of excluding clause 109 would be meaningless. In my view, clause 108 cannot be read so as to import other formal procedures beyond informal discussions. I am fortified in this conclusion also by the terms of 109.2 which refers back to informal discussions. To the extent that the ATO Guidelines exist and create processes which travel beyond informal discussion, then such a policy is in addition to and not a requirement of the agreement.

PN196

In accordance with clause 141.5, I determine that the proper application of clause 108 of the agreement is that it applies to probationers. I also determine that probationers whose performance is at risk of falling below the general standard expected for the classification is entitled to be advised of that through information discussion. Further, that probationers, through informal discussion, should be given help to improve their work performance to a satisfactory level.

PN197

I will now adjourn the matter. There is another matter that I have got at 2.30. The parties can confer and if they wish to confer with me, I should be available in about an hour-and-a-half.

PN198

MR LAPIDOS: Commissioner, just on that point, the matter that we raised earlier to let you know that we were interested in conferring with you, that is not necessary any more, though it will assist us for the purposes of tomorrow if we can get your decision because I am still coming to grips with it.

PN199

THE COMMISSIONER: Very well, yes, of course.

PN200

MR LAPIDOS: Do you have any idea how long it might take to get that?

PN201

THE COMMISSIONER: If you return at about - well, we should be able to fax it to you in about an hour-and-a-half.

PN202

MR LAPIDOS: Okay.

PN203

THE COMMISSIONER: We will be able to get it to you today. You will be able to see it overnight, and we will resume at 10.30 tomorrow to hear any submissions that may be considered necessary, having reflected on the decision that I have made. The matter is adjourned till tomorrow morning.

ADJOURNED UNTIL TUESDAY, 14 JANUARY 2003 [2.25pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #ASU1 BUNDLE OF DOCUMENTS PN28
EXHIBIT #ASU2 SUMMARY OF PROPOSED AGREEMENT PREPARED BY ASU PN32
EXHIBIT #ATO1 RECORD OF DISCUSSIONS OF THE CONDITIONS SUBGROUP FOR THE AGENCY AGREEMENT NEGOTIATIONS FOR THE 2002 AGREEMENT PN152
EXHIBIT #ATO2 EXTRACTS OF CLAUSES DEALING WITH UNDERPERFORMANCE AND INDEX CLAUSES TO THE AGREEMENT PN159
EXHIBIT #ATO3 EXPLANATORY DOCUMENT PUBLISHED BY ASU PN165