C2007/3020, Transcript of Proceedings [2007] AIRCTrans 437 (4 September 2007)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 17308-1

COMMISSIONER SMITH

C2007/3020

s.170LW - prereform Act - Appl’n for settlement of dispute (certified agreement)
CPSU, the Community and Public Sector Union
and
VicForests
(C2007/3020)

MELBOURNE

10.35AM, WEDNESDAY, 22 AUGUST 2007

PN1

MR J CRANE: I appear on behalf of the Community and Public Sector Union with MS S PARR and VicForests employees MR N ALLAN, MS J LUDERMAN and MR T SANDERS.

PN2

MR B MURRAY: I seek leave to appear for VicForests with MS C PROUD and MR MACDONALD.

PN3

THE COMMISSIONER: Any objection to the application for leave, Mr Crane?

PN4

MR CRANE: If it pleases the Commission, your Honour, this application
refers - - -

PN5

THE COMMISSIONER: Is there any objection?

PN6

MR CRANE: No objection, my apologies.

PN7

THE COMMISSIONER: Leave is granted, Mr Murray. Yes, thanks, Mr Crane.

PN8

MR CRANE: Your Honour, the Community and Public Sector Union's application is with respect to the consultation clause as noted in the VicForests Agreement 2006, specifically with respect to the implementation of a corporate restructure with respect to a number of changes, including changes to position descriptions, changes to the locations of a number of staff located across Victoria and a series of other changes which may result in the relocation of staff and associated outcomes with those relocations.

PN9

The CPSU submits, respectfully, that there has been a lack of consultation processes in accordance with the employer's responsibilities and obligations under the said agreement and we are seeking that the Commission assists the parties to come to an agreement regarding appropriate consultation processes and timeframes in order to assist the parties to progress through the dispute.

PN10

THE COMMISSIONER: Mr Murray.

PN11

MR MURRAY: I'll be a little longer than that, Commissioner, but not excessively long. As you know the notification indicates that this is a dispute about the application of the VicForests Agreement. I presume, Commissioner, that you have a copy of that.

PN12

THE COMMISSIONER: Yes, I do.

PN13

MR MURRAY: It alleges that the dispute relates to the consultation clause, clause 9, as well as the clauses dealing with permanent relocation and residential relocation principles which are allowances, if you like, and reimbursements and things of that nature.. It's a dispute brought under section 170LW of the
pre-reform Act so it's limited to disputes regarding the application of that agreement.

PN14

I want to make it clear, Commissioner, that I'm not putting this up as a jurisdictional point. We don't object to the Commission's exercise of jurisdiction in this matter. Nevertheless, for the reasons that I'll outline over the next few minutes, I think that this dispute really should be characterised not as being about consultation. If you look at some of the material that I'll be referring to, it should become apparent that the dispute is really about the restructure itself and in particular what's colloquially called the spill and fill process that VicForests is determined to adopt in filling positions in the reorganisation.

PN15

We provided you a letter, sir, dated 17 August and a copy of that was also provided to the union.

PN16

THE COMMISSIONER: Do you have a spare copy of that?

PN17

MR MURRAY: Yes, I do, sir.

PN18

THE COMMISSIONER: Thanks, Mr Murray. Do you need a copy?

PN19

MR CRANE: No, we're fine, thanks.

PN20

MR MURRAY: Together with that, Commissioner, there was a kit of materials. You may not have that either - you do have that?

PN21

THE COMMISSIONER: Yes.

PN22

MR MURRAY: That kit of materials outlines various things in it. It's the main documentary material or evidence of the explanation that VicForests has provided to its staff regarding the proposed changes and the impacts that they will have on VicForests' staff. That was also provided, Commissioner, to the CPSU. The materials, as you go through them, they'll make it clear that the proposed restructure is proposed for reasons related to necessary productivity improvements which are designed to achieve best value for the Victorian public from harvesting timber products in Victoria's state forests.

PN23

The circumstances in which this new business model was developed are also discussed in that material. I think it's common knowledge that the impact of the fires in 2006 and 2007 has had a dramatic effect on resources in Victorian state forests. Wildfires in that period from December 2006 up until early February 2007 burnt out some 670,000 hectares of state forests in eastern Victoria. When you add that to the effect of the 2003 alpine fires, sir, there has been approximately 47 per cent of the state forests east of the Hume Highway that has been burnt out during the last four years.

PN24

That reduces sustainable harvesting levels by as much as about 30 per cent, Commissioner. That and changes in the nature of the business that have been going on even before that in relation to the supply of harvested materials, that's led to a reconsideration of things such as operational boundaries in VicForests and the proposal, as it now stands, which is to consolidate three regions that currently exist into two. The regions now, west Gippsland, east Gippsland and north-east will become two regions, central highlands and east Gippsland. Together with that there will be substantial changes to many jobs in VicForests. Many of the jobs which are currently generalist in nature will become specialist in their focus and the geographical scope of some of these jobs or many of these jobs will be changed and some jobs will be completely new.

PN25

There are currently 143 effective full time positions in VicForests. About
70 per cent of those positions will be directly affected by all this while the remaining approximately 30 per cent won't have any substantial changes made to them so 30 per cent of the staff who are currently incumbent in positions will remain in those positions and 70 per cent of staff will be the subject of these changes. It's been decided, as a proposal by VicForests, that the best way to place people into these restructured and new positions is by that spill and fill process that I mentioned earlier on.

PN26

It is intended, Commissioner, that when all of this is implemented on 1 January 2008, quite sometime away, there will be 143 positions as there are 143 positions now. That doesn't mean that some people might decide that they would prefer not to work for VicForests or work for someone else, in which case there could be natural attrition below that 143 figure, but if anybody in VicForests currently wants a job with VicForests, they will have a job with VicForests. No one through this process is going to face forced redundancies unless they don't wish to relocate in some instances. There will be jobs but obviously some people may find those jobs less appealing because they may have to relocate to take them up.
At the end, in 2010 it's anticipated that there will be a staffing level effective full time of 130 but that will happen as a result, as I said before, of natural attrition.

PN27

VicForests is firmly committed to the notion that the spill and fill process is the most equitable process for this. There will be competition between existing staff. There will be an appropriate fit in some circumstances of people's skills and experience and qualifications to do certain jobs and not others. That's why, for the purposes of equity and fairness to its staff, VicForests has proposed that there be that spill and fill process.

PN28

I mentioned that there will be the necessity in some instances of people relocating. There are in some instances situations where there are two or three VicForests people in department sustainability and environment offices. They will be taken out of these small locations and they will be consolidated into larger locations. The reason for that is for business efficacy and for cost saving. Where that is to be done, clauses 59 and 60 will provide for protections of entitlements of staff and VicForests is committed to providing all of the entitlements for relocation and for travel that are in clauses 59 and 60 and it is also prepared to do a bit more. It's prepared to reimburse the costs associated with rental leases that have to be terminated, if that is necessary, as a result of the relocation and it's also prepared to have a transition period of two years for people to make necessary changes. That's clauses 59 and 60.

PN29

As for the substantive clause on consultation, the letter that we have provided to the Commission indicates that VicForests has been engaged in very substantial consultation. What VicForests is required to do under clause 9 is, as soon as there is a proposal for restructure, it has to advise the affected employees and it has to advise the CPSU. It has done that through the material that I've put before you, Commissioner. It has explained the rationale and it has explained the potential impact on the employees. It has invited feedback and responses and it is considering those now. In fact, among the feedback it had was feedback from employees as well as some concerns from the union about the timeline. The timeline was changed as a result of that feedback.

PN30

The timeline that we now have, Commissioner, is that - if I can just go through it - VicForests determined upon its proposals on 30 July, it advised all employees of the proposed changes at meetings at Healesville and Orbost on 31 July. It also asked for staff volunteers on that day to join a transition working group that will have VicForests staff on it as well as management. On 1 August it had a consultation meeting with CPSU officers regarding the proposal. Those officers are in attendance today. There were meetings with staff and members of the management team in regional locations that commenced on that day, 1 August.

PN31

Then on 2 August VicForests established an intranet site so that all of the information that it had provided at the meetings could be accessed by any staff. I might add that those staff that were on leave were also contacted by email or by telephone as was relevant and on that date, 2 August was when the feedback started to come in and the consideration of alternatives started. On 6 August VicForests started to provide written answers to staff questions. VicForests also invited the secretary of the CPSU to attend a personal briefing on the restructure. The secretary on 9 August declined to attend that person briefing.

PN32

On 10 August that transitional working group was formed. Then on 15 August staff feedback was completed and since 16 August the feedback has been under consideration. What VicForests is now doing is collating points from that feedback for further discussion and on my instructions in any case, there has not been any feedback which suggests that this is a model that will not work. There has been some negative feedback but that negative feedback is more in relation, predictably and understandably, to personal circumstances such as, "I don't want to move."

PN33

There will be a timeframe implemented for filling positions, Commissioner. The expressions of interest for certain roles at grade 5-6 will close on 10 September. Applicants will be advised of the results of that on 12 October. Then on grade 2 to 4 roles there will be expressions of interest on 22 October called for and on
3 December there will be an announcement regarding those positions.

PN34

Commissioner, I indicated at the beginning that it should become apparent that this is not a dispute about the application of the agreement. The reason for that is that VicForests through its consultation and through its commitments under 59 and 60 and more, has done everything that is required of it under the agreement.

PN35

That then takes us to what I suggest is the real nature of the dispute and that is revealed in a letter from Ms Batt, the secretary of the union, and that letter or email was dated 9 August 2007. I have a copy of that for you. You can ignore the top part there, Commissioner. It begins:

PN36

Catherine and I have been briefed by both Sarah and John.

PN37

That email, I don't know whether you've seen that before, Commissioner, but if you read that email in which the secretary declines the personal invitation to attend a briefing, it's clear that the union's objections are spelt out in its action proposals. It wants the spill and fill process to be abandoned. It wants a so-called full rationale for the restructure to be provided. It wants management to clarify its position regarding the alleged loss of 20 positions in terms of VicForests' obligations to meet pay rises under a new agreement. It wants an agreed negotiating group to reach agreement on what's called The Way Forward and it wants the negotiation of an agreed relocation package.

PN38

VicForests responded to that letter with a letter of its own to Ms Batt on 16 August. Again I have a copy for you, Commissioner and a copy has been provided to the union, obviously. In the letter that I've just handed up, Commissioner, VicForests explains once again the rationale for the spill and fill process. It talks about a revised timeline. It emphasis that there will be no job losses which indicates that the concern regarding pay rises under the new agreement is not a relevant concern and is not anything that's playing on the minds of VicForests as they go through this exercise. It talks about the transition working party and it commits VicForests to all of its obligations under clauses 59 and 60.

PN39

The last thing I want to say, Commissioner, is that if the real problem here, as we allege it is, that the CPSU does not like spill and fill, that is not something that the CPSU can seek to escape by means of an LW dispute. The courts have long recognised that an employer has the managerial discretion to fill positions by spill and fill.

PN40

THE COMMISSIONER: Can you give me some authorities on that at an appropriate time.

PN41

MR MURRAY: I can give them to you now and I can give you a copy of a case. This is Jones v Department of Energy and Minerals. It's a decision reported in (1995) 60 IR 304. If you go to page 304 and then on to 308 you'll see at page 308 in the middle paragraph - I should give you a little bit of a background about this. This was a case of a Victorian senior public servant who in the early 1990s was told that his position was to be abolished as part of a restructure and he challenged that.

PN42

THE COMMISSIONER: I can understand that proposition so these persons are now potentially redundant, are they?

PN43

MR MURRAY: There will be circumstances potentially where a person will decide that they're simply not prepared - - -

PN44

THE COMMISSIONER: No, no, I meant from VicForests' point of view. They propose to abolish these persons from their jobs, do they?

PN45

MR MURRAY: They propose that these jobs will change and people will have an opportunity to apply for new jobs, yes.

PN46

THE COMMISSIONER: In essence, these people will no longer have their jobs and unless they apply they're redundant.

PN47

MR MURRAY: That follows but the redundancies are not forced redundancies in the sense that there is - I should say retrenchments are not forced retrenchments, not that you could have a voluntary retrenchments, I presume.

PN48

THE COMMISSIONER: I don't know. People are being told they don't have a job and they must apply for a job.

PN49

MR MURRAY: Yes. The Commission has long recognised suitable alternative employment as - - -

PN50

THE COMMISSIONER: As a defence against redundancy.

PN51

MR MURRAY: As against retrenchment.

PN52

THE COMMISSIONER: Yes, as against retrenchment. Yes, I agree with that.

PN53

MR MURRAY: That's what would happen in these instances, if it comes to that.
We hope that we - when I say we, VicForests hopes that it will retain its staff.

PN54

THE COMMISSIONER: No, no, I understand that. I was just wondering how this decision - you indicated that spill and fill was recognised and that's why I was - in the context of a dismissal I can understand but in the context where people are told they've got to apply for jobs - - -

PN55

MR MURRAY: If you look at the passage, Commissioner - - -

PN56

THE COMMISSIONER: It's 308, is it?

PN57

MR MURRAY: Yes, it's at 308 because it's quite wide in its scope. Halfway through the paragraph it starts on Mr Jones' evidence. If you go down to "however" it says - the judge said:

PN58

However, it is within the employer's prerogative to rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly created positions.

PN59

And that's what's happening. I think that completes what I need to say, Commissioner, unless you have any questions.

PN60

THE COMMISSIONER: Are you content to go into conference to see if we
can - - -

PN61

MR MURRAY: Yes, we are, Commissioner.

PN62

THE COMMISSIONER: Mr Crane, did you want to add anything before we went into conference?

PN63

MR CRANE: I ought to add, your Honour, but I believe it can dealt with in conference.

PN64

THE COMMISSIONER: We'll adjourn the matter into conference.

<SHORT ADJOURNMENT [11.01AM]
CONTINUED IN TRANSCRIPT IN CONFIDENCE